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Article Macro Economics

Poverty in
Pakistan and way
forward

Article Written By:

Shoaib Rehman B07311


M Nauman Khan -
Saqib Aslam -

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Article Macro Economics

ARTICLE (March 9, 2009): Pakistan suffers from a number of social, political, and economic problems.
With a population roughly half that of the United States in an area slightly less than the size of two
California's, Pakistan is experiencing unwanted growth.

While projections indicate that the population growth rate of Pakistan may actually be decreasing,
those same projections also predict that by the year 2050 Pakistan will have assumed its place as the
third most populated nation in the world. A rapidly growing population, along with political tensions,
both internal and external, and an economy trapped in a cycle of debt, all serve to prevent Pakistan
from attaining the progress it needs to advance, and perhaps to survive.

Bright streetlights shops stocking fancy stuff and restaurants that adorn our otherwise dim roads, seem
enough to blind one from the barefooted four-year-old boy rummaging through our garbage or the
eyeballs-rolled-back-in-the-head drug addict getting the cold sweats while carrying a malnourished
baby girl on his shoulder begging, to satisfy his crave for his addiction or to feed the little girl, we
cannot know. Day after day, the only visible now common sight all around us in Pakistan is the rich
getting richer and the poor getting poorer.

This dilemma of the poor getting poorer and the hungry getting hungrier views were sought from four
eminent personalitys renowned in their fields.

The claims regarding poverty alleviation touted during Musharraf/Shaukat Aziz tenure, the claimed
decrease in the poverty rate from 33% to 23%, was not based on real-time happenings and figures,
but was rather done by systematic manipulation of statistical data.

In an economy like Pakistan to achieve a 10% decline in poverty levels in such a short period, is
nothing short of a miracle.

The lack of planning in the agricultural sector during the previous regime, a severe shortage of food is
being witnessed, coupled with manifold increase in their prices. These factors have created more
poverty and hunger, with the result that an average family can barely manage two meals a day.

A news report writes that on enquiring from the renowned Mr Abdul Sattar Edhi and Bilquis Edhi, they
stated poverty is increasing at a phenomenal rate: 40% of our population is living at the edge of the
poverty levels while out of this 15% are so poor that they cannot even afford to have one meal a day.

Ms Shazia Marri, Minister for Information, Government of Sindh , said about 70% of the population in
rural areas was living below the poverty line. Poor agricultural growth was witnessed because no help
was extended to the poor small farmers; neither water courses nor any loans from agricultural banks
were given to them. She further said when calamities hit rural areas, the small farmer lost his crop
thereby decreasing his spending power making survival difficult which, in cases, made him migrate to

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cities to look for a livelihood. This added to urbanization, where facilities were already stretched to the
limit.

In spite of the continuous economic crisis, what the so-called elite did to ease their guilty conscience
was to declare blame on poor government policies or on the poor themselves for not making efforts to
improve their lot. What their elitist brains failed to comprehend is the fact that there is no social and
economic mobility in Jinnahs young country. Putting government policies to a side for now, one can
question why the 5-year-old girl wearing clothes two sizes smaller than her and selling flowers does not
go to school or why an entire family of eight lives in a jhuggi.

On the topic of the bleak human condition of the poverty-stricken economic woes are faced by those
who do not own any assets; land, livestock, education or a house. They own nothing more beyond
what we can see on them. Those who manage to study till matric or in rare cases up to intermediate in
government schools still did not get an increase in share of jobs as these are usually given or rather
taken away by influential parents whose children have studied in private schools. These are the things
that define who is to be rich and who is to be poor.

There is education apartheid in Pakistan. Presently, either child go to Urdu medium schools or to
madrassas or not at all, thus rendering them unqualified for jobs that have English as a requirement
resulting in immobility of the poor to better their class. More than 80% of the countrys revenues are
generated by indirect taxes, so the burden is on the poor; while only 20% of taxes are collected from
rich. One can only stretch their imagination that far to expect anything other than poverty. There is no
transfer of assets, no shift in tax policies and no structural change.

From 2002 to 2007 hardly any GDP growth has been seen in the agricultural sector. The only growth
witnessed has been in the banking sector. The average growth rate in the banking sector has been
13% in the last 8 years while in the agricultural sector the average growth is 3%. In 4 out of the last 8
years, the agricultural sector has had negative growth (decline). Comparatively, the banking sector has
had a growth rate of 30% in 2 out of the last 8 years and witnessed a 40% increase in another year.

Mr. Edhi stated that nothing in this country is meant for the poverty-stricken; even drinking water,
when available, is dirty and is the main cause of diseases which can be fatal. There is no electricity in
government schools, no teachers and thus no standard of education. He said that when politicians
come into power, they simply make themselves rich instead of the country.

Additionally, Mr Edhi revealed the concept of the beggar mafia who has systematically turned begging
into a well-paid job. The average beggar, according to Mr Edhi, makes about RS 400 a day; he pointed
out that if the rich constantly give money to beggars to ease their own guilty conscience, begging will
never end. Why would one want to work at a job when you can get money for free? The Edhis also
pointed out the fact that the government has to take the first step to abolish the art of begging in the
country and went further on to say that our country is overridden by jahalat, poverty, laziness and no
family planning.

Ms Shazia Marri was of the view that the cycle of progress in our country did not match the demands of
the people. The basic issue of an unstable economic environment in Pakistan discouraged investors
from putting money in any field of work in the country.

Additionally, not much international aid was forthcoming in the past years because the government was
not a peoples government but was of an authoritarian nature, thus did not feel accountable to people.
Although, several donations come internationally, [especially during the major earthquake in Kashmir]
it was the governments job to make sure the aid reaches the deserving people. However, due to non-
existence of an adequate distribution system, corruption flourished and the donated amounts never
reached the deserving or aided the cause for which it was given.

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Ms Marri also pointed out that there was lack of opportunity for rural people in urban areas as the job
market is more competitive. The previous government had hired teachers without adequate
qualifications, thereby further reducing the standard of education imparted in government schools.

To overcome these serious social and economic problems, the immediate step the government has
taken is by starting the Benazir Income Support programme; RS 1000/- each to be given to more than
3 million families so those earning 5000 rupees a month will have a 20% increase in purchasing power.

On their part, to help feed the poor and hungry, Edhis have opened 325 centers that provide free food
to more than 3 million people every day. Ms. Marri stated that women in rural areas who are either old
or widowed, needed financial support to survive. However, the previous government did not have any
concept of a welfare system which is something Benazir Bhutto wanted to develop for the people.

She said that the government was now ready to emancipate women, particularly in the rural areas, and
would make sure that they are given their share in agricultural land-ownership; 15 to 18 acres of land
will be given to women individually and other programmes would be developed to assist them earn a
decent livelihood. The introduction of agricultural loans, that will be easy to pay off, and basic
agricultural inputs such as water and seeds will be made available.

Men will also be considered for allotment of agricultural land, but the main focus will be on women. She
said that the construction of dams for the province will be planned and rain forests will be preserved.
The government will also provide teachers with academic programmes to improve the quality and
standard of education in the country. Unlike the previous regime, the government is treating the
poverty crisis as a serious issue for the social and economic strengthening of majority of the provinces.
Further, Ms. Marri said that the government will now be accountable to the Pakistani people unlike the
authoritarian regime of General Zia-ul-Haq and Musharraf.

With Mr Asif Ali Zardari having been elected President of Pakistan, the onus of providing good, strong
and clean governance rests with him. Expectations are running high with his party holding the reins of
power. Mr Zardari can order immediate steps be taken to alleviate the sufferings of the poor, providing
them help and opportunities to better their lot.

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