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World Bank warns food shortages could raise terrorism in Pakistan

KARACHI: A serious food shortages and land inequality could increase social unrest and terrorism incidents in Pakistan, a recent World Bank’s study warns. “In Pakistan, the probability of violent attacks by insurgents, sectarians, and terrorists is found to increase with food insecurity and land inequality,” says the study titled ‘Addressing

By Tariq Ahmed Saeedi
January 22, 2015
KARACHI: A serious food shortages and land inequality could increase social unrest and terrorism incidents in Pakistan, a recent World Bank’s study warns.
“In Pakistan, the probability of violent attacks by insurgents, sectarians, and terrorists is found to increase with food insecurity and land inequality,” says the study titled ‘Addressing Inequality in South Asia’.
It says concentration of landholdings is a norm in rural settlements of the country, wholly acquired through inheritance with purchased land accounting for only 16 percent of all landholdings.
This norm governs the access to public transportation, health, sanitation, electricity, schooling and other services, the report says.
“In Pakistan, land inequality is unambiguously associated with greater access to (public) services,” it says. “(There is) change in the availability of public goods when the share of land owned by the top quintile increases by one percent in Pakistani villages.”
According to the study, quality of teaching in unequal society is because of the wealthy opts out of public goods, for instance moving to private schools.
“Greater inequality reduces the quality of public services when the rich can opt out,” the report mentions.
Comparing a nonmonetary indicator of inequality in South Asia, which is one of the most dynamic regions in the world, the study finds the health status is poor, especially in Pakistan and India.
Infant and under-five child mortality rates are alarming in Pakistan and India since out of every 1,000 child births in the former, 94 die before reaching one year of age and 120 within five years. The figures for the latter are 82 and 117, respectively.
Counting education as another neglected nonmonetary dimension of inequality, the assessment generally notes a wide disparity in public spending on education.
“Public spending tends to be progressive at lower grade levels but regressive at secondary and especially tertiary levels,” it says. “Equity requires committing additional resources to disadvantaged groups to offset their otherwise more limited access to basic services.”
Social protection spending is largely progressive across the region, the study says, appreciating the achievements of the world’s largest public works program in India and the income support program of Pakistan.
“However, the coverage of social protection programs in South Asia is partial, their targeting is generally poor, and the amount of resources they make available to those who need them the most is often too modest,” it says.
“Across all countries in the region, 60 percent to 80 percent of the beneficiaries are not poor, and they receive between 50 percent and 80 percent of the funding.”
As far as the energy subsidies are concerned, according to the finding, the wealthy turns out to be the biggest beneficiary.
The report says the energy subsidies eat into four percent of GDP in Pakistan and Bangladesh as against two percent in Sri Lanka and India.
“In the case of Pakistan, the poorest 40 percent of households used to receive less than 30 percent of total electricity subsidies, while the richest 20 percent received close to 40 percent of total subsidies,” it says.
Despite some improvement, it adds, “electricity subsidies remain regressive”.
While subsidies are massive government tax collection is not impressive. The tax receipts are much below the actual potential, while only a small portion of the registered taxpayers are filing their income tax returns.
“This situation clearly points to weak tax enforcement by the Federal Board of Revenue,” the report says.
It adds that poor in Pakistan pay almost as much tax as the middle class.
The low-income group has developed its own coping strategies to defy an economic shock, like food price inflation. Selling an agriculture asset is one of them, which is tantamount to compromising “long-term ability to earn an income”.
The report adds, “In contrast, the wealthiest groups are much less likely to use these mechanisms.”
The World Bank says South Asia has still the moderate levels of inequality based on standard monetary indicators.
However, “Despite not being the poorest region in the world, the region has some of the worst human development outcomes worldwide,” it adds.
Inequality is one of the seven debating issues in the annual four-day meeting of World Economic Forum in Swiss Alpine resort of Davos.
The gathering started on Wednesday through 24th January. It is not the first time that this theme is selected to invite attention of the world leaders for addressing the inequality. For several years, the rally has been discussing this, but the progress is said to be ‘disappointingly slow’.
Anti-poverty charity Oxfam has already forewarned if the gap between rich and poor is not narrowed one percent best-off will have half of the world’s wealth by the next year.