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Friday March 29, 2024

Food inflation affects more than 80 percent Pakistanis

By Mansoor Ahmad
May 25, 2018

LAHORE: Food inflation impacts a majority of the people living in Pakistan, as more than 80 percent of them earn less than $2 per day.

The richest segment of society spends 10-15 percent of its income on food. Middle class consumes 30-40 percent of its income for food, while poorer segments spend 70-80 percent on food. Poor are more vulnerable than the affluent because they spend most of their total income on food. When food becomes expensive they have to curtail other essential expenses to save themselves from starvation.

The World Bank has portrayed poverty as pain. “Poor people suffer physical pain that comes with too little food and long hours of work; emotional pain stemming from the daily humiliations of dependency and lack of power; and the moral pain from being forced to make choices such as whether to pay to save the life of an ill family member or to use the money to feed their children,” it documents.

As poor consume bulk of their income for food they feel more stress during the fasting month as food inflation reaches its peak.

Poverty though is not limited to Ramazan. It prevails through generations and round the year. Research reveals that large numbers of people living just above poverty line continue to fall and come out of poverty during their lifetime.

Poor need empowerment that provides the ability to advance goals and values. For this government needs to focus on appropriate policy that promotes growth, as it benefits the poor. Unfortunately this has not happened in Pakistan.

The only way to reduce poverty is through inclusive growth particularly in turbulent times like the one being faced by Pakistan. Nations have rebuilt themselves from ashes by including each segment of the society in nation building.

Pakistan can join the developed world by redesigning its policies according to its national interest. First and foremost the economic managers of this country must realise that the quality of institutions matter.

Studies by World Bank reveal that political stability and the rule of law are associated with growth but not necessarily with poverty reduction. On the other hand, enhancing civil liberties and political freedom are linked with poverty reduction but not necessarily with growth.

Poor women are vulnerable to abuse and violence in the home, when widowed, and in the workplace.

Men, particularly young men, are more likely to be picked up by the police. Corruption breeds poverty. If corrupt officials demand bribes, it means even basic services are put beyond the poor people’s reach, which makes them feel voiceless and powerless.

It can also impose costs on businesses which have the same effect as taxation, and tend to be most difficult for small and poor entrepreneurs to avoid. A large number of poor in Pakistan live in the rural areas where comprehensive rural programmes are needed to develop agriculture. Pakistan needs research and development in agriculture sector. Studies by Indian government reveal that additional government spending on agricultural R&D and extension has the largest impact on production growth, with a cost– benefit ratio of 13; it also leads to large rural poverty-reduction benefits.

Additional government spending on education has next largest impact in reducing rural poverty, largely because of the increases in non-farm employment and rural wages that it induces. Finally, public investment in irrigation has an impact on agricultural productivity similar to that of education investments and only a small impact in reducing rural poverty.