LAHORE: Pakistan is one of the few countries in the world that have kept growing even in the most adverse economic conditions, said the World Bank in a report.
The Bank, in the report, said even in the times of distress the growth in GDP continued, though at a slow rate.
Addressing inequalities and poverty should be the main concern of the government however, as constant rise in inequalities is testing the limits of tolerance of those that have been denied fair share in growth.
Inequality may look like a global phenomenon, but there are few exceptions. Fast growing countries reduced inequalities. Brazil is one example, referred frequently by the World Bank. Inequalities in developed economies are different from inequalities in the low income countries. In developed world, hardly one to two percent of the population is poor; but in economies like Pakistan where almost 40 percent are classified as poor, increasing inequality really matters.
Poverty reduction requires both a rapid pace of growth and a more pro-poor pattern, which implies a reduction of the inequalities that restrict the poor people from sharing the opportunities created by economic growth.
If one solely focuses the period of the early 1990s, there were signs that a positive correlation was emerging between rising inequality and economic growth. It appears that the recent growth processes seen in many reforming economies, including Pakistan have put upward pressure on inequality. Growth has accompanied falling inequality in some countries, but Pakistan was not in the list.
Unless there is an appropriate change in the distribution, people who have a larger initial share of the pie tend to gain more share when the pie expands. Among growing economies, the median rate of decline in the $1.9 a-day headcount index is only around one percent a year for those countries for which growth came with rising inequality.
In contrast, poverty declined around 10 percent a year among countries where growth led to falling inequality. Either way, poverty tends to fall, but at very different rates. Equitable growth is the fastest way to reduce poverty.
It would be wrong to blame globalisation behind growing poverty. Globalisation may be a factor, but seldom is the main cause behind the poverty. The extent and distribution of world poverty stems from a lack of access to resources and opportunities. Also, dependencies, corruption and other governance failures, and poor people's lack of rights in the face of traditional local power structures, as well as the lack of education and health care, are all key factors behind poverty and hunger.
An analysis of the links between globalisation and poverty must take the dynamics and volatility of globalisation processes into account. Since majority of the poor live in rural areas and depend on labour or earn their living as small farmers the effects of globalisation on employment and small-farm competitiveness are central while its impact on poverty is determined.
Government must also realise that in previous two elections the ruling parties suffered defeats probably because poor electorate refused to wait for the long-term solutions, such as the economic progress that globalisation offers. Overcoming poverty through economic growth alone would require decades, even with a high growth rate. To defy the time issue and to cope with the emergencies, social policy is needed. This regime would have to come up with a social policy aimed at mitigating the miseries of poorest of poor.
Potential to decrease inequalities in Pakistan is much higher than all other economies. We have largely excluded our fair gender from the economic stream.
Gender inequality is a common problem in all the developing economies, but gender discrimination in Pakistan is highest in the region. There has been an increased participation of women in economy in Bangladesh, India and Sri Lanka. Their economies are moving at much higher pace than Pakistan.
Women are an untapped source for stimulating economic growth and promoting social development. This is particularly true in Pakistan, where women are often systematically deprived of an equal access to social services as well as to physical and social capital.
Women empowerment through improving living conditions and enabling them to actively participate in the social and economic life of the country may well be the key for long-term sustainable development.