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Povertyand NaturalResource
Managementin Pakistan
Muhammad Irfan
I. POVERTY PROFILE
Multidimensional of povertydefies a neat demarcation.Oftenseveral but
not separable meanings can be attributedto povertywhich essentially should
encompass totalityof deprivationexperienced by an individual or group of
individuals.Encyclopaediaof Social Sciences forinstance,suggeststhatdefinition
of
poverty is convention specific and distinguishesbetween Social Poverty and
Pauperism.The formerincludes economic inequalityor propertyincomes etc in
additionto social inequalitysuch as dependenceor exploitationwhile Pauperism
denotesones inabilityto maintainat the level conventionallyregardedas minimal.
Pauperism has been the focus of researchersin Pakistan and elsewhere in the
developingworld, whereineffortshave been made to quantifythe poverty,thus
defined,usingessentiallyarbitrary povertylinesor normswithapplicationof varying
procedures forestimation. the
During past varietyof procedureswereused. Planning
Commissionof Pakistanhoweverin 1998-99 suggestedan officialpovertyline in
termsof minimumcaloric requirementper adult (2350 per day) and the needed
expenditureof Rs 670 per personforthatyear.Despite the need to demonstrate the
relevance of this caloric requirementthe constructedpovertyline can facilitate
monitoring thepovertylevels in thecountrywhichhas assumedimportancegiventhe
global emphasison MDGs and Social SafetyNets.
Regionaland ProvincialPovertyIncidence
Invariablyall theresearchexerciseson estimationof povertyconcurthatpoverty
levelsare higherin ruralareasthanin theurban(see Tables 1, 2 and 3). Giventhatthe
ruralpopulationaccountsfortwo thirdsof thetotal,majority of thepoor live in rural
Pakistanandpoverty is a ruralphenomenon.Accordingto theofficialestimatesthehead
countratioof poor in ruralareas is almostdoubleof theurbanareas in 2004-05. The
WorldBankstudysuggestsalso similarmagnitudes of theruralurbangap,thoughJamal
differson thegap betweenurbanand ruralareas.These researchexercisessuggestthat
poverty is predominantly a ruralphenomenon becausetwo-thirdsof thepopulationslive
inruralareas.
ProvincialPovertyProfile
Fourprovinces, whichalso coincideswith
mostlydefinedon thebasis of ethnicity
resourceendowments
natural ThusPunjaband Sindhprovinces
oftenclassifythecountry.
haverichagricultural
resourcebaseas wellas botharemoredevelopedcompared toresource
PovertyIncidenceat DisaggregatedLevels
To a largeextentthedichotomy of urbanand ruralareasfailsto reckonwiththe
continuum obtainedat ground.Ruralareasareintegrated withnearbyurbancentres because
of boththefactorand productmarket Similar
interdependence. interlinkages existbetween
smalltownsand majorurbancentres.In otherwords,neither theurbanareasnortherural
areasarehomogenous units.Urbanareasincludemajortownsandsmalltowns.Based on
householdlevel (raw data) one findsthatthemajorurbancentres(classifiedby Federal
Bureauof Statistics as selfrepresentingbecauseof largepopulation sizes andtheprovincial
capitals)are in a very comfortable situationwhere the poverty incidence (usingofficial
poverty line)in 2004-05 was 9.7 In
only percent. contrast theotherurbanareaswerecloser
to ruralareaswherethepercentages of poorwere22.1 percent and28 percent respectively.
Withintheruralareasnon-farm populationwas worsthitbyregistering 34 percent pooras
compared to 23 percentof thepopulation of farm households. In terms of the provincial
comparison substantial differential
persistswherein majorurbancentresof Sindhappearto
be leastpoor(6.2 percent)comparedto 20.6 percentof NWFP. In an overallcomparison,
NWFP can be regardedas the mostpoor (see AppendixTable 5). Major urbanareas
particularlyin SindhandPunjabprovinces weretheoneswhichexperienced industrial
and
commercialdevelopment, hence a lower level of povertyis plausible.The above
disaggregated descriptionof povertyincidenceis indicative
of theclose similarity between
ruralareasand smallurbanareas.The latterappearsto be theextension of theformer with
mushroom growth oflessproductiveinformal sectorenterprises.
than5 acres. On the otherhand,two percentof the householdsat the top owned 30
percentof land.Andthislandinequality getstranslatedintoincomeinequality andhigher
levelof povertyamongthesharecroppers and tenantsamongthefarmpopulationin an
otherwise richagriculturalregionsof Punjaband Sindh.WhilstBalochistanand NWFP
accountfor 18 percentand BaraniPunjab accountsfor6 percentof totalpopulation,
nearlythree-fourth of thepopulationresidein areashavingirrigated In those
agriculture.
areas wherethefeudalisticstructure persistsaccounting forover 25 percent of therural
population failto getout of povertybecause themajor share of is
output appropriated by
landlordsas returnsto landareover50 percent.
Barani or non-irrigatedPunjab whichyieldedthe lowestlevels of povertyhas
benefited fromdiversedevelopments whichled thisarea to relativeprosperity. Priorto
independence the BritishEmpireprovidedmilitary and otherjobs disproportionately to
thisregion.This was the beginningof the road to relativeprosperity in theseareas
becausetheempirealso builthospitals, schoolsandinitiated otherdevelopment activities.
This low level of povertyof non-irrigated Punjab is also associatedwithlowerfamily
sizes and betterhumancapitalassets. Furthermore, becauseof thelocationof capitalof
country Islamabad, headquartersof all the threebranches of ArmedForces and hostof
otherindustrial the
activities, area is well developedthoughnot havingvast irrigated
lands.
agriculturalgrowthin percapitatermsafteradjustingtheofficialpopulationgrowthrate
[WorldBank (2007)] was negative(-1 percent).This to a largeextentexplainstheweak
linkbetweenpovertylevelsand agricultural growth, becausethelatterwas notsufficient
as well as it has been erraticexhibitingyear-wise The sectordependsto a
fluctuation.
largeextenton the production of majorcropslike wheatand cotton.The latterbeing
producedin Southern Punjaband Sindhwherelanddistribution is highlyskewedthereby
one getsan anomalousfindings thatagriculturally richzones are associatedwithhighest
levelsofpoverty.
Agricultural growthduringtheperiodof GreenRevolution(1970 to 1980) was
mostlyinputbased (seeds, fertiliser and water). Since theearly1990s,thetotalfactor
in
productivity crop sub-sector appears to have remainedstagnantor declined.
Deterioration in waterand soil qualitysince 1990s is also reported.In orderto achieve
perceptible growthin thefarmsector,measuresare neededto addressthedecliningsoil
fertility manypartsof thecountry.
in Accordingto theWorldBank (2007) study,around
Rs 70 billionper yearor 6.8 percentof agricultural GDP is lostdue to soil degradation
attributable in wateruse. It is also imperative
to inefficiency to diversify and venture into
high value crops wherever appropriate. Research on high value crop such as oilseeds,
vegetables,fruitsand livestockis desperatelyneeded.It may be added thatlivestock
production will have a majorimpacton povertyalleviationbecause it is moreevenly
distributed thanthe crop income.Improvement in waterdeliveryhas to be accorded
priority.
Efforts
madein thepastto redistribute thelandthrough landreforms almostfailed.
Now theland reforms have been officiallybanished.Negativeimplications of insecure
for
tenancyarrangement production can be addressed but politicalfeasibilityis not
certain,thoughproductivity gains accordingto some studiesare of the orderof 18
percentifsmallfarm sharecropper resultsfroma shiftto rentfixedtenancy.Efficiency of
land marketsand securityof tenancycan be improvedthroughimprovement of land
of sale andpurchaseoflandin an overallcontextof limitedarable
recordsandfacilitation
land.
Rural Non-farmEconomy
Preciseestimateof thenumberof ruralnon-farm enterprisehaveneverbeenmade
though a recentWorld Bank studyputs it around3.8 million.
Almost two-fifths of the
ruralpopulationis engagedas self-employed or wage earnerin thenon-farm enterprise
sector.Whilemostof theself-employed in tradesector,wageemployment is foundin the
construction
andtransport sectors.Around30 percentoftheaveragehouseholdincomein
ruralareasoriginatesin thissub-sector.
Mostoftheseenterprises in ruralareas,in nearby
small towns, are familybased. These enterprisessimply are reflectiveof low
and less skillednatureof thebusiness.These so called informal
productivity activitiesto
a largeextentare recyclingwages.Accordingto WorldBank studymedianvalue added
per workerwas Rs 18,000 in ruralareas and Rs 27,000 small townenterprises. Poor
and lack of access to credithas been identified
infrastructure as major constraint to
growth.
APPENDIX
AppendixTable 1
ComparisonofPoverty Based on theOfficialPoverty
Estimates, Line,
1998-99,2000-01and 2004-05
1998-99 2000-01 2004-05 Difference
( 1)-(3) Difference(2)-(3)
Region Щ £} Q) (£ (3}
Urban 20.9 22.69 14.94 5.96 7.15
Rural 34.6 39.26 28.13 6.47 11.13
Overall 306 3446 23JH 6M 1052
Source: Haque andArif(2007).
AppendixTable 2
PovertyEstimatesin Pakistan,1998-99, 2001-02 and 2004-05
1998-99 2001-02 2004-05
Poverty National 30.0 34.4 29.2
Headcount Urban 21.0 22.8 19.1
Rate Rural 33.8 39.1 34.0
National 6.3 7.0 6.1
PovertyGap Urban 4.3 4.6 3.9
Rural 7.1 8.0 7.2
Squared Nation 2.0 2.1 2.0
PovertyGap Urban 1.3 1.4 1.2
Rural 2J. 2Л 23
Source: WorldBank(2007).
AppendixTable 3
Trendsin Poverty
Incidence
(PercentageofPopulationLivingBelowthePovertyLine)
1987-88 1996-97 1998-99 2001-02 2004-05
Pakistan 23 28 30 33 30
(2.4%) (3.6%) (3.3%) (-3.0%)
Urban 19 25 25 30 28
(3.5%) (0%) (6.7%) (-2.2%)
Rural 26 30 32 35 31
(1.7%) (3.3 %) (3.1 %) (-3.8 %)
Source: Jamal(2007).
Note: AGR frompreviousperiodaregivenin parenthesis.
AppendixTable 4
IncidenceofPoverty
byRural/Urban
Overall ___ RuralAreas
1998-99 2000-01 2004-05 1998-99 2000-01 2004-05 1998-99 2000-01 2004-05
WorldBank (2006d)
Punjab 29.8 30.7 29.5 23.7 23.0 21.2 32.2 33.8 33.4
Sindh 26.2 37.5 22.4 15.3 207 13.8 34.5 48.3 28.9
NWFP 408 42.3 39.3 26.1 30.0 26.1 43.3 44.4 41.9
Balochistan 22.1 37.2 32.9 25.2 27.4 21.5 21.6 39.3 35.8
Anwar(2006)
Punjab 31.6 32.2 29.7 24.2 23.2 206 34.6 35.8 33.9
Sindh 26.0 35.3 22.4 15.6 20.1 14.3 34.0 45.0 28.4
NWFP 41.3 41.3 38.9 27.1 29.0 26.5 43.7 43.4 41.4
Balochistan 21.6 35.5 33.1 22.9 26.2. 22.4 21.3 37.5 35.9
AppendixTable 5
PovertyIncidencebyProvinceand Region2004-05(Poor %)
Urban Areas Rural Areas Overall
Total MajorUrbanCentres Other Total Farm Non-farm Total
Pakistan 14.9 9.7 22.1 28.1 23.1 34.2 23.9
Punjab 16.3 11.8 21.0 28.0 19.8 36.6 24.3
Sindh 11.0 6.2 24.6 23.7 24.0 23.2 18.3
NWFP 21.9 20.7 22.5 34.1 32.0 37.0 32.1
Balochistan 18.5 74 25.6 28.8 223 36.5 26.7
Source: Based on HouseholdData Tabulation,HIES 2004-05.
AppendixTable 6
byRegionsand Overall-I 992-93to 2001-02
GiniCoefficient
Year FBS (2001) WorldBank(2002) Anwar(2005)
Overall
1992-93 0.2680 0.276 0.3937
1993-94 0.2709 0.276 0.3864
1998-99 0.3019 0.296 0.4187
2001-02 - - 0.4129
Rural Areas
1992-93 0.2389 0.252 0.3668
1993-94 0.2345 0.246 0.3647
1998-99 0.2521 0.251 0.3796
2001-02 - - 0.3762
UrbanAreas
1992-93 0.3170 0.316 0.3970
1993-94 0.3070 0.302 0.3685
1998-99 0.3596 0.353 0.4510
2001-02 - - 0.4615
AppendixTable 7
forPakistanbyRegionsbetween
ofPoverty
Decomposition
2001-02to2004-05and 1998-99to2001-02
Growth Redistribution Residual TotalChangein Poverty
1998-99to 2001-02
Pakistan 5.66 -2.05 -0.22 3.83
Urban 4.58 -1.82 0.99 1.77
Rural 6.12 -2.23 -0.7 4.59
2001-02to 2004-05
Pakistan -12.48 1.42 -0.5 10.56
Urban -8.06 1.18 0.91 7.79
Rural -14.29 2.2 -0.93 11.16
1998-99to 2004-05
Pakistan -5.90 -0.18 0.61 6.69
Urban -4.54 -1.42 0.02 5.98
Rural (Ш 094 6M
-6£7
Source:Anwar(2006).
AppendixTable 8
HeadcountbyAgroclimatic
Poverty Zone2004-05
(%)
Urban Rural Pakistan
Rice WheatPunjab 11.00 20.39 16.09
MixedPunjab 21.25 29.60 26.90
Cotton-WheatPunjab 20.27 36.54 33.02
Low Intensity
Punjab 34.94 29.47 30.34
BaraniPunjab 7.66 7.20 7.38
CottonWheatSindh 18.29 24.36 22.51
Rice- OtherSindh 8.43 23.09 15.82
NWFP 21.88 34.13 32.11
Balochistan 18.46 28.76 26.65
Total 1A94 28ЛЗ 23.94
Source:Based on HouseholdLevel Data Tabulation.
AppendixTable 9
Estimation byFarmvs.Non-farm
ofPoverty HouseholdbyAgro-climatic
Zone
Urban Rural Pakistan
Farm Non-farm Farm Non-farm Farm Non-farm
Rice-Wheat Punjab 4.20 11.33 11.10 28.54 16.09 83.91
MixedPunjab 8.66 22.32 21.03 37.06 26.90 73.10
Cotton-Wheat Punjab 4.56 22.25 29.17 44.00 33.02 66.98
Low IntensityPunjab 41.51 33.39 21.08 45.11 30.34 69.66
BaraniPunjab - 8.21 2.04 14.55 7.38 92.62
CottonwheatSind 27.80 17.47 24.12 24.65 22.51 77.49
Rice-OtherSind 18.45 8.07 23.85 21.83 15.82 84.18
NWFP 15.55 22.64 32.01 36.97 32.11 67.89
Balochistan 25.76 17.75 22.30 36.52 26.65 73.35
Total 14.90 85.10 28.10 78.90 23.94 76.06
Source:Based on HouseholdLevelTabulationofHIES 2004-05.
AppendixTable 10
SourcesofIncomebyPoverty
Status2004-05(Percentages)
Remittance Non
Wages/ Foreign+ Crop Livestock farm Rental Sale of Other Total
Salaries Pak Income Income Income Income PropertyIncome Income
Urban Extremely Poor 55.04 0.19 0.00 1.68 27.44 0.00 0.00 15.65 100.00
Ultra-poor 39.22 4.64 2.93 0.95 38.87 0.00 0.04 13.36 100.00
Poor 45.44 3.03 3.08 1.26 33.03 0.36 0.04 13.75 100.00
Quasi Non-poor 40.17 4.01 2.67 0.89 37.12 0.52 0.05 14.57 100.00
Non-poor 33.00 6.23 4.00 0.92 33.91 2.10 2.02 17.82 100.00
Total 37.07 5.08 3.46 0.97 34.77 1.34 1.12 16.19 100.00
Rural ExtremelyPoor 26.87 4.40 15.25 11.49 22.00 0.00 0.00 19.99 100.00
Ultra-poor 33.39 6.14 15.21 6.81 23.18 0.03 0.46 14.79 100.00
Poor 28.48 7.83 21.01 7.83 20.91 0.09 0.96 12.89 100.00
Quasi Non-poor 22.37 8.85 26.43 8.55 19.91 0.40 0.80 12.69 100.00
Nonpoor 15.30 11.58 32.22 6.97 16.80 0.79 1.58 14.77 100.00
Total 23.07 9.08 25.58 7.84 19.59 0.38 1.04 13.44 100.00
Pakistan ExtremelyPoor 31.14 3.76 12.94 10.00 22.83 0.00 0.00 19.33 100.00
Ultra-poor 34.95 5.74 11.92 5.24 27.38 0.02 0.35 14.41 100.00
Poor 32.94 6.57 16.30 6.10 24.10 0.16 0.72 13.11 100.00
Quasi Non-poor 28.99 7.05 17.59 5.70 26.31 0.44 0.52 13.39 100.00
Non-poor 26.19 8.29 14.85 3.24 27.33 1.59 1.85 16.65 100.00
Total 29.13 7.34 16.00 4.86 26.16 0.80 1.07 14.63 100.00
Source: Based on HouseholdLevel datatabulation.
AppendixTable 11
SourcesofIncomebyLand Size - 2004-05 (Percentages)
Wages/ Crop Livestock Non-farmRental Sale of Other
Land Category Salaries RemittanceIncome Income Income Income propertyIncome Total
No land 37.11 7^21 1% 2Л6 33.23 Ш Õ79 15.53 100
1-2.5 28.42 12.26 17.52 6.62 22.13 0.27 0.19 12.59 100
2.5-5 21.71 8.34 28.24 8.23 14.98 0.34 3.87 14.28 100
5-7.5 13.86 8.31 34.97 8.82 18.08 0.10 0.17 15.69 100
7.5-12.5 16.17 9.48 35.84 9.29 15.36 0.24 1.34 12.29 100
12.5-25 17.21 9.25 32.91 9.97 14.16 0.43 2.82 13.26 100
25-hi 10.87 5.59 47.55 10.32 11.46 0.55 0.93 12.72 100
Total 29.13 7.34 16.00 4.86 26.16 0.80 1.07 14.63 100
Source: Based on HouseholdLevel HIES 2004-05Data Tabulation.
AppendixTable 12
Numberof Yearsto GetoutofPovertybyGrowthand EquityScenarios
Low Intermediate High
Poverty Growth Growth Growth
Equitable Poverty
Extreme 70 24 15
Moderate 29 10 6
HighlyInequitablePoverty
Extreme 139 47 29
Moderate 58 20 12
ModeratelyInequitablePoverty
Extreme 93 32 19
Moderate 39 13 8
Source:Weissand Khan(2006).
AppendixTable 13
ofZonesin TermsofDistricts
Distribution
AgroclimaticZones Districts
1. Rice/WheatPunjab Sialkot
Gujrat
Gujranwala
Sheikhupura
Lahore
Kasur
Narowal
Mandi Bahauddin
Hafízabad
2. Mixed Punjab Sargodha
Khushab
Jhang
Faisalabad
Toba Тек Singh
Okara
3. Cotton/WheatPunjab Sahiwal
Bahawalnagar
Bahawalpur
Rahim Yar Khan
Multan
Vehari
Lodhran
Khanewal
Pakpattan
4. Low IntensityPunjab D. G. Khan
Rajanpur
Muzaffargarh
Leiah
Mianwali
Bhakkar
5. Barani Punjab Atttock
Jhclum
Rawalpindi
Islamabad
Chakwal
6. Cotton/WheatSindh Sukkur
Khairpur
Nawabshah
Hyderabad
Thaiparker
Nousheroferoz
Ghotki
Umerkot
Mirpurkhas
Sangbar
7. Rice OtherSindh Jacobbabad
Larkana
Dadu
Thatta
Badin
Shikarpur
Karachi
8. NWFP Swat
Dir
Chitral
Buner
Charsada
Noshera
Peshawar
Kohat
Karak
Tank
Abbottabad
Haripur
Batagram
Kohistan
Mardan
Swabi
Bannu
Lakkimarwat
Shangla
Malakand Agency
Hangu
D.I. Khan
9. Balochistan Quetta Division
Sibi Division
Kalat Division
Makran Division
Zhob Division
Nasirabad Division (Excluding Nasirabad District)
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