Poor should be included in the task force to get a real picture


Dec 15 - 21, 2003 



Despite an appreciable stability achieved at macro-economic fundamentals during last three years the poverty level has simultaneously increased during the period and according to an estimate a formidable 35-36 percent of the population living below poverty line in Pakistan.

There is a general feeling among the people that the revenue targeted policies framed by the international donor agencies especially the IMF were responsible for adding to the miseries of the middle and low income groups in the country.

Although it is quite obvious that the indirect taxes and levies on essential commodities like POL products and electricity consumption were responsible for raising the prices of these items, it sounds funny when the policy makers set up various task force or committees to find out solution of the problematic areas.

The poverty alleviation program, which is on top of the government agenda, can only produce results when the taxes and levies are recovered according to the level of the income instead of putting these levies through indirect tax system which does not discriminate among the poor and the rich. The worst thing of the indirect taxation system is that it deals indiscriminately with the poor as well as the rich.

In order to deal with the situation, the government on its part has recently constituted a task force on poverty alleviation and employment generation under the chairmanship of Minister for Privatization Dr. Hafeez Shaikh.

The task force would review current poverty and unemployment status, public sector contribution, government policies, and suggest improvements. The task force has been asked to submit its report within a month.

The task assigned to the committee includes reviewing the current state of poverty and unemployment in the country. To assess the impact of public sector development related programs on employment generation and poverty reduction besides assessing the government policies and programs for poverty alleviation and employment generation through private sector development. The members and terms of reference of the task force are Dr. Nasim Ashraf, Chairman NCHD, Dr. Ishrat Hussain, Governor State Bank, Javed Sadiq Malik, Secretary, Planning and Development division, Dr. Waqar Masood Khan, Secretary, Economic Affairs Division, Dr. Ashfaq Hasan Khan, Economic Advisor, Finance Division, Dr. A.R, Kamal, Director PIDE, Islamabad, Dr. Nuzhat Ahmed, Director Applied Economic Research Center Karachi and others. Members from the private sector are Farid Rehman Peshawar, Dr. Ahemd Hussain, Lahore, Dr. Salman Shah Lahore, Shahid Kardar Lahore, Dr. Mushtaq Mirani Hyderabad, Ms. Saadiqa Salahuddin Karachi and Malik Naeem Khan Quetta.



Meanwhile, Center for Research on Poverty Reduction and income distribution of the Planning Commission has suggested the government to adopt Human Poverty Index (HPT) as a scale to measure poverty, which says 40 percent of the population was poor in 2001. This he said at the launch of the second Pakistan Human condition report 2003.

The human conditions are not improving in the country for last two decades especially in health sector. In order to meet the social development, the government needs to enhance present 3 per cent spending on health to nearly double at 5-6 percent in medium term, the report said.

Income or consumption expenditure based poverty measures like head-count index, poverty gap, poverty severity measure only the deprivation in income/consumption expenditure, which is only one dimension of poverty. The only existing tool closer to the measuring the deprivation is the Human Poverty Index (HPI) of UNDP. Though the data required for the estimation of this index is characterized by paucity and non-creditability, this does not affect the extent of accuracy of HPI as compared to other aggregate poverty measures. Thus it is highly desirable to use HPI as a poverty measure, the report observed.

The government measured the poverty level at 32.1 percent in 2001 rising from 29.8 percent in 1997 and 30.6 percent in 1998.

The officially notified poverty line is of Rs748.56 per capita per month based upon the minimum caloric requirement of 2350 calories per day at the price of the year 2000-01. Based upon this poverty line, the percentage of population estimated to the poor is 32.13 percent i.e. 45.13 million, the report estimated.

Out of 45 million poor, 62.63 percent are transitory poor, 4.98 percent extremely poor i.e. below Rs374.3 per person per month and 32.39 percent are chronically poor. Transitory poor keep falling in and out of the poverty due to economic shocks and are characterized as transitory poor.

In Pakistan, poor and non-poor are densely located around the poverty line, that is why poverty line should be used as a tool for the basis of the efficiency and cost effectiveness of any pro-poor policy. Effects of the poverty are also felt on the people not falling under poverty line, because of their extensive vulnerability to socio-economic shocks, rendering their non-poor situation a temporary phenomenon.

People feel that while constituting any task force or committee especially for carrying out poverty reduction plans, representation should also be given to the poor who can really point out the actual gravity of the situation as they know the taste of the pudding.