The politics of poverty

As if the plethora of commissions, advisory councils, task forces and other ivory tower get-togethers created since the inauguration of the PTI government were not enough, we have a new one on our hand in the shape of the Poverty Alleviation Coordination Council (PACC).

Given that we have a hung parliament and a divisive society, creating this council is the best way to resurrect the politics of poverty in the country. Moreover, critics would see it as undermining and sidelining the powers of the already existing supra body such as the Inter-Provincial Coordinating Council (IPCC), which is a clearing house of all provincial coordinating issues and programme. Probably it is a knee-jerk reaction of the government to deflect the approaching inflation and its likely impact on poverty rather than a well-thought-out move that takes into account the ongoing difficult political and fiscal environment leading to an almost moribund IPCC.

If nothing else of the previous two governments is commendable, at least they didn’t exploit the falling poverty in the country for political gains, and kept it as a non-issue at the national level after establishing the BISP. With the PACC’s establishment, it will get into additional quagmire of inter-provincial coordination challenges. At the same time, the above arguments should not be construed as being oblivious to the issue of poverty. Of course, there is extreme, chronic and inter-generational poverty and pockets of poverty in the urban and rural areas of Pakistan but recognising it in the form of a council is not helping matters. Why an ivory tower council will face inherent challenges in meeting its objectives is obvious from a few factors.

First, coordination among institutions is the biggest challenge in the country. I would even go to the extent of saying that even if effective coordination could be established among individual organisations’ head, regional and local offices, it would transform the country’s governance leave alone the coordination among organisations, which work in silos with their own agenda’s, egos and turf wars. For example, it will be interesting to see how BISP and Pakistan Bait-ul-Mal (PBM) can heal old wounds, caused by the establishment of BISP, despite the PBM being a favourite of multilaterals for income-support intervention at the time of the PPP government.

In this age of IT, all that coordination requires is a real-time electronic information exchange system and an effective communication mode (like Skype) set up to hold meetings among organisations to achieve a common goal. Since its establishment, BISP is still struggling with building a common database of beneficiaries of all organisations.

In labour, the coordination role of the council will face another structural challenge. Although labour is devolved to the provinces, the EOBI and the WWF both remain with the federal ministry. If provinces have a fundamental disagreement with this arrangement, how can the council bring about effective coordination to resolve the many issues facing working and pensioner employees, even if their pool is fairly small. In addition, the EOBI has sizeable asset holdings which it may be reluctant to open for scrutiny of other organisations to contribute towards poverty alleviation.

Second, each of the organisations involved in income/asset support of various kinds tackle different aspects of multi-dimensional poverty. Without solid and reliable evidence at the micro-level, the political and bureaucratic clout of each organisation will underpin which aspect of poverty alleviation – income, physical, human and financial asset building or vulnerability – is pushed in the council’s agenda for coordination and consensus. Prioritising among these competing demands will introduce friction among the organisations.

Third, a bigger impediment in the smooth working of the council will be the political, bureaucratic and ideological dynamics at work for consensus on a single national, provincial, district-wide benchmark for poverty metric. At the policy intervention level, poverty cannot be tackled or monitored without substantial, detailed, credible and transparent benchmark evidence and its causes at the district and sub-district level. Its measurement is fairly technical for politicians and consequently gets politicised very easily. Consensus on a single metric is likely to open a Pandora’s box among the gurus themselves due to competing measures of poverty: basic needs metric, the Multidimensional Poverty Index (MPI), BISP’s Poverty Score card, plus the ‘various cottage industry’ estimates. Among them, the basic needs metric is sensitive to short-run monetary, fiscal, exchange rate and re-distributive policies. The MPI is a long-term and slow-moving measure dependent on gradual improvement in the social indices. The BISP metric is also a medium-term measure structurally dependent on ownership of physical assets.

Politically, the poverty incidence based on the Basic Needs Measure is advertised openly if there is an improvement, and suppressed or delayed if it worsens during the political cycle. Unfortunately, there is no unique measure or single number within a measure which satisfies everybody as each measure has strengths and weaknesses. The reliability and coverage (spatial as well as household) of data underlying these indices is another challenge that will confront the council members.

The Basic Needs approach and the MPI rely on data from memory recall of the single respondent. In the former metric, intra-household expenditures are under-estimated, while the BISP household measure, although partially (excluding financial assets, jewellery) asset-based is downward biased in the expectation that lower poverty score increases the chances of a household being included in the list of beneficiaries.

Fourth, the dynamics of coordination for poverty alleviation at the provincial level are also complex. Different metrics have different payoffs for each province. It will be interesting to watch the NFC deliberations with respect to the poverty metric adopted for resource distribution formula. Between 2004-05 and 2014-15, both these metrics show a lower incidence of poverty in all the provinces, but a faster decline in Punjab and Sindh. But disparities between urban and rural Sindh may politically compel Sindh to go for the MPI metric; but for showcasing political performance, the Basic Needs measure is more attractive.

In the end, let’s hope that the PACC will not be used as a substitute for an impartial, rigorous and independent estimation of poverty incidence based on the HIES results expected by the end of 2019. Let us hope that this council may not suffer the same fate as some other high-powered institutions in the past.

The writer is a freelance contributor.