LAHORE: Despite Pakistan has witnessed economic growth, lack of planned strategies has failed to distribute income equally, said economists and civil society activists at a discussion program on persistence of poverty.
“Economic policies pursued in Pakistan during high economic growth or recession put emphasis only on increasing production and planners shy away from measures necessary for equitable distribution of this progress” said Asif Ali Shahid, a Certified Public Accountant.
There are no policies aimed at distributing assets as economic planners fear that equitable distribution would retard growth, he added. He said since production determines distribution, industries that upgraded technologies were able get rid of low skilled labour that created a large pool of semi and unskilled labour force in the country.
Citing an example, he said spinning mills used to employ up to 500 workers to pick foreign material and trash from their cotton meant for spinning. Now this task is done by laser machines installed before the cotton enters the spindles.
“The unskilled or semi skilled work force that was rendered jobless cannot find any manufacturing job because they lack the expertise to operate high tech machines” he said.
Senior economist Yunus Kamran said the East Asian economies adopted different growth strategies than Pakistan, which ensured that benefits of growth are distributed adequately across the society.
He said the Asian tigers were successful in restructuring the economies in such a manner that created opportunities in the manufacturing and services sectors. He said low paid agricultural workforce in Pakistan is still around 50 percent of its total labour force although the share of agriculture in its gross domestic product (GDP) has reduced to merely 20 percent.
“Our policies and mechanisms lacked thrust to shift more people to high tech sectors of the economy that would have increased their income along with those that still adhered to agriculture” he said.
He added that all creditable economic planners have strategies that would foster inclusive growth; however, lack of political support is their problem.
Faisal Qamar, FCA, said that corruption was at the root of the problems, adding that in corruption expenditure is not directed to benefit the poor. He said growth remains exclusive if the economic policies remain hostage to corruption.
He said purging of corruption was essential in accomplishing more inclusive economic and social policies. A swing in economic ideas and policies are a key factor in making economic growth more equitable, he said.
Faisal urged the planners to apply taxation principles that are required to distribute wealth. Fair land reforms would distribute land more equitably, he added. He said development economists do not consider growth or development positive if it does not benefit the poor.
He regretted that large amounts spent on military expenditure distort distribution of resources as it results in inadequate allocations for education and health. He further said persistence of poverty is due to denial of education and health facilities to the poor.