TABLE OF CONTENTS

Introduction Definitions History Kinds of Poverty Methods of Measuring Poverty Causes of Poverty Effects Of Poverty Current Situation i -Global ii -Pakistan Measures/Removals of Poverty Poverty In Pakistan Poverty Reduction Strategies/Solutions Govt. Policies about Reduction of Poverty Summing up References

INTRODUCTION

HISTORY

DEFINITIONS OF POVERTY
Most economists agree that a safe definition of poverty is the

Inability, through lack of income or wealth, to provide decent housing, clothing, health care, nutrition, or education for oneself or one's family.

Poverty is deprivation of those things that determine the quality of life, including food, clothing, shelter and safe drinking water but also such "intangibles" as the opportunity to learn, to engage in meaningful employment, and to enjoy the respect of fellow citizens. State of being poor: the state of not having enough money to poor: take care of basic needs such as food, clothing, and housing. housing. Lack : a deficiency or lack of something poverty of emotion Infertility of soil: lack of soil fertility or nutrients. soil: nutrients.

FAMOUS QUOTATIONS
³Poverty iz the stepmother ov genius.´
By : Josh Billings (1818 - 1885)

³Oh! God! that bread should be so dear, And flesh and blood so cheap!´
By : Thomas Hood (1799 1845)

³Poverty is a slap on Nation¶s face.´
By : N.Y Times

TYPES OF POVERTY
Following are the types of poverty

1- Economic Poverty
Lack of monitory demands for providing themselves with Food, Cloth and Shelter.

2 - odily Poverty
Lack of property physical health and access to health living conditions.

3 - Mental Poverty
Lack of thinking, which is resultant of lack of access to education and knowledge.

4 - Societal Poverty
Lack of social connectivity.

5 - Cultural Poverty
Lack of coming together in a society. No collaborative activities taking place which leads to disconnect between people.

6 - Spiritual Poverty
Surprising right? Yes, lack of feeling of togetherness/brotherhood plays an important role in bringing people together.

7 - Political Poverty
Lack of understanding of how system works. The basic problem is the understanding of how to cast one's vote and elect their leaders.

METHODS OF MEASURING POVERTY
1) Per capita monthly expenditures Method 2) Per capita calories Method 3) The per capita income approach 4) The measure of head count ratio

1) Per capita monthly expenditures measures
This criterion was presented by Dr. Hussain Malik (A late professor of Quad e Azam University). Poverty can be measured on the basis of per capita monthly expenditures. 



If the expenses made by any individual are above 748 RS a month then he is

considered not poor, Below this level is considered to be poor.

2) Per capita calories Method
This criterion was also presented by Dr. Hussain Malik. According to this measure : 

The person who at average gets 2550 calories per day he is living above the poverty
line 

The person who is not getting per day calories 2550 he is living below poverty line. Food Deficient Population = 69.69%

3) The measure of head count ratio
In this method ratio of poor to the total population is represented. 

This approach does not make estimation of poverty. However, this can be known how many poor are there in the country And what is there future trend?
Poverty Headcount in Transition Regions

4) The per capita income approach
In this criterion the income level is set for a person. 



A person earns more than 748 RS per day then he is considered not poor. A person having income below this point is considered poor.

Poverty Line For 2001 And 2006-07
The inflation rate of 21.45 percent between the PIHS 2000-01 and PSLMS 2006-07 is used to inflate the per capita per month poverty line of Rs. 723.4 to get Rs. 878.64 as the poverty line for 2006-07. While calculating the inflation rate between the two surveys, monthly Consumer Price Index in different months during the survey period.

Comparison of poverty estimates
Estimates by Region Headcount 2000-01 2004-05 Poverty gap 2000-01 2004-05 Severity of poverty 2000-01 2004-05

Urban Rural Overall

22.69 39.26 34.46

14.94 28.13 23.94

4.55 8.04 7.03

2.87 5.64 4.76

1.35 2.44 2.13

0.84 1.77 1.48

40 30 20 10 0 E t b a te s He a ou t Se v e r ity of pov e r ty

CURRENT SITUATION
Overvie o xisting overty Trends
opulation 152.53 million overty Line based on caloric consumption presently, s.878.64 per adult opulation belo the poverty line 23.9 percent (2004-05) bsolute no. o poor 36.45 million (2004-05) ercentage o population living belo the poverty line in rural areas 28.10 percent and in urban areas14.9 percent. OV TY 1996-97 TO 2004-05 by 7.1 million to 3.1 million 2.1 million to 700,000 2.4 million to 1.9 million

people in absolute poverty ensioners in absolute poverty Children in absolute poverty

CAUSES OF POVERTY
Poverty has many causes, some of them very basic. Some major causes of Poverty are as follows :

A) Overpopulation
Overpopulation the situation of having large numbers of people with too few resources and too little space is closely associated with poverty. It can result from high population density or from low amounts of resources or from both. Excessively high population densities put stress on available resources. Only a certain number of people can be supported on a given area of land and that number depends on how much food and other resources the land can provide.

B) Vicious Cycle Of Poverty
³A condition in which a disorder or disease gives rise to another that subsequently affects the first.´ VCP is the main cause of under development in Poor Countries DEMAND SIDE OF VCP SUPPLY SIDE OF VCP

POVERTY

POVERTY

Low Productivity

Small Size Of Markets

Low Productivity

Low Savings

Lack Of Capital

Low Investment

Lack Of Capital

Low Investment

C) Unequal distribution of resources in the world economy
Many experts agree that the legacy of colonialism accounts for much of the unequal distribution of resources in the world economy. In many developing countries, the problems of poverty are massive and pervasive. In recent decades most of these countries have tried to develop their economies with industry and technology with varying levels of success. Some nations have become fairly wealthy. Many developing countries, however, lack essential raw materials and the knowledge and skills gained through formal education and training.

D) Global Distribution of Resources
In many developing countries, the problems of poverty are massive and pervasive & many experts agree that the legacy of colonialism accounts for much of the unequal distribution of resources in the world economy.

§ § §

In recent decades most of these countries have tried to develop their economies with industry and technology with varying levels of success. Some nations have become fairly wealthy. But many of them lack essential raw materials and the knowledge and skills gained through formal education and training.

E) Inadequate Education and Employment
Illiteracy and lack of education are common in poor countries. Govts. of developing countries often cannot afford to provide for good public schools, especially in rural areas. Poor people also often forego schooling in order to concentrate on making a minimal living. In addition, developing countries tend to have few employment opportunities, especially for women. As a result, people may see little reason to go to school.

F) High Standards of Living and Costs of Living
People in developed nations have more wealth and resources than those in developing countries, their standard of living is also generally higher. Thus, people who have adequate wealth and resources in developing countries may be considered poor in developed countries.

G) Environmental Degradation
The deterioration of the natural environment, including the atmosphere bodies of water, soil and forests is an important cause of poverty. Environmental problems have led to shortages of food, clean water, materials for shelter and other essential resources. people who live directly off these natural resources suffer most from the effects.

Social Indicators
Country Life Expectancy Year 2007** M 63.2 62.1 71.7 62.5 61.6 70.2 66.7 68.6 71.1 65.3 F 63.6 65.3 77.0 64.2 62.4 73.7 74.0 72.8 75.8 69.2 Infant Mortality Rate per 1000** Year 2007 70^ 62 12 56 59 26 18 26 10 30 Mortality Rate under 5 per 1000 Year 2007** 10 85 14 77 76 31 21 34 12 38 Population Avg. Annual (%) Growth Year 2007** 11.8* 1.5 1.3 1.7 2.2 0.7 0.7 2.0 2.0 1.3

Pakistan India Sri Lanka Bangladesh Nepal China Thailand Philippines Malaysia Indonesia

G) Economic and Demographic Trends
In the 1950s and 1960s, most people in the . experienced strong income growth. Because of inflation average family income almost doubled during this period.

owever, between the early 1970s and the early 1990s typical incomes, adjusted
for inflation, grew little while the cost of living increased.

Periods of economic recession tend to particularly affect young and less-educated people, who may have difficulty finding jobs that pay enough to support themselves.

H) Individual Responsibility and Welfare Dependency
There are differing beliefs about individual responsibility for poverty. Some people believe that poverty is a symptom of societal structure and that some proportion of any society inevitably will be poor. Others feel that poverty results from a failure of social institutions, such as the labor market and schools. These people feel that poverty is beyond the control of those who experience it, but might be remedied if appropriate policies were enacted.

EFFECTS OF POVERTY
Poverty has wide-ranging and often devastating effects.

Effects of Poverty

A) Malnutrition and Starvation
Malnutrition is one of the most common effects of poverty. In developing countries, the poorest people cannot obtain adequate calories to develop or maintain their appropriate body weight. In Ethiopia, it is estimated that almost half of all children under the age of 5 suffer from malnutrition. Poor children in developing countries often suffer the most, commonly from a deficiency known as protein-energy malnutrition.

B) Infectious Disease and Exposure to the Elements
In addition to the effects of malnutrition, the poor experience high rates of infectious disease. Inadequate shelter or housing creates conditions that promote disease. Without decent protection, many of the poor are exposed to severe and dangerous weather as well as to bacteria and viruses carried by other people and animals. In the tropics, monsoons and hurricanes can destroy the flimsy shelters of the poor. Once exposed, people are vulnerable to fluctuations in temperature that lower their resistance to disease. They also are more likely to become infected with diseases carried by insects or rodents.

C) Mental Illness and Drug Dependence
In most developed countries, rates of mental illness are highest among the poor. The most common disorders associated with poverty are depression and anxiety disorders. Without meaningful, well-paying work and the resources and social affirmation that come with it, many poor people develop low self-esteem and feelings of worthlessness. People who are stressed by the uncertainty of where they will get their next meal or spend the night often develop high anxiety.

Because the poor experience high rates of severe mental illness, they also have high rates of suicide.

D) Crime and Violence
Some experts believe that poverty leads people to commit acts of violence and crime, Anger, desperation, and the need for money for food, shelter, and other necessities may all contribute to criminal behavior among the poor. Other experts caution that the link of cause and effect between poverty and crime is unclear. In some cases, poverty undoubtedly motivates people to commit crimes, although it may not be the only factor involved. Other problems associated with poverty are often linked to crime.

E) Long-Term Effects
People who grow up in poverty may experience lifelong problems because of it. Lack of food , shelter , clothing and deprivation of health etc. are some common features of poverty. They are at a disadvantage in things such as education because they have limited income and resources. All children also need adequate nutrition and health care for good physical and mental development, and poor children are often malnourished and sick from a young age.

Poverty In Developing Countries
Œ Œ
Many developing nations experience severe and widespread poverty, which often leads to disease epidemics, starvation, and deaths. In the past few decades, millions of people have starved and died as a result of famine in such countries as Bangladesh, Ethiopia, North Korea, Somalia, and Sudan.

Œ

As recently as 1998, almost one person in four (23 percent) residing in developing countries lived on less than $1 a day.

Œ

Throughout the developing world, ethnic and racial minorities experience prejudice from majority groups and have difficulty attaining an average standard of living.
Under the system of apartheid, enforced in South Africa from 1948 to the early 1990s, the government systematically denied rights, fair treatment, and educational and employment opportunities to nonwhites, leaving them in massive poverty.

EXAMPLE

Œ

Migrants and refugees, who have left their native land and settled elsewhere, also experience high degrees of poverty.

Œ

Migrants commonly lose the immediate economic support of their families and enter into societies in which they may have difficulty finding good work, especially if they do not speak the language .

A) AFRICA
Africa includes some of the poorest countries in the world. In much of Africa south of the Sahara, harsh environmental conditions exacerbate the conditions of poverty

B) South and East Asia
Approximately 267 million people in East and Southeast Asia lived on less than $1 per day in 1998.

China has very large numbers of poor due to the great size of its rural population. Southeast Asian countries as Vietnam, the Philippines, and Indonesia also rank among the world¶s poorest.

C) LATIN AMERICA
In Latin America (Central America, South America, and the Caribbean), the poorest people are commonly Native American, people of African ancestry, and mestizos.

D) EASTERN EUROPE & CENTRAL ASIA
Many countries formerly part of the Communist bloc (the Communist countries of eastern Europe), including those of the former Soviet Union, have relatively high levels of poverty.

Poverty Lines Used in the Region
Country Pakistan India Bangladesh Sri Lanka China Vietnam Philippines Thailand Indonesia Nepal
2500 2000 1500 1000 500 0 National Rural Urban

National 2350* 2112 2250* 2150 2100 2000 1978 2100 2250*

Rural 1410* 2400 1267.2 1200 1450*

Urban 940* 2100 844.8 800 800*
Pakistan India Bangladesh Sri Lanka China Vietnam Philippines Thailand Indonesia Nepal

POVERTY IN DEVELOPED COUNTRIES
Poverty rates in some developed countries are higher among racial minorities. Example : U.S. , U. , USTR LI etc«

Indigenous people in developed countries also tend to su er rom very high rates o poverty. In the United States, many Native mericans live and ork on economically depressed . Native merican reservations and experience high rates o oblessness and

alcoholism.

In ustralia, many boriginal people live in similar conditions.

Where The Poor Live
Latin America and Carrabian 0.5% Europe and Central Asia 2% Middle East and North Africa 6.5%

South Asia 44.5%

East Asia & Pacific 23.2%

Sub-Saharan Africa 24.3%

Measures/Removals of Poverty
How people and institutions portray and try to cope with poverty depends to a considerable extent on how poverty is measured. The differences between relative poverty (having less than others) and absolute poverty (not having enough to survive) are great. There are a wide variety of options for measuring wealth and wellbeing and for establishing lines that separate the poor from the no poor.

A) International Measurements
In the 1990s developed countries typically enjoyed average per capita yearly incomes in excess of $15,000 and often $20,000.

The poorest countries often had per capita yearly incomes substantially under $1,000.

Africa and one of the world¶s poorest countries, was about $100 at the end of the 1990s.

According to one figure, the per capita income in Mozambique, a country in southeastern While people with such low incomes might be able to produce or obtain some food and other basic needs, they generally have difficulty providing for themselves.

Pakistani Poverty Measurements
Poverty is one of the major economic problems in Pakistan. It has been an economic problem ever since Pakistan came into being. After the time of independence Pakistan¶s economy moved at a very slow pace.

There are many reasons, which made the economy to move slowly..

The Human Development Index
The HDI provides a composite measure of three dimensions of human development:

i. ii. iii.

Living a long and healthy life Being educated Having a decent standard of living

Pakistan¶s human development index 2007
HDI value Life expectancy at birth Adult literacy rate (years) (% ages 15 and older) 1. Japan (82.3) 121. Bhutan (64.7) 122. Bolivia (64.7) 123. Pakistan (64.6) 1. Georgia (100.0) 122. Mauritania (51.2) 123. Timor-Leste (50.1) 124. Pakistan (49.9) 125. Côte d'Ivoire (48.7) 126. Nepal (48.6) 139. Burkina Faso (23.6) Combined primary, secondary and tertiary gross enrolment ratio (%) 1. Australia (113.0) 156. Ethiopia (42.1) GDP per capita (PPP US$) 1. Luxembourg (60,228) 125. Papua New Guinea (2,563)

1. Iceland (0.968) 134. Comoros (0.561) 135. Ghana (0.553) 136. Pakistan (0.551)

157. Papua New Guinea 126. Ghana (2,480) (40.7) 158. Pakistan (40.0) 159. Senegal (39.6) 160. Côte d'Ivoire (39.6) 172. Niger (22.7) 127. Pakistan (2,370) 128. Angola (2,335) 129. Guinea (2,316) 174. Malawi (667)

137. Mauritania (0.550) 124. Comoros (64.1) 138. Lesotho (0.549) 177. Sierra Leone (0.336) 125. India (63.7) 177. Zambia (40.5)

Selected Indicators Of Human Poverty For Pakistan
Human Poverty Index (HPI-1) 2004 1. Chad (56.9) 30. Malawi (36.7) 31. Rwanda (36.5) 32. Pakistan (36.2) 33. Eritrea (36.0) Probability of not surviving past age 40 (%) 2004 1. Zimbabwe (57.4) 54. Solomon Islands (16.1) 55. Bolivia (15.5) 56. Pakistan (15.4) 57. Comoros (15.3) Adult illiteracy rate (%ages 15 and older) 2004 1. Burkina Faso (76.4) 14. Nepal (51.4) 15. Côte d'Ivoire (51.3) 16. Pakistan (50.1) 17. Timor-Leste (49.9) People without access to an improved water source (%) 2004 1. Ethiopia (78) 86. Nepal (10) 87. Cuba (9) 88. Pakistan (9) 89. Trinidad and Tobago (9) Children underweight for age (% ages 0-5) 2004 1. Nepal (48) 13. Ethiopia (38) 14. Burkina Faso (38) 15. Pakistan (38) 16. Chad (37)

CAUSES OF POVERTY IN PAKISTAN

57 million people in Pakistan have one-room houses and some of those people are forced to sleep wherever they get a space.

There are more than 30 million people living below the poverty line in Pakistan

Poverty Reduction Strategies/Solutions
Since the second half of the Twentieth Century, governmental and non-government organizations have proposed or attempted to reduce global poverty through a number of strategies. As global poverty effects has upon such detrimental and

societies

communities, the relative merits of these strategies remain source of great controversy.

1) Free Market
The most dramatic reductions in poverty in the 20th century have been in India and China, where hundreds of millions of people in the two countries grew out of poverty, mostly as a result of the abandonment of collective farming in China and the cutting of government red tape in India.

This was critical in fostering their dramatic economic growth. However, UN economists argue that for the market reforms to work, considerable state intervention is needed .

2) Improved agricultural system
Today 70% of nation links directly or indirectly with agriculture so its needs Quick steps for improvement. Proper price of crops should be given. Exports should be encouraged in a calculated & systematic way not like wheat this year. Canals and other water channels must be properly made so water should not be wasted & incentive should be given to farmers.

3) Rural development
A big Giant for the nation is undeveloped rural HR and infrastructure Programs like Khushaal Pakistan must be Continued & encourage more technical based institution must be Started, IT

institution must be started new markets should be made for proper Marketing.

4) More Economic zones, Industrial parks,ITparks
Govt. must initiate the IT parks India has an IT EXPORT of $16 billion We must focus on it. More industrial states likeSUNDAR,M2 Faisalabad must be made.

5) Improving the social environment & abilities
Subsidized housing development and urban regeneration. Subsidized education. Subsidized health care. Assistance in finding employment. Subsidized employment (see also Workfare). Encouragement of political participation and community organizing. Community practice social work.

6) Development Aid
Most developed nations give some development aid to developing nations. The UN target for development aid is 0.7% of GDP currently only a few nations achieve this. Some think tanks and NGOs have argued, however, that Western monetary aid often only serves to increase poverty and social inequality, either because it is conditioned with the implementation of harmful economic policies in the recipient countries or because it's tied with the importing of products from the donor country over cheaper alternatives or because foreign aid is seen to be serving the interests of the donor more than the recipient.

7) Employment Opportunities

SUGGESTIONS
y Proper implementation ZAKAT system. y Fair distribution of wealth. y Pakistan is a country having an average GDP growth at 7% during last 5 y y y y y y y y y y

years . It got tremendous opportunity for the future. We must focus on political stability . We must overcome this energy crisis as soon as possible . Improved agriculture system. Small ,medium & foreign investors should be encouraged. Improved educational system. Awareness of family planning. HR development Proper utilization of resources. More employment opportunities.

References
Economic survey of Pakistan 2006/07 HDR 2006-07 www.worldbank.com MSN Encarta Poverty - Wikipedia, the free encyclopedia www.Poverty.com Policy Wing, Finance Division www. Finance.org www. Finance.gov WDI 2006-07, World Bank www.World Bank.org www.poverty.org

Zeeshan Maqsood MBA (COMSATS) Lahore, Pakistan. E-mail: zeejaze@hotmail.com Cell: 0300-4111570