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Old Friday, May 18, 2007
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Hope for the poor S RAHMAN

ARTICLE (May 18 2007): Poverty is a curse. Yet a bigger curse is a government's apathy towards this curse. Blessed are the nations whose governments focus more on material development aimed at socio-economic uplift of the masses. One should pity those nations whose governments have no agenda other than mere reliance on self-projecting, luring slogans and impracticable programmes.

Pakistan is lucky to have made strides in the area of socio-economic development that has improved the common man's lot in reality. Not only that, things seems to be moving with such a pace and in such a direction that one can easily predict the eradication of poverty from the country within the foreseeable future. And the foreseeable future means within the next one to two decades, not beyond that.

The credit certainly goes to the Shaukat Aziz government, as much as to the President, General Pervez Musharraf, for having embarked on a mission to rid the Pakistani nation of the curse called poverty, with exceptional speed, so as to achieve this target close to the 2015 deadline of Millennium Development Goals (MDGs).

It is the year 2016, officially declared as the year of the fulfilment of the present regime's Vision, meaning the Vision of Prosperity and Optimal Development. Candidly speaking, although the country would be given a 'Visions' off and on, by many top political leaders, the Vision that is in currency nowadays is backed up by ingeniously planned, effective back-up efforts. The stress on implementation and follow-up is tremendous and that is making things work optimally.

The question certainly is not of pace or direction alone, but that of concrete figures - relevant to material progress made - that substantiate the sitting government's claims of endeavouring to bring prosperity in Pakistan.

Even a cursory look at the poverty statistics suffices to suggest that the government's poverty reduction efforts have met much success. The success has mainly come in the wake of a high growth rate, reduction in unemployment and direct transfers, all these factors collectively contributing towards a 10.6 percent decline in absolute poverty.

The poverty head count, which was 34.4 percent in 2001, came down to 23.9 percent in 2005. Rural poverty, in particular, declined at a higher pace than urban poverty. As against a 7.8 percentage point reduction in urban poverty during 2001-05, rural poverty declined by 11.2 percent.

The number of people living below the poverty line declined from about 49 million in 2000-01 to 36 million in 2004-05, or 13 million people moved out of poverty trap, of which 10 million people were in the rural areas (Table 1). During this period the total population, however, increased by about 12 million.


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2000-01 2004-05 -
Total Urban Rural Total Urban Rural
Population (mill) 142.86 47.50 95.36 152.53 52.41 101.50
Poverty HC (%) 34.46 22.69 39.26 23.90 14.90 28.10
No of Poor (mill) 49.23 10.78 37.44 36.45 7.81 28.52
Population out of 12.77 2.85 9.92
================================================== ==============================

POVERTY TRAP (MILL) For sure, these figures speak volumes of the government's sincerity of purpose and determination to do away with poverty. The fact is that ever since the present government took over, it first preference has been to deal a blow to poverty, which increased in the nineteen nineties.

One look at the figures and one will arrive at the conclusion that during the last seven years, the country has witnessed remarkable progress in the reversal of the poverty trend. This accomplishment owes much to the underlying strategy of Poverty Reduction Strategy Paper (PRSP).

More importantly, poverty reduction continues to be the all-embracing vision of the Medium Term Development Framework (MTDF) 2005-10 and MDGs 2015. Credit also goes to the government's practical approach and the steps taken thereof with fixed, reasonable deadlines to reduce poverty.

And wondrous results are expected from the government's move towards a knowledge-based economy, aimed at developing human resources to fill the growing demand for a skilled labour force. Pakistan is fortunate enough to be blessed with a sizeable human resources.

Out of its total population of 160 million, more than 100 million are of youth in their early twenties. Prime Minister Shaukat Aziz made specific mention of this positive economic indicator during his recent visit to China.

It is additionally encouraging to note that during 2001-02 to 2005-06, the country has spent approximately Rs 1,400 billion on the social sector and poverty-related programmes (Rs 760 billion on social sector development). The number of new public sector projects launched during this period by the government have increased manifold from 197 in 2002-03 to 799 in 2006-07.

The new projects initiated by the provinces and the FATA and Northern Areas during this period have also increased, from 86 in 2002-03 to 432 in 2005-06.

The government is also resolute about the effective implementation of a pro-poor growth strategy for which purpose it has taken serious initiatives. First and foremost is the agriculture sector, where most of the poor are engaged. The sector is being provided loans, better seeds, better agricultural marketing facilities and higher allocations for research and development.

Micro-enterprises, which are labour-intensive and have positive implications for income distribution, have also been taken on a top priority basis and have been provided support, particularly through provision of credit. And in order to make this sector competitive, it has been opened to specialised institutions both in the private and public sectors.

Above all, the government has paid full attention to the creation of assets. The government is fully alive to the fact that lack of physical assets such as land, livestock, housing, financial resources and rehabilitation arrangements are both a cause and an outcome of poverty.

Similarly, lack of access to social assets in terms of deficient skills, scant access to basic services - education, health, nutrition, reproductive health, water supply and sanitation and social exclusion is major constraint to reducing poverty in Pakistan.

With these specific inadequacies in view, the government has extended vehement support to initiatives to redistribute resources, especially in services that create assets, such as education, health, and infrastructure; and by implementing policy and institutional reforms to ensure effective delivery of services.

A participatory process engaging poor households and poor communities in decisions on choice, operation, monitoring, and evaluation of programmes and services that build their assets, is an integral part of the strategy.

And as for the pro-poor expenditures, as percentage of GDP, the aggregate pro-poor expenses increased from 3.8 percent in 2001-02 to 5.6 percent in 2005-06. In monetary terms, these expenditures have increased from Rs 167 billion in 2001-02 to Rs 435 billion in 2005-06, showing an average annual growth of 27 percent.

The development expenditures, during this period have increased at a much faster rate from Rs 37.6 billion (0.9% of GDP) to Rs 170.8 billion (2.2% of GDP) or 46 percent on the annual average. Current expenditures during this period increased from Rs 129.7 billion (2.9% of GDP) in 2001-02 to Rs 263.8 billion (3.4% of GDP) in 2005-06 or 19.4 percent annually (Table 2).


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Year EXPENDITURE Percent of
Development Current Total GDP
(Billion Rupees)
2001-02 37.6 129.7 167.3 3.8
2002-03 44.2 164.3 208.5 4.3
2003-04 79.0 182.3 261.3 4.6
2004-05 112.6 203.6 316.2 4.8
2005-06 170.8 263.8 434.6 5.6
================================================== =
In all, the government's concentration on ameliorating the masses' lot, not only through the formulation of workable policies, but through the continuation of prudent macroeconomic and sectoral policies is most likely to bring about further reduction in unemployment and poverty.

Much better, positive results are expected from investments in development projects, particularly irrigation, power, agriculture and livestock that the government has launched with the idea of developing the infrastructure and creating millions of new jobs and income opportunities for the poor.
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