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April 12, 2019

Reducing poverty

Editorial

 
April 12, 2019

Will the prime minister’s Ehsas programme be able to turn Pakistan into a welfare state? With PM Imran Khan issuing a detailed policy statement on the initiative, many questions about what the government is thinking have been answered. The one crucial thing to understand is that, while the programme will be coordinated via a new Ministry for Social Protection and Poverty Alleviation Coordination, its success banks on all government departments partaking in the programme. In principle, the programme includes 115 policy actions which are to be taken under four heads: addressing elite capture, creating safety nets, improving livelihoods, and human capital development. Although detail remains scant on how to genuinely address the issue of elite capture of resources, there are proposals on how to address the other three issues. In itself, the committee formulating the programme has made an extensive list of proposals, which appear to gel well on paper. This makes the programme bold and ambitious, but there are two crucial questions that must be asked: how much of it will be implemented? How does it sit with the current government’s overall policy arc?

The issue of the overall economic policies of the PTI government needs to be addressed before a welfare programme is implemented. There is high inflation, rising tariffs, a depreciating currency, and falling growth rate. Moreover, the public-sector investment programme has been massively shrunk, which comes with a major reduction in jobs created via the public sector. The government has also been demolishing shops and poor housing across the board, which sits uncomfortably with promises to provide security of tenure to small farmers and informal housing occupants as well as promises to provide space to set up small shops. Data and technology are catchwords that translate into new ways of including and excluding persons from any state benefits. In principle, exclusion is not a feature of a welfare state. Access to digital services, brands and microcredit are strategies that both give and take from the poor, depending on how they are implemented. The tone of the programme on the issue of labour rights is correct, but it remains to be seen whether there is any serious movement in this direction.

The trouble is that, on paper, much of what the Ehsas programme proposes has already been attempted – or at least already exists in government policy documents. Some of the strategies are good; some show mixed results, while some others do not work. We must remember that Pakistan’s economy works very well for the richest – and does not work at all for the poorest. It has been rare to see massive reductions in poverty in world history without seeing a rise in wages. Dignified wages are crucial to alleviating poverty, and this issue gets limited attention in the Ehsas programme. That, coupled with fixing the general direction of the economy, will be crucial for a serious attempt at poverty reduction in Pakistan to work.