REPORT WRITING

ASSIGNMENT
SUBMITTED TO:
Sir Azmat Ansari

REPORTED BY:
Raahima Nasim 17663

TOPIC:
Upper Class and Poor Class of Pakistan.

LETTER OF TRANSMITTAL
Date : 28.02. 2013 To : Sir Azmat Ali Ansari From : Raahima Nasim Subject : Upper Class and Poor Class of Pakistan.

As per your instructions, I have filed a report on Upper Class and Poor Class of Pakistan, which revolves around the upper social class rules over everything, and the poverty faced by the major population of Pakistan, which also includes the research survey I did on the basis of the topic my report. I found this film very intriguing and enlightening, hope this report exceeds your expectations.

TABLE OF CONTENTS
i. ii. iii. iv. v. vi. vii. viii. ix. Executive Summary Index Introduction Poverty In Pakistan The Upper Social Class of Pakistan Factors which lead to desperate Poverty in Pakistan Conclusion Bibliography Glossary

EXECUTIVE SUMMARY
More than 65 million of the total population of Pakistan is suffering from extreme poverty, around 65 million of the people belong to Lower Middle Class, 25 million belong to the Upper middle class, and 15 million of the population belongs to Upper class or the the richest class. The unbalance equation of the social classes makes the extreme poor people suffer a lot. This report shows the major factors which lead Pakistan nation to this condition, theres a huge room for improvement and measures which are to be taken care of by the Pakistans government and official to get rid of this curse of poverty and inequality.

INTRODUCTION
Poverty, destitution, need, want imply a state of privation and lack of necessities. Poverty denotes serious lack of the means for proper existence: living in a state of extreme poverty. Destitution, a somewhat more literary word, implies a state of having absolutely none of the necessities of life: widespread destitution in countries at war. Need emphasizes the fact that help or relief is necessary: Most of the people were in great need. Want emphasizes privations, especially lack of food and clothing. The upper class in modern societies is the social class composed of the wealthiest members of society, who also wield the greatest political power. The upper class is generally contained within the wealthiest 1-2% of the population, and is distinguished by immense wealth (in the form of estates) which is passed on from generation to generation. Between the two extreme terms of Upper class and Poverty line, there falls a pair of social classes, i.e; The Upper Middle Class and the Lower Middle Class. When a nation which fails to create a balance among these social classes. If the population reaches towards the both extreme ends of Upper class and Desperately poverty, a country suffers. It has become a major problem and a threat for Pakistan over the years. In order to complete this report, a research survey was carried out in one of the top ranked private university, to get information about which classes they belong to, what are their necessities, how much they can afford and what is their perception about poverty in Pakistan.

POVERTY IN PAKISTAN
Poverty in Pakistan is difficult to quantify. In 2006, the methodology used by the Pakistani government to estimate those living in poverty was challenged by the World Bank and the United Nations Development Programme (UNDP). At that time, the government estimate was that 23.9 per cent of the population lived below the poverty line but the independent organisations assessed the figure in the range of 25.7 - 28.3 percent. Those independent bodies supported estimates of a considerable fall in the statistic by the 2007-08 fiscal year, when it was estimated that 17.2% of the total population lived below the poverty line. The declining trend in poverty as seen in the country during the 1970s and 1980s was reversed in the 1990s by poor federal policies and rampant corruption.This phenomenon has been referred to as the "poverty

bomb". In 2001, the government was assisted by the International Monetary Fund (IMF) in preparing the Interim Poverty Reduction Strategy Paper that suggests guidelines to reduce poverty in the country. As of 2009, Pakistan's Human Development Index (HDI) is 0.572, higher than that of nearby Bangladesh's 0.543, which was formerly a part of the country itself. Pakistan's HDI still stands lower than that of neighboring India's at 0.612. Meanwhile, in the research survey, the 30% of the literate class, which are students of a wellknown University had no idea that India is suffering the curse of extreme poverty, more than Pakistan According to the HDI, 60.3% of Pakistan's population lives on under $2 a day, compared to 79% in nearby India and 81.3% in nearby Bangladesh, and some 22.6% live under $1 a day, compared to 24.9% in India and 49.6% in Bangladesh. Wealth distribution in Pakistan is highly uneven, with the top 10% of the population earning 27.6% and the bottom 10% earning only 4.1% of the income According to the United Nations Human Development Report, Pakistan's human development indicators, especially those for women, fall significantly below those of countries with comparable levels of per-capita income. Pakistan also has a higher infant mortality rate (88 per 1000) than the South Asian average (83 per 1000). According to the research for this report, in 60% of the Upper class and Upper middle class families having 5-7 members, the source of income is only one i.e; A parent.

UPPER CLASS OF PAKISTAN

The people of upper class in Pakistan enjoy high social, economic and political status and they are the privileged class people. These people have sense of superiority and show the same to the lower and middle classes in every walk of their life. The majority of these classes is constituted by the businessmen, jagirdars, landlords, sardars, high officials and army personnel. This is the class which is responsible for keeping the economy of Pakistan unstable and miserable. At the time of inception of Pakistan, upper class was confined to few. Landlords dominating the society before 1947 therefore, the same class after leaving the Hindu landlords for India

assumed the power and gradually dominated the entire economy of Pakistan. The politics of Pakistan has generally been in the hands of these landlords and jagirdars class.

FACTORS WHICH LEAD TO DESPERATE POVERTY IN PAKISTAN

ECONOMIC AND SOCIAL VULNERABILITY
"Vulnerability" in this case stands for the underlying susceptibility of economically deprived people to fall into poverty as a result of exogenous random shocks. Vulnerable households are generally found to have low expenditure levels. Households are considered vulnerable if they do not have the means to smooth out their expenses in response to changes in income. In general, vulnerability is likely to be high in households clustered around the poverty line. Since coping strategies for vulnerable households depend primarily on their sources of income, exogenous shocks can increase reliance on non-agricultural wages. Such diversification has not occurred in many parts of Pakistan, leading to an increased dependence on credit. While economic vulnerability is a key factor in the rise of poverty in Pakistan, vulnerability also arises from social powerlessness, political disenfranchisement, and ill-functioning and distorted institutions, and these also are important causes of the persistence of vulnerability among the poor. Other causes of vulnerability in Pakistan are the everyday harassment by corrupt government officials, as well as their under-performance, exclusion and denial of basic rights to many in Pakistan. Also, lack of adequate health care by the state lead the poor to seek private sources, which are expensive, but still preferable to the possibility of medical malpractice and being given expired medicines in state run medical facilities. Also, the failure by the state to provide adequate law and order in many parts of the country is a factor in the rise of vulnerability of the poor. In a survey carried out among the students, 100% of the audience said the Government is taking very little or no measures at all to help the people who live in need. Yet in another question, where we asked for their opinion why such people are suffering from extreme

poverty, 60% said its because theres much injustice in our society, 20% said that these poor population is lazy and lacks will power, while 20% had no clue what we were talking about.

LACK OF ADEQUATE GOVERNANCE

By the end of the 1990s, the manner in which power is exercised in the management of a country's social and economic resources for development emerged as Pakistan's foremost developmental problem. Corruption and political instabilities such as the insurgency in Balochistan and decade long armed conflict with the Taliban in Waziristan region resulted in reduction of business confidence, deterioration of economic growth, reduced public expenditure, poor delivery of public services, and undermining of the rule of law. The perceived security threat on the border with India has dominated Pakistan's culture and has led to the domination of military in politics, excessive spending on defense at the expense of social sectors, and the erosion of law and order. Pakistan has been run by military dictatorships for large periods of time, alternating with limited democracy. These rapid changes in governments led to rapid policy changes and reversals and the reduction of transparency and accountability in government. The onset of military regimes have contributed to non-transparency in resource allocation. In particular, the neglect by the Pakistani state of the Balochistan and Khyber Pakhtunkhwa has rendered the region poverty-stricken. Those who do not constitute the political elite are unable to make political leaders and the Government responsive to their needs or accountable to promises. Development priorities are determined not by potential beneficiaries but by the bureaucracy and a political elite which may or may not be in touch with the needs of the citizens. Political instability and macroeconomic imbalances have been reflected in poor creditworthiness ratings, even compared to other countries of similar income levels, with resulting capital flight and lower foreign direct investment inflows. The current government of Pakistan has professed commitments to reforms in this area. In research survey, when we asked the students, in their opinion,do they think that poverty in Pakistan has been increasing, decreasing or staying about the same? 90% of the audience answered that its has been increasing since the 5 years of Governance, it was a lot better back in the time of General Pervez Musharraf. We further asked, what do they see in future, will poverty be increasing in the next five years? 70% of the audience said that they have no hope left for the betterment of this or any issue in

Pakistan and poverty will keep on increasing. Rest of the 30% had no idea what will be happening in near future.

INEQUALITY
The recent 2010 Pakistan floods have accentuated differences between the wealthy and poor in Pakistan. Abdullah Hussain Haroon, Pakistan's diplomat to the United Nations, has alleged that wealthy feudal warlords and landowners in Pakistan have been diverting funds and resources away from the poor and into their own private relief efforts. Haroon also alluded to was evidence that landowners had allowed embankments to burst, leading to water flowing away from their land. There are also allegations that local authorities colluded with the warlords to divert funds. The floods have accentuated the sharp divisions in Pakistan between the wealthy and the poor. The wealthy, with better access to transportation and other facilities, have suffered far less than the poor of Pakistan.

INCOME INEQUALITY
Although the real national income of Pakistan, on an average, is revealed to be increasing each year from the past 25 years, the concentration of income in the hands of a few has also taken a leap. According to figures revealed by the government of Pakistan, the reported income of the richest 20 percent of households has been almost 7 percent higher than the poorest 20 percent households over the last 25 years. A more accurate way to determine the income disparities in Pakistan is the calculation of the Gini coefficient. It takes upon values between zero and one; the closer the number is to zero, the greater is the equitable distribution of wealth in the country and vice versa. In a report released by the US State Department, Pakistans Gini coefficient is 0.68 which depicts the huge income disparity that exists in the country. The Gini coefficient was reported to be 0.30 in 2002, reflecting the huge increase in income disparity over the last ten years. In the research survey, we asked the students in which 90% lie between 19-23 years age group, were asked that how much do they spend on unnecessary luxuries, enjoyment, hoteling etc. 30% of them answered ten thousand rupees or more per month, 45% of them answered five to eight thousand rupees per month, and the others said less than five thousand. To be very factual, the average income of a family which falls neither in Lower middle class nor in extreme poor community, earns ten thousand rupees salary in which they have to cover everything from their house rent, food, school fees, transportation costs etc.

An average student which goes to a private university, whose fees per semester is around 50,000 rupees, 40% of those students has a family income of One hundred thousand rupees or more, 45% of them has a family income around Fifty thousand to One hundred thousand rupees, while the remaining 15% has a family income of Thirty thousand to Fifty thousand rupees. This shows a Lower middle class person can never imagine of seeking admission in a Top university of Pakistan unless he chooses to take a loan to continue his higher studies without any guarantee that he will be able get a job after completing his studies to pay the loan back.

TAX SYSTEM
One of the most devastating factors for increased income and wealth inequalities in Pakistan is the establishment of the regressive tax system. Statistics have revealed that the taxes on the poor in the last 10 years have increased by almost 35 per cent, while the rich are paying minimal direct taxes on their massive income and wealth. Hence, the policies of the federal government have also been designed to benefit the rich, keeping the poor at a disadvantage.

CONCLUSION
Economic disparities are bringing along shortage of food and lack of essentials services for the poor population of country. What is even more worrisome is the heating up rage of the poor against the rich. Analysts fear that the great divide between the rich and poor of Pakistan might eventually lead to civil war if the government does not take serious measures to prevent the increasing disparity. It is suggested that the government should invest in human resource development of the agricultural sector to give the poor a chance to step forward. Moreover, credit schemes for small entrepreneurs should be introduced that might help them in acquiring wealth. The government policies also need to be revised to bridge the gap that exists between the rich and the poor of Pakistan.

BIBLIOGRAPHY
http://x.dawn.com/2012/09/25/poverty-hovers-around-33pc/

http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/EXTPA/0,,c ontentMDK:20209057~menuPK:435735~pagePK:148956~piPK:216618~theSitePK: 430367~isCURL:Y~isCURL:Y,00.html

http://www.pakonomy.com/2012/06/29/income-inequality-inpakistan/#.UknyUNK-rjZ

http://en.wikipedia.org/wiki/Poverty_threshold

APPENDICES

GLOSSARY
Jagirdars Property owners

Vulnerability

Obligation/Burden

Per-capita

Per individual/person

Gini coefficient

A measure of statistical dispersion intended to represent the income distribution of a nation's residents.