[Pakistan] Govt claims 10.6 per cent decline in poverty

from DAWN

ISLAMABAD, June 4: Poverty and unemployment have reduced significantly for the first time in Pakistan’s 57 years of history, according to the Pakistan Economic Survey 2005-06 released here on Sunday.

That is the statistical truth, endorsed by international financial and development agencies, insisted by Prime Minister’s Adviser on Finance Dr Salman Shah at a joint news conference with State Minister for Finance Omar Ayub and Adviser to the Ministry of Finance Dr Ashfaque Hasan Khan.

“Poverty has declined by unprecedented 10.6 percentage points”, he said referring to the survey which claimed that head-count ratio — percentage of population living below the poverty line — has fallen from 34.46 per cent in 2000-01 to 23.9 per cent in 2004-05.

The percentage of population living below the poverty line in rural areas, has declined from 39.26pc to 28.10pc while those in urban areas, it has declined from 22.69 percent to 14.9 percent in this period.

The reduction in poverty has been achieved by the government over the last five years by spending Rs1,332 billion on poverty related and social sector programmes to cater to the needs of poor and vulnerable sections of society.

The strong economic growth, the survey said, has created employment opportunities and, therefore, has reduced unemployment. According to the Labour Force Survey 2005 (first two quarters), since 2003-04 and until the first half of 2005-06, 5.82 million new jobs were created as against an average of creation of 1-1.2 million annually.

“Consequently, unemployed rate which stood at 8.3 per cent in 2001-02 declined to 7.7pc in 2003-04 and stood at 6.5pc during July-December 2005”, it said and added that the rising pace of job creation is bound to increase the income levels of the people. The information technology sector alone has created 114,737 new jobs in 2005-06.

Responding to a question, Dr Ashfaque Hasan Khan said that a number of international organisations especially the World Bank, UNDP, Asian Development Bank (ADB) and the Department for International Development (DFID) of the United Kingdom have “authenticated” the labour force survey which determined the poverty reduction and cut in unemployment rate in Pakistan.

He denied that the government had firmed up the survey by calculating it on 2150 calories per day to show the cut in poverty. “It was based on 2350 calories per day and cannot be changed by the government or any individual”, Dr Ashfaque clarified.

The Household Integrated Economic Survey (HIES), a component of Pakistan Social and Living Standards Measurement (PSLM), provides important data on household income, consumption expenditure and consumption patterns at national and provincial level with rural urban breakdown.

In reply to a question, Dr Salman Shah said that poverty was still very much there and was a challenge for the government. “We need to achieve the UN Millennium Development Goals (DMGs) about poverty”, he said.

The fight against poverty represents the greatest challenge of our times, the survey conceded. Considerable progress has nevertheless been made in different parts of the world in reducing poverty. The proportion of people living in extreme poverty on global level fell from 28 per cent in 1990 to 21 per cent in 2001 (on the basis of $1 a day).

The recent trends in global and regional poverty clearly suggest one thing and that is, that rapid economic growth over a prolonged period is essential for poverty reduction.

At the macro level, economic growth implies greater availability of public resources to improve the quantity and quality of education, health and other services. At the micro level, economic growth creates employment opportunities, increases the income of the people and, therefore, reduces poverty. Many developing countries have succeeded in boosting growth for a short period. But only those that have achieved higher economic growth over a long period have seen a lasting reduction in poverty East Asia and China are classic examples of lasting reduction in poverty.

“Macroeconomic stability is therefore, key to a sustained high economic growth”, the survey said. Although extreme poverty on global level has declined, the gap between the rich and poor countries is increasing,” the survey said.