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Alleviating urban poverty - the Pakistan way
Appeared in: Manpower Journal. Special issue on impact of structural reforms on employment scenario. Guest editor: Amitabh Kundu. New Delhi: Institute of Applied Manpower Research. 34(Oct-Dec 1998)3. pp. 127-147.
Revised version of a paper presented at the international seminar "Urban poverty alleviation in Asia: challenges and perspectives", University of Kaiserslautern, 18th and 19th July, 1996.(1)

Urban poverty alleviation in Pakistan: challenges and perspectives

Pakistan, the fourth most populated country in Asia(2) and the most urbanized in South Asia,(3) presently suffers from tensions in its largest city of the worst kind. Assuming a direct relationship between political unrest and social disparities, the following questions arise: (i) What is the extent of urban poverty in Pakistan and how did it develop over time? (ii) Why and how and to whom is urban poverty in Pakistan challenging? (iii) What are the perspectives and what are the preconditions for different scenarios?

(i) Urban areas account for one third of Pakistan's population;(4) one fifth of the urban population is considered to be poor;(5) that makes nine million urban poor; they may be more, maybe up to one tenth of the total population.(6) This is, because figures appear to be rather inconclusive: If one third of the total population is considered to be poor,(7) and one sixth(8) to one third(9) of the poor live in urban areas, the number of urban poor could be anywhere in the range of 8 to 15 mn. Thus, Pakistan should be ranking fourth in South and South East Asia by the number of urban poor.(10) It is also difficult to establish, how poor the urban poor are, both in absolute terms and relatively. The rural poor in Pakistan, for example, have different income and consumption patterns, and even more so the rural poor in other countries, not to speak of the shortcomings of statistics. There are hardly any attempts to compare the social situation within South Asia: maybe because meaningful comparisons between India and Pakistan are not encouraged by either of their governments; social scientists of the two countries rarely have the chance to visit their neighbouring country, let alone are allowed to do independent research there. Comparative studies on Pakistan and Bangladesh would be easier, but seem to be less challenging.(11)

(ii) Urban poverty certainly is a challenge in Pakistan: morally, intellectually, socially and economically, but most of all politically. The largest concentration of the urban poor live in Karachi, where they constitute a most vocal group, which has been politically instrumentalised during the last decades to the extent, that Karachi has been described as "Asia`s answer to Beirut" and the "Belfast of Asia",(12) with more than 2.000 people killed in 1995 during political feuds. At times, the danger of a total break down of "law and order" and of the economy loomed over the city, threatening the unity of the country. Since internal and external politics of Pakistan and India are intertwined, such a break down should be unwelcome in India, which for its own reasons has to have the greatest interest in the status quo; it should be of concern to us also: it creates an environment suited to all kinds of undesired economic activities, e.g. the trade in narcotics and arms, and would also drive many out of the country [Mallet/Bokhari 1996].

(iii) A more optimistic scenario is painted by the advocates of the modernisation theory and a growth oriented strategy, which always had its followers in Pakistan. According to their expectations, the benefits of economic growth will trickle down to the poorer segments of the population: the gross domestic product not only grows as a total and per capita, but also for the average poor: urban poverty, thus, will be eliminated. The perspectives for the time being are, however, that the number of urban population will grow at a rate higher than the already comparatively high rate of population growth in Pakistan; the development of incomes and income distribution will depend, at least to some extents on domestic factors, especially government policy. Given the present situation in Karachi, a change of the political climate and political will seem to be preconditions for any improvements [Jafri 1996].

Present problems and possible remedies have to - and will - be discussed against the background of history. External shocks, e.g. colonialism and the partition of India, 1947, were responsible for a rapid urbanization, an increase of urban poverty, shortcomings of government intervention and - presently - ethnic and political strife.

Basic demographics of urban poverty

Pakistan experienced one of the highest growth rates of population world wide; the number of people eight-folded within a century;(13) it quadrupled in only 50 years to (1996) over 130 million.(14) The urban population growth accelerated from 4.3 per cent per annum in the last three decades (1960-1992) to 4.6 percent at present (1992-2000).(15) 34 per cent of Pakistan's population presently live in towns;(16) with around 45 million urban population Pakistan ranks 5th in Asia (after China, India, Japan and Indonesia).(17) With some ten million inhabitants,(18) Karachi is one of the largest cities in Asia; in South Asia it ranks only behind Bombay, Calcutta and New Delhi. According to the World Bank, Karachi is one of the fastest growing megacities of the world and expected to rank 7th by the year 2015 with then over 20 million inhabitants; having surpassed Calcutta and New Delhi it will be second to Bombay in South Asia; Lahore will rank 22nd internationally and 6th in South Asia with 12 million inhabitants, as many as Hyderabad, Bangkok, Osaka or Lima.(19)

Unfortunately, it is more than one and a half decades ago, that Pakistan's population was properly counted. No census could be completed after 1981; the 1991 census had to be abandoned after large scale rigging and it was impossible to have one afterwards.(20) Since the number of population is the basis for the distribution of seats in parliament and for allocating public funds, census figures ultimately decide who is going to rule, what language is to be spoken (officially) and who will get a job (by reservation). In the absence of statistical evidence, guesses based on simple trend extrapolations are used at will. Numbers are to be interpreted with great caution; if cited in the following and not stated otherwise, they refer to the 1981 census.

21 per cent of the total urban population live in one town, i.e. Karachi.(21) Nevertheless, the concentration is less marked than in most other countries. At ten million, Karachi's population would be just 7.5 per cent of the national population. Roughly half as many live in the second large city, Lahore; the 2:1 gap between them is less than in the other countries of the area, except India.

In 1981, four tenth of all urban population were living in the three cities with more than one million inhabitants, i.e. Karachi (1995: 9.8 mn), Lahore (5.0 mn) and Faisalabad (1.9 mn); their percentage must have increased in the meantime. Peshawar (1995: 1.7 mn), Gujranwala (1.6 mn), Rawalpindi (1.3 mn) and Multan (1.2 mn) also have crossed the one million line by now.(22) If we take all cities with more than 100.000 inhabitants, they comprise about two thirds of the overall urban population. There is a host of smaller cities, altogether there were 384 towns in 1981; few of them, however, are in the below 10.000 inhabitants category. In this connection, we have to consider, that Punjabi villages can be fairly big with far more than 10,000 inhabitants, without being classified as "towns".

90 per cent of all urban population live in the two major provinces, Punjab (56 %) and Sind (34 %). The North West Frontier Province (7 %) and Baluchistan (3 %) are less urbanized; together they have only one tenth of the urban but one fifth of the total population of Pakistan. The share of urban in total population is highest in Sind (43 %), followed by Punjab (28 %) Baluchistan (16 %) and, finally, NWFP (13 %).(23)

Small towns (with less than 25,000, but at least 10,000 inhabitants) are of some importance in Baluchistan (23 %) and the NWFP (17 %), very small towns (with less than 10,000 inhabitants) in Baluchistan only (13 %). Both groups do not much influence the distribution of the urban population by provinces.

Almost all major towns are to be found along a semi-circle spanning from Peshawar through North East Punjab to Karachi, with the highest number of towns in the triangle Lahore-Rawalpindi-Faisalabad. In the thinly populated areas west and east of the Indus Valley even small towns do have central importance, hence their official recognition as "urban".

Urbanization and poverty in perspective

The areas which presently comprise Pakistan have seen cities since pre-historic times. Remnants of settlements have been found at Mergah (Baluchistan) dating from 7000 B.C.; in Moenjo Daro (near Larkana on the mid Indus), we can still see impressive ruins of a large city. It is generally assumed, that the great Indus Valley civilization came to a sudden end in the middle of the second millennium B.C., shortly before or at the times of the Aryan migration from Central Asia to the Indian subcontinent. Whatever the reasons for urban decay, the level of urban organization at these early times seems to have been higher than that of most of the larger settlements of the region today. Similar remarks may be justified for the cities of Gandhara - more than a millennium later at the time of Alexander the Great, and a thousand kilometres to the North. And again, a millennium later, at the time of the Arab conquest of the lower Indus Valley (711 A.D.) and the beginning of the spread of Islam on the subcontinent, we hear of large settlements, like the port city of Debal and Multan, the centre of lower Punjab. And when - again a millennium later - the colonial power finally reached the North West of the subcontinent; they developed their own centres like Karachi, the port, and Rawalpindi, the largest garrison west of Delhi. In between, there must have been long periods of urban decline and mass urban poverty, ultimately leading to giving up many sites. We do know, however, little of the dynamics.

The British period in India has often been associated with de-urbanisation and de-industrialization, but this may not have been the case with what became Pakistan; Punjab and Sind, conquered only in the 1840s, were known as the rural backwaters of the subcontinent; the Frontier and Baluchistan were basically tribal areas and merely of strategic importance in the "great game". Lahore was then the only major town (with 128,441 inhabitants in 1875) [Latif 1995: 253], although with no industry.(24) Multan was the other, smaller, centre of Punjab. Lyallpur, now Faisalabad and the third largest city of Pakistan, was still to be founded by Mr. Lyall. Rawalpindi, not far away from Taxila, the seat of learning of the Gandhara period, was chosen by the British to set up tent at because of its strategic location at the foothills of the Himalayas, where the main road from the Khyber to the plains of the Punjab crosses the Margalla Hills; Ayub Khan built Islamabad as the new capital of Pakistan on the outskirts of Rawalpindi. Today, the twin cities may have as many inhabitants as Faisalabad. Gujranwala, on the Grand Trunk Road from Rawalpindi to Lahore, now the third largest city in the Punjab, is of little centrality, even in the provincial context, due to its proximity to Lahore; like a number of secondary cities, it has been benefitting from the spill overs of the capital of Punjab.(25) Sialkot, once the third largest city of (West) Punjab, was literally cornered after Partition and lost its importance.

Karachi now has a share of one third of the Sind population.(26) The metropolis was an unimportant harbour town(27) when the British conquered Sind on their way to Afghanistan and it was much smaller than Lahore (1901: 136.000 vs. 204.000 inhabitants) until Independence. Hyderabad, the second city of Sind, had been the major town of Sind at various times of its history, but crossed the 100.000 only in 1931. Its population shot up after Partition; in the 1970s growth almost came to a halt, most probably because of the proximity to Karachi. Hyderabad has become more attractive vis-ŕ-vis Karachi during the last years, since Karachi became more crowded and - of lately - more dangerous.

Peshawar and Quetta are the only centres of the two western provinces. The Peshawar Valley has been the location of important towns throughout history; Quetta gained its importance after the Afghans had to cede this area to the British; it had to be rebuilt after it had been totally destroyed by an earthquake in 1935. Both cities became major centres of Pashtoon refuguees after the Soviet invasion of Afghanistan, whose number in and around Peshawar alone was estimated to be more than a million at times.

At the turn of the century, what became Pakistan had 31 towns with 1.2 mn inhabitants,(28) 7 per cent of the total population. Since Independence, the total urban population of Pakistan more than seven-folded: in 1951 they were only 6 millions, less than one fifth of the total population. In the late 1940s, almost all the Hindu and Sikh population were driven out of the country; those places with the largest Hindu and Sikh population saw the largest influx of refugees from India: in Faisalabad (then: Lyallpur) 70 per cent of the inhabitants of 1951 were born outside Pakistan, in Gujranwala 51 per cent, in Multan 49 per cent, and in Lahore 46 per cent [Zingel 1982 : 248].(29)

As a combined effect of partition and migration, only few of the urban population have their roots in these cities: they are migrants or descendants from migrants, often refugees from India. Those from East Punjab, the largest group, just changed places within their province: they remained in a familiar socio-cultural environment, where the same language was spoken and customs were - more or less - the same.

Karachi, one of the entreports developed by the raj, always had a mixed population. When Hindus and Sikhs were driven out, Urdu-speaking refugees, mainly from the United Provinces, Central Provinces, Bombay Presidency and Hyderabad State, arrived; like those refugees who accompanied Prophet Mohammad from Mecca to Medina, they were called mohajir. Karachi also received a number of traders and entrepreneurs, often members of merchant castes from the Kathiawar Peninsular and members of smaller (Muslim) religious communities. The capital of the new state was first established here, it was the major port of the country and its "link" to the eastern "wing"; it developed into a boom town during the late 1940s and early 1950s until the end of the Korean War, again in the early 1960s during Pakistan's second five year plan (1960-65), and once again in the 1970s after the beginning of the oil boom in the Gulf states. The prospect of getting a job with the government, industry or services always attracted many Punjabis and later Pashtoons and Baluchis. The secession of Bangladesh brought hundreds of thousands of refugees from the former province of East Pakistan, who also spoke Urdu, and - because they often came from Bihar - are called Biharis. The fact, that initially so few Sindhis came, has been explained by institutional factors, most of all the feudal order, which remained intact longer there than in the rest of Pakistan. The Soviet invasion of Afghanistan brought the Afghans, mostly Pushtoons; today, Karachi may have as many Pashtoon inhabitants as Peshawar does.

Quetta is situated within the Pashtu language area of Baluchistan; in addition to the Pashtu, Brahui and Baluchi speakers many Punjabis came with the government admistration and the Army (Pakistan's Staff Academy is in Quetta). Likewise, many Punjabi (Hindko) speakers went to Peshawar, from the Punjabi speaking areas of the NWFP (Derajat, Hazara) as well as from Punjab Province; it was only after the beginning of the Afghan War, that the share of Pushtoons increased dramatically.

Islamabad, finally, is a totally new city, planned on the drawing board by the Greek Architect Doxiades; the idea of a basically temporary population, who would reside in the city only for the few years their service was required by the government, could not be realized; few who made it to Pakistan's most prestigious address, want to leave; the governments did their best to keep population figures low: new sectors were opened only slowly, plots not awarded and tens of thousands of applications not forwarded.(30) Every change of government, however, brings in a new clientele to be honoured, and thus a new impetus for expanding the capital city. The growing number of domestic servants have to be housed as cheaply as possible in order to keep their wages low, a fact explaining why slums are to be found in posh neighbourhoods.

Measuring urban poverty

Pakistan enjoys a higher per capita income than the other South Asian mainland states;(31) still it has its share of poor, many of whom are concentrated in the big cities. Detailed statistics on urban poverty, however, are missing. For many years, not much has been written on urban poverty by the Pakistani academic community;(32) poverty issues are being dealt with only since the overall political situation in the country became less repressive. In 1993, prime minister Nawaz Sharif instituted the "Task Force on Poverty Alleviation and Self-Reliance" with four members, all well known Pakistani economists; the Task Force, however, had only one meeting; before the National Assembly was dissolved along with the Task Force.(33)

There are few indicators to determine the extent and structure of urban poverty. In the absence of reliable and up-to-date figures, indirect measures may be used. They can, however, be tricky: The World Bank, for example, states, that 44 per cent of total housing is "sqatter housing", i.e. housing stock occupying land illegally.(34) But in Pakistan, squatter houses can be fairly well built, they most probably have electricity (officially or inofficially), maybe access to piped drinking water, although proper latrines and drainage are less likely. And, as the seminal work of van der Linden [1975] shows in his survey of Karachi slums, these can be of very different quality. Organisers of an ecumenical self-help project in Karachi assured me, that secure legal titles to the land on which people had built their houses was the most effective obstacle to improving their housing conditions, not lack of money. The legality of occupancy rights, therefore, or rather the absence of legality, is of limited value as an indicator of poverty.

This also applies to the "rural-urban gaps", a term the UNDP use in their reports: The fact, that 100 per cent of the urban population "have access to health sevices" (1985-91) as compared to 85 per cent of the rural population, that 80 per cent vs. 45 per cent have access to water (1988-91), that 55 per cent vs. 10 per cent have access to sanitation (1988-91), and that child nutrition (1980-92) is better by one fifth,(35) is to indicate the distance between urban and rural areas. But, what does it mean to "have access" to health services? One of the most irritating observations that people from rich countries can make in almost any poor country is, that abject poverty exists in the immediate vicinity of affluence. "Having access", then, obviously does not necessarily mean "to benefit" from them. Likewise, having access to water, may mean only a standpipe nearby providing water of questionable quality, especially if low lifted from heavily polluted sub-surface water; and the sanitation, one has "access" to in urban areas, often means non-descriptive facilities, which are less hygienic than "no sanitation" in rural areas, which may stand for excursions into the sugar fields.

Associating poverty with economic informality may also fail. Pakistan's cities have always been service towns: in 1961 only the two most "industrial" towns of (then) Lyallpur and Gujranwala had more than 40 per cent of their labour force employed in industry. "Other services" accounted for up to 45 per cent: in Quetta [Zingel 1982 : 251], then not exactly known for its poverty.

Unemployment would be a good proxy variable for poverty if available on a household and not on a personal basis. Official figures for unemployment became much higher after the statistical concept was changed;(36) urban unemployment now (1993-94) is 7.0 per cent, slightly higher than the rual one (5.4 per cent).(37) An official of the Ministry of Manpower and Overseas Pakistanis in 1989 estimated, "that a large fraction of the labour force is engaged in the informal and non-wage sector and low-product activities indicates the existence of about 10 per cent of the employed labour force as presently under-employed. Taking together the unemployed [then officially 3 per cent] and the under-employed, under-utilization of the labour force is about 13.13 percent or approximately 4 million." [Hashmi 1989 : 15]. Official unemployment was (relatively) almost twice as high in the urban areas than in the rural areas in 1987-88,(38) but we have - unfortunately - no information on how many of the urban families are without income from employment.

According to the World Bank, the share of the poor ("people in absolute poverty") is lower in urban (1990: 20 per cent) than in rural areas (31 per cent);(39) this is not exactly in line with the indicators of urban infrastructure and has to be interpreted in a way, that "access" to urban infrastructure has little impact on poverty. On the other hand, a greater gap between these figures would explain the rural exodus.

Alleviating urban poverty I: Income and price policies

Pakistani policy makers have often been blamed for their blind faith in the market forces. The country has been more market oriented than India and - for some time - Bangladesh or Sri Lanka, despite a long tradition of five year plans. But there is still a tendency to emphasize economic growth and wait for social problems to be solved automatically. Pakistan also has been decentralized to some extent; in principle, social affairs come under the provinces rather than the federal government. Unfortunately, Pakistan during most of its history, has been a federal republic more in name and on paper than in practice. Subsidiarity, therefore, has hardly been practiced, although - to me - it seems to be one of the guiding principles for welfare in Islam.

The current (eighth) five year plan (1993-1998) has a short chapter on "Poverty alleviation", in which the history of such policies is summarized in a very general way:

"In Pakistan the strategies for poverty alleviation have been varying over time. In the early years some ad-hoc approaches were adopted to provide temporary relief to the poor. In subsequent [sic] period when systematic planning was started, high growth was chiefly considered a panacea for various economic problems including poverty. Towards the end of the sixties, it was realized that the trickle-down effect of growth process could not be expected to relieve the burden of poverty. The problem of income disparity especially at regional level assumed alarming proportions which was also used by some politicians as one of the justifications for the separation of the eastern wing of the country."(40)

Without going much into detail, the Planning Commission state in the same document: "Poor mostly live in rural areas and are dependent on agriculture. [...] Labour intensive process of industrialization based on use of technology will be encouraged."(41) What follows is an optimistic outlook on the implementation of the Social Action Programme:

"The Social Action Programme lays emphasis on primary education, basic health, population welfare, sanitation and potable water. It is targeted towards rural areas and women. Elaborate operational strategy and machinery has been devised and funds to meet development and recurring expenditure have been earmarked to ensure effective implementation of the programme."(42)

As far as "funds" and "effective implementation" are concerned, there is little cause for optimism: the budget for 1996-97 hardly leaves any room for "development and recurring expenditure"; only 1.6 per cent of the federal budget are earmarked for social services, and funds have to be found first to close the frightening gap between planned outlays and expected revenues [Haidari 1996]. As for the current five year plan, there is no mention of any programme designed for the urban poor.(43) This is in line with much older plans, which were neither specified nor followed by any recognizeable action:

"The challenge faced by the urban works programme, therefore, is to ignite a new spark of enthusiasm which will effectively harness the energies of the urban unemployed or underemployed to the improvement of slum areas, low cost self help housing, development community parks and other commuity facilities."(44)

There is no policy of alleviating urban poverty as such in Pakistan. And there are only few economists, who think that poverty has to be removed directly. One is A. R. Kemal [1995 : 53]. Discussing macro-economic policies, he summarises:

"Preceeding discussion brings it quite clearly that macro economic policies of Pakistan need major revisions. The policies of growth without much regard to income distribution shall have to be reconsidered with a view to eradicating poverty and unemployment problems."

Ashfaque H. Khan [1994 : 83], another leading economist in Pakistan, follows the rather traditional approach, although he adds a note of caution:

"Public policy should primarily aim at achieving a higher GDP growth rate of 6.5 - 7.0 per cent on a sustained basis over the next couple of years. To do that, investment rates must be in the range of 22 - 26 per cent. Needless to state, these growth and investment targets must be associated with political stability and improved law and order situation. If these economic and non-economic targets are achieved, the country's employment situation is likely to improve considerably."

The question remains, how the poor are to be reached. Farooq-i-Azam [1995 : 60], a senior civil servant in the field of manpower development, expresses little hope in government activities in the informal sector, where most of the poor are to be found:

"The government's policy and programmes have been almost exclusively directed at the large sector, and the small sector (the term is used here to denote both micro and small enterprises) has been expected to develop by default, which it actually did. Unfortunately, given the government's trek [sic!] record, some people are sceptical of any government intervention in the small sector and believe that it should be left alone, if its present growth potential is not to be underminded. However, the current economic climate in the country has more than ever increased the need for the government's intervention to stimulate and support the small sector's growth."

There has been little effort, to attack urban poverty directly, e.g. by slum improvement policies, and these have - despite some international assistance - been utterly unsuccessful, as Kool et al. [1988 : 28sqq. and 36 sq.] describe.

For a long time, migration was seen as a vademecum: The underlying assumption is, that spatial income differentials (existing, assumed, expected) cause migration, because migrants try to improve their well-being by moving to other places. This would explain the mass rural exodus as well as outmigration. It would be plausible to assume, that people in Pakistan set out for migration only after trying to obtain sufficient information, and we can observe, that migration typically follows etablished trails, laid out by members of the baraderi (extended family); in cases for which such information is missing, funds are pooled to send out a scout to check new destinies; these patterns were even followed - to the extent possible - in the late 1940s. Manpower agents came in on a large scale during the first years of the oil boom, but now it seems, that new migrants make more and more use of their own networks. Conditions in the rural areas, where most migrants into the urban areas come from in Pakistan, therefore, have to be considered as comparatively unattractive (in the eyes of the migrants), at least in perspective, to explain the mass rural exodus.

There has never been a policy in Pakistan to stem the rural exodus. Migration policy in the first years of the new state was the (re-)settlement of the refugees and some secondary migration. There was hardly any regional analysis or regional planning; the word "regional" itself from the mid 1950s onwards was reserved for the east-west conflict within Pakistan; all areas of West Pakistan were amalgated into a "One Unit", i.e. West Pakistan Province, in 1955;(45) all political and administrative decisions were highly centralized during the military dictatorship of Ayub Khan (1958-1969); discussing any regional distribution became "Anti-Pakistan". Obtaining a passport was difficult and emigration, thus, almost ruled out.

The picture changed, after the regional question was finally "solved" by the break-up of the country. Zulfikar Ali Bhutto had promised, that everybody would get a passport; Pakistan was one of the first countries to take the golden opportunity of sending workers to the newly rich oil states from 1973 onwards. Cities, especially Karachi, became through-stations to the Gulf, remittances becoming the most important foreign exchange earner. Many of the migrants belonged to underprivileged groups like artisans, craftsmen, and those who did the most menial jobs, leading to a scarcity of domestic servants and even sweepers at times, upsetting the social order [Streefland 1979].

Migration almost became a substitute for any meaningful social policy. Home remittances allowed people to make generous contributions, especially for building mosques, which, additionally were sponsored by all kinds of agencies of the Islamic oil exporting countries and - after the military coup of Zia ul-Haq in 1977 - by the Pakistan government. The still intact family networks made sure, that even distant relatives were supported by remittances, which - indirectly - boosted the demand for education and the setting up of private schools.

Despite some studies, little is known about the mechanics of outmigration and remittances. What is known, is that migrant workers especially come from the rain fed barani areas of the Potwar Plateau and the Frontier, but also from Karachi and Baluchistan. Things are more complicated, because of the income mix of most households. Income from remittances is tax-free and - individually - unaccounted for; not all remittances come through official channels (banks). I have not seen any figures, which would allow conclusions on how many families in Karachi have access to remittances, or - even more desirable - which groups are benefitting therefrom.

Other schemes for income generating aimed at small enterprises. Prime Minister Nawaz Sharif inroduced the "yellow cabs", i.e. taxis imported duty free and sold under soft credit terms in order to create incomes for the owners/drivers and - at the same time - provide urban transport. The programme was in line with privatisation of public transport, but added to the foreign exchange problems as well as to traffic congestion (not to speak of allegations of large scale corruption).

For a long time, price policy and consumer subsidies were seen as instruments to alleviate poverty [Zingel 1986]. Like India, Pakistan inherited the public distribution system for essential consumer goods, which had been introduced in the subcontinent at the beginning of World War II. This system was abolished during the 1980s; sugar was the last item to be de-rationed; the de-rationing went surprisingly smooth; food items provided through the ration shops were not very attractive, quality-wise, and out of reach for many consumers for lack of availability or income, anyway. Other attempts, like selling pre-baked bread (roti), in order to save energy costs for the poor, totally failed for lack of acceptance. A strict price regime (fixed and ceiling prices) was attempted by the military but could not be enacted even when tried with brute force.

Foreign trade and foreign exchange policies also have had their impact on the real income of the poor. The Pakistani Rupee is now partly convertible; imports and exports of food items are still regulated and the respective markets are delinked from the world market. As a basically still agricultural country, Pakistan can feed its population itself: rice of superior quality is exported and cheap wheat (of similar caloric value) is imported, which makes sense economically.

Alleviating urban poverty II: Leaving it to the NGOs

For alleviating the worst cases of need, a number of NGOs are working in the country, often supported by foreign agencies/funds.(46) The term of NGO is, however, often a misnomen, since much of the funds originally come from government sources or from tax exempted income, as would be the case for most of the German contributions.

Zakat and ushr are religious "taxes", which - in principle - have to be paid by the faithful (2.5 per cent annually on wealth in the case of zakat) for the benefit of the poor, the needy, and some other related target groups. Since 1980, zakat is being collected by the state; income from zakat, however, amounts to 2 per cent of public current revenue and 1 per cent of social expenses [Malik 1992]. The introduction of zakat and its central collection and administration met with heavy resistance from the shia community (they were later exempted) and was seen as another step of the military dictatorship to usurp religion. Ushr taxes agricultural income and has been less popular and yielding much less revenue [Mustafa 1996].The Ministry of Aquaf, i.e. of religious affairs, took over more and more mosques and their "aquaf boxes", i.e. their donations. This discredited the whole system of zakat and alms giving [Clark 1986].

Most social work is probably done by informal groups organized by the mohallas, the pirs, i.e. around the mosques and shrines. The Agha Khan Foundation, an international NGO with headquarters in Switzerland and headed by the Agha Khan(47) set up - among others - a Medical University in Karachi. The AKF is a funding as well as an executing agency, receiving funds also, for example, from the German government [Kahlen 1987]. The other Muslim organisation, which is known outside Pakistan too, is the Edhi Foundation, said to be the largest welfare organisation in Pakistan, funding hospitals, clinics, orphanages, emergency relief and social services. Funding mainly comes from private zakat payments [Zaidi 1996].

Social work is also done by more formal groups like the Rotaries and Lions, by business associations etc. The extent of such private attempts at alleviating urban poverty is totally unknown and in all likelihood underestimated. The latest, well publicised, private social engagement is that of the former captain of the Pakistan cricket team, Imran Khan; he is ímmensely popular and set out to build a private cancer hospital in Lahore, financed by own funds and private contributions; after the government was rather unhelpful in this matter, he started his own political movement, after which relations with the government further deteriorated; a bomb attack on his hospital may be an indication, that private social engagement seems to be unwanted once it extends to more than charity. The same can be said for human rights movements, like the Women's Action Forum (WAF) or the Human Rights Commission of Pakistan (HRCP) of Asma Jahangir, a lawyer, who has become known also outside Pakistan.

Because Pakistan only has a small minority of Christians and since trade unions had been banned for many years and have (thus) not been very organised, two established channels for foreign non-governmental aid, which proved to be useful in many other countries, play no important role in Pakistan. A prominent example of church support is the working of the German doctor, Ruth Pfau, who almost singlehandedly set up a nation-wide organisation to eradicate leprosy in Pakistan. She has been surprisingly successful and has been appointed as National Adviser to the President of Pakistan, but has to supplement the financial contributions from the Pakistan government with international private donations.(48)

All these organisations are filling a vacuum left by a - (again) democratically elected - government on the federal and provincial level. There is hardly any local government on the town (city) level, which could be compared to institutions of the same name in central Europe


Summing up: there is considerable poverty in the fast growing cities of Pakistan. The relationship between a growing urban population and urban poverty is not clear and cannot be established given the lack of statistical data. Thus, we cannot say, whether the number of poor or the extent of individual (average) poverty in the urban areas is growing faster than the number of urban population or not. And - whatever this relationship may be - we also cannot say, what is cause and what is consequence; but people migrating into the urban areas most probably do this in the expectation of a more promising future, there. In any case, there seems to be a trend of faster growth in secondary centers, not the least because of increasing problems of internal security in Pakistan's largest city.

Given the fact, that the government is totally absorbed, politically, in their power struggle, and is financially impotent, due to vast outlays for debt servicing, defence and "law and order" and a tendency to ad-hocism, they pursue a policy of laisser faire, hoping for a solving of social problems by economic growth and leaving them otherwise to foreign donors and private charity. Pakistan has the benefit of substantial financial funds in the hands of their citizens inside and outside the country, plus the technical skills, organisational know-how, international experience and connections, which could be used in the same way as in East Asia. It also has the advantage of the traditional family structures still intact, which provide the social safety net. Foreign aid has lost much of its importance already; the preparedness of the western donors and the ability and willingness of the Islamic oil-rich countries to step in, when the Pakistan government fails, may increasingly be limited.

The idea of social solidarity in the name of the religion may have suffered due to the ordained Islamization under a military regime; the zakat and ushr funds never played the role expected. This idea has also been discredited by unnecessary secrecy and central administration.

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