The question of human development

August 2, 2020

Covid-19 will make poverty alleviation more difficult; particularly under chronic inequalities in income, health and education

More than 32 million people in Pakistan have been lifted out of poverty since 2001. The poverty headcount has also consistently gone down. Human Development Index (HDI) - an approach to poverty measurement across the health, education and standards of living dimensions – also categorises Pakistan as a medium human-development country. However, despite steady progress on health, education and standards of living, the income (and consumption) inequalities in Pakistan have not improved over time.

There are many ways to measure income (and consumption) inequality with percentiles being the most common one. Under this method, all households are ranked by income, from lowest to highest, and then divided into 100 groups with equal numbers of people to allow for measuring the distribution of national income among these groups compared to the total. For example, the first 40 percentiles represent the bottom 40 percent and the last 40 percentiles reflect the top 40 percent of national income distribution. Income (and consumption) inequality is, thus, measured by comparing what share of the national income (or consumption) is earned (or consumed) by each percentile. In Pakistan, the income shares of top 40 percent and bottom 40 percent in national income distribution have not significantly changed since 1987. A study by Oxfam analysing the consumption inequality in Pakistan from 1990-91 to 2012-13 concludes that consumption share of top 20 percent in national income distribution has remained five times higher than the consumption share of bottom 20 percent from 1990-91 to 2011-12. This striking gap between consumption shares of the richest 20 percent and the poorest 20 percent highlights the enormity of inequality and its manifold challenges in the country.

Post Covid-19, the progress in poverty alleviation efforts is most likely to suffer; and with poor becoming the poorer, the existing inequalities would become even more striking. Ironically, HDI has reported an increase in Gross National Income (GNI) per capita by 62.4 percent between 1990-2018 in Pakistan. Despite that, the national income distribution has remained skewed. The theory of change for improved GNI per capita posits that more income would translate into better educational and income-generation opportunities, ultimately leading to reducing income inequalities. However, even before a shock like Covid-19, this theory has not worked well for Pakistan. The current pandemic and its impact on the poor certainly indicate the ill-preparedness of economic and social systems with respect to an effective shock response while the existing divide between the rich and poor continues to make relief and recovery efforts more complicated.

Regional inequalities between urban/rural areas as well as big/ small cities have been omnipresent, sustaining disparities between quality of healthcare within national boundaries.

Let’s take the case of education, for example. Between 1990 and 2018, there has been an increase of 2.9 years in average years of schooling for adults in Pakistan. The expected years of schooling for children of school-entering age has also increased by 3.8 years. While these indicators reflect that both adults and children can now benefit from better educational opportunities, access to education is still not a level-playing field and depends upon many factors including financial resources of the parents. Public education system in Pakistan has long suffered from many problems which has opened avenues for private sector to expand. There has been a phenomenal rise in expensive private schooling in Pakistan since 1990s and this “dualistic’’ education system has enhanced the existing social and economic inequalities. While such private institutions are expensive, the quality of education they impart is certainly better than public schools. The income inequality has, thus, inevitably limited the prospects of quality education for those belonging to the bottom strata of national income distribution.

Variations in infrastructure are another obstacle to educational equality. Since much of the development in infrastructure has taken place in and around metropolitans and urban centers, better educational opportunities are also centred around those areas. Poor internet connectivity harming online education in Gilgit-Baltistan and lack of higher education facilities in parts of KP and its merged areas are just a few examples. Such disparity in infrastructure implies that educational opportunities significantly depend upon where one is born, unless one has financial means to afford residential education opportunities.

The situation is no different in health sector. The government expenditure on health as a percentage of GDP has been consistently low in Pakistan while the population has steadily increased. Health care expenditure in provincial budgets is also more focused towards keeping the facilities running rather than development spending. In the absence of new facilities to meet the demand of rising population, quality and availability of health services continue to be greatly unequal. Shortfall in public services as well as challenges relating to structure, organisation and administration have provided an opportunity to private sector to expand, which has created sharper disparities in the healthcare access among the rich and the poor. Even in Covid-19 response; when public health facilities were straining under peak caseload in metropolitans, their private counterparts not just ensured quality in-patient health care but also offered expensive home monitoring programmes for those who could afford. In addition to gaps in spending and structure, regional inequalities between urban/rural areas as well as big/small cities have been omnipresent, sustaining the disparities between quality of healthcare within national boundaries.

Covid-19 has underlined huge challenges for those at the bottom strata of national income distribution. In addition to a greater unequal income, they will also suffer from unequal health and education opportunities. While virtual education promises safety from the pandemic, the impact will be different for those who cannot afford the comfort of a laptop, a reliable internet connection and a peaceful corner at home. And while isolation and social distancing become the new and the ‘safest’ norm, the realities are going to be harsher for those living in joint houses in rural areas, dependent upon a basic health unit which might be located far from home, and deficient in necessary facilities in the hour of need. Overall progress in human development cannot translate into more equal income distribution per se, unless the non-income dimensions like health, education and regional infrastructure are fairly shared by different income strata in an income distribution. If this does not happen, shocks like Covid-19 will continue to push the poor deeper into greater risks and vulnerabilities.

The writer is a development practitioner with experience in poverty alleviation and emergency response in Pakistan. She tweets @rafia12361

The question of human development: Covid-19 will make poverty alleviation more difficult