The present economic achievement and development is not knowledge-based

Sep 12 - 18, 2005

Prime Minister Shaukat Aziz feels that Pakistan's human resource was the greatest asset of Pakistan, saying that the government is focusing on imparting new skills to the labour to meet the growing demand of the industry.

In a meeting with a group of international trade union leaders, PM observed: "we cannot find trained labour and are experiencing shortage due to high growth and growing demand of the industry. The biggest challenge is to train labour with skills on international standards so that they have more opportunities both at home and abroad. The government has established a national vocational training authority to train its manpower".

As a matter of fact, the Prime Minister has identified the lack of training and quality education as the root cause of poverty in Pakistan.

In fact, inaccessibility to quality education and training is the fundamental cause of the widening gap between the rich and the poor in Pakistan as the unaffordable price of quality education has made it an exclusive domain of the rich.

Though the poverty alleviation was on top of the agenda of the present government yet it failed to check excessive commercialization of the quality education both by the private as well as the public sector educational institutions. Take the example of Institute of Business Administration (IBA); it is a public sector institution yet the price of education being charged by it is beyond the reach of even the middle income group. Education in fact has become a lucrative business instead of a noble cause to develop society as whole on human, social and other moral values. A large number of industrialists, businessmen and retired bureaucrats have chosen the area of education for minting money and they are accomplishing their "goal" with the connivance of the governments at least for decades.

Amazingly, on one hand many of the educational institutions were given amenity plots at cheaper rates and were allowed duty free import of lab equipment and other accessories (medical universities), besides being treated softly in terms of taxation, but on the other hand they are out to fleece people at the highest rates. Why they are being treated with privileges when they are operating purely on commercial grounds?

The economic policy supported by good political decisions of the present government has put the economy on the right track with an impressive GDP growth rate, however, the present economic achievement and development is not knowledge-based. For sustainable economic glory, it is the knowledge-based development which ensures sustainable growth in the real sense as is in the case of the developed economies around the world. Quality education and training at an affordable price is the only way to productively use our human capital which the prime minister says is the real asset of the country.

The current wave of mounting inflation mainly on the back of rocketing oil prices has played havoc with the purchasing power of the common man, and the unabated increase in oil prices seems formidable for society unless alternative options are made available. The worst-hit segment of society is the fixed income group which is suffering the multiplier effects on general prices. Ms. Rashid, a housewife with three kids says that due to exorbitant increase in cost of transportation, utility bills and even essential food items, she is out of her budget and unable to send her kids to private schools. This year she shifted her kids from a private English medium school to government school. Though the quality of education in government schools - generally called as "Peela" schools - is poor as children go to school just as a formality otherwise instead of gaining knowledge they indulge in some bad habits due to poor and hopeless environment.

The situation calls for fundamental changes in our education system if we really want to get rid of poverty, crime, disease and other exploitations in society.


The UNDP's Human Development Index (HDI) shows that Pakistan's level of human development is low for its level of income. Pakistan's education indicators are the worst in South Asia - the fact that the education index in Nepal and Bangladesh, two countries with significantly lower per capita incomes than Pakistan, is 10 to 20 percent higher than Pakistan is a clear indicator of the low priority accorded to education in Pakistan's development policies. Pakistan's public sector spending on education and health, at barely 2.1 percent of GDP, is significantly lower than that of other countries in the region. At the same time, experience in Pakistan shows that accelerating human development is as much an issue of increasing expenditure on social sectors as of improving the effectiveness of spending through better governance, and future social development initiatives must be designed keeping this in mind. The report also analyses the links between poverty and vulnerability in Pakistan, and concludes that, in general, the capacity of the poor in Pakistan to access public entitlements like political processes, or goods and services which determine human development contrasts strikingly with that of the rich.

The report provides a comprehensive commentary on the causes of the increase in poverty in the 1990s, and hypothesizes that poor governance is the key underlying cause of poverty in Pakistan. Corruption and political instability, which are both manifestations of governance problems, have resulted in waning business confidence, deteriorating economic growth, declining public expenditure on basic entitlements, low efficiency in delivery of public services, and a serious undermining of state institutions and rule of law, which in turn translates into lower investment levels and growth. The effects of poor governance have compounded the economic causes of rising poverty such as decline in GDP growth rate, increasing indebtedness, inflation, falling public investment and poor state of physical infrastructure. At the same time, social factors such as the highly unequal distribution of land, low level of human development, and persistent ethnic and sectarian conflicts are also obstacles to the achievement of long term sustained development. Environmental degradation is also closely interlinked with increasing poverty and has impacts on the health of the poor as on the un-sustainability of their livelihood.

The report also analyzes responses to poverty in the country. Foremost among the government's governance related reforms are the Devolution Plan. Under this plan, the delivery of services in the social and other poverty-focused sectors has been decentralized, with the elected local governments given the mandate and responsibility to manage and run these services. The government is also in the process of introducing important reforms to improve the functioning of judicial institutions to enhance equitable access of the citizenry to justice. Other poverty alleviation measures of the government include the introduction of microfinance banks, the institution of a small civil works program in the form of the Khushhal Pakistan Program, and a revamping of the Zakat system. ADB is assisting the government in the implementation of these poverty alleviation initiatives through key initiatives such as the $300 million Devolution Support Program loan being processed this year, which will enhance service delivery capacity in local governments; the $350 million Access to Justice Program loan, approved in December 2001, which aims to bring about reform in the lower judiciary and police, and the $150 million loan, approved in December 2000, for setting up the Khushhali Bank, which provides microfinance to poor households.

NGOs and Community Based Organizations (CBOs) are working throughout Pakistan in a wide range of poverty reduction activities. While some NGOs are purely welfare oriented, many are involved in broader poverty reduction efforts including strategies to improve income-generation opportunities, savings and credit initiatives, and social development. The private sector has also started to play an increasing role in the delivery of social sector services, particularly health and education. This growing role of the civil society and private sector offers opportunities for public-private partnerships that could facilitate and enhance the quality and outreach of social and development services in the country.

Poverty alleviation has to be effected not only through macroeconomic policies, but also by bringing about significant improvements in the structure and functioning of systems of governance. The government's ambitious governance reform agenda is at the core of its strategy for reviving growth, reducing poverty, and accelerating social development. In some areas, such as devolution, public expenditure management, anti-corruption initiatives, and the independence of the State Bank of Pakistan, appreciable progress has been made. In others, such as reform in the tax administration, the justice system, the police, and the civil service, the process, although started, is at a relatively early stage. However, for the success of the proposed development agenda it will be critical to consolidate the reforms in the first category, and accelerate the process in the second.