- Microfinance banks and corporate social responsibility contribute significantly to inclusive economic growth
Interview with Mr. Altaf Hussain, an analyst
PAGE: What must the incumbent government do to alleviate poverty in Pakistan?
Altaf Hussain: As per my analysis, we must first determine whether the incumbent government is sufficiently empowered to alleviate poverty. Powerful lobbies such as the sugar mill mafia, flour mill mafia, transport mafia, and others prevent the government from enforcing its orders, rendering it ineffective in ensuring compliance.
Deputy Commissioners in many areas issue price lists for household necessities, but markets ignore these rates. Despite fines, penalties, and imprisonment, the government fails to enforce its directives. When pressure from the government increases, marketers resort to strikes, exacerbating shortages, disrupting supply, and driving prices even higher.
In Pakistan, no government has successfully controlled commodity prices, demand, or supply. A major drawback is the lack of real-time, accurate, and updated data, coupled with frequent misrepresentation of facts. This undermines compliance and prevents effective control of non-compliance.
On the other hand, the government imposes heavy taxes, customs duties, and excise burdens, yet fails to meet tax and duty collection targets. This results in expensive products for end users and lower revenue from producers and retailers. The above issues highlight major governmental weaknesses that fuel inflation and push people below the poverty line.
For the last few months, we have heard positive news about declining trade deficits, increased export volumes, foreign investments in our homeland, and record highs in the PSX. Despite these developments, prices of primary market necessities remain inflated.
To alleviate poverty, the incumbent government must undertake the following measures:
- Good Governance: This is fundamental for all aspects of national development, including law and order, justice, and the economy. The government must ensure transparency, a clear vision, well-defined policies, controlled implementation measures, genuine audits, and corrective legal action based on audit findings.
- Education: This is a prime pillar of national development. Unfortunately, Pakistan’s education budget is minimal and decreasing yearly. The concept of education must be redefined beyond merely building government schools, colleges, or universities with outdated subjects and curricula. Modern teaching methods, updated course outlines, and new subjects are essential to equip students to face global challenges. In the current era of AI, every educational institution must include digital labs and research centers. Courses should enable students to compete domestically and open global opportunities. An improved education system will naturally lead to job creation.
- Foreign Investment: This plays a vital role in economic development. The government must create an opportunity-rich economic environment to attract foreign investors. A safe and trustworthy environment, coupled with improved law and order, will encourage investors to establish manufacturing plants. This creates local jobs, reduces shipping costs, customs duties, and port charges, ultimately lowering product costs and controlling inflation.
- Infrastructure: This is crucial for controlling inflation. Good roads ensure safe journeys, reduce distances, and cut fuel and logistics costs.
- Subsidies on Basic Necessities: To provide relief, the government must reduce taxes and duties on essentials and control their market prices. Manufacturers share responsibility for monitoring prices when products reach consumers. Customers frequently face artificial inflation, where the price printed on packaging differs from the final purchase price.
- Reduce Government Expenses: Cutting government expenditure is essential to control inflation. This includes reducing costs for fuel, vehicles, maintenance, free utilities, complimentary air tickets, and unnecessary luxury purchases.
PAGE: What is your perspective about charity work in Pakistan?
Altaf Hussain: In Pakistan, charity work is supported on both religious and humanitarian grounds. Many organizations provide free food, shelter, and healthcare to the poor. This is invaluable support for impoverished and disabled individuals. Some organizations have taken mature steps beyond handouts, offering technical skills training, interest-free loans, and even rickshaws to both men and women.
The government has also initiated low-cost training programs to equip students with essential skills. The government and charity organizations should collaborate on a strategy ensuring that able-bodied recipients receive sustainable employment opportunities rather than perpetual aid. This benefits individuals, reduces the burden on organizations and government, and strengthens the national economy.
PAGE: Do you think Corporate Social Responsibility (CSR) by the corporate sector is vital to address poverty in Pakistan?
Altaf Hussain: Corporate Social Responsibility (CSR) plays a crucial role in addressing poverty in Pakistan. With 40-45% of the population below the poverty line according to the World Bank’s 2026 report, CSR cannot be the primary solution but offers valuable complementary initiatives. CSR targets poverty through sectors like financial inclusion, agriculture, education, and healthcare, with companies partnering with NGOs for sustainable impact. The government should create an efficient, accessible, and supportive environment enabling companies to focus on practical, beneficial CSR initiatives that help alleviate poverty.
PAGE: How effective are microfinance banks in terms of inclusive economic growth in Pakistan?
Altaf Hussain: Over recent years, microfinance banks (MFBs) have significantly expanded in Pakistan. Through strategic approaches, they have achieved sustainable growth. MFBs offer easy account-opening procedures and accessible loans with clear terms and manageable monthly installments. Many previously unserved individuals have accessed these loans for small businesses such as opening shops, purchasing taxis or rickshaws, or building houses for rental income. This circulates money through economic transactions and enables borrowers to earn livelihoods. Debtors repay both principal and interest, creating a win-win scenario for both banks and borrowers. In summary, microfinance banks effectively contribute to inclusive economic growth.
The incumbent government must make clear, strategic, long-term, and well-informed economic decisions to combat poverty and mitigate its devastating impact on the population and nation. Transparency and good governance are essential to rebuild public confidence.