Part - II
Like other developing countries Pakistan is facing high level of poverty, strong pressure of population growth, chronic unemployment and increasing social inequality. This requires a departure from the traditional development approach of implementing generalised policies. A comprehensive growth strategy driven by financial support for the agriculture sector and effective human capital empowerment can help induce and sustain long-term socio-economic development.
The poverty situation is Pakistan is not very encouraging despite concerted efforts by both public and private sectors. There are 58.7 million facing multidimensional poverty and experiencing the effects of poor health, lack of education, inadequate living standards, low income, poor working conditions and violence threats.
One third of Pakistani households are facing poverty with a minimum daily wage of $1.25. There is uneven distribution of the poor population among provinces – Balochistan: 52 percent, Sindh: 33percent, Khyber Pakhtun-Khwa: 32 percent and Punjab with 19 percent of its population living below the poverty line. Almost half of the country’s rural households live in poverty as compared to 18 percent of the population in urban areas.
Pakistan belongs to the list of countries most exposed to poverty risks. It is at the 146th position out of 187 nations on the Human Development Index. The influence of natural disasters has made the economic situation worse for the poor and reversed the achievements credit by poverty reduction programs over the years.
The earthquake of 2005 and two back to back floods in 2010 and 2011 have also added to the poverty levels of the country. The country is also experiencing a high level of inequality.
The current state of poverty and inequality is leading to social issues and negative economic implications. There has been an increase in suicide and illegal organ sale cases. The government is committed to reducing poverty and closing the inequality gap. In addition to a focus on larger growth driving policies, a lot of direct-effect programmes are also providing quick relief to the underprivileged; these programmes include the Benazir Income Support Programme.
Private and non-profit initiatives are also focusing on ways to reduce the income gap and increase economic capacity of the less privileged. Highly dedicated philanthropic efforts from individuals, corporations and the non-government sector are playing their bit to control and reduce poverty.
Despite all these efforts and programmes, the poverty level in Pakistan stands high and is acute – requiring a quick response. It cannot wait for the trickledown effect of economic growth. There is an urgent need for targeted policies with efficient and direct impact on the worsening situation. No doubt, development, growth, employment generation and poverty alleviation have always been the focus of social policies and programmes in Pakistan. However, the benefits of these policies and programmes have not been distributed equitably.
The threat of extreme poverty needs a wholesome approach. Learning from the experience of other developing countries where generalised policies did more wrong than good, a separate set of policies and programmes are needed to deal with rural and urban poverty.
Farm-financing can be a useful approach towards rural poverty. There has been a significant increase in micro-financing opportunities for urban population in the recent years. The success of these programmes should be leveraged to reduce poverty in the rural areas by improving standard of living and economic self-sufficiency. Small and easy interest-free loans for farmers working in agriculture, dairy and poultry sectors should be made available.
District administrations can be made responsible for assessing, distributing and recollecting loans. The application process should be simple and efficient. Control mechanisms to ensure fair and transparent disbursement should be inbuilt in the financing system. Participation in farm-related trainings can be incentivised through this programme. Lending to women should be encouraged to follow the international best practices in micro-finance for poverty alleviation.
Mandatory vocational training can deal with the growing unemployment and poverty in the urban areas. A lot of efforts and resources are being spent on increasing the level of education for the poor population of the country. Having graduated from school or college, the educated youth are facing a lot of issues in finding jobs matching their qualifications. In this case they remain a burden on the overall economy with zero output. It is recommended that a mandatory vocational training programme be introduced in the public-sector education system. This will allow the development of occupational skills.
These skills will help graduates find a quick job for personal sustenance till the time they get a job according to their academic qualification. This will also have an impact on small and medium size industries which will now experience some increase in efficiency due to the presence of qualified skilled workers.
These are just a couple of territory-specific policy ideas to target poverty and inequality using specific policies. The objective is to believe that poverty and inequality cannot be generalised. There is a need to acknowledge the fact that these issues are of different nature for people in different regional divisions. And this very basic difference in their nature solicits a unique approach for better and sustainable results.
The writer is a public policy graduate from Carnegie Mellon University.