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Poverty alleviation: Pakistan’s experience

Poverty alleviation: Pakistan’s experience

Poverty alleviation is one of the preeminent factors in sustainable development goals (SDGs) set by UNO. Ever since the beginning of formulation of formal economic policies in the world after the second world war, the poverty has been the core of discussion. The reason behind that was the next threat is from poor. Those, who “have not” and lies in the category of those who do not have the resources and in the war of resources they can go to any extent. That’s what we have seen in the last twenty years. Therefore, the main focus of every budget and economic policy have been two major factors; economic growth and poverty especially in the rule of the governments with prolonged regimes.

Since 1999 till 2007, a very hyper sensitive issue of Pakistan’s economy was poverty reduction and economic growth in Pakistan. The primary concentration behind increasing economic growth was also poverty reduction according to the rule of trickle-down effect. This concept of trickle-down is basically from 1960s, “let the cake be big and then cut it” which means that people who have resources must be given the chance to increase their resources and when the resources increased, they will reach to the poor and reduce the poverty consequently.

Since Pakistan came into being, there have been two approaches for poverty alleviation. Before 1980s the conventional approach was used to reduce poverty by charity, taxes and other sources without any emphasis on religiosity but in 1980s, in the period of Islamisation the Shariah based approach was introduced and the main focus of the approach was to introduce the zakat system in banks, interest free finances for poor without making them overburdened with the pressure of paying back the amount of loan with interest on that, distributive justice, prohibition of monopoly in which monopoly control authority was authorized to ensure that there should be an atmosphere of competition rather rich is becoming the richest and poor getting poorer.

Later on, monopoly control authority named as Federal Competition Beuro. Moreover, the government tried to implement the law of inheritance, state’s responsibility for providing basic necessities was increased and that’s how the trend of poverty declined that time in 1980s till 1991. But, as far as the income inequality is concerned, that doesn’t seem to decrease. Surprising thing was that in 1970s and early 1980s it was said that the income inequality is the reason behind poverty alleviation which proved wrong because, by taking these distributive measures, the trend of poverty declined.

The controversial findings are ensured by taking the data from Pakistan Social and Living Standard Measurement Survey (PSLMS) 2000-2008 with a sample of around 15000 households and applying scientific techniques (econometric techniques) on it to check that what are the factors significantly impact the poverty alleviation.

According to the Pakistan Social and Living Standard Measurement Survey (PSLMS) 16.4 percent of people are literate with 5 years of schooling, 23.5 percent are matriculate, 9.3 percent are with education in the bracket of 10-14 years of schooling. Only 3.3 percent are literate with more than 14 years of schooling. Findings of the study shown that gradually as education level increases, the probability of being poor decreases.

Furthermore, trade-off impact was also seen in urban and rural areas of the country that households who move from rural to urban area, the chances for them to coming out of the poverty increases. Results of the study are significant for the category including skilled and highly qualified persons, and recommends that self-employment and skills effectively eliminate poverty.

If we link all this scenario with China’s journey coming out of poverty, we can see that they majorly focused and make heavy spending on infrastructure development, spending on education by providing outclass educational resources and heavily spent on IT and innovations that even America has allocated the budget of more than $150 billion in order to compete China in terms of technology.

Poverty will never end unless the real solutions to eliminate poverty are provided by the government and policy makers. The government of Pakistan is sponsoring many aid programmes and there are a number of departments including Pakistan Bait-ul-Mal, Pakistan Poverty Alleviation Fund and Benazir Income Support Programme (BISP) working with the aim to alleviate poverty from the country. The survey shows that the transfers and aid make recipients relatively lethargic, dependent on others and develop habits of shirking work. Government and NGOs must create working opportunities in the economy, instead. However, the Kamyab Jawan Programme is the good initiative taken by the current government that is helping the youth to establish small and medium enterprises, generating employment opportunities and providing skills to the youth to alleviate the poverty in Pakistan. Effects of remittances on poverty reduction in Pakistan are significant in such a way that foreign remittances have changed the life altogether as per the findings of the study but the remittances also create consuming rather than productive economy. That means, remittances have a short run impact on poverty reduction but not long lasting. Infrastructural development, better education and vocational trainings, providing skills, roads, health facilities, redistribution of resources from haves to have nots, affordable housing schemes, equal opportunity for females to participate in economic activities and public facilities can play significant role in reducing the chances of poverty.

The author is M.Phil Scholar, National University of Modern Languages, Islamabad.

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