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Money Matters

Consumption measures

By Shahzada Irfan Ahmed
Mon, 05, 17

POLICY

Poverty is not an absolute term and varies according to different circumstances and scenarios. The huge diversity along several dimensions within Pakistan implies there is no single explanation of poverty and thus importantly no valid single policy intervention to remove it.

There are different ways in which people have been poor, remain poor and will continue to be poor unless public policy and intelligent resources are focused upon poverty reduction taking into account its diversity.

Similarly, the resources and natural wealth of a geographical location do not necessarily have a positive effect on the locals. Instead, it has been observed that there is a pattern of “resource curse” as most

resource rich districts fall in the extreme poverty zones.

Natural gas reserves provide an excellent example in this regard. With 12.5 trillion cubic feet, Dera Bugti alone has had 46.7 per cent of the total gas reserves in Pakistan in 2012. Similarly, with 6.7 trillion cubic feet, Ghotki had more than a quarter of the total gas reserves and Dadu had almost nine per cent of the total gas reserves. Tharparkar had the largest coal reserves in the country. In complete contrast to their resource richness, Dera Bugti and Tharparker are in the Extreme Poverty Zone -1 and Ghotki and Dadu in the High Poverty Zone.

Besides, poverty has a direct link with the low quality of services provided by the civil servants, specially the senior bureaucracy, and the community-based models for social sector development are one of the best in context of countries like Pakistan.

These were some of the results of research studies shared at the Second International Research Conference -From Knowledge to Action– held by Pakistan Poverty Alleviation Fund (PPAF) in April this year. The aim of this conference was to help participating individuals and organisations learn from both successes and failures of poverty alleviation initiatives, while showcasing the work of PPAF and its partner organisations.

It was also an opportunity for participants to examine issues in both a comparative and a global context due to the presence of foreign delegates.

Poverty alleviation has always been on top of the agenda of the respective governments, at least in their policy documents. Different schemes and projects are also launched with a declared aim to target the poor and bring positive change in their lives. These can be in the form of direct subsidies, cash grants, asset transfers, skills development for livelihood and so on.

In this context, it is imperative that a periodical impact analysis of such initiatives is done and the improvement in the lives of the targeted communities as a result of these be worked out. If the results are not satisfactory, it becomes important for the evaluators to identify the impediments and ways to remove them.

The said conference tried to serve these purposes and bring findings of the specially commissioned surveys and research studies in the knowledge of the participants.

The conference titled “From Knowledge to Action” focussed on four main themes: geography and typology of poverty in Pakistan; results from the completion of the PPAF-III World Bank project; latest evidence from international and national poverty graduation approaches; and current/ongoing research that focuses specifically on women and girls.

PPAF is an independent and autonomous institution that invests funds received from international donors, especially the World Bank in social sector and infrastructural development projects, livelihood programmes etc through its partner institutions. These are the funds pledged by the bank to the government of Pakistan.

Since its formation in 2000, the foundation has received three financial disbursements from the World Bank for three consecutive five-year terms.

Samia Liaquat, group head at PPAF, shared at the event that the foundation had had a huge portfolio of microfinance loan reimbursements but now its focus had returned to the poor who fall under the 40 mark on the poverty score card. From now onwards, she says, they will leave the economically active portion of the population for conventional microfinance.

She said Pakistan Microfinance Investment Company (PMIC) had come into being for this purpose which is a major development. So, she says, PPAF will focus on the marginalised poor through asset transfers and livelihoods while PMIC will meet the needs of the better off. She shared that when PPAF started, there was no microfinance sector. At that time there were only 60,000 borrowers and four microfinance

institutions (MFIs). "Today there are 4 million borrowers and 60 institutions."

The lesson in this is that a major focus shall be on the poor who do not have the capacity to avail and benefit from microfinance options. Findings of a study titled "Geography of Poverty in Pakistan" were also received with great interest at the event. The study explained the pattern of prevalence of poverty on geographical grounds.

For example, it mentioned Muzaffargarh as an acute case of resource curse. "With nearly 8,000 gigawatts per hour, Muzaffargarh makes 20 per cent contribution to the total thermal power generation capacity in the country. The district had nearly half of the population poor in 2012-13 and hosted third largest population of the poor."

The study asserts natural resources do not seem to be the drivers of poverty reduction in many of the poorest districts. Partly, the absence of trickle down or trickle across effects is a function of ownership of these resources and the ways in which these resources are allocated for exploration and exploitation. There is hardly any trickledown effect for the locals.

On the other hand, it says, the situation is such because resource exploitation also requires skilled employment using advanced technologies, "which de facto exclude the local, poor, illiterate and semi-literate, under-educated population from these opportunities."

Another observation shared during the presentations was that sustained delivery of public services required an effective devolution and empowerment of local governments. It is a fact that districts farther from provincial capitals are poorer than the ones at a closer distance.

As we know, Punjab has more than half of the population of the country and Balochistan has more than half of the geographic area of the country. Provinces are thus too large administrative units to ensure the effective delivery of public goods and services to everyone and everywhere, it adds.

The geographical location also has a correlation with people's access to state machinery for redressal of their issues. It was observed that poor territories are often far from the main urban centres, thus not the favourite duty stations for the competent civil servants; and for this reason their issues are not properly taken care of.

As the zones of extreme and high poverty require talented administrators to run public affairs, there is a need to create an incentive structure to discourage the concentration of administrative talent within a few urban centres, the study suggests. It is imperative as poverty cannot be tackled without giving the poor easy access to quality service delivery.

With so many lessons and experiences shared at different forums, it is high time that poverty alleviation strategies be revised/modified at micro and macro level to help the poor break shackles of poverty.

 

The writer is a staff member