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May 13, 2021

Human development

There is now a well-established critique that GDP alone does not capture human welfare quite well on its own. There is a need for a broader canvas to convey the meaning of people-centred development. Thanks to renowned Pakistani economist Dr Mahbub-ul-Haq, we have been seeing the UNDP Human Development Reports since 1990 based on the Human Development Index that ranks countries in the world on the basis of their performance on social indicators.

Dr Hafiz Pasha was the lead author for the UNDP’s Pakistan National Human Development Report (NHDR) to flush out all the possible aspects linked to human development and inequality. What a riveting and delightful report!

Starting with why it is important to study inequality, then proceeding to measure inequality, measure regional inequality, flush out special measures of inequality, quantify political economy of inequality, analyze governance and institutional capacity to address inequality, probe people’s perceptions of inequality, study the impact of Cvoid-19 on inequality and growth, to giving a way forward the NHDR is truly comprehensive. Due to space constraints, we refer to insights only in the first part of the report with a hope that subsequent article/s would capture the research of part two, three and four of the report.

The NHDR spells out inequality right in the beginning, “The concept of inequality is based on disparities in assets, income, status, education, health, rights, and other opportunities, either due to discrimination at the social level on the basis of gender, religion, caste, or other characteristics, or the manipulation of policies by powerful groups or individuals.”

Right to equality is both enshrined in the constitution as well as in the Sustainable Development Goals. Power, people and policy are the three main drivers of inequality in Pakistan as per the NHDR 2020 framework. Pakistan’s very influential groups work the system of privileges to their advantage by concentrating the country’s resources in fewer hands and increasing inequality.

As far as people are concerned, those belonging to the marginalized gender, race, caste and religion are discriminated against by others. Therefore, it is crucial that no one is discriminated against if one were to push for equality.

The third driver of inequality, policy, examines the mechanisms and systems that are not effective or even violate social justice principles. The report spells out a policy reforms agenda to change laws and policies to make them more equitable.

The report lays emphasis on studying the rate of growth of real per capita of the bottom 40 percent of population in line with one of the SDG indicators. Between 2001 and 2008 in particular (during the Musharraf era), and to some extent also from 2008-2010, the rate of growth of the real per capita income of the 40 percent belonging to the poorest strata was less than the overall income growth of the population of Pakistan; inequality increased in this otherwise high growth period.

You need the growth rate of per capita income of the poorest to be more than the overall income growth of the population for them to experience a real increase in their incomes. It happened from 2011 to 2019 (during democratic governments’ tenures). In this period, the economy grew slowly but incomes of the poorest 40 percent grew faster than the overall population. Particularly from 2015-16 to 2018-19, yearly growth in the income of the total population went down and the incomes of the poorest 40 percent went up.

It shows income inequality increases in the national high growth periods due to lack of inclusivity. Moreover, authoritarian governments may dwell more on achieving overall national high growth and not show concern on the distribution of growth, and democratic governments may focus more on distribution.

To illustrate inequality concretely, it might suffice to state that 9.9 percent of children between the ages of 10 and 15 years are employed as child labourers. Almost 60 percent of women employed are engaged in marginal occupations. Almost 53 percent of all workers are not even paid the minimum wage. There is income inequality, inequality in consumption spending, wealth inequality. The report has specifically studied the relatedness of inequality to the prospects of the rise of the middle class. It has also looked at the urban-rural divide and regional inequality between provinces.

In 2018-19, Punjab scored highest on the Inequality-adjusted Human Development Index (IHDI) with a score of 0.535, followed by Sindh, Khyber Pakhtunkhwa, and Balochistan.

Balochistan scored last on the IHDI with a value of 0.447. However, in terms of difference between the Human Development Index (HDI) and IHDI – to gauge the suppression of human development due to inequality – Sindh is the worst, followed by Punjab, Balcohistan and Khyber Pakhtunkhwa.

As far as the special regions of Pakistan are concerned, Kashmir and Gilgit-Baltistan are much more developed than former Fata. The erstwhile tribal areas lag behind on all indicators of human development than the national average.

The report has also flushed out in detail the Child Development Index, the Labour Development Index, and Gender Development Index. These various indices have regional variations also covered and provide very useful reference point to examine various aspects of inequality.

Lots of work, particularly quantitative work, has gone into writing this report. While capturing some aspects of the report in today’s article, it was a hard decision what to include and not include from a genuinely rich research work. Though certain structural qualitative issues such as the historical civil-military imbalance in the country that continues in one form or another has not been explicitly discussed in the report. However, one understands this partial omission as such structural analysis might be beyond the mandate of the UNDP.

The writer is an Islamabad-based social scientist.

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