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Review of CSR, Poverty Alleviation

Nazir Ahmed Shaikh
Review of CSR, Poverty Alleviation

In 2024, approximately 700 million people, or 8.5% of the global population, lived in extreme poverty, defined as surviving on less than $2.15 per day, with Sub-Saharan Africa accounting for two-thirds of this total. Despite progress in reducing extreme poverty from 36% in 1990 to 9.2% in 2022, the pace of decline slowed significantly, with only about 69 million people projected to escape extreme poverty between 2024 and 2030, compared to 150 million between 2013 and 2019. Additionally, around 3.5 billion people — 44% of the world’s population — remained below the $6.85 per day poverty line, a figure that has barely shifted since the 1990s due to population growth, highlighting persistent challenges in achieving broader prosperity.

Similarly, in 2024, Asia remained home to a significant share of the world’s poor, with approximately 155 million people — about 3.9% of the region’s population — living in extreme poverty on less than $2.15 per day, a figure higher than pre-pandemic projections due to the lingering effects of COVID-19 and inflationary pressures. In Southeast Asia, the poverty rate varied widely, with Myanmar reporting the highest at 49.7% of its population living below the national poverty line, while countries like Indonesia and the Philippines saw extreme poverty drop to around 2.5% and 3% respectively by 2022, though 2024 estimates suggest a slower decline due to economic disruptions. Despite robust economic growth in the region, with Southeast Asia’s GDP growth projected at 4.7% in 2024, about 20% of developing Asia’s population — over 800 million people — still lived below the $6.85 per day threshold, reflecting persistent moderate poverty and inequality challenges.

As far as Pakistan’s poverty rate is concern, it was surged to 25.3%, a 7% increase from 2023, pushing approximately 13 million more people below the poverty line, as reported by the World Bank’s ‘Poverty Projections for Pakistan’ using the national poverty line. This escalation, driven by macroeconomic shocks, the lingering effects of the 2022 floods, and record inflation — peaking at 38% in May 2023 before easing to 17% by mid-2024 — reversed earlier post-pandemic recovery trends, with poor households facing disproportionate welfare losses. Despite economic stabilization efforts, with GDP growth reaching 2.5% in fiscal year 2024, the World Bank estimates that around 40.5% of Pakistanis, or roughly 98 million people, remained below the lower-middle-income poverty line of $3.65 per day, highlighting persistent structural challenges.

The “Macro Poverty Outlook for Pakistan”, released by the World Bank in October 2024 says limited growth in real wages and employment will keep the poverty rate near 40% through fiscal year 2026. At the same time, monetary poverty will remain high. Tepid growth in non-agricultural sectors led to falling real wages for construction, trade and transportation, while employment and labour force participation rates and job quality indicators have not risen. These, together with fiscal consolidation and high inflation, led to a poverty rate of 40.5% in the fiscal year 2024 and an additional 2.6 million Pakistanis falling below the poverty line. Social protection expenditures increased while development expenditures declined, weakening social service delivery and delaying reductions in alarmingly high stunting and learning poverty rates, the report says. The fiscal deficit is projected to rise to 7.6% of GDP in the fiscal year 2025 due to higher interest payments but is expected to decrease gradually as fiscal tightening measures and falling interest payments take effect. The recovery is expected to continue, with real GDP growth reaching 2.8% in FY25, as the economy benefits from the availability of imported inputs, easing domestic supply chain disruptions and lower inflation.

Modern practice

Corporate Social Responsibility (CSR) is a vital aspect of modern business practices, reflecting the growing recognition that companies have a responsibility to contribute positively to society and the environment. By integrating CSR into their operations, businesses can enhance their reputation, attract and retain talent, drive innovation, manage risks, and contribute to sustainable development. However, challenges such as greenwashing, lack of standardization, and resource constraints must be addressed to ensure that CSR initiatives are meaningful and impactful. As societal expectations continue to evolve, CSR will play an increasingly important role in shaping the future of business and society. Through job creation, education, healthcare, community development, environmental sustainability, and women’s empowerment, businesses can make a meaningful impact on the lives of impoverished individuals and communities. However, to maximise the effectiveness of CSR initiatives, businesses must adopt a long-term, collaborative, and transparent approach that aligns with the needs of the communities they serve. By integrating CSR into their core strategies, businesses can contribute to a more equitable and prosperous world.

CSR encompasses a wide range of activities and initiatives, which can be broadly categorized into four main areas viz Economic Responsibility, Social Responsibility, Environmental Responsibility, and Ethical Responsibility. Measuring the effectiveness of Corporate Social Responsibility (CSR) initiatives in poverty alleviation involves a combination of quantitative and qualitative metrics.

Quantitative Metrics:

1- Income Levels:

2- Employment Opportunities:

3- Access to Services:

4- Economic Indicators:

5- Sustainability Metrics:

Qualitative Metrics:

1- Quality of Life Indicators:

2- Community Engagement and Empowerment:

3- Social Impact:

4- Feedback and Satisfaction:

5- Policy Influence:

Evaluation Methods:

Using a combination of these metrics allows companies to comprehensively evaluate how well their CSR initiatives are addressing poverty, ensuring that efforts are not just one-off but contribute to lasting change.

There are many Pakistani Corporate Social Responsibility (CSR) initiatives recognized for their efforts in poverty alleviation in Pakistan as of 2024. Due to limited publicly available comprehensive data specific to 2024, this list is based on notable initiatives from prominent Pakistani companies, their historical impact, and ongoing efforts aligned with poverty reduction, drawing from their established programs and projected activities.

These initiatives highlight a blend of direct economic support, skill development, and community uplift, tailored to Pakistan’s socio-economic challenges. Their success is measured by income improvements, job creation, and access to essential services, making a tangible dent in poverty across the country.

The author, Nazir Ahmed Shaikh, is a freelance writer, columnist, blogger, and motivational speaker. He writes articles on diversified topics. He can be reached at nazir_shaikh86@hotmail.com

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