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Old Thursday, March 29, 2012
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All wrong on poverty & aid
March 29, 2012
By Anjum Altaf and Samia Altaf

IT is our claim that the debates on poverty and aid have gone off the rails. On poverty, it is too narrow, quibbling about a few percentage points above or below some historical number.

On aid, it is too broad, arguing whether it is helpful or harmful in its totality. These are important issues and we need to get the big picture right if the public discourse is to make any sense.

Let us start with poverty. We are hobbled by the fact that our understanding of poverty alleviation is borrowed from elsewhere without much adaptation to our context. This has led us down unrewarding paths much like prescriptions based on flawed diagnoses.

An example should make this clear. Imagine a community of 100 people in which 10 are homeless. Many ways can be found to house the homeless in such a situation. These can include borrowing by the state, progressive taxation of the better off, charitable social action by the affluent, or assistance by an external donor.

Now imagine another community of 100 in which 90 are homeless. None of the above mechanisms are likely to work. Some other recourse would need to be found that would focus on generating the wealth to be allocated to housing the homeless.

On poverty, our models are derived from societies where only small minorities are deemed poor in an absolute sense. We are copying solutions that work in such societies and applying them to situations where the majority is blighted with absolute poverty. No amount of alleviation funds or income-support programmes can cope with situations in which the majority is poor no matter how well-off the non-poor may be. Simple arithmetic can reveal how financially absurd such approaches are.

The only solution in such situations is to generate wealth to raise the living standards of the economically marginalised. An essential aspect of this is employment creation that yields higher incomes for marginalised families. Not any form of employment would yield the desired results in our context.

We can see in India that even extended periods of wealth generation concentrated in high-tech services yield very slow gains in poverty alleviation. In contrast, the town and village enterprises favoured by China in the 1980s were much more effective in reducing poverty.

This brings us to aid. We know from East Asia that aid has been an effective ingredient in recipes yielding rapid growth. In contrast, it has been much less effective in South Asia. Why doesn’t aid work here?

First, as mentioned above, the use of aid for direct poverty alleviation and income support is a fool’s errand. Its persistence is a comment on the intellectual bankruptcy of our intelligentsia.

Second, the use of aid for service delivery is equally misguided. Any aid that has to be siphoned through long bureaucratic chains would leak away without robust mechanisms of accountability. The continued deterioration of our public education and health systems, the recipients of huge amounts of aid, should have told us that long ago.

Third, the use of aid for improving governance and capacity building in institutions where incentives are hopelessly skewed is like praying for rain. The persistence of these misallocations points to the strong incentives for arrangements that yield windfall gains to many of the non-poor in the name of the poor.

Grants and concessional loans can benefit Pakistan provided they are directed to wealth generation and employment creation for the poor. In terms of design, in a system riddled with corruption and lack of accountability, aid has to avoid programmes and projects dependent on long and diffused bureaucratic chains.

It has to be focused on discrete, perhaps turn-key, investments critical to spurring the wealth-generation dynamic. These could include dams, power-generation plants, irrigation channels, farm-to-market roads, and the like.

Some mention of the kind of wealth generation appropriate for Pakistan at present can be initiated here although it needs a fuller discussion. Given that half its labour force is still in agriculture which has been a major source of resilience in difficult economic conditions, the sector should be the obvious focus of attention.

Even otherwise, there is little chance that Pakistani manufacturing can become internationally competitive quickly in the prevailing global and domestic environment. And with half the population functionally illiterate, there is little that growth in high-end services, useful as it is in its own right, can do to yield a significant contribution to employment generation.

Trickle-down, if it ever happens, would take too long; the more likely outcome is what Arundhati Roy has famously termed “gush-up.”

An analysis and adaptation of the early Chinese experience is warranted. It was focused squarely on rural growth, the reform of incentives to farmers, modernisation of agriculture, and facilitation of town and village enterprises servicing agriculture and manufacturing goods for the poor with rising incomes. This triggered the upward spiral that strengthened demand for investments in human and physical capital providing the foundation for subsequent urban industrial development.

Given that a huge pool of capital-seeking productive investments exists in our immediate neighbourhood in the food-deficit Gulf states, the conditions are ripe for a win-win partnership that could modernise Pakistani agriculture, use aid effectively, and help the country grow its way out of poverty.

If we get this big picture right, subject it to critical analysis, and rally public support round its implications, we can break the logjam of the present and launch the dynamic that could carry us to a more prosperous future.

Anjum Altaf is dean of the School of Humanities, Social Sciences and Law at the Lahore University of Management Sciences. Samia Altaf is the author of So Much Aid, So Little Development: Stories from Pakistan.
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Dying young in the throes of poverty

Dr. Zaheer Ahmad Babar


According to a newspaper report, published in the last week of May 2012, a 15-year-old maid was tortured to death, allegedly by her employer and his family in the Garhi Shahu area of Lahore. The family suspected that the girl was involved in a theft.

The area police inquiries showed that one Asif Butt had employed two sisters - Robia and Sobia of Sheikhupura - as maids some five years ago. On the day of the incident, the family tortured Robia whom they accused of committing theft. She succumbed to her injuries after a couple of hours. Asif informed the family of the victim that the girl had died of illness. The family took the body to their native town and came to know that Robia was beaten up as they noticed scars on her body.

This is not the sole incident of its kind. During the past years, the national press has been publishing reports about deaths of servants and maids at the hands of employers, and a visible hike has been witnessed in such incidents. Mostly such housemaids and servants are very young and fall in the category of child labour. Once their parents hand them over to some well-to-do families, they are at the mercy of those families. Living in those houses as domestic servants, they lose their childhood in servitude. And what is more horrible is that some lose even their lives.

According to some unofficial figures, three million children in the country are employed in the shadow economy, and a large number of them serve as domestic servants.

According to a newspaper survey published in a daily, many families prefer to employ young boys and girls as domestic servants in major cities, including the federal capital and Lahore. They accept low wages, stay with the family and are considered safe, obedient and easy to control and bully.

According to another newspaper report, an 11-year-old boy Ali Shan, worked as a servant at the house of a grade 18 government employee in Islamabad. On January 5 this year, the landlady informed the police that Shan had committed suicide by hanging himself in the living room. However, the Golra police, who arrived to investigate found that circumstantial evidence did not prove her claim. Shan's body was not hanging, but on its knees with a curtain that was still on its railing with its lower portion passing through the sweater he had on. That made the police arrest the husband and wife on a murder charge.

Later on, the police suspicions were confirmed by the autopsy carried out on the body at PIMS. The body bore no sign of hanging, nor any injuries. Instead the autopsy suggested the boy had been strangled as his neck had a round mark and not the 'V' mark that signifies a hanging.

According to other such reports, on July 24, 2010, teenager housemaid Salima Bibi was found dead with a bullet in her body at the house of her employer in the federal capital. Police investigation proved she was shot dead. Another housemaid died at the hands of her employers in the Bhara Kahu outskirts during the same year. Her brutally tortured body was found in a wooded area near Rawal Lake. She was hit on her head and her neck was slit. Police identified her as Maria Talib Hussain from Multan, working as a housemaid. Her employer, assistant director of a government department, had reported to the police the previous day that she had disappeared with his family's ornaments and cash. But during the investigation his wife told the police that while interrogating Maria for the missing ornaments, she hit her on the head which proved fatal.

In yet another such incident in August, Taqi Usman, a 12-year-old domestic servant from Chiniot was allegedly clubbed to death in Lahore by his employer for not feeding the house pet. Fourteen-year-old Ahsan Haider was killed on suspicion of stealing the sound system from the music academy where he was employed.

Another suspected killing that was highlighted in the media was of Shazia, a young Christian girl who died on January 22, 2010, in a Lahore hospital. Her death sparked protests in the Christian community and her mother lodged a case with the police alleging that her employer Advocate Chaudhry Naeem had tortured, raped and murdered her. Later, the lawyer was acquitted of the charges by the court.

All such incidents highlight the need for enacting stricter laws for the protection of young people working as domestic help. State of Pakistan's Children, a report compiled by the Society for the Protection of the Rights of the Child (SPARC), claims as many as eight cases of severe torture against domestic child servants led to their deaths during the previous year.

A spokesperson for SPARC said: "It is being observed that every fourth house in Islamabad employs a child as a domestic servant. These children are brought from poor parts of the country, like Rahimyar Khan and Multan to serve as domestic servants." She demanded that both the federal and provincial governments take effective measures to check growing violence against child domestic workers and respond to the situation by adding Child Domestic Labour in the list of banned occupations under the Employment of Children Act 1991.

The UN Convention on the Rights of the Child (CRC), which sets out the political, cultural, social, health and economic rights of a child (under the age of 18), has been ratified by 194 countries. Pakistan is one of the first 20 countries to have signed and ratified the Convention.

Article 32 of the Convention says, "The right of the child to be protected from 'economic exploitation' and from performing any work that is likely to be 'hazardous' or to interfere with the child's education, or to be harmful to the child's health physical, mental or otherwise."

Iftikhar Mubarik, the programme manager of Violence Against Child Labourers run by SPARC, identified domestic employment as the worst form of child labour. Mubarik told this writer in Islamabad recently that domestic labour deprives young children of several rights that have been identified by the state. It has 'no specified working hours' which often victimises young children to a routine devoid of education, rest and leisure.

Section 7 of the Employment of Children Act 1991 states, "The period of work on each day shall be so fixed that no period shall exceed three hours and that no child shall work for more than three hours before he has an interval of at least one hour for rest." The Act which defines a child as a person below the age of 14, while prohibiting certain occupations for a child fails to address child labour in the domestic sector.

According to an ILO estimate, in Pakistan every fourth house employs a child for work. Mubarik said that in the previous year as many as ten cases of child domestic servants being tortured and killed were reported.

According to the SPARC investigations, child domestic labour is practised in all provinces of Pakistan; most cases of violence towards child domestic labour occur in the Punjab, reveal the research studies. The Child Rights Movement (CRM) launched their Punjab chapter during the last year. The body comprises of almost 20 NGOs, hailing from various districts of the Punjab. The CRM has demanded that the federal government establish the National Commission for the Rights of the Child in compliance with the recommendations given by the UN Committee on Child Rights in its concluding observations to Pakistan. A delegation of the organisation called on the Punjab Chief Minister Shahbaz Sharif and demanded inclusion of domestic labour in the schedule of the 34 banned Hazardous Occupations as defined by the Employment of Children Act (ECA) 1991.

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Addressing poverty
By: Jomo Kwame Sundaram | March 10, 2013

Global leaders have touted the apparent success of achieving in 2010 - well ahead of the 2015 target - the Millennium Development Goal of halving the share of people, who were living below the poverty line in 1990. But, amid enduring poverty, rising inequality and lacklustre growth in many developing countries, the success of past anti-poverty policies and programmes appears dubious.

In fact, outside of East Asia, progress has been modest, with the situation worsening in some countries and regions - despite several economic growth spurts, sustained expansion in some large developing countries and public commitments by the international community to the 2000 Millennium Declaration, which led to the MDGs.

This mixed record calls into question the efficacy of conventional poverty-reduction policies, often identified with the Washington Consensus, which transformed the discourse on poverty in the 1980s. Washington Consensus reforms - including macroeconomic stabilisation and market liberalisation - were supposed to reduce poverty by accelerating economic growth.
But little attention was paid to poverty's structural causes, such as inequality of assets and opportunities, or the unequal distributional consequences of growth. And, because unskilled workers tend to lose their jobs first in economic downturns, while employment generally lags behind output recovery, reduced public investment in health, education, and other social programmes ultimately increase the vulnerability of the poor.

Not surprisingly, therefore, the fallout from the global economic crisis that erupted in 2008 has prompted experts, policymakers, and the international financial institutions to rethink poverty. Many are rejecting the once-dominant perspectives on poverty and deprivation, warning that they lead to ineffective policy prescriptions.

For example, the UN’s report “World Social Situation: Rethinking Poverty”, and its companion book “Poor Poverty: The Impoverishment of Analysis, Measurement, and Policies”, have sought to advance the debate on poverty by examining the conventional policy framework and assessing popular poverty-reduction programmes. They affirm the need for a shift away from the fundamentalist free-market thinking that has dominated poverty-reduction strategies in recent decades toward context-sensitive measures to promote sustainable development and equality. Indeed, these reports challenge the prevailing approach, which has left more than one billion people living below the poverty line, and has failed to prevent economic growth from stalling in most countries.

Meanwhile, inequality has increased worldwide - even in countries that have experienced rapid economic expansion. While growth is usually needed for poverty reduction, it does not necessarily translate into job creation, as many countries' recent record of jobless or job-poor growth demonstrates.
The UN encourages governments to assume a more proactive development role, which would entail an integrated policymaking approach aimed at promoting structural change, while reducing inequality, vulnerability and economic insecurity. Growth must become more stable, with a consistently counter-cyclical macroeconomic policy stance, prudent capital-account management, and greater resilience to external shocks.

Generally, economies that have succeeded in terms of both economic growth and poverty reduction over the last three decades have done so by adopting pragmatic, heterodox policies. Often invoking investor and market friendly language, they have generally encouraged private investment, especially in desired economic activities, such as those that create more job opportunities or offer increasing returns to scale.

But aid conditionality and treaty commitments have significantly constrained policymaking in most developing countries, especially the poorest. In particular, slow growth and revenue losses, owing to economic liberalisation programmes, have reduced the scope for fiscal policy, with serious consequences for poverty and destitution. This trend must be reversed.
Moreover, while the programmes that most donors like have sometimes helped to ameliorate the conditions facing the poor, but have not reduced poverty significantly. Leaders must consider, design, and implement pragmatic and innovative alternatives, rather than continue to rely on ineffective policies and programmes.

In recent decades, social policies have increasingly involved some form of means testing of eligible beneficiaries, ostensibly to enhance cost effectiveness. But, in general, universal social policies have been much more effective and politically sustainable, while policies targeting the poor, or the “poorest of the poor”, have often been costly and neglectful of many of those in need.

The right to social security enshrined in the Universal Declaration of Human Rights requires universal social protection to ensure the well-being of all, including people living in poverty and those at risk of poverty. Social policy, provisioning and protection must, therefore, be integral to development and poverty-reduction strategies.

In order to address global poverty effectively, world leaders must pursue poverty-reduction policies that support inclusive, sustainable economic growth and development – in turn increasing the fiscal resources that are available for social spending. Only when all citizens benefit from economic development can leaders devoted to poverty reduction claim genuine success.
The writer is assistant director general at the Economic and Social Development Department of the UN Food and Agriculture Organisation in Rome. This article has been reproduced from the Turkish newspaper, Today’s Zaman, with which TheNation has a content-sharing agreement.

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Eradicating poverty through women empowerment
Riaz Missen

The UNDP’s Millennium Development Goals (MDGs) report of the outgoing year claims achieving remarkable results worldwide vis-à-vis reducing extreme poverty, enhancing primary school enrolment of girls and bringing down child and maternal mortality but equally highlights the challenge ahead: “Lack of safe sanitation hampering progress in health and nutrition, biodiversity loss continues apace, and greenhouse gas emissions continue to pose a major threat to people and ecosystems”.

The report, which carried on its title page the photograph female brick-kiln workers, said the economic slowdown in the developed world must not be allowed to decelerate or reverse the progress that has been made. Terming eradication of inequality and pressing on food security, gender equality, maternal health, rural development, infrastructure and environmental sustainability, and responses to climate change as the longstanding goals, it emphasizes on the role of governments, civil society and private sector in this regard.

Even governments around the world achieve the targets set for 2015, more than 600 million people will still be using unsafe drinking water, one billion living under and around poverty line, mothers continuing to die needlessly in childbirth, and children suffering and dyeing from preventable diseases.
Ban Ki-moon, the Secretary General UN, noted in the preface of the report that eradicating hunger and ensuring that all children complete their primary education were the targets that remained unfulfilled. “Achieving the MDGs depends so much on women’s empowerment and equal access by women to education, work, health care and decision-making,” he added while pointing out unevenness of progress within countries and regions, and the severe inequalities among populations, especially between rural and urban areas.
Pakistan may not be standing at par with many developing countries, which are fortunate enough to have peaceful neighborhood and have no ideological burdens to carry. Still, what has been done here amidst all the chaos and anarchy following the War on Terror, both on its western border and its soil, is nothing less than miraculous.

Those most amazing aspect of Islamabad’s efforts vis-à-vis eradicating extreme poverty from its soil, though the funds and resources dedicated to this cause are far lesser than rooting out militancy, constitutes adopting the strategy to this end suggested by UN Secretary General. During last five years has shown enough progress on empowering women as a means to achieving the Millennium Development Goals (MDGs).

The political leadership of the country, which had jointly struggled to restore democracy through peaceful means, also took care of the people duly affected by international economic recession and the War on Terror through establishing Benazir Income Support Program (BISP) as an independent authority - patronized by President and Prime Minister and managed by a high powered Board headed by its Chairperson -through the Act of the Parliament in 2010.

Dedicating its social safety net to a female political leader, who was assassinated by extremists, gave a clear message to the world, in and around, that political leadership across the divide was as united in favor of the underprivileged section of the society as it was opposed to religious extremism. More, the program is also being led by a female politician, Farzana Raja, who has earned lot of praise as well as assistance from international donors for running the program efficiently and honestly - she is spending only 30% available resources on running the administration.

BISP conducted countrywide Poverty Survey/Census for the first time and collected the data of 27 million households. The poverty census completed in record time of one year across all Pakistan including Azad Jammu & Kashmir, Gilgit-Baltistan and FATA. The allocation for the financial year 2012-13 is Rs 70 billion to provide cash assistance to 5.5 million families, which constitutes almost 18% of the entire population. The Program aims to cover almost 40% of the population below the poverty line. Recently the Asian Development Bank (ADB) has agreed to give BISP $200 million to bring the left-outs into its social safety net.

More than 7 million beneficiary families have been identified through Poverty Scorecard Survey for disbursing Rs1000/month through ‘branchless banking system’ (Smart Card, Mobile Phone, and Debit Card). Called as Martial Plan and having focus on poverty alleviation through empowering the women, more than Rs146 billion has been disbursed to the deserving and needy of the country with complete transparency in about 4 years time through the elected representatives of the people, regardless of their party affiliation.

To make people independent financially rather than perpetually depending on government support, BISP is providing interest free loans up to Rs 300,000 to help recipients set up small businesses. The most striking feature of this program is that the female beneficiary is the sole owner/proprietor of the business and the counseling, monitoring and training for starting the business is provided through Pakistan Poverty Alleviation Fund (PPAF).

A total of 10,000 young males and females have been trained and another 20,000 are currently undergoing training. The target is to train 150,000 students every year. Pakistan is also providing through its social safety net insurance cover of Rs.100, 000 in the case of the death of the bread earner of the poor family registered with the authority. With a view that health shocks are the major reason for pushing people below the poverty line, Rs25000 health insurance is being provided to the poorest families for the first time in Pakistan. Pilot phase has been launched from Faisalabad.

Finally, as the Poverty Survey had indicated, millions of poor children never attend any school due to financial limitations. Waseela-e-Taleem Program has been initiated with generous help of the World Bank and DFID, to send 3 million children to school through additional cash incentives of Rs.200 per child. “The BISP was designed to alleviate the poverty through empowerment of women in the country, and, in addition, it is helping to materialize the dream of making Pakistan a welfare state,” a top official of the BISP says, adding that the work of 15 years has been done in just four-and-a-half years, and if the program continues for other 10 years, it would help reduce poverty across Pakistan by 10 per cent.

http://www.thefrontierpost.com/category/40/
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Raising aspirations

Shahid Khalil


Poverty is like a disease which besides treatment needs the commitment and the determination of the individual to get rid of it. We have to take measures to raise the aspirations of the poor to motivate them to wriggle out of poverty.

Security is a perennial concern in Pakistan. Insecurity and violence have been shown to lower economic prosperity, and may have adverse consequences for aspiration levels. It is highly improbable that one moves out of poverty without aspiring to do so.

Understanding what leads rural Pakistanis to aspire or fail to aspire is especially important given that Pakistan has an extremely young population that will need to find employment in the coming years For rural populations highly dependent on agriculture, the consequences of high fertility include increasingly smaller average farm sizes, as family land assets become further divided. As Pakistan's working-age population grows, it is vitally important to understand what drives individuals to aspire to improve their outcomes and invest in their future.

A recent report by the Internal Food Policy Research Institute reveals that very large numbers of rural Pakistanis feel they lack access to basic services and institutions that might influence aspirations. These include security, justice, and social safety nets, among others. Further, women and the poor feel they have even less access to these services than do men and the better-off. Most respondents also live in communities lacking important infrastructure that has been shown in other contexts to boost economic growth. Individuals also generally feel that they have little control over what happens in their lives.

The report has additionally identified characteristics that predict aspirations levels: women have lower aspirations than men; the uneducated have lower aspirations than those with some education; the middle-aged (25-45) have lower aspirations than the young (age 18-25); and agricultural wage labourers have lower aspirations than rural non-farm workers.

Further, various internal factors are strongly correlated with aspiration levels, including an internal locus of control, high self esteem, religiosity, trust, envy, and a sense of poverty being due to external factors. This suggests some particular groups that are most at risk for aspiration failures, and that might be specifically targeted by policies aimed at raising aspirations.

This report has also identified a number of potential policy levers associated with higher aspirations in rural Pakistan: holding organized meetings of village residents, improving the justice system, upgrading road surfaces (from mud to other types), expanding communication and transport links with other localities, and providing training of some type through NGOs. This is suggestive evidence that good policy can create and cultivate the institutional conditions that permit and encourage individuals to aspire. The report additionally investigates some of the possible economic decisions that may be affected by aspirations, and finds that higher aspirations are associated with higher crop yields, less pre- and post-harvest loss, more savings, more cash loans (likely indicating greater access to and use of credit), and a greater propensity to operate a nonagricultural enterprise.

The aspirations of Pakistanis are also at an especially critical juncture given the country's deteriorating security situation, two major floods in the last 2.5 years, and an increasing likelihood of such extreme weather events due to climate change. The recent flooding has only heightened perennial concerns in Pakistan about a lack of basic necessities such as education, health, security, mobility, and access to information. Without these basic necessities, aspiration levels may be exceptionally low. It is critically important to understand what policies raise aspirations, and which can ensure that aspiration levels remain high. With this knowledge, resources can be targeted to leverage individuals' desires for a better life to improve actual outcomes for rural Pakistanis.

Corruption and a poor justice system have also been shown to lower economic growth and may similarly have adverse consequences for aspiration levels.
Thus, a sufficient condition for the perpetuation of poverty is a general failure of the poor to aspire. Aspirations may relate to income, wealth, educational attainment, social status, or any other area one considers important. When an individual's aspirations are high relative to the average level in his district, his aspiration level is considered to be high. Conversely, when an individual's aspirations are low relative to the average level in his district, his aspiration level is considered to be low. Understanding what leads to high or low aspirations among the poor, and understanding how aspirations (as well as certain cognitive biases that help determine them) affect behavior provides useful information for effective, pro-poor policy formulation.

Exposure to media and information can provide important knowledge that helps increase productivity and improve rural livelihoods. For example, people can learn about prices, commodity demand, weather expectations, job, or farming techniques. This information can make them more productive and better able to adapt to changing conditions. Second, people can learn about the standards of living of similar people in different cities. This might inspire them to work harder in order to achieve a better life, and can even promote migration. In both of these ways, exposure to media and information has the potential to positively impact aspiration levels.

Parents are one of the most important influences on their children and can serve as role models, mentors, and support systems. As such, parents are likely to be at the center of one's aspirations window. Individuals whose parents have significant levels of achievement may be relatively more likely to have high aspirations. Conversely, low parental achievements may anchor an individual's aspirations at low levels. We collected data on an important aspect of parental achievement: the highest level of education obtained by each parent.

Another important aspect of an individual's aspirations window is the set of neighbors, friends, and acquaintances with whom he/she is likely to interact. With more interactions, an individual is more likely to encounter a person with very high aspirations. An important factor conditioning the number of people with whom an individual interacts is her perceived degree of mobility. Mobile individuals who feel the confidence and freedom to leave their village will likely meet more people with high aspirations.

Locus of control is a psychological concept measuring "a generalized attitude, belief, or expectancy regarding the nature of the causal relationship between one's own behaviour and its consequence," and it is likely to influence an individual's behaviours and productive investments. Individuals with a strong internal locus of control believe that outcomes in their life are due to their own actions and effort, while those with a strong external locus of control have a more fatalistic view of the world.

Closely linked to an individual's locus of control is his/her perception of the causes of poverty. Poverty may be associated with a fatalistic worldview. If poor individuals believe they are poor for reasons beyond their control, then they may not be motivated to make costly but ultimately beneficial investments to reduce their own poverty.

Attitudes to change have sizeable linkages with poverty; adaptability and eagerness to learn new techniques can lead directly to greater resilience and productivity.

The impact of self-esteem on behaviour is a subject of great interest to social psychologists. Self-esteem may also have beneficial economic impact if it leads to more investment in education, harder work, more ambition, higher aspirations, and more efficient collaboration with others.

Envy may consume energy and prevent beneficial cooperation and collaboration with others. Religiosity has been blamed for extremism and violence. However, it can also be associated with acts of generosity and with pious behaviour. Understanding the climate of religiosity in an area can be important for designing policies that approximate to the worldviews and preconceptions of the people. Higher aspiration levels are also associated with higher savings and use of credit (normalized as a share of expenditures) and a greater likelihood of operating a non-agricultural enterprise.

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Poverty indicators

Shahid Khalil


Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having schooling or medical care.

And poverty is concentrated in the agricultural belt of the country where the majority of the people have no land on which to grow food or a job to earn a living, or access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation.

We all know these facts, but rarely do our planners seek to conduct surveys to know the depth of the problem. Pakistan's economy has been growing at a slow pace (around 3 per cent per year) during the last 5 years. Savings and investments as per cent of GDP have been declining and the overall deficit has been growing. Prices of essential items rose manifold during the last five years. Slow production activity resulted in an increasing number of unemployed people. High and persistently increasing inflation resulted in declining real wages of skilled and unskilled workers and real household consumption expenditure remained stagnant. This is evident from the increasing share of food expenditure in total household expenditure since 2007.

Different measures of poverty show considerably high levels of deprivation. The Multidimensional Poverty Index (MPI) indicates that about 49.4 per cent of the population suffered multiple deprivations in 2007, while an additional 11.0 per cent were vulnerable to multiple deprivations. Income poverty measured by the percentage of the population living below PPP US$1.25 per day was 22.6 per cent. This indicates that income poverty only tells part of the story. The multidimensional poverty headcount was 26.8 percentage points higher than income poverty. This implies that individuals living above the income poverty line may still suffer deprivations in education, health and other living conditions. Slow economic growth of the past five years has compounded the problem.Peoples' perception about the economic condition of their household and the community is not very encouraging. The nationally representative household survey, the Pakistan Social and Living Standards Measurement Survey (PSLM), asks respondents to provide their perception about the economic situation of their household and community. In addition, subjective information on the effectiveness of public services and facilities available to them is also asked. But this survey is conducted rarely and its findings are withheld for a long time.

The most recent survey was conducted in 2010-11. Nearly 43 per cent respondents of this survey expressed either a worsening economic situation of their household or no change compared to the previous year. Only 16 per cent households reported a better or much better economic condition. Similar responses were received when these questions were asked about their community. In this survey, households were also asked about their level of satisfaction with the facilities and services provided by the government. In response to this question, 31 per cent reported satisfaction with health facilities, 12 per cent were satisfied with the Family Planning services, 61 per cent with school services, 15 per cent with Agriculture Extension Services, and 10 per cent with the police.

In Pakistan, there are 114 districts in the Punjab, Sindh, Khyber Pakhtunkhwa (KPK), Balochistan and Islamabad. According to the Mouza Census of 2008, there are 52,376 mouzas in the four provinces. Mouza, a revenue village, is a unit of land organization defined by the government. It consists of one or more villages. There are 27,059 mouzas in the Punjab, 5,983 in Sindh, 11,854 in KPK and 7,480 in Balochistan.

The survey revealed the way that people of rural areas live in Pakistan. They do not enjoy even half the facilities available to the poorest in big cities. This disparity will have to go in order to put Pakistan on a sustained growth path. The structure of internal roads in most of the villages was mud. This pattern holds across provinces. Other common structures were soling in the Punjab, asphalt in KPK and concrete and asphalt in Sindh. The structure of most of the external roads in the villages of the Punjab and Sindh was asphalt, whereas gravel roads were common in KPK. Some external roads in Sindh were mud and in KPK were mud and concrete. A majority of the selected villages were connected with the nearest city through a main road.

Motorcycle, three-wheeler, four wheeler (e.g., suzuki van), and bus were found to be the most common modes of transport to go to the nearest city. Motorcycle, three-wheeler, and bus were common in the Punjab whereas four wheelers, such as Suzuki vans were commonly used in KPK. Mechanical transport has become more popular in recent years. The use of bullock carts was not found as a means of transport in 2012 whereas 5 villages (2 in Punjab and 3 in Sindh) reported bullock cart a mode of transport to go to the nearest city in 2007. Motorcycle appeared to be the most common mode of transport in recent years

Out of 76 villages, basic health units (BHU) were available in only 11 per cent of the villages, rural health clinics (RHC) in 9 per cent villages, and clinics or dispensaries in 29 per cent villages. Hospitals were found in only 1 per cent of the selected villages. However, nearly half of the villages had the services of a mid-wife and lady health worker (LHW). Hakeems and quack doctors were available in nearly half of the villages.

Although, some formal health facilities, such as, Basic Health Units, Rural Health Centers, and hospitals were available in very few villages, most of these services are available within a radius of 10 kilometers from these villages. Average distance to health facilities is relatively longer in KPK as compared to the Punjab and Sindh.

The average distance to most of the credit services located outside the village was 15 kilometers. A majority of input suppliers and money lenders were located within an average distance of ten kilometers from these villages. However, formal institutions, such as, ZTBL, commercial banks, cooperatives, NGOs, are more than 15 kilometers away from these villages. These distances are relatively longer in KPK as compared to the Punjab and Sindh

The availability of basic services and amenities indicates the level of development in a community. The key informants were asked about the presence of basic facilities in their communities. The data indicate that the mobile phone service was available in almost all the selected 76 villages. Nearly 93 per cent of the villages were electrified. However, very few villages had access to natural gas. About 60 per cent of the villages used cylinder gas. This proportion is 87 per cent in KPK and 25 per cent in Sindh. Immunization services were available in most of the villages. Very few villages had a sewerage system. Garbage collection system was available in only one village. Less than half of the villages had a health awareness program.

The distance from a village to important locations is crucial in determining the access of people to such facilities and amenities that do not exist in the village. The selected villages were located at an average distance of 22 kilometers from tehsil headquarters and 44 kilometers from the district headquarters. The selected villages of the Punjab were located at an average distance of 52 kilometers from the district headquarters. This distance was 27 kilometers in Sindh and 37 kilometers in KPK. However, these villages were not very far from the city. The average distance to the nearest city was 13 kilometers. These villages were at an average distance of less than 20 kilometers from the commercial center, mandi (main market), weekly market, and commercial bank. The railway station was far away from these villages. These distances were considerably high in KPK.

In most of the villages there was no need for any permit or license to start a new business. However, several constraints, were identified. Nearly 80 per cent of the villages identified access to good quality of electricity as the major constraint for the growth of non-farm business. Among other constraints, lack of access to formal credit, poor quality roads, corruption, tedious loan procedures, lack of access to market and market information, a dysfunctional legal system, and crimes were identified as major constraints.
The data collected on the physical infrastructure of schools indicate that most of the schools had boundary walls. Almost all schools used chalk-boards for teaching. However, the infrastructure that is crucial for the quality of education was missing in these schools. For example, less than half of the schools had a playground. Libraries were available in only 15 per cent of the schools, and scientific laboratories were available in only 6 percent schools.

Most of the schools had a drinking water facility. However, the common sources were hand or motor pumps.

Toilet facilities were also available in most of the schools. However, in most of the co-education schools, separate toilets for girls and boys were not available.

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Poverty, unemployment fuel terrorism

Prof. Dr. Asmatullah Khan


Pakistan is at the worse stage of unemployment, poverty and socio -economic devastation. The reason is that the country is without sincere leadership and fair accountability system. The open corruption, ill planning policies, energy crisis, delay in justice and lack of quality education and proper innovative research have made the country at the verge of collapse.
“According to the Transparency International Corruption Perception Survey conducted in 2012, corruption and bad governance caused over Rs. 18 trillion losses to the nation, while Pakistan dropped from the 47th to the 35th position on the most corrupt countries list from 2008 to 2012.
In regard to the provincial governments, the TIP noted that the Punjab, which has been the most corrupt in the 2008 survey, has emerged as the least corrupt during these years; where as there has been rampant corruption in the Khyber Pakhtunkhwa, Baluchistan and Sindh. According to the National Corruption Perception Survey conducted in 2010, the Punjab was ranked as the least corrupt province, while Khyber Pakhtunkhwa emerged as the most corrupt province”. Where corruption is common and commission and bribe is claimed as a legal right, there, economic development and human prosperity will remain at stake, because, priorities of the governmental machinery have been changed.
Therefore under such poor and corrupt governance, the economic issues like, inflation, unemployment, poverty, energy crisis, low industrial and agricultural productivity, poor investment, imbalance in export and import, low per capita income and unfavorable balance of payment is the definite and certain outcomes. The growing inflationary spiral and unfavorable balance of payments are the results of our weak and unstable trade, investment, monetary, fiscal and industrial policies, which has almost collapsed the socio economic situation of the country and living of the poor’s are quite miserable. The prices of almost all the daily use house hold items have been increased ten times, while the per capita income of the household has been declined five folds on account of growing unemployment and businesses deterioration. Increasing Unemployment and open violation of merit in recruitments has pushed the young generation to commit suicides and also to get involved in the terrorist and subversive activities against their own people.
The reason is that today, more than 60% of our young graduates are wandering in streets in search of jobs and are knocking at the doors of the corrupt politicians to buy jobs for their livelihoods and hardly 10% succeed in getting jobs either on payment to the corrupt politicians or on the basis of their approaches, political affiliations and nepotism. Thousand such examples can be quoted, where low merit and less qualified people have been directly appointed in the previous coalition government but meritorious and hard workers, honest candidates have been deprived from their due rights of appointment due to which they are in the state of extreme disappointment.
In addition, the poor quality of education and lack of real technical education are other causes of producing thousands of unproductive graduates living as parasites on the already debilitating economy. Today thousands of graduates are having degrees from educational institutions without quality insurance and quality control system.
Such educational institutions are either run only to make money at private sector or to ensure employment as a side business at public sector without any check and balance systems. Such educational institutions generally are having less qualified and inexperienced teachers and poor labs facilities and are mostly working without proper accountability systems.
Most of such institutions are paying salaries to their teachers less than Rs. 6000/ per month and they are running their institutions under semester systems, where teachers are all in all and the students are getting good grades without knowledge, skill and even without attending their classes. Therefore, their graduates are having poor performance in all respect.
The Higher Education Regulatory Authorities have been constituted almost in all provinces but they are usually headed by the irrelevant non professional bureaucrats.
Consequently, such authorities are less effective and are not achieving the desired objectives of quality control and quality assurance.
Therefore, as a result, such educational institutions are having free hands to determine their own fee structure, appointment criteria’s, syllabi, credit hours and awarding degrees and running the institute under their free discretionary powers.
Again thousands of such ghost educational colleges and universities can be seen around us, where only degrees are awarded and huge fee are collected.
Today, the West has declared their educational institutions a rich source for their foreign exchange earnings on account of their quality education.
Educational Institutions even in some Muslim countries including Malaysia, Turkey, Iran, Saudi Arabia are also enjoying good reputation and are attracting a good number of foreign students, which is a good source of foreign exchange earnings for them as well, but unfortunately our educational institutions are declining day by day on account of our poor educational policies and lower standards.
Appointments, and transfers are almost made on political grounds, including the appointments of Vice Chancellors, Principals, and Directors in our educational institutions, such political interferences have adversely affected the quality and standards of our education. (To Be Continued)

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Poverty, unemployment fuel terrorism — II

Prof. Dr. Asmatullah Khan


But it is not only the issue of poor and substandard education, unproductive graduates, who are unemployed having a peace of paper in their hands to certify their educational qualifications with out adequate skill and professionalism but it is a matter of the future of the young generation who are living as parasites in a society and are unproductive, lowering further per capita income and increasing the poverty level.
It is not only the poor families, who are spending their lives without even basic needs and are counting their days with complications and hardships but numerous other issues have further pushed the lives of the poor and young generation more miserable and have pushed the country at the verge of collapse, creating problems of other social evils, like increasing suicides, killing of their families and kids on account of hunger, growing theft cases, suicide attacks, target killings etc. Besides other economic issues like, growing debt burden, poor export, lower productivity, poor investment, issues of security, law and orders etc. The loyalty of the young and poor with the country is also in question. Actually, employment generation and higher ratio of the working force is a good indicator of socio-economic prosperity, development and economic stability and vice versa. All these social and economic issues are the result of our poor planning policies and lack of sincere and honest leaderships, otherwise our young generation is quite talented and this land is indeed very fertile and rich to feed honorably its nation in all respect.
Today, the growing energy crisis and load shedding and its increasing cost, is another alarming issue creating unemployment, being created on account of our poor planning policies, which has further not only made the life of the people miserable and at risk but also industrial and agriculture sectors are badly suffering and many industries and businesses have been closed on account of energy shortages, being known that today energy is the fifth very important factor of production. The collapse of the industrial and agriculture sector has not only increased poverty and unemployment in the country but has also increased the bills of our import expenditures but also has badly suffered our export sector as well. The every day increase in our import bills and decline in the export have raised expenditures many folds and has overburdened the country’s exchequer due to unfavorable balance of trade and payments. The industrial decline has further raised unemployment which has consequently adversely affected the per capita income of the country and export of the manufactured goods and agricultural products. Non availability of the energy and its growing cost for the industry, transport, businesses and tube wells installed for the irrigation purposes has further pushed the country in to the worse economic stagnation and inflationary spiral. Resultantly, the deficits in payments and trade have made the country at the verge of economic devastation and financial deficits.
The growing gas load shedding and increasing per unit cost is another setback for the economy of the country and is also not only increasing the miseries of the poor households and industrial sector but the transport sector is also suffering adversely. It is certainly quite apparent that in a country where neither energy is available nor cheap and frequent transportation facilities exists for the speedy supply of the labour force and raw materials to the industries nor their limited finished goods can avail the facilitation of the cheap access to the consumer market at national as well as international levels, how industry and agriculture will prosper and flourish and how income of the poor will increase and poverty will be eliminated? How the profit of the investors will increase and capital formation will grow? It is indeed beyond the understanding of the poor people of Pakistan that in spite of the fact that production of the gas has been increased many folds on account of the exploration of the oil and gas fields and it is indicated from the revenue of the government, which has been collected from this sector in the past few years as elaborated in the following paragraphs.
The government collected revenue of over Rs.138 billion from six different heads of oil and gas in the first six months of this fiscal year, up by over 106 per cent when compared with Rs. 67bn collected in the period last year. This was in addition to about Rs. 220bn as general sales tax on oil and gas collected in first six months, putting the total revenue receipts from oil and gas at about Rs. 358bn. As a result, the petroleum sector has emerged as the top revenue yielding sector for the government. According to official figures of the ministry of finance, the government collected Rs. 57.6bn as petroleum levy on oil products in July-December 2012-13 against Rs. 20.3bn collected during the same period last year, showing an increase of a whopping 184pc. Royalty on oil and gas stood at Rs. 29.8bn compared to Rs. 26.4bn in the first half of last fiscal year, an increase of about 13pc. On top of that, the government earned a windfall levy of Rs. 11.4bn during first six months of this fiscal year against zero collection under this head last year. Likewise, the government also collected Rs. 25bn as Gas Infrastructure Development Cess (GIDC) against no collection last year because the GIDC was introduced with effect from July 1, 2012. As a result, the petroleum sector has emerged as the top revenue yielding sector for the government and also for its investors, but unfortunately, these huge earnings are not appropriately utilized for the welfare of the general masses and all such resource generating institutions like P.I.A, Pakistan Steel mill, WAPDA, Railways, and such other departments are at the verge of collapse due to the incompetency and inefficiency of the previous Pakistan Peoples Party Coalition Government. Poor planning policies and incompetent technocrats and growing corruption could also be made responsible for this devastation and economic decline. The increasing external and internal debts burden in the history of Pakistan is another complex issue which very rightly depicts the inefficiency of the rulers and failure of their monetary and fiscal policy makers. The every day devaluation of the Pakistani currency and increasing dollar exchange rate is another conspiracy against this country, which is intentionally committed just to please their master’s and to give stability to their currencies and economy. The growing debt services burden is the outcome of our ill policies. According to the State Bank of Pakistan, the country’s foreign exchange reserves fell $154 million to $13.395 billion in the week ending Feb 8, from $13.549bn in the previous week. The payment of $146 million made to the International Monetary Fund in this month is not included in this data. The foreign exchange reserves held by the central bank slipped to $8.458bn from $8.586bn but that of commercial banks rose to $4.937bn from $4.888bn during the week. It indicates that financial position of the country is quite unstable.
In the circumstances prevailing in the country, where the intelligence agencies of India and Israel are destabilizing our country and are creating the issues of law and order in Pakistan and daily hundreds of our soldiers and innocent people are killed and sovereignty of the country is at stack. The fact of involvement of MOSAD and RAW is now no more secret and confidential, because the sudden death of an Indian spy Sarbajit Singh in Pakistan and the revenge, the official protocol and reaction of the Indian Government and their intelligence agencies in India have very openly exposed their involvement in the anti Pakistan activities since last several decades.
Therefore, it is the utmost need of the day to make the country stable, sovereign, and socio-economically prosper by reducing unemployment and poverty through our appropriate economic, political and educational policies. It is possible and achievable only if we provide a sincere leadership and a rapid and fair justice and quality education system to the general masses of the country in every walk of life.

(Prof. Dr. Asmatullah Khan, is a renowned Economist and a Retired Vice Chancellor of a public Sector University)

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