Poverty Reduction in Pakistan and MDGs

An overview of the measures taken by the Government of Pakistan to fulfill its commitment to reduce the poverty level by half as signed in the declaration of MDGs (Millennium Development Goals) in September 2000 along with 187 other UN members.

Pakistan signed the declaration of MDGs (Millennium Development Goals) in September 2000 along with 187 other UN members. The document depicts a unified vision of development of the world community expressed in eight time bound benchmark goals.

One of the targets of eight Millennium Development Goals was to reduce poverty by half at the end of the targeted period of 15 years. Pakistan assured the world to do whatever it takes to reduce poverty to 13 percent as envisioned by MDGs in 15years ending 2015.

At present 35 percent, (some estimate 40 percent) citizen of the country live below poverty line. If we look at Global Food Price Index it jumped from 120 in 2006 to 220 in 2008 and consequently pushed 30 million people below poverty line worldwide. In 2011 it further increased to 240 triggering food riots in many countries. The price of essentials like flour has risen 67 percent, milk 80 percent and meat 100 percent. Resultantly the availability of food at higher prices further brought hunger, poverty and food insecurity. According to the FAO definition of food security ‘it exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active healthy life’.

Food spending accounts for about 60 percent budget outlay of the lowest income group while the highest income group allocate 40 percent. Even a slight increase in food prices will significantly lower consumer’s purchasing power, especially among the poor. Around 75 percent of the population surrounds both sides of the poverty line. Higher food inflation disproportionately affects the poor. Bringing food inflation down remained the major policy challenge for Pakistan. The World Bank 2011 estimates that 44 million people in the developing countries have been pushed into extreme poverty due to higher prices of corn, wheat and oil.

On the other hand upper income brackets registered a gain in income share to the richest at the expense of the poorest and the middle class. The richest one per cent who got 20 per cent of the total income is continuously growing. The Pakistan elite club matches the elitist of the world in their extravagant life style. Whereas according to FAO 925 million people do not have enough to eat and 98 per cent of them live in developing countries with 65 per cent people living in 7 Asian countries i.e. India, China, Congo, Bangladesh, Indonesia, Pakistan and Ethiopia.

Currently at 2.5 per cent annual growth rate the prospects of increasing economic and job opportunities for the poor are slim. The devastating floods, double digit food inflation, falling investment, rising unemployment and spending on ongoing war on terror have further compounded the miseries of the poor.

This poverty and hunger can be reduced by addressing the failures and deprivations in many dimensions of human life such as, ill health, malnutrition, unemployment, vulnerability, powerlessness, social exclusion and so on.

The poverty reduction strategy of the government focuses mainly on the five areas which include:

  1. Accelerating economic growth and maintaining macroeconomic stability
  2. Investing in human capital
  3. Augumenting targeted interventions
  4. Expanding social safety nets
  5. Improving governance

For a country like Pakistan, rapid economic growth over a prolonged period is essential for poverty reduction. Greater availability of public resources to improve the quantity and quality of education, health, and other services by allocating the significant funds in the annual budgets is the key to reduce poverty in the long run. The focus should be on investment and growth rather than diverting resources to subsidy in the form of cash transfer. Migration to urban areas is picking up pace and people already living in subhuman conditions in the cities are swelling. So there is need to divert resources toward rural areas where people still are living a very poor life. Direct cash transfer to the poor and resource transfer to the rural economy and high prices of agriculture commodity might have brought improvement in the life of rural segment. But if we see closely, it reveals that wealth generation is not taking place in the economy, resultantly the lower strata of the society is suffering as usual. Another important factor that needs a lot of work to be done is empowering women particularly in rural areas which requires promoting sustainable development. Already the MDGs have helped lift millions of people out of poverty and saved countless children’s lives.

Containing inflation, raising nominal income, effective price control and monitoring mechanism can help a lot in avoiding increase in poverty incidence in urban areas. Similarly increasing cropping area which has been stuck at 550 million acres for last many years is required to be enhanced. Pakistan needs 500000 ton additional wheat every year to feed its ever increasing population. As a result higher production in agriculture can give govt. a breathing space on fiscal and monetary front but it requires the urgency of developing such policies and tools.

Leave a Reply

Your email address will not be published.