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  ECONOMY WATCH

Selected by Zeeshan Ahmed Khan
Oct 24 - 30, 2005

POVERTY REDUCTION STRATEGY OF PAKISTAN

Just three weeks ago, I've discussed the prospects of meeting Millennium Development Goals for Pakistan in my column. I had pointed out at that time that Pakistan would feel difficulty in meeting two of the goals: poverty and environment. The country is off the track in these two areas according to global monitoring report issued by the World Bank. Officially, it is claimed that 33% of the overall population of Pakistan is living below the poverty line. However, some unofficial sources said that the figure is close to 41%. If we accept the official figures, Pakistan will have to reduce this figure to 17 - 18% by 2015 in order to meet MDG targets.

The most difficult question for economic managers is about the strategies for controlling the poverty. Controlling the poverty is never an easy task for any government. It depends on their strategies and plan. If strategies are based on unrealistic facts, all efforts could be ruined.

Recently, Governor State Bank of Pakistan, Dr. Ishrat Hussain has given a lecture at the Elliott School of International Affairs, George Washington University, USA. In his speech, governor briefed the audience on government's strategies to eliminate poverty.

Dr. Hussain initiated with the importance of economic growth and exposed the fact that Pakistan has maintained an average 6 percent growth rate for last four years. He claimed that this rate is a threshold rate at which poverty starts declining in the context of Pakistan. In his views, this is the reason why Pakistan expects to be successful in meeting the poverty MDG.

Talking about the strategy of poverty reduction, he said that poverty is more in rural areas of Pakistan than urban. Thus most of the extremely poor people, living below poverty line are inhabitants of rural areas. It is the basic point of government's strategy to improve the living standards of rural population. Explaining, how he would improve the social status of rural population, Dr. Hussain said that government is providing micro credit facilities to rural population to increase the earning activities. To support the strategy and insisting on success of this plan, he quoted various facts and figures of last years, specifically in the agriculture sector. We think that this policy will not be effective enough. Poor people living in rural areas are spending life like animals. They are slaves to powerful landlords and already owe compound debts to them. They have no land to sow and no business to extend with this micro credit. The only way to let the out of extreme hunger is to provide them agricultural land. Lease them land for five years free of cost and then provide them loans to produce crops. I believe that they will remain no longer poor before 2015.

Talking about poverty in urban areas, he pointed out that thousands of graduates are jobless but don't have skills to meet the demand for skilled workers. He said that few sectors like IT, call centers and media are places where manpower is required and government is supporting technical and vocational training programs to meet the demand for skilled workers.

Explicitly mentioning the reforms in education sector, he said that the government is focusing on establishing girls schools in undeveloped areas. Such schools will have only female staff. A survey showed that people of these undeveloped areas are not reluctant to send their female children to such schools. The strategy will help in decreasing gender inequality in education.

About drinking water, sanitation, nutrition, roads and basic infrastructure facilities, Dr. Hussain reviewed the performance of Khushhal Pakistan Program. He further said that well-established institutions, such as civil service, judiciary and police are underperforming and there is continuous erosion to their performance. He criticized the situation and said poor man is severely disturbed by the activities of these institutions. According to him, it is also a cause of poverty.

Enlightening the role of welfare organizations and other social welfare works in the country, governor said that the government institutions like Bait-ul-Maal are underperforming. On private level, country witnessed $1.5 billion welfare transfers every year.

Of all the measures discussed above, I think government should concentrate on improvement of its institutions like government educational institutions, health institutions and civil service departments. If government only correct the direction of these bodies, half of poverty will eliminate itself.

SOCIAL SECTOR AND POVERTY RELATED EXPENDITURES
(RS BILLION)

 

2001-02

2002-03

2003-04

2004-05

2005-06

 

ACTUAL

ACTUAL

ACTUAL

BUDGET

PROJECTED

Community Services

10.98

16.57

20.63

21.46

23.85

Human Development

90.67

105.81

134.13

147.73

179.38

Rural Development

24.3

34.18

45.3

43.04

95.42

Safety Nets

8.33

13.75

11.46

19.03

6.37

Governance

32.98

38.54

42.44

46.8

19.53

Total

167.25

208.84

253.96

278.06

324.55

 

 
 

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