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Make every effort in reducing poverty

Make every effort in reducing poverty

Income distribution in poverty alleviation also matters. A highly unequal income distribution makes it harder to decline poverty. Reducing the income inequality will raise the numbers who benefit from the same rate of economic growth. Conversely, higher inequality will require even greater growth to yield the same reduction in poverty, according to the Government of Pakistan statistics.

Over the years, in Pakistan, the pattern of income distribution measured in terms of the Gini Coefficient and household income share of the lowest and the highest 20 percent for rural and urban regions has been mixed and moderate. In the report, it is also recorded that the Household Income and Expenditure Surveys (HIES) undertaken periodically from 1961-64 to 2018-19, offer facts for the selected years. The Gini Coefficient of household income had been almost 0.35 or below since the 1960s, reaching 0.407 in 1990-91, 0.410 in 1998-99, and after that, it started declining because of enhanced poverty situation and reached 0.30 in 2018-19 as against to 0.33 in 2005-06.

The government of Pakistan also recorded that the COVID-19 pandemic has significantly increased poverty and inequality globally, causing a substantial reversal in progress toward global Sustainable Development Goals (SDGs). According to the latest estimates provided by the United Nations Department of Economic and Social Affairs in the report “The World Economic Situation and Prospects 2022”, progress in reducing extreme poverty has been setback by various years in most states. An unprecedented 85 million more people entered extreme poverty in 2020 worldwide.

The number is projected to remain well above pre-pandemic levels for the next several years, probably at a record high for the last decade. Only a slight fall is expected in 2022, to about 876 million people. Fast-developing economies in East and South Asia also developed economies will likely see a reduction in poverty in the near term. But it is anticipated to raise more in the world’s most vulnerable economies.

The government also showed that the capacity to reduce poverty will be largely constrained by insufficient fiscal space across the developing world, the slow recovery of employment in some states and the tightening of worldwide monetary conditions.

Extreme weather, wars and conflicts and political fragility could also further affect poverty prospects. The uneven pace of recovery between developing as well as developed states will widen income inequality across states and make it all but impossible to reduce global inequality by 2030, as targeted in the global SDGs.

The rise in global fuel and commodity prices has also severely impacted Pakistan’s economy when it was already facing a balance of payments crisis in the world market, stemming from high food and fuel prices. The combined effects of the global food and fuel crises adversely affected the economy resulting in the unsustainable current account and fiscal deficits and unprecedented high inflation.

The macroeconomic crisis in Pakistan necessitated making social protection an urgent priority for the poor and vulnerable segments of society. With the objectives to attain both growth and equity, social protection is the best mechanism available to transfer the benefits of economic progress to the extremely poor and vulnerable people in order to make them part of the overall development process. It is also recorded that Pakistan’s poverty reduction efforts have been widely acknowledged.

According to the World Bank report “Global Social Protection Responses to COVID-19,” Pakistan ranks 4th globally in terms of the number of people covered and 3rd globally in terms of the percentage of population covered amongst those that covered over 100 million people; the World Bank has stated that only “selected states have attained impressive 6-digit levels” in this regard.

Pakistan’s Ehsaas Emergency Cash is one of them that demonstrated how cash transfer programs can be deployed to counter socio-economic fallouts because of external shocks like COVID-19 which present a long-term predicament. The approach can also address rising inequality and advance the attainment of SDGs in a post-COVID-19 world.

The Government of Pakistan is striving to make progress toward SDGs amid challenges of ensuring quality education, gender equality, skill development, health & sanitation, infrastructure development and job creation. Pakistan is committed to alleviating poverty in line with the SDGs target Goal-1 “No Poverty” in all its manifestations everywhere by 2030.

Planning Commission’s poverty estimation is based on the Cost of Basic Need approach (CBN) estimated poverty line at Rs 3757.85 per adult equivalent per month. According to statistics, 21.9 percent of the population lives below the poverty line in FY2019 as against 24.3 percent in FY2016 as per the latest Household Integrated Economic Survey 2018-19 used for the poverty estimation.

Poverty in both rural and urban areas has also declined as a poverty headcount of 11.0 percent in Urban and 28.2 percent in rural areas is estimated. No doubt, the pandemic brought substantial changes to every aspect of people’s lives, and setbacks have already been observed in some dimensions of human development.

The most strongly affected regions are health, income and education. The Government is committed to making real improvements in people’s lives and implementing strategies that are aligned with poverty alleviation and SDGs indicators. The Long-term remedy, however, remains to be sustained high economic growth with equity. The Government of Pakistan is making strenuous efforts to attain higher economic growth with an emphasis on human resource development.

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