Jump in Pakistan’s poverty level

THE previous government had been claiming economic success, saying that poverty had been contained through improved economic management. However, the difference between the claims and facts underlines the importance of adopting a consistent method to measure poverty and avoid political considerations in compiling data.

Giving autonomy to the Federal Bureau of Statistics and other relevant statistical agencies is crucial in this respect, otherwise the statistics released by the government would remain a suspect.

According to latest World Bank estimates, Pakistan ranked most exposed to poverty risks among 43 countries. Its poverty rate jumped from 23.9 per cent to 37.5 per cent in three years. This can be described as devastating.

According to a presentation made by the Planning Commission to the prime minister, the latest estimates indicate that 64 million people were living below the poverty line in 2008 as against 35.5 million people in 2005. The main factors for the plunge were slow economic growth, sudden external shocks, high inflation and shortages in certain cases.

Pakistan’s position in human development index was 136 out of 177 countries, and 40 per cent of the urban population was living in slum areas. The Planning Commission was also not optimistic about future trends in this regard.

The condition for reducing the fiscal deficit to 4.2 per cent of the GDP during the current year had forced the government to slash the development programme, which could further lead to unemployment and accentuate poverty.

The PSDP has already been slashed by Rs100 billion and the government could spend only 19 per cent during the first six months of the current fiscal year out of a total allocation of Rs371bn for the public sector development programme.

It was feared that achieving IMF conditions would ultimately force the authorities to ignore social sector spending and make it impossible for Pakistan to meet the UN Millennium Development Goals.

Although a rise in poverty level was expected between 2005 and 2008, the scale of increase as reported by the Planning Commission is simply baffling.

It is, therefore, critical to finance job creation, delivery of essential services and infrastructure and safety net programmes for the most vulnerable groups of society. To achieve these objectives, it is essential to redesign the fiscal strategy.

Although it looks difficult, a way must be found to reduce poverty and ensure that people on the fringes continue to get at least basic necessities of life like food and medical care at affordable rates during the difficult period.

It is, thus, suggested that the restoration of investor confidence is another area which needs to be given high priority in this context. A higher level of investment would automatically create more jobs, reduce poverty level and promote economic growth.

For this a meticulous planning and commited leadership is needed to get out of the crisis without indulging in statistical trickery.

The following suggestions must be given priority consideration: (a) warlike conditions may be stopped, (b) more attention may be paid to developing rural areas, (c) concentration of development may not be assigned to one place only, (d) all the budget for five years may be reserved for development of industrial units in rural areas, (e) no concentration of industrial areas may be allowed in one place and (f) all funds deposited in foreign countries may be recalled and invested for the betterment of the people. (Courtesy: Dr Ali Akbar Dhakan – Dawn)