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 Barriers to economic development and poverty reduction


Spatial distribution of poverty

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 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.
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.


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. Women in Pakistan suffer from poverty of opportunities throughout their lives. Female literacy in Pakistan is 29% compared to Male literacy at 55%. 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. 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, contribute to the deteriorating situation with women and the rise in their poverty.


Economic and social vulnerability

"Vulnerability" in this case stands for the underlying susceptibility of economically deprived people to fall into poverty as a result of exogenous random shocks. Vulnerable households are generally found to have low expenditure levels. Households are considered vulnerable if they do not have the means to smooth out their expenses in response to changes in income. In general, vulnerability is likely to be high in households clustered around the poverty line. Since coping strategies for vulnerable households depend primarily on their sources of income, exogenous shocks can increase reliance on non-agricultural wages. Such diversification has not occurred in many parts of Pakistan, leading to an increased dependence on credit.

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.

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.


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.


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. 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. 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. 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.

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.


Feudalism

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. 51% of poor tenants owe money to the landlords. 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

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" 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. They study in a religious environment that has been radicalized by the world-sponsored exposure of the "Holy Jihad" in Afghanistan.

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.

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. The clergy have become more powerful in Pakistan and have considerable sympathy among the poor.


Barriers to economic development and poverty reduction

For years economists thought that countries throughout the world would follow a the same basic pattern for economic development. It was thought that with some initial capital investment, nations would continue on a path from pre-industrial agrarian societies to industrialization. However, many today hold that these theories are highly misleading when they are applied to developing nations today. The situation faced by developing nations today are very different than those faced by the developed nations when they were going through economic development. Among the new realities facing developing nations are a much larger population, fewer natural resources, and a poorer climate. Most importantly, today’s developed nations did not have other powerful developed nations to contend with during their early process of development. This means that it is much more difficult for poor nations today to achieve economic development.