POVERTY IN PAKISTAN
Research Analyst, PAGE
Oct 25 - 31, 2010
Poverty in Pakistan is a growing concern of the concerned circles. Although the middle-class has grown to 35 million, nearly one-quarter of the population is classified poor. As of 2007, Pakistan's Human Development Index (HDI) is 0.572, higher than that of nearby Bangladesh's 0.543. Pakistan's HDI still stands lower than that of neighboring India's 0.612.
Incidence of poverty in Pakistan rose from 22ñ26 per cent in the fiscal year 1991 to 32ñ35 per cent in the fiscal year 1999. It subsequently fell to around 22 per cent.
TREND IN POVERTY INDICATORS (%)
YEAR URBAN RURAL PAKISTAN 1998-99 20.9 34.7 30.6 2000-01 22.7 39.3 34.5 2004-05 14.9 28.1 23.9 2005-06 13.1 27.0 22.3
According to the Human Development Index (HDI), 60.3 per cent of Pakistan's population lives on $2 a day.
Wealth distribution in Pakistan is highly uneven, with 10 per cent of the population earning 27.6 per cent of income. The country also has a higher infant mortality rate (88 per 1000) than the South Asian average (83 per 1000).
SPATIAL DISTRIBUTION OF POVERTY
At the time of partition and independence in 1947, Pakistan inherited the most backward parts of South Asia with only one university, one textile mill and one jute factory. The country has made tremendous progress and its per capita GNP remains the highest in South Asia. During the last decade, poverty elimination programs helped many of the poor to participate and rise up. However, the global financial crisis and other factors like the occupation of Afghanistan have hampered growth. Poverty has historically been higher in rural areas and lower in the cities.
INFLATION BEHAVIOUR AND PROSPECTS
Sharp rise in food and fuel prices generated a rapid acceleration of headline inflation in both high income and developing countries and the unprecedented slowdown in the global economy was witnessed during 2008-09. The median of year-over-year consumer price inflation in high-income countries, which peaked at 5.2 per cent in mid 2008, turned negative in July, but was 0.6 per cent in November 2009. The median inflation rate in developing countries has declined from a peak of 12.4 per cent in mid-2008 to only 2.6 per cent. Notwithstanding the declines in headline inflation, core inflation has remained relatively stable in high-income countries.
Inflation developments have changed drastically among middle and low-income countries. Median inflation in low-income countries peaked at 15.4 per cent in the middle of 2008, but as of October 2009, it was 1.2 per cent well below the levels observed before the food and fuel boom. However, food inflation in developing countries has not been falling as rapidly as overall prices in the two-thirds of developing countries for which data are available through May 2009. As a result, by the end of May 2009, food prices in developing countries had risen about eight per cent faster than non-food prices, when compared with January 2003. This suggests poor in these countries may not be benefiting from lower international food prices to the same degree as the poor in richer countries and that a significant portion of 130 million pushed into extreme poverty during the food price spike may not have exited poverty as might have been expected given the fall in international food prices.
LACK OF GOOD GOVERNANCE
By the end of the 1990s, the manner in which power is exercised in the management of a country's social and economic resources emerged as Pakistan's foremost development problem. Corruption and political instabilities such as various separatist movements in Balochistan and tribal areas resulted in reduction of business confidence, deterioration of economic growth, cut in public expenditures, poor delivery of public services, and undermining of the rule of law.
The perceived security threat on the border with India has dominated Pakistan's culture and has led to the domination of military in politics and excessive spending on defense at the expense of social sectors.
In addition, major cities and urban centers are home to an estimated 1.2 million street children. This includes beggars and scavengers who are very young. The law and order problem worsens their condition as boys and girls are game to others who would force them into stealing, scavenging, and smuggling to survive. A large proportion consumes readily available solvents to stave off hunger, loneliness, and fear. Children are vulnerable to contracting HIV/AIDS as well as other diseases.
Pakistan is home to a large feudal landholding system where landholding families hold thousands of acres and does little work on the agriculture. They enlist the services of their serfs to perform the labor of the land. 51 per cent of poor tenants owe money to the landlords. Power and land landlord grabs allows him to exploit poor farmers.
The inadequacy of income to meet basic needs, low quality of life, denial of opportunities and choices basic to human development are different facets of poverty. The main objectives of government policies should be to raise the standard of living and improve the socioeconomic conditions of the people and thus reduce the incidence of poverty in the country.