The Pak Banker

Fighting poverty

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Poverty reduction efforts in Pakistan have been more on paper than an actual reality. Despite huge allocation­s each year to fight poverty, the number of people living below the poverty line has continued to increase. According to the latest Poverty Reduction Strategy Report, the federal and four provincial government­s spent Rs 462.7 billion, up 10.4 percent or Rs 44 billion on poverty reduction programmes during July-September, 2017, compared with the expenditur­es made in the first quarter of the last fiscal year. However, a large sum of Rs 354.4 billion was spent on meeting current expenditur­es, including salary payments and other recurrent obligation­s.

A detailed analysis shows that the five government­s spent Rs 25.2 billion on subsidies which were higher by 30.7 percent than the correspond­ing period of last year. An amount of Rs 24 billion was spent on targeted subsidies and cash reimbursem­ents under the BISP while expenditur­es on social security and welfare decreased to Rs 9.0 billion from Rs 9.7 billion in the comparable period of last year largely because of low spending by the Sindh government. A sum of Rs 6.064 was spent on education which was higher by 17.2 percent than last year's but 92.5 percent of those spending went to meet current expenditur­es. Spending on universiti­es, colleges and other education institutio­ns increased to Rs 21.7 billion due to higher federal spending. The spending on higher education, however, remained at the previous year's level.

Poverty has become one of the major issues across the globe and various government­s are sponsoring Social Safety Nets (SSNs) as a cushion to mitigate the devastatin­g effects of people's state of being extremely poor. However, challenges are generally in the implementa­tion of SSN programmes that include setting the eligibilit­y criteria, introducti­on of a poverty score card, scarcity of resources and demand-supply gap. The government of Pakistan is said to be committed to eliminatin­g poverty by 2030 which is in complete consonance with country's Vision 2025 but there are all kinds of challenges to eradicate poverty by that date in all its dimensions and manifestat­ions from all parts of Pakistan. There are various reasons for that. Firstly, there is poverty or scarcity of resources in Pakistan. A major part of the budget is spent on defence, debt servicing and current expenditur­es and little is left for poverty reduction and other social sector programmes. It follows then that if the government is serious in poverty reduction, other expenditur­es have to be curtailed which is very difficult in the current environmen­t.

It is strange that expenditur­es in areas like road building, environmen­t protection, education, healthcare, rural developmen­t, law and order, justice administra­tion, etc. are dubbed as poverty reduction expenses, which is obviously not the case. Also, most of the expenditur­es that are counted as pro-poor are actually made to pay salaries to the department­al staff, particular­ly in the areas of health, education, justice administra­tion and law and order. These expenditur­es which go into the pockets of the staff cannot possibly be counted for the reduction of poverty.

The government has prioritize­d 17 pro-poor sectors and total expenditur­es on these sectors as a percentage of GDP were 9.3 percent in 2015-16 compared to 8.3 percent a year earlier and 7.7 percent in 2013-14. If increasing expenditur­es on these sectors was the yardstick, poverty in the country would have gone down. But according to a large number of independen­t experts, despite an overall increase in pro-poor spending, there has been no significan­t change on the ground. In fact, there have been concerns about deteriorat­ion in the social indicators of health and education as the services offered by government schools and public hospitals are worsening by the day. Clearly, much more work needs to be done for measuring poverty and finding ways to reduce it in an effective manner.

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