The situation regarding unemployment and resultant poverty is more alarming in rural areas



Jan 05 - 11, 2004



Presiding over the second meeting of the "Prime Minister Task Force on Poverty Alleviation and Employment Generation", in Islamabad last week, Minister for Privatization, Dr. Abdul Hafeez Sheikh, who is also the chairman of the task force, emphasized that the recommendations of the task force should be practical suggesting both short term and long term measures to combat this social evil.

Addressing the members which included high profile representatives both from public and private sectors and eminent economists, Dr. Sheikh said that poverty ratio needed to be curtailed urgently and in his opinion it could be done through implementation of government progressive economic and investment policies for creation of more job opportunities. Poverty and unemployment were interlocked and poverty level could not be curtailed without creating more jobs. "We have to focus on labour intensive development projects in the public sector", he added.

The second meeting of the task force reviewed poverty and unemployment status and assessed the impact of the ongoing public sector development program in the context of curtailing unemployment. The task force also reviewed presentations from DFID, National Database and Registration Authority (NADRA), Chief Economist Planning Commission Dr. Pervez Tahir, Dr. Mushtaq and the three sub-committees. The next meeting was fixed for early January next year.

The task force and its members from public sector Dr. Nasim Ashraf, Chairman, NCHD, Dr. Ishrat Hussain, Governor State Bank of Pakistan, Javed Sadiq Malik, Secretary Planning and Development, Waqar Masood Khan, Secretary Economic Affairs Division, Dr. Ashfaq Hasan Khan, Economic Advisor, Finance Division, Dr. A. Ra Kemal, Director PIDE, Dr. Nuzhat Ahmad, Director Applied Economic Research Centre, Chairman Planning and Development, Government of Punjab/Additional Chief Secretaries, Government of Sindh, NWFP and Balochistan and Shaukat Hayat Durrani, Additional Secretary (EA), Prime Minister's Secretariat and seven members from the private sector; Farid Rehman, Peshawar, Dr. Akmal Hussain, Lahore, Dr. Salman Shah Lahore, Shahid Kardar Lahore, Dr. Mushtaq Mirani, Hyderabad, Ms. Saadiqa Salahuddin Karachi and Malik Naeem Khan from Quetta attended the meeting.

It is a source of great embarrassment for the Economic Managers of the country that despite strong improvement in macro economic indicators, the people remain as deprived as ever. Their miseries have multiplied during this period of economic turnaround of which the government is so boastful. The unemployment which remained below 5 percent mark in 1980s' is highest ever now at above 8 percent pushing more and more people into the net of grinding poverty. Poverty level has risen from 15 percent to 38 percent in the last 15 years. It is commonly believed that the government either lacks the commitment or the planner have no capacity to do something meaningful to mitigate poverty in the near future.

The Governor State Bank in his analysis of the causes of increase in poverty level in Pakistan, at a function of Agha Khan Rural Support Program a few weeks back, referred to period of 1990s when the economic growth rate had fallen and consequently the poverty level had risen from 18 percent in 1980 to 33 percent in 1990. The lesson from this situation underscores the need for maintaining a higher growth rate at not less than 6 percent annually and sustained for some years which could increase employment opportunities and combat poverty. We need to continue prudent economic policies and with special emphasis on higher growth with enhanced allocation for public sector development program giving top priority to labour intensive projects.

The situation regarding unemployment and resultant poverty is more alarming in rural areas. The present government has done well to undertake construction of a number of small dams and water reservoirs mostly in rural areas, which will provide temporary employment to a large number of labour-class. Similarly roads should be constructed in rural areas specially from farm to market, which will doubly benefit the rural population providing employment to unskilled workers and improving returns to the farmers of their product.



In order to address the problem of rural poverty, the government should ensure that the farmers get at least the minimum procurement price for their produce. With wheat prices raised to Rs. 350 per 40 kg and cotton also fetching a good price this year, rural incomes will be substantially improved. The higher industrial output in the last year should help in combating poverty in the urban areas. The encouragement to small and medium enterprises is also intended for the purpose of the creation of self-employment. But as these measures may not be enough, the targeted approach to reduce poverty is all the more necessary in the immediate perspective. Though it may take time to fully come to grips with them, but the benefits of economic recovery should be filtering down to the grass roots level.

As for investment in human resources, the allocation for education sector is still very low at just about two percent of the gross domestic product and it will need to be substantially increased. Private investment is required to be further accelerated, as that is the proven route to job creation. The role of NGOs in employment generation and poverty reduction should be expanded and regularly monitored. The increase in unemployment and poverty, especially in the decade of the nineties, has been and continues to be a source of concern. The setting up of the task force indicates the gravity of the problems underscoring the need of urgent action.