Poverty in Pakistan: many reasons, few solutions

from New Kerala

Pakistan, a nation of 160 million, has in real terms 34 percent of its population - much higher than the government's figure of 24 percent - living below the poverty line, but precious little seems to be done to address the imbalance.
Even more frightening is the fact that government figures do not recognise the growing urban-rural divide.

The issue is directly linked to the country's tax structure, with the majority of revenues going into the coffers of the federal and provincial governments, forcing the local bodies that have to wrestle with the poverty issue to plead with these authorities for more money.

"The time-consuming red tape involved in this process has a direct bearing on the lack of progress in poverty reduction at the grassroots level," The News said Tuesday.

"Bureaucratic battles over turf have added to the problem, with local bodies' officials and their provincial counterparts squabbling over just which agency - local or provincial - has the authority to do what and when and how.

"Islamabad, too, has a habit of jumping into the fray, making the problem of jurisdiction more acute. All this needs to change, and fast, if the issues of good governance and poverty reduction are to be seriously addressed," the newspaper noted.

According to The News, "some controversies in this country never seem to die down and are always with us. A case in point is the controversy over the issue of what constitutes the real level of poverty in Pakistan. The debate over this issue has been going on for years".

The government says that the number of people living below the poverty line has dropped significantly in recent years from 34 percent of the population in 1999 to 24 percent today.

Independent analysts, however, claim that the poverty level has not gone down and that the number of people living below the poverty line is still around 34 percent - and that translates into more than 38 million people.

As in the case of many other developing countries, the government uses an income yardstick of a dollar-a-day per person to define poverty. But this is a very misleading figure in Pakistan's case.

"For one thing, there has been a sharp decline in the rupee's value against the dollar over the last 15 years. Back in the early 1990s, a dollar was worth around Rs.30. Today, it is worth Rs.60. So, when one says that a person's income is a dollar a day today, it translates into an income of Rs.60 rupees a day," the newspaper noted.

Based on the census figure of an average of 6.7 people per Pakistani household, this income translates into a household income of Rs.402 per day (60 multiplied by 6.7), or Rs.12,060 per month.

More than 60 percent of Pakistan's population still lives in rural areas, where many people grow their own vegetables, grains and fruit and keep livestock to meet their food needs. Also, most of them don't live in rented dwellings.

"Given this fact, a household income of Rs.12,060 per month hardly constitutes a family living in abject poverty," The News noted.

Besides, a household income of Rs.12,060 per month has a much higher buying power in Pakistan than its dollar equivalent has in developed countries.

"In terms of the cost of foodstuff and other basic needs, the purchasing power parity of a dollar in Pakistan is an estimated three times higher than it is in developed countries. So a household income Rs.12,060 per month in Pakistan translates into a buying power equal to what the dollar equivalent of Rs.36,180 (would command) in developed countries," the newspaper maintained.

But, the other side of this coin has to do with the fact that that Pakistan is becoming an increasingly urbanised country, with large numbers of the rural population migrating to cities.

"While people living in cities have better access to things like healthcare and education, they pay much higher prices for food than the inhabitants of rural areas. Moreover, unlike rural inhabitants, most urban inhabitants live in rented accommodation and have to spend a big chunk of their income on rent.

"They also have to spend a big chunk of their income on transport costs, commuting back and forth from their homes to their work places. The cumulative result of all these factors has been a sharp rise in urban poverty," the newspaper noted.