WB poverty re­port

The Pak Banker - - FRONT PAGE -

Ac­cord­ing to lat­est an­nual re­port of the World Bank, the share of peo­ple liv­ing in ex­treme poverty around the globe has de­clined, but it is fall­ing at a slower pace in Sub- Sa­ha­ran Africa. The per­cent­age of peo­ple liv­ing in ex­treme poverty fell to a new low of 10 per­cent in 2015 - the lat­est year for which the data was avail­able - down from 11 per­cent in 2013, re­flect­ing some progress. The num­ber of peo­ple liv­ing on less than dol­lar 1.90 per day, the thresh­old of ex­treme poverty, fell dur­ing this pe­riod by 68 mil­lion to 736 mil­lion glob­ally. Im­por­tantly, more than a bil­lion peo­ple have lifted them­selves out of ex­treme poverty over the last 35 years and the present poverty rate is lower than it has ever been in the recorded his­tory.

The data on poverty in Pak­istan isi­nad­e­quate and not in con­so­nance with the in­ter­na­tional stan­dards. The method to counter poverty is also di­rect and not in line with the in­ter­na­tional stan­dards to re­duce poverty through in­creased in­vest­ment and cre­at­ing more op­por­tu­ni­ties for em­ploy­ment. Ac­cord­ing to the lat­est Eco­nomic Sur­vey 2017- 18, the pro­por­tion of pop­u­la­tion liv­ing be­low the na­tional poverty line was 29.5 per­cent in 2014- 15 which was tar­geted to be re­duced to 9.0 per­cent by 2030 while pro­por­tion of re­sources al­lo­cated by the govern­ment di­rectly for poverty re­duc­tion pro­grammes was 42.2 per­cent in 2014- 15 and pro­jected to be en­hanced to 43.5 per­cent by 2030.

So­cial Safety Nets Pro­grammes ( SSNP) was the main ve­hi­cle to reach the poor and dis­ad­van­taged groups through re­dis­tri­bu­tion of re­sources with ba­sic ob­jec­tive of re­duc­ing poverty. Bud­geted SSNP in­clude BISP, Pak­istan Bait- ul- Mal, So­cial Se­cu­rity and Zakat, EOBI, Work­ers' Wel­fare Fund while Pak­istan Poverty Al­le­vi­a­tion Fund and Mi­cro­fi­nance through spe­cial­ized in­sti­tu­tions were the non- bud­getary parts of the pro­grammes. A Na­tional Frame­work was also de­vised for Sus­tain­able De­vel­op­ment Goals ( SDGs) at district level and im­ple­ment­ing the global agenda to en­sure in­clu­siv­ity and sus­tain­abil­ity to achieve the SDG goals to join up­per mid­dle class coun­tries by 2030.

The World Bank re­port shows very clearly that though the progress on over­all global poverty re­duc­tion has been com­mend­able, this progress has been mainly lim­ited to de­vel­oped coun­tries and emerg­ing mar­ket economies. The de­vel­op­ing coun­tries, par­tic­u­larly lo­cated in the Sub- Sa­ha­ran re­gion, have not been able to gain this ad­van­tage. This is ob­vi­ous from the fact that while global poverty was 10 per­cent of the pop­u­la­tion, poverty in Sub- Sa­ha­ran Africa was still as high as 41 per­cent. This un­even progress was a mat­ter of great con­cern as more of the world's poor be­come con­cen­trated in a re­gion be­set by con­flicts and the ef­fects of cli­mate change. Also, the Sub- Sa­ha­ran coun­tries have suf­fered more from a com­bi­na­tion of lower growth and highly cap­i­tal in­ten­sive in­dus­tries that do not cre­ate much em­ploy­ment.

The pol­i­cy­mak­ers in Pak­istan have fixed very am­bi­tious tar­gets to re­duce the poverty rate from about 30 per­cent to 9 per­cent in the next decade which is not likely to be achieved, given the poor sav­ing and in­vest­ment rate, po­lit­i­cal in­sta­bil­ity, aid fa­tigue in donor coun­tries and a host of other in­hibit­ing fac­tors. More­over, the method of tack­ling poverty in our coun­try is flawed. In­stead of re­duc­ing poverty through in­creased eco­nomic ac­tiv­ity and cre­ation of more em­ploy­ment, the govern­ment seems to have re­lied mainly on di­rect grants like Zakat, Bait- ul- Mal and BISP for poverty re­duc­tion which could ex­pand the class of hangers- on who will not be will­ing to work but will de­velop the habit of liv­ing on the dole. Lastly, Pak­istan must stick to in­ter­na­tional def­i­ni­tion of poverty. It is no use un­der­es­ti­mat­ing the level of poverty when its signs are vis­i­ble every­where. Also, it is bet­ter to rec­og­nize the ex­tent of the prob­lem if we want to re­solve it.

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