Poverty in Pakistan

A slum in Karachi, Pakistan with an open sewer running along the lane. Poverty in Pakistan is a growing concern. Although the middle-class has grown in Pakistan to 35 million[1], nearly one-quarter of the population is classified poor as of October 2006.[2]. 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.[3] This phenomenon has been referred to as the poverty bomb.[4] The government of Pakistan with help from the International Monetary Fund (IMF) has prepared an Interim Poverty Reduction Strategy Paper[5] that suggests guidelines to reduce poverty in the country. As of 2007, 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 neighbouring India's at 0.612.[6] Incidences of poverty in Pakistan rose from 22–26% in the fiscal year 1991 to 32–35% in the fiscal year 1999. They have subsequently fallen to 25–26% according to the reports of the World Bank and the UN Development Program reports. These reports contradict the claims made by the Government of Pakistan that the poverty rates are only 23.1%.[2] Furthermore, the poverty rate declined to 17.2% in 2007-08 according to the World Bank.

According to the Human Development Index (HDI), 60.3% of Pakistan's population lives under $2 a day, compared to 75.6% in nearby India and 81.3% in nearby Bangladesh,[8] and some 22.6% live under $1 a day. Compared to 41.6% in India and 49.6% in Bangladesh[9] Wealth Distribution in Pakistan is highly uneven, with 10% of the population earning 27.6% of income[10]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).[11]

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1 Spatial distribution of poverty 2 Poverty and gender 3 Economic and social vulnerability 4 Environmental Issues 5 Lack of adequate governance 6 Feudalism 7 Poverty and the rise of Islamic fundamentalism 8 See also 9 References 10 External links

Spatial distribution of poverty

Poverty in Pakistan At the time of partition and independence in 1947, Pakistan inherited the most backward parts of South Asia with only one university, one Textile Mill and one Jute Factory. The country has made tremendous progress and its per Capita GNP remains the highest in South Asia. During the last decade poverty elimination programs helped many of the poor to participate and rise up. However the Global financial crisis and other factors like the occupation of Afghanistan have impacted Pakistani growth. Poverty in Pakistan has historically been higher in rural areas and lower in the cities. Out of the total 40 million living below the poverty line, 30 million live in rural areas. Poverty rose sharply in the rural areas in the 1990s[12] and the gap in income between urban and rural areas of the country became more significant. This trend has been attributed to a disproportionate impact of economic events in the rural and urban areas. There are also significant inhomogeneities in the different regions of Pakistan that contribute to the country's rising poverty. In the 1999 Fiscal year, the urban regions of the Sindh province had the lowest levels of poverty, and the rural areas of the North West Frontier Province had the highest. Punjab also has significant gradients in poverty among the different regions of the province [12]. The North West Frontier Province of Pakistan was one of the most backward regions of the South Asian Subcontinent. Despite this, tremendous progress has been made in many areas. The NWFP now boasts several universities including the Ghulam Ishaq Khan University of Science and Technology.Peshawar a sleep cantonment during British towns is a modern cosmopolitan city. Much more can be done to invest in the social and economic structures. NWFP remains steeped in tribal culture, though the biggest Pathan

city is Karachi where the Pakhtuns are one of the richest class of people. The Pakhtuns of the region are heavily involved in the transportation, lumber, furniture and small arts and crafts business. Some deal in cross border arms and drugs smuggling. This smuggling actively encouraged by the West and by Pakistan during the Soviet invasion of neighboring Afghanistan is intact and according to Western reports supported the Taliban regime. These and other activities have led to a breakdown of law and order in many parts of the region [13].

Poverty and gender
The gender discriminatory practices in Pakistani society also shape the distribution of poverty in the country. Traditional gender roles in Pakistan define the woman's place as in the home and not in the workplace, and define the man as the breadwinner. Consequently, the society invests far less in women than men [14]. Women in Pakistan suffer from poverty of opportunities throughout their lives. Female literacy in Pakistan is 43.6% compared to Male literacy at 68.2%, as of 2008.[15] In legislative bodies, women constituted less than 3% of the legislature elected on general seats before 2002. The 1973 Constitution allowed reserved seats for women in both houses of parliament for a period of 20 years, thus ensuring that women would be represented in parliament regardless of whether or not they are elected on general seats. This provision lapsed in 1993, so parliaments elected subsequently did not have reserved seats for women. Reserved seats for women have been restored after the election of 2002 . [16]. Female labour rates in Pakistan are exceptionally low. All this, coupled with the rise of honor killings against women, a legal system that is regarded as misogynistic, and the intransigent denial of these problems by the Pakistan government, as well as their institutionalized harassment of women's rights groups operating in the country [17][18], contribute to the deteriorating situation with women and the rise in their poverty.

Un-Employment Rates 1998 Census Administrative 1981 Both Unit Male Female Census Sexes Pakistan 19.68 20.19 5.05 3.1 Economic and social Rural 19.98 20.40 5.50 2.3 vulnerability Urban 19.13 19.77 4.49 5.2 NWFP 26.83 27.51 2.58 2.2 "Vulnerability" in this case stands for the Rural 28.16 28.64 4.00 2.0 underlying susceptibility of Urban 21.00 22.34 0.74 3.7 economically deprived people to fall into Punjab 19.10 19.60 5.50 3.2 poverty as a result of exogenous random Rural 18.60 19.00 6.00 2.5 shocks. Vulnerable households are Urban 20.10 20.7 4.70 5.0 generally found to have low expenditure Sindh 14.43 14.86 4.69 3.3 levels. Households are considered Rural 11.95 12.26 3.70 1.6 vulnerable if they do not have the means to smooth out their expenses in response Urban 16.75 17.31 5.40 5.8 to changes in income. In general, Balochistan 33.48 34.14 8.67 3.1 vulnerability is likely to be high in Rural 35.26 35.92 9.81 3.0 households clustered around the poverty Urban 27.67 28.33 5.35 4.0 line. Since coping strategies for Islamabad 15.70 16.80 1.70 10.7 vulnerable households depend primarily Rural 28.70 29.40 8.20 13.5 on their sources of income, exogenous Urban 10.10 11.00 0.80 9.0 shocks can increase reliance on nonUnemployment Rate: It is the percentage of agricultural wages. Such diversification persons unemployed (those looking for work has not occurred in many parts of and temporarily laid off) to the total Pakistan, leading to an increased [19] economically active population (10 years and dependence on credit . above). Source: [3] 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 distortionary institutions, and these also are important causes of the persistence of vulnerability among the poor [20]. Other causes of vulnerability in Pakistan are the everyday harassment by corrupt government officials, as well as their underperformance, 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 [20].

Environmental Issues
Environmental problems in Pakistan, such as erosion, use of agro-chemicals, deforestation etc. contribute to rising poverty in Pakistan. Increasing pollution contributes to increasing risk of toxicity, and poor industrial standards in the country contribute to rising pollution [21] [22].

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 various separatist movements in Balochistan and Waziristan 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 [23]. 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 [24] [25]. 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 North Western Frontier Provinces has rendered the region poverty-stricken [4]. 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 [26]. In addition, Pakistan's major cities and urban centres are home to an estimated 1.2 million street children.This includes beggars and scavengers who are often very young.The law and order problem worsens their condition as boys and girls are fair game to others who would force them into stealing, scavenging and smuggling to survive. A large proportion consumes readily available solvents to starve off hunger, loneliness and fear. Children are vulnerable to contracting STD's such as HIV/AIDS, as well as other diseases[27].

Pakistan is home to a large feudal landholding system where landholding families hold thousands of acres and do little work on the agriculture themselves. They enlist the services of their serfs to perform the labor of the land [28]. 51% of poor tenants owe money to the landlords. [29] The landlords' position of power allows them to exploit the only resource the poor can possibly provide: their own labor.

Poverty and the rise of Islamic fundamentalism

Trends in Poverty - Sources: [30][31] The rise of poverty in the country has been correlated with the rise of Islamic Fundamentalism in many parts of the country. The Pakistani government's attempts at proposed reforms have been criticized as "weak" [32] and has been associated with an "expedient brand of romance between the establishment and the religious right". Madrassa education is offered on the pretext that they provide better education than the other schools [33]. They study in a religious environment that has been radicalized by the world-sponsored exposure of the "Holy Jihad" in Afghanistan [32]. Poverty and the lack of a modern curriculum have proved destabilizing factors for Pakistani society that have been exploited by religious organizations banned by the government to run schools and produce militant literature. Though many madrassas are benign, there are those that subscribe to the radicalist branches of Sunni Islam, [32] [34]. As a result, Islamic political parties have become more powerful in Pakistan and have considerable sympathy among the poor. This phenomenon is also pronounced in the North Western Frontier Province [35]. The clergy have become more powerful in Pakistan and have considerable sympathy among the poor.

Poverty in India

Percent of population living under the poverty line, which is 356.35 rupees or around $7 a month in rural areas. Poverty in India is widespread with the nation estimated to have a third of the world's poor. According to the a 2005 World Bank estimate, 42% of India's falls below the international poverty line of $1.25 a day (PPP, in nominal terms Rs. 21.6 a day in urban areas and Rs 14.3 in rural areas); having reduced from 60% in 1980.[1] According to the criterion used by the Planning Commission of India 27.5% of the population was living below the poverty line in 2004–2005, down from 51.3% in 1977–1978, and 36% in 19931994[2] While poverty rates in India are high, they are not on a par with what neighbouring Pakistan and Bangladesh experience. Among the causes ascribed for the high level poverty in India are its history under British rule, large population, and low literacy. Also important is India's social structure, including the caste system in India, and the role of women in Indian society. Economic growth has in the past been dampened by a dependence upon agriculture, and the economic policies adopted after its independence. Since 1950s Indian government and non-governmental organizations have initiated several programs to alleviate poverty, including subsidizing food and other necessities, increased access to loans, improving agricultural techniques and price supports, and

promoting education and family planning. However, 30 million people have been added to the ranks of the hungry since the mid-1990s and 46% of children are underweight. [3]

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1 Poverty estimates o 1.1 Historical trend 2 Causes of poverty in India o 2.1 Lack of investment for the poor o 2.2 Caste system o 2.3 British era o 2.4 India's economic policies o 2.5 Neo Liberal Policies and their Effects 3 Efforts to alleviate poverty o 3.1 Outlook for poverty alleviation o 3.2 Controversy over extent of poverty reduction

3.3 Persistence of malnutrition among children

Poverty estimates
The World Bank estimates that 456 million Indians (42% of the total Indian population) now live under the global poverty line of $1.25 per day (PPP). This means that a third of the global poor now reside in India. However, this also represents a significant decline in poverty from 60 percent in 1981 to 42 percent in 2005, although the rupee has decreased in value since then, while the official standard of 538/356 rupees per month has remained the same.[4][5] Income inequality in India (Gini coefficient: 32.5 in year 1999- 2000)[6] is increasing. On the other hand, the Planning Commission of India uses its own criteria and has estimated that 27.5% of the population was living below the poverty line in 2004– 2005, down from 51.3% in 1977–1978, and 36% in 1993-1994[2]. The source for this was the 61st round of the National Sample Survey (NSS) and the criterion used was monthly per capita consumption expenditure below Rs. 356.35 for rural areas and Rs. 538.60 for urban areas. 75% of the poor are in rural areas, most of them are daily wagers, selfemployed householders and landless labourers. Although Indian economy has grown steadily over the last two decades, its growth has been uneven when comparing different social groups, economic groups, geographic regions, and rural and urban areas.[7] Between 1999 and 2008, the annualized growth

rates for Gujarat (8.8%), Haryana (8.7%), or Delhi (7.4%) were much higher than for Bihar (5.1%), Uttar Pradesh (4.4%), or Madhya Pradesh (3.5%).[8] Poverty rates in rural Orissa (43%) and rural Bihar (41%) are among the world's most extreme.[9]

The India State Hunger Index 2008 by the International Food Policy Research Institute. Punjab has the best nutritional situation, whereas malnutrition in Madhya Pradesh is worse than in Ethiopia or Sudan. India has a higher rate of malnutrition among children under the age of three (46% in year 2007) than any other country in the world.[7][10] Despite significant economic progress, 1/4 of the nation's population earns less than the government-specified poverty threshold of 12 rupees per day (approximately USD $0.25). Official figures estimate that 27.5%[11] of Indians lived below the national poverty line in 2004-2005.[12] A 2007 report by the state-run National Commission for Enterprises in the Unorganised Sector (NCEUS) found that 77% of Indians, or 836 million people, lived on less than 20 rupees (approximately USD $0.50 nominal; $2 PPP) per day.[13] As per the 2001 census, 35.5% of Indian households availed of banking services, 35.1% owned a radio or transistor, 31.6% a television, 9.1% a phone, 43.7% a bicycle, 11.7% a scooter, motorcycle or a moped, and 2.5% a car, jeep or van; 34.5% of the households had none of these assets. [14] According to Department of Telecommunications of India the phone density has reached 33.23% by Dec 2009 and has an annual growth of 40%. [15]

[edit] Historical trend
The proportion of India's population below the poverty line has fluctuated widely in the past, but the overall trend has been downward. However, there have been roughly three periods of trends in income poverty. 1950 to mid-1970s: Income poverty reduction shows no discernible trend. In 1951, 47% of India's rural population was below the poverty line. The proportion went up to 64% in 1954-55; it came down to 45% in 1960-61 but in 1977-78, it went up again to 51%. Mid-1970s to 1990: Income poverty declined significantly between the mid-1970s and the end of the 1980s. The decline was more pronounced between 1977-78 and 1986-87, with rural income poverty declining from 51% to 39%. It went down further to 34% by 1989-90. Urban income poverty went down from 41% in 1977-78 to 34% in 1986-87, and further to 33% in 1989-90. After 1991: This post-economic reform period evidenced both setbacks and progress. Rural income poverty increased from 34% in 1989-90 to 43% in 1992 and then fell to 37% in 1993-94. Urban income poverty went up from 33.4% in 1989-90 to 33.7% in 1992 and declined to 32% in 1993-94 Also, NSS data for 1994-95 to 1998 show little or no poverty reduction, so that the evidence till 1999-2000 was that poverty, particularly rural poverty, had increased post-reform. However, the official estimate of poverty for 1999-2000 was 26.1%, a dramatic decline that led to much debate and analysis. This was because for this year the NSS had adopted a new survey methodology that led to both higher estimated mean consumption and also an estimated distribution that was more equal than in past NSS surveys. The latest NSS survey for 2004-05 is fully comparable to the surveys before 1999-2000 and shows poverty at 28.3% in rural areas, 25.7% in urban areas and 27.5% for the country as a whole, using Uniform Recall Period Consumption. The corresponding figures using the Mixed Recall Period Consumption method was 21.8%, 21.7% and 21.8% respectively. Thus, poverty has declined after 1998, although it is still being debated whether there was any significant poverty reduction between 198990 and 1999-00. The latest NSS survey was so designed as to also give estimates roughly, but not fully, comparable to the 1999-2000 survey. These suggest that most of the decline in rural poverty over the period during 1993-94 to 2004-05 actually occurred after 19992000.

Causes of poverty in India
Lack of investment for the poor
Over the past 60 years, India has neglected basic literacy for the majority. See Literacy in India. This has denied the illiterate population - 33% of India - even the possibility of escaping poverty.[citation needed]

Caste system
Further information: Caste system in India A disproportionally large share of poor are lower caste Hindus.[16] According to S. M. Michael, Dalits constitute the bulk of poor and unemployed.[17] Many see the pan-Indian social construct of caste system as a system of exploitation of poor low-ranking groups by more prosperous high-ranking groups. In many parts of India, land is largely held by high-ranking property owners of a particular dominant caste (kshatriya) that economically exploit low-ranking landless labourers and poor artisans, all the while degrading them with ritual emphases on their so-called god-given inferior status. According to William A. Haviland, casteism is widespread in rural areas, and continues to segregate Dalits[18]. Others, however, have noted the steady rise and empowerment of the Dalits through social reforms and the implementation of reservations in employment and benefits.[19][20]

British era
The reign of the Islamic dynasty of the Great Mughals had been an era of unprecedented prosperity in India.[21] The Mughal era ended about 1800. Jawaharlal Nehru claimed "A significant fact which stands out is that those parts of India which have been longest under British rule are the poorest today."[15] The Indian economy was purposely and severely deindustrialized (especially in the areas of textiles and metal-working) through colonial privatizations, regulations, tariffs on manufactured or refined Indian goods, taxes, and direct seizures, as noted by linguist and commentator Noam Chomsky.[22] However, according to economist Angus Maddison, such explanation ignores the role of changes in demand and technology.[23] In 1830, India accounted for 17.6% of industrial production against Britain's 9.5%, but by 1900 India's share was down to 1.7% against Britain's 18.5%. (The change in industrial production per capita is even more extreme due to Indian population growth). This is because Europe - particularly Britain - industrialized before the rest of the world. This view claims that British policies in India exacerbated weather conditions to lead to mass famines which, when taken together, led to between 30 to 60 million deaths from starvation in the Indian colonies. Community grain banks were forcibly disabled[citation needed] , land was converted from food crops for local consumption to cotton, opium, tea, and grain for export, largely for animal feed. [16] According to Angus Maddison, "They replaced the wasteful warlord aristocracy by a bureaucratic-military establishment, carefully designed by utilitarian technocrats, which was very efficient in maintaining law and order. [...] However, the pattern of consumption changed as the new upper class no longer kept harems and palaces, nor did they wear fine muslins and damascened swords. This caused some painful readjustments in the traditional handicraft sector. It seems likely that there was some increase in productive investment which must have been near zero in Moghul India: government

itself carried out productive investment in railways and irrigation and as a result there was a growth in both agricultural and industrial output." [23] Indian literacy rate rose almost tenfold during the British era. In 1947, India's literacy rate matched China's.[citation needed]. However, in 2007, China reported at 91% literacy rate versus 66% for India. See Literacy in India

India's economic policies

A rural worker drying cow dung in Bihar, the poorest state in India. In 1947, the average annual income in India was $439, compared with $619 for China, $770 for South Korea, and $936 for Taiwan. By 1999, the numbers were $1,818; $3,259; $13,317; and $15,720.[24] (numbers are in 1990 international Maddison dollars) In other words, the average income in India was not much different from South Korea in 1947, but South Korea became a developed country by 2000s. At the same time, India was left as one of the world's poorest countries. Hindu rate of growth is an expression used to refer to the low annual growth rate of the economy of India, which stagnated around 3.5% from 1950s to 1980s, while per capita income averaged 1.3%.[25] At the same time, Pakistan grew by 8%, Indonesia by 9%, Thailand by 9%, South Korea by 10% and in Taiwan by 12%.[26] The term was coined by Indian economist Raj Kumar Krishna. License Raj refers to the elaborate licenses, regulations and the accompanying red tape that were required to set up and run business in India between 1947 and 1990.[27] The License Raj was a result of India's decision to have a planned economy, where all aspects

of the economy are controlled by the state and licenses were given to a select few. Corruption flourished under this system.[28] The labyrinthine bureaucracy often led to absurd restrictions - up to 80 agencies had to be satisfied before a firm could be granted a licence to produce and the state would decide what was produced, how much, at what price and what sources of capital were used. —BBC[29] India had started out in the 1950s with:[30]
• • • • •

high growth rates openness to trade and investment a promotional state social expenditure awareness macro stability

But we ended the 1980s with:[30]
• • • • •

low growth rates (Hindu rate of growth) closure to trade and investment a license-obsessed, restrictive state (License Raj) inability to sustain social expenditures macro instability, indeed crisis.

Poverty has decreased significantly since reforms were started in the 1980s.[31][32] Also:

Over-reliance on agriculture. There is a surplus of labour in agriculture. Farmers are a large vote bank and use their votes to resist reallocation of land for higherincome industrial projects. While services and industry have grown at double digit figures, agriculture growth rate has dropped from 4.8% to 2%. About 60% of the population depends on agriculture whereas the contribution of agriculture to the GDP is about 18%.[33] High population growth rate, although demographers generally agree that this is a symptom rather than cause of poverty.

Despite this, India currently adds 40 million people to its middle class every year.[citation needed] Analysts such as the founder of "Forecasting International", Marvin J. Cetron writes that an estimated 300 million Indians now belong to the middle class; one-third of them have emerged from poverty in the last ten years. At the current rate of growth, a majority of Indians will be middle-class by 2025. Literacy rates have risen from 52 percent to 65 percent in the same period.[34]

Neo Liberal Policies and their Effects
Other points of view hold that the economic reforms initiated in the early 1990s responsible for the collapse of rural economies and the agrarian crisis currently underway. As journalist and the Rural Affairs editor for The Hindu, P Sainath describes in his reports on the rural economy in India, the level of inequality has risen to extraordinary levels, when at the same time, hunger in India has reached its highest level in decades. He also points out that rural economies across India have collapsed, or on the verge of collapse due to the neo-liberal policies of the government of India since the 1990s[35]. The human cost of the "liberalisation" has been very high. The huge wave of farm suicides in Indian rural population from 1997 to 2007 totaled close to 200,000, according to official statistics[36]. That number remains disputed, with some saying the true number is much higher. Commentators have faulted the policies pursued by the government which, according to Sainath, resulted in a very high portion of rural households getting into the debt cycle, resulting in a very high number of farm suicides. As professor Utsa Patnaik, India’s top economist on agriculture, has pointed out, the average poor family in 2007 has about 100 kg less food per year than it did in 1997[37]. Government policies encouraging farmers to switch to cash crops, in place of traditional food crops, has resulted in an extraordinary increase in farm input costs, while market forces determined the price of the cash crop[38]. Sainath points out that a disproportionately large number of affected farm suicides have occurred with cash crops, because with food crops such as rice, even if the price falls, there is food left to survive on. He also points out that inequality has reached one of the highest rates India has ever seen. In a report by Chetan Ahya, Executive Director at Morgan Stanley, it is pointed out that there has been a wealth increase of close to 1 trillion $ in the time frame of 20032007 in the Indian stock market, while only 4-7% of the Indian population hold any equity[39]. During the time when Public investment in agriculture shrank to 2% of the GDP, the nation suffered the worst agrarian crisis in decades, the same time as India became the nation of second highest number of dollar billionaires[40]. Sainath argues that Farm incomes have collapsed. Hunger has grown very fast. Public investment in agriculture shrank to nothing a long time ago. Employment has collapsed. Non-farm employment has stagnated. (Only the National Rural Employment Guarantee Act has brought some limited relief in recent times.) Millions move towards towns and cities where, too, there are few jobs to be found. In one estimate, over 85 per cent of rural households are either landless, sub-marginal, marginal or small farmers. Nothing has happened in 15 years that has changed that situation for the better. Much has happened to make it a lot worse. Those who have taken their lives were deep in debt – peasant households in debt doubled in the first decade of the neoliberal “economic reforms,” from 26 per cent of farm households to 48.6 per cent. Meanwhile, all along, India kept reducing investment in agriculture (standard neoliberal procedure). Life was being made more and more impossible for small farmers.

As of 2006, the government spends less than 0.2% of GDP on agriculture and less than 3% of GDP on education[41]. However, some government schemes such as the mid-day meal scheme, and the NREGA have been partially successful in providing a lifeline for the rural economy and curbing the further rise of poverty.

Efforts to alleviate poverty
Since the early 1950s, government has initiated, sustained, and refined various planning schemes to help the poor attain self sufficiency in food production. Probably the most important initiative has been the supply of basic commodities, particularly food at controlled prices, available throughout the country as poor spend about 80 percent of their income on food.

Outlook for poverty alleviation
Eradication of poverty in India is generally only considered to be a long-term goal. Poverty alleviation is expected to make better progress in the next 50 years than in the past, as a trickle-down effect of the growing middle class. Increasing stress on education, reservation of seats in government jobs and the increasing empowerment of women and the economically weaker sections of society, are also expected to contribute to the alleviation of poverty. It is incorrect to say that all poverty reduction programmes have failed. The growth of the middle class (which was virtually non-existent when India became a free nation in August 1947) indicates that economic prosperity has indeed been very impressive in India, but the distribution of wealth is not at all even. After the liberalization process and moving away from the socialist model, India is adding 60-70 million people to its middle class every year. Analysts such as the founder of "Forecasting International", Marvin J. Cetron writes that an estimated 390 million Indians now belong to the middle class; one-third of them have emerged from poverty in the last ten years. At the current rate of growth, a majority of Indians will be middle-class by 2025. Literacy rates have risen from 52 percent to 65 percent during the initial decade of liberalization (1991-2001).[citation needed]

Controversy over extent of poverty reduction
The definition of poverty in India has been called into question by the UN World Food Programme. In its report on global hunger index, it questioned the government of India's definition of poverty saying: The fact that calorie deprivation is increasing during a period when the proportion of rural population below the poverty line is claimed to be declining rapidly, highlights the increasing disconnect between official poverty estimates and calorie deprivation.[42] While total overall poverty in India has declined, the extent of poverty reduction is often debated. While there is a consensus that there has not been increase in poverty between 1993-94 and 2004-05, the picture is not so clear if one considers other non-pecuniary

dimensions (such as health, education, crime and access to infrastructure). With the rapid economic growth that India is experiencing, it is likely that a significant fraction of the rural population will continue to migrate toward cities, making the issue of urban poverty more significant in the long run [43]. Some, like journalist P Sainath, hold the view that while absolute poverty may not have increased, India remains at a abysmal rank in the UN Human Development Index. India is positioned at 132ond place in the 2007-08 UN HDI index. It is the lowest rank for the country in over 10 years. In 1992, India was at 122ond place in the same index. It can even be argued that the situation has become worse on critical indicators of overall well-being such as the number of people who are undernourished (India has the highest number of malnourished people, at 230 million, and is 94th of 119 in the world hunger index), and the number of malnourished children (43% of India's children under 5 are underweight (BMI<18.5), the highest in the world) as of 2008[44]. Economist Pravin Visaria has defended the validity of many of the statistics that demonstrated the reduction in overall poverty in India, as well as the declaration made by India's former Finance Minister Yashwant Sinha that poverty in India has reduced significantly. He insisted that the 1999-2000 survey was well designed and supervised and felt that just because they did not appear to fit preconceived notions about poverty in India, they should not be dismissed outright[45]. Nicholas Stern, vice president of the World Bank, has published defenses of the poverty reduction statistics. He argues that increasing globalization and investment opportunities have contributed significantly to the reduction of poverty in the country. India, together with China, have shown the clearest trends of globalization with the accelerated rise in per-capita income.[46]. A 2007 report by the state-run National Commission for Enterprises in the Unorganised Sector (NCEUS) found that 77% of Indians, or 836 million people, lived on less than 20 rupees per day (USD 0.50 nominal, USD 2.0 in PPP), with most working in "informal labour sector with no job or social security, living in abject poverty."[47][48] A study by the McKinsey Global Institute found that in 1985, 93% of the Indian population lived on a household income of less than 90,000 rupees a year, or about a dollar per person per day; by 2005 that proportion had been cut nearly in half, to 54%. More than 103 million people have moved out of desperate poverty in the course of one generation in urban and rural areas as well. They project that if India can achieve 7.3% annual growth over the next 20 years, 465 million more people will be spared a life of extreme deprivation. Contrary to popular perceptions, rural India has benefited from this growth: extreme rural poverty has declined from 94% in 1985 to 61% in 2005, and they project that it will drop to 26% by 2025. Report concludes that India's economic reforms and the increased growth that has resulted have been the most successful anti-poverty programmes in the country.[49][50][51]

Persistence of malnutrition among children
According to the New York Times, is estimated that about 42.5% of the children in India suffer from malnutrition in India.[52] The World Bank, citing estimates made by the World Health Organization, states "that about 49 per cent of the world's underweight children, 34 per cent of the world's stunted children and 46 per cent of the world's wasted children, live in India." The World Bank also noted that "[w]hile poverty is often the underlying cause of malnutrition in children, the superior economic growth experienced by South Asian countries compared to those in Sub-Saharan Africa, has not translated into superior nutritional status for the South Asian child."[53]

Causes of Poverty in Pakistan :
Pakistan is a poor country. Its economy is facing flucuations now a day. At the time of independence Pakistan has very low resources and capital, so the processes of progress were very slow. Unfortunately the politicians of Pakistan were all not well aware of moderen global system and the progress processes and the needs of country. Due to problems. The countinuous failure of policies leads the people of country to miserable is poverty which is becoming the cause of crime and social disorder. It is difficult to point out all causes of poverty in Pakistan but the major causes of poverty are as under:

Government Policies:
Government is not well aware of present conditions of country. The policies of government which do not have awareness about the problems of a common man. After implimentation, After the failure of one policy, government does not consider its failure and announced aftermaths of last one. Heavy taxes and unemployment crushes the people and the suitable medical facilies are not proviede to people and they are forced to get treatment.

Another cause of poverty is corruption. There are two types of corruption. There is more and more by using fair and unfair means. One has to pay a heavy cost to get his right. Law and order concernes failed to provide justice to a common man. Justice can be bought by money only. But things. In this whole scenario some corrupt people has been occupying the resource conditions.

Division of Agricultural Land:
Pakistan is an agricultural country. Most of people are farmers by profession. One has but he has to divide the land into his children when they got young. After division the land. Now the families of his children are suffering and spending their lives below poverty line.

In our society social bonding are gradually becomes thinner and thinner. Everyone is gradually changing from basic needs and have no concept about the limitations of others. People are not ready to trust on others which effect our social and economic system and it is another cause.

Lack of Education:
The literacy rate of Pakistan is very low. Most of people do not have any concept and they are unable to adopt technology for their business needs, that’s why business do not decrease in revenue which lead the society to poor financial conditions.

Large Scale Import:
The import of Pakistan is greater than export. Big revenue is consumed in importing, import for industry. If we decrease import and establish own supply chains from our better opportunities to earn.

Law and Order:
There are lot of problems regarding law and order. Terrorist attacks create uncertain stock are getting loss due to which the whole country faces uncertaine in crimes.

Fluctuated Foreign Investment:
Foreign investor comes to local markets. They invest millions of dollars in stock market the investor withdraws his money with profit and market suddenly collapses.

Government is unable to manage the departments and country has ow reserve assests, companies run by government are sold to foreign investors.

Moral Culture:
The main reason for poverty is the social dishonesty and irresponsible behaviour of unfair means. A shop keeper is ready to get whole money from the pocket of customer duties well. In society the man considered brave or respectful who do not pay taxes, irresponsible behaviour continuously increases and produces loss of county.

POVERTY REDUCTION STRATEGIES IN PAKISTAN: Poverty has many dimensions in Pakistan. The poor in Pakistan have not only low income but they also lack access to basic needs such as education, health, clean drinking water and proper sanitation. The Government of Pakistan fully recognizes that sustained growth is critical for reducing poverty in the country but focus on growth alone is not enough. A high economic growth must be accopanied by other poverty reducing measures such as investment in human capital, like education, health, food supply programs etc. The key factors which play an important role in reducing poverty and achieving higher economic growth have been identified as under: 1. Importance to agriculture sector: Agriculture in Pakistan is the single largest sector employing about 43% of the county’s work force. More than two thirds of the country’s population lives in rural areas and majority of them are dependent directly or indirectly on agriculture for their living. The government is giving priority in solving the problem of irrigation water by constructing of dams. The other issue of availability of agricultural credit at low cost, timely supply of fertilizer other inputs at cheaper cost are being tackled on priority basis. The emphasis on improving the agriculture sector will increase agricultural productivity, farmers incomes and employment oppurtunity in the rural areas. Housing and construction sector: In the past fewe years, the government is taking effective measures to speed up growth in the housing and counstruction sector. This sector is highly labour intensive. About 35-40 industries have forward and hackward linkages with it. In the Federal Budgets, the government has taken several concessionary measures to boost up the housing and construction sector. Small and Medium Enterprises (SMEs): The SMEs represent a significant component of Pakistan’s economy. These help in providing employment to the workers and value addition to the products. The government is providing them credit facilities, skill development and technical information through micro credit banks namely SME Bank and Khushhali Bank. Information Technology: For reducing poverty, information technology is yet another sector which has great potential to creat jobs for the educated unemployed youth in the country. The government has taken effective measures to develop IT and telecom Sector in the last four years. The fast growing IT and telecom sectors is creating more job opportunities, raising the income level of the people, and hence reducing poverty.









Investment in human capital: For poverty alleviation, investment in human capital is very essential. The government is increasing allocations in the Federal and provincial budgets in education, health and nutrition, both for the people living in urban and rural areas. Promoting gender equality: The government is encouraging and providing opportunities to woment (who are more than 51% or our population) to work in various enterprises along with men. The promotion of gender equality will increase economic growth and help in poverty reduction. Good Governance: Ivestment in improving governance in short as well as long term has direct impact on reducing poverty. Access to justice facilitates enforcements of property rights, encourages inflow of foreign and direct investment which increases employment opportunitites, improvement in the law and order situation encourage investment in the country. Construction of small public works: The government is creating employment opportunities by taking up small public works like construction of farm to market roads, rehabilitating water supply schemes, repairing existing school, lining water courses etc. Further Land Reforms: The imposing of ceiling on land and distribution of the surplus land among the landless, making provision for proper security of the tenant cultivators, arranging irrigation facilities for dry land, development of agro based industries etec., can go a long way in reducing poverty in the country.

Poverty reduction in Pakistan: During the last few years, a strong growth in the economy, rise in per income, an increasing flow of foreign remittances and massive government spending on poverty related and social sectors programs have helped in reducing poverty in Pakistan, from 34.5% in 2001 to 23.9% in 2007.

Poverty is as old and as injurious as the human kind. No other factor has affected humanity so severely as the poverty has done it. Numerous studies and measures were taken by humans to eradicate poverty from society and made it balanced with the human needs and aspirations. Even the developed nations have not been able to eradicate this menace completely from their societies, what to talk about poor and underdeveloped nations.

In our humble and novice efforts we have endeavored to dilate on few of the factors and dig out their effects on poverty. We have found that although inflation and saving have negative effect on poverty yet strangely it is insignificant. Where as unemployment and literacy have positive relationship with poverty. Investment, Income distribution, GDP, trade openness has negative relationship. Despite our findings and other studies done in past and undergoing now, we find temporary solutions to address it momentarily. It is one of the constants of our social problems societies are confronting from times immemorial—some relief and

more sufferings an the cycle continues, and likely to remain prevalent for the times to come.

http://www.statpak.gov.pk http://www.articlesbase.com http://www.planningcommission.com.pk http://www.tradechakra.com Economics of Pakistan written by Sh. Muhammad Ramzan , Khursheed Khan and Prof. M. Saeed Nasir.

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