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Economic growth help reduces poverty

No doubt, the reduction of poverty has become a central goal for development. It can be attained through economic growth. Experts believed that the growing per capita income in general leads to poverty reduction. It is also recorded that factors that appear to limit the impact of economic growth on poverty reduction, counting high initial income inequality, low human capital, low government expenditure on social services, a reliance on non-labor-intensive sectors for growth and lack of openness to the world economy.

Furthermore, the eradication of poverty in the developing world has become a chief policy objective to most governments and international organisations because of its significance to the general well-being of society. Globally, statistics showed that the geography of poverty has a rural face. Approximately 1.4 billion poor worldwide, 70 percent reside in rural regions of developing states. Rural development and transformation, therefore, remain central to the goal of poverty reduction enunciated in SDGs (Sustainable Development Goals). Before going by worldwide facts & figures of poverty levels it would be helpful to briefly explain the initiatives of poverty often used.

The World Bank (WB) has showed extreme poverty as those living under $1.90 a day. Based on this meaning, the number of people living in extreme poverty has declined to 10 percent during 2015 as opposed to 11 percent during 2013. This translates to 68 million people almost the Globe earning greater than the defined poverty line of $1.90 a day. Despite the global reduction in extreme poverty, rates remain stubbornly high for many low-income states, particularly those affected by conflicts and political upheavals.

Statistics also explained that a large proportion of the world’s poorest population lives in Sub-Saharan Africa. Another measure of poverty often used is the multidimensional poverty index. It was compiled through the UN during 2010 and measures poverty as an acute deprivation of essential aspects of life. Experts also recorded that it measures three elements such as living standards, education and healthcare. An interactive databank created through the Oxford Poverty and Human Development Initiative explains that states in Africa like Niger, South Sudan, Chad and Burkina Faso are some of the nations which have high levels of multidimensional poverty.


Pakistan also ranks poorly on this index. The Pakistan multidimensional poverty report introduced during 2016 explained that four out of 10 Pakistanis live in multidimensional poverty. Furthermore, statistics showed that there are extreme disparities across provinces. 73 percent people in Fata and 71 percent in Balochistan live in multidimensional poverty compared to 31 percent in Punjab and 43 percent in Sindh. It is also extremely disconcerting to note the wide disparities in poverty present in cities. Whereas the level of multidimensional poverty is less than 10 percent in Karachi, it is greater than 90 percent in districts in Balochistan like Qilla Abdullah. International experts also urged that a successful policy of poverty reduction must have at its core initiatives to promote rapid and sustained economic growth. The challenge for policy is to combine growth enhancing policies with policies that permit the poor to participate totally in the opportunities unleashed and so contribute to that growth. This includes policies to make labour markets work better, remove gender inequalities and raise financial inclusion. Furthermore, various forms of economic policy reforms have been proposed through international institutions and other development partners. These policy reforms became popular in the last decades and have assisted some countries to transform their economies and enhance economic growth and development over the years. The present government of Pakistan must ensure to formulate policies which address to remove societal inequalities in terms of economic opportunities. Growth which is sustainable, broad based and inclusive and which offers a chance for everyone to advantage from it can lead to reduction in poverty levels in Pakistan.

The Government of Pakistan statistics also showed that the Pakistan Poverty Alleviation Fund (PPAF) has disbursed Rs 10.836 billion in interest free loans to poor and vulnerable families over the last 4-year to assist decline poverty and promote financial inclusion in Pakistan. It is important to note that the World Bank Poverty and Shared Prosperity Report 2018 has recorded that from 2010-2015 the growth of incomes of the bottom 40 percent in Pakistan has been merely 2.7 percent whereas the growth in incomes of the average population was recorded at 4.3 percent. This is in contrast to other developing states such as Latvia, Brazil, Peru and Egypt where the incomes of the bottom 40 percent are growing faster than the average population. It is imperative that in order to drag people out from the shackles of poverty, Pakistani policymakers must fight to reduce income inequalities present in the society.

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