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  ECONOMY WATCH

Selected By AMANULLAH B ASHAR
Nov 21 - 27, 2005

POVERTY ALLEVIATION - EARTHQUAKE HAS ADDED FUEL TO THE FIRE

Recent widespread devastation caused by October earthquake in the northern part of the country is to add to the plight, miseries and sufferings of the poor. Over 33% population was living below the poverty line in Pakistan perturbing the economic managers that the graph of the poverty ridden segment of society might further rise if a strong follow-up was not effectively carried for the rehabilitation of the affected population.

Although the UN Secretary General has earnestly appealed to all members of the UN to come forward open heatedly with the relief and rescue support and to donate generous for the rehabilitation of the destroyed life of the people in Azad Kashmir, NWFP and some parts of Punjab. The campaign, however, needs serious persuasion to produce positive results.

Unfortunately, while the plan to implement the poverty reduction schemes in the form of self employment opportunities being offered by the SMEs and the micro-financing companies were still in the initial stage, the natural calamity has increased the scope of the poverty alleviation efforts by many folds.

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, he 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 the 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," he said.

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 under-performing 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, the SBP governor said that the government institutions like Bait-ul-Maal are under-performing. 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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