Poverty tentacles spreading over urban centres

LAHORE: Planners must revisit their approach towards poverty, which is not restricted to rural areas but also spreading equally in the urban centres.

Economic experts said increasing the funds for social welfare programs highlighted the ever-growing disparities between the poor and the rich. Some considers subsidies as a growing burden on the exchequer and instead advocates accelerating growth to reduce poverty. Both, however, conveniently ignore the reality that poverty today is fundamentally different from the poverty three decades back.

We have to recognise that poverty is dynamic in nature. Sometimes, poor households move out of the poverty and not non-poor fall into poverty over a period of time. This shows that unlike the past when poor families remained poor for generations, in modern times they have now chance to wriggle out of poverty through hard work and luck. Similarly, the non-poor may become poor due to the accident of life, caused by the occurrence of disease, disability and unemployment. Once this reality is recognised the planners would be forced to transform their mindset.

Another problem in dealing with poverty is that politicians tend to cover the maximum number of people from the limited resources available. This dilutes the support that is provided to the poor. The disbursed amount does not have much impact and provides nominal relief to the poor household. Take the case of Benazir Income Support Program, a poor household, comprising on an average 6.5 family members, is provided Rs1,500/month or Rs18,000/year. This comes to Rs2,769/year or Rs237/month. All those earning minimum wage are entitled to this support. There are millions of workers employed in the informal sector that earn half the minimum wage. Many of them are sole bread earner for their families. It would have been more prudent, had these low wage earners been targeted and provided larger monthly support of e.g. Rs3,000-5,000/family. This will certainly provide some relief to these families.

Similarly, the subsidised wheat flour provided, during the month of Ramazan, is meant for both poor and rich. A better way would be to restrict these supplies to the poor only. The Benazir Income Support Program’s (BISP) card holders could be provided subsidised wheat flour on BISP card every month. It is absurd to flood the market with subsidised wheat flour for one month and let poor buy this commodity at market rates in the remaining 11 months.

Another problem in the current pro-poor policies is that some measures adopted with good intention have unintended consequences. Many public sector entities and a large number of private sector enterprises provide their workers with health insurance cards. These cards entertain the holders or their families only when they are hospitalised. Normal ailments requiring treatment without admission in the hospitals are not covered. 

Several poor ignore their health issues where hospitalisation is not required as they cannot afford to get treated at the private clinics. As a result, the minor health issues blow up sufficient enough to land them into a hospital.

The planners should come out with products that facilitate workers even in the normal ailments. What we need is to address the genuine problems of the poor. Cosmetic measures are good for public consumption but of no use for the poor. The challenge for the planners is to devise products for those in need. Finally, it should be ensured that assistance provided to the poor should be meaningful.

Planners should start with simple and limited goals while devising pro-poor programs.  It would make sense to divide social safety net policies into three categories: provision of back-up manual work at below market wages to those who are able to work; provision of insurance against catastrophic events such as health-care emergencies or crop failure that push people into poverty; and third provision of cash support, e.g. in the form of old age pension, to people who are no longer able to work.