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Monday June 17, 2024

Multidimensional poverty index at 39.5pc in Pakistan: report

By Mehtab Haider
May 25, 2024
A representational image showing a young girl carrying an infant. — Reuters/File
A representational image showing a young girl carrying an infant. — Reuters/File

ISLAMABAD: The Multidimensional Poverty Index (MPI) in Pakistan has been estimated at 39.5 per cent, indicating that more than one-third of the country’s population is living below the poverty line.

The latest study done by Nasir Iqbal of the Pakistan Institute of Development Economics (PIDE) and Head of Macro Policy Henna Ahsan revealed that the incidence (headcount ratio) of multidimensional poverty in Pakistan is 39.5%.

This shows that more than one-third of the country’s population is multidimensional poor, facing deprivation in health, education and standard of living. This means a multidimensional poor person in Pakistan on average is deprived of nearly half of the weighted indicators used in MPI calculations. In other words, each multidimensionally poor person in Pakistan on average is deprived in nearly half of the 15 weighted indicators used for MPI calculations. Pakistan’s national MPI, which is the product of the percentage of poor people and the average intensity of poverty, stands at 0.191. This indicates that poor people in Pakistan experience 19.1% of the deprivations that would be experienced if all people were deprived in all indicators. Furthermore, the incidence (headcount ratio) of multidimensional poverty in urban areas is reported to be 17% while in rural areas, more than half of the population (51%) is multidimensional poor.

In terms of the percentage contribution of each of the 15 indicators, the largest contribution comes from year of schooling (33.15%) followed by health facilities with 18.95% and school attendance with 10.7%. When aggregating the indicators by dimensions, the largest contribution is due to education at 49.4% followed by standards of living at 26.5%. At the same time, deprivation in health with 24.1% has the lowest contribution among the dimensions. Multidimensional poverty has slightly increased in 2019-20 compared to 2014-15. The percentage share of multidimensional poor has increased from 38.6% in 2014-15 (the last time MPI was calculated) to 39.5% in 2019-20. This marginal increase signifies a deviation from the historical pattern of multidimensional poverty in Pakistan.

Over the last 15 years, multidimensional poverty in Pakistan has consistently declined. The trajectory from 2014-15 to 2019-20 however is in the opposite direction. For the first time in 15 years, the population share of the multidimensional poor in the country has increased. The regional spread of MPI informs that primarily the increase has occurred in urban areas of the country. The headcount ratio in the urban areas has increased from 9.5% in 2014-15 to 17.3% in 2019-20, exhibiting almost 50% increase in urban poverty. Even though multidimensional poverty in Pakistan is mostly concentrated in rural areas, its share is in consistent decline. Rural poverty has dropped from 54.2% in 2014-15 to 51.9% in 2019-20.

Among the four provinces of Pakistan, multidimensional poverty is the highest in Balochistan. According to the data, 70% of the population in Balochistan are identified as multidimensionally poor. This is followed by 48% in Khyber Pakhtunkhwa and 45% in Sindh. Punjab has the lowest incidence (headcount ratio) of multidimensional poverty in the country. With 30% of its population identified as poor, it is the only province that has a lower headcount ratio than the national average of 39.1%.

Except for Sindh, multidimensional poverty has decreased in the provinces. For instance, in Balochistan, the headcount ratio has dropped from 72.4% in 2014-15 to 70.5% in 2019-20, in KP from 49.1% to 48.8% while in Punjab, the share of multidimensional poor decreased from 31.0% to 30.4. In Sindh, the headcount ratio increased from 43.1% in 2014-15 to 45.2% in 2019-20.

Multi-dimensional ICT poverty: According to the estimates, 44.1% of Pakistan’s population is identified as multidimensional ICT poor. This shows that around half of the country’s population faces acute deprivation in availability, access and affordability of ICT services and severely lack digital literacy. The intensity which shows the share of deprivation each person experiences on average is 43.7%. This means that a multidimensional digital poor person in Pakistan on average is deprived in 43% of the weighted indicators used in the MPI calculations.

The ICT MPI value for the year 2019-20 stands at 0.191, showing that on average the population identified as multidimensional poor in Pakistan is deprived in 19.1% of total deprivation that would be experienced if all people were deprived in all indicators. Digital poverty in Pakistan is predominantly concentrated in rural areas. The incidence (headcount ratio) shows that more than half (53.10%) of the rural population is multidimensional poor. In contrast, the situation in urban areas is comparatively better. Here, the ICT poor make up 28.5% of the total urban population.

Multidimensional ICT poverty in Pakistan is mainly driven by availability of ICT. At the dimension level, ICT availability makes up more than half of the ICT MPI with 55.6% contribution. ICT literacy and access has the second highest contribution with 30.7%, followed by ICT affordability and access. With 13.7%, deprivation ICT affordability and access have the lowest contribution to national MPI among the three dimensions.

At the indicator level, the use of computers with 22% has the highest percentage contribution to the ICT MPI. This is followed by basic ICT items for communication, modern ICT items and internet access with each contributing 15%. The third highest contribution to the ICT MPI among the indicators is affordability/access of ICT for communication with 10%.

Provincial spread of multi-dimensional ICT poverty: Among the provinces, Balochistan has the highest prevalence of multidimensional digital poverty. According to the data, 59.8% of the population in Balochistan is identified as multidimensional ICT poor.

This is followed by 43.6% in Khyber Pakhtunkhwa and 47.9% in Sindh. Punjab has the lowest incidence (headcount ratio) of multidimensional ICT poverty in the country. With 37.7% of its population identified as poor, it is the only province that has a lower headcount ratio than the national average of 44.1%.