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The challenges of poverty reduction

NEARLY 39PC OF PAKISTANIS LIVE IN MULTIDIMENSIONAL POVERTY: UN

A large number of Pakistanis understand that their standard of living has worsened or remained more or less the same. No doubt some says they are better off and likewise small numbers believe that economic conditions have improved somewhat. Frankly speaking the extreme poverty has risen rather than fallen.

Pakistan has keenly observed an abnormal decline in poverty that is declining from nearly 35 percent in 2001 to less than 10 percent by 2013-14. The poverty stricken population saw some improvement in living standards. Access to toilet facilities for example has significantly improved. Use of motorcycles has risen and the poorest households now have refrigerators, televisions and stoves. Moreover poor Pakistanis have moved towards a more diverse diet, with a greater consumption of dairy, chicken meat, fruits and vegetables. The labour class prefers to have lunch in hotels as compare to the early livings of the poor who use to skip dinner and only having with raw onion and bread in the day timings. They also spend a smaller quantity of their total income on food items but less on housing, utilities, education, health care and consumer goods, including leisure goods. They spend their nights in their friends’ residences. They wore most of the time old and dirty dresses.

Some people see, the gap between the rich and poor is growing. Only the wealthy corrupted and connected can get good jobs and worldly education or set up lucrative businesses. Few genuinely argue that Pakistan is the same country today that it was two decades ago years ago. Only a bare minimum level of existence has also risen.

FUTURE REQUIREMENTS

Things have not improved on key issues yet like child stunting or schooling or jobs, which will determine what the Pakistan future looks like. Pakistan has no doubt a growing middle class but a large portion of the country’s population remains in abject poverty. Unemployment and a population boom contribute to Pakistan’s current economic and social problems. Due to ethnicity and provincialism the poor middle class has been greatly ignored. Compared with other countries Pakistani youth and middle class is a silent spectator just calmly watching the worst situation?

In 2008, over 17 percent of the total population was living below the poverty line. The unemployment rate, as of 2010, was an unparallel 15 percent. Substandard governance and political insecurity and terrorism have further added tremendous issues. The latest statistics reveals that above 60 million Pakistanis are living below the poverty line. This is posing a challenge for the government. The number of poor increased due to the adoption of a new methodology for measuring poverty which uses the 2013-14 survey data.

The government was committing itself to a greater challenge because 2001 poverty line formula that placed 20 million people poor was outmoded and confusing. The new poverty line estimates the number of poor households at 6.8 million to 7.6 million. Taking 2013-14 data, the poverty comes out to be 29.5 percent of the population. In monetary terms, poverty line stands at Rs3, 030 per adult equivalent per month.

Under the old poverty line, the percentage of the poor fell by around 25 percentage points, from a high of 34.6 percentage points in 2001-02 to 9.3 percent in 2013-14. The 2001 model of poverty measurement was based on food energy intake which was not a representative one. Thus to make it more transparent and reasonable, the government has also incorporated costs of basic needs for capturing non-food expenditures in the new formula.

Non-food items will include expenditures on education, health and mobile phones. These will be added to calculating the exact number of poor in the country. Poverty is a challenge and the government should take seriously measures to cut it. Whatever the methodology is used by the government the poverty level in the country has declined in the true sense of the word.

NEW READINGS OF OFFICIAL INDEX

Pakistan’s new poverty index reveals that 4 out of 10 Pakistanis live in multidimensional poverty. The report details Pakistan’s official Multidimensional Poverty Index (MPI) which was earlier published in the Economic Survey of Pakistan 2015–2016. The report has been compiled with technical support from UNDP Pakistan and the Oxford Poverty and Human Development Initiative (OPHI), University of Oxford. According to the report, nearly 39 percent of Pakistanis live in multidimensional poverty, with the highest rates of poverty in FATA and Balochistan.

Pakistan’s MPI showed a strong decline, with national poverty rates falling from 55 percent to 39 percent from 2004 to 2015. However progress across different regions of Pakistan is uneven. Poverty in urban areas is 9.3 percent as compared to 54.6 percent in rural areas. Disparities also exist across provinces.

The report found that over two-thirds of people in FATA (73 percent) and Balochistan (71 percent) live in multidimensional poverty. Poverty in Khyber Pakhtunkhwa stands at 49 percent, Gilgit-Baltistan and Sindh at 43 percent, Punjab at 31 percent and Azad Jammu and Kashmir at 25 percent. Islamabad, Lahore and Karachi have less than 10 percent multidimensional poverty, while Qila Abdullah, Harnai and Barkhan (all in Balochistan) have more than 90 percent poverty.

Deprivation in education contributes the largest share of 43 percent to MPI followed by living standards which contributes nearly 32 percent and health contributing 26 percent. The Multidimensional Poverty Index uses a broader concept of poverty than income and wealth alone. It reflects the deprivations people experience with respect to health, education and standard of living, and is thus a more detailed way of understanding and alleviating poverty.

Since its development by OPHI and UNDP in 2010, many countries, including Pakistan, have adopted this methodology as an official poverty estimate, complementing consumption or income-based poverty figures.

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