MEETING THE CHALLENGES OF POVERTY ALLEVIATION
Aug 1 - 7, 2011
Amartya Sen writes in his book The Idea of Justice: "Thus, the relationship between resources and poverty is both variable and deeply contingent on the characteristics of the respective people and the environment in which they live - both natural and social." After identifying the four important sources of variation namely personal heterogeneities, diversities in the physical environment, variations in social climate and differences in relational perspectives, he discusses disability, resources and capability in the following words: "The relevance of disability in the understanding of deprivation in the world is often underestimated, and this can be one of the most important arguments for paying attention to the capability perspective. People with physical or mental disability are not only among the most deprived human beings in the world, they are also, frequently enough, the most neglected."
Pakistan is perhaps the only case in world economies where, despite huge economic capability, 40 percent of its population exists below the poverty line - living on $1.25 a day or less. The efficiency of a dollar spent on poverty alleviation is of great importance.
Pakistan spent around $17 billion on poverty alleviation programs during the first half of the last decade and brought down poverty from 35 per cent in 2000-01 to 26 per cent in 2006. The poverty was further reduced to around 18 percent by 2008, which was verified by the IMF during the course of SBA negotiations.
Now, when the poverty percentage has swiftly shot back to 40, the comparative inefficiency of a dollar spent on poverty reduction programs should certainly come under the scanner.
A power reduction strategy paper (PRSP) prepared in 2003 by the ministry of finance underlined the following four objectives as pillars of the program: (a) accelerating economic growth while maintaining macroeconomic stability (b) improving the governance (c) investing in human capital (d) targeting the poor and the vulnerable.
The previous government worked sincerely to achieve the stated objectives and succeeded in cutting down poverty significantly. Its successors not only failed to maintain the momentum but also earned the dubious distinction of attaining the highest-ever rate of poverty witnessed during the last and the current decades.
First, it failed in maintaining the growth momentum by indulging in high non-development spending thereby giving a reason to the state bank to tighten its monetary stance by keeping the interest at an absurdly high level.
Second, instead of improving governance, it gave way to the corrupt and economically harmful practices usually associated with our democratic system.
Third, it failed to invest in human capital as it ignored the most important social development sectors including importantly education. Lack of education is the most severe mental disability and a potential contributor to the poverty.
Targeted cash programs represent short-term measures. They can be helpful in winning another election term but sustained efforts to improve education and vocational capabilities of the poor is the only solution to reduce poverty on a long-term, permanent basis.
The numbers of enrolment at primary and secondary levels give a fair picture of a national educational systems and policies. Enrolments at the primary level during the six-year (2001-07) recorded an increase of 26 percent against a meager 3.6 percent during the next three years.
Similarly, enrolments at secondary level registered an increase of 58 percent during the said six-year period against a paltry seven percent during the following three years.
This shows the seriousness of the present government in improving the human capital. The deteriorating law and order condition ensuing from the so-called war on terrorism has also affected school-enrolment level during recent years. But, this situation has not emerged overnight. By now, we should be able to reconcile with the ground realities and develop strategy to invest in and improve human capital on a consistent basis.
ENROLMENT STATISTICS (IN '000)
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Primary 14,560 15,094 16,207 18,190 17,757 17,993 18,360 18,468 18,756 19,022 Middle 3,821 3,918 4,321 4,612 5,322 5,431 5,427 5,414 5,501 5,525 High School 1,574 1,589 1,800 1,936 2,188 2,373 2,484 2,556 2,582 2,658 Higher Sec/Inter 582 625 691 307 891 942 960 1,074 1,165 1,257 Degree Colleges 300 321 329 453 356 380 384 429 542 620 Universities 276 332 423 472 521 606 741 804 936 1,105 Source: Pakistan Economic Survey
Besides a number of NGO-programs and poverty reduction funds operating in the country, the much hyped BISP (Benazir Income Support Program) is convincing donors and world organizations of the government efforts to target poverty.
The program, no doubt, has its presence in the country and the recent recognition by the Asian Development Bank, as reported by the BISP chairperson Ms. Farzana Raja, should dispel some of the doubts raised by the critics about program's transparency. The stigma attached to the programs that are conceived by political setups in Pakistan is, nevertheless, hard to remove.
People of Pakistan have seen yellow cab and sasti roti schemes and they feel that BISP is comparatively more documented and effective. The criticism that besides funds' misuse the program is being manipulated to augment PPP vote bank is not so easy to defend.
BISP started in 2008-09 with an initial allocation of Rs34 billion, subsequently raised to Rs70 billion. The program covered 3.5 million poor families to start with and later extended its outreach to five million families.
ADB's assistance to the program is in the range of $150 million. A recent dimension added to the program targets low school-enrolment level. Taking the name 'conditional cash transfer', the scheme stands to assist those families who wish to impart education to their children.
Targeted subsidies and cash transfer programs have been devised by the developed nations to narrow down the income equality gap resulting from the implementation of rapacious free market economy model. They are essentially of short term nature and cannot be expected to produce long-term economic benefits. Developing economies, especially those committed to the goal of poverty alleviation, would do well to minimize their reliance on such window-dressing measures and devise ways and means to economically grow on a consistent basis by maintaining macroeconomic stability, improving governance and investing in human capital.