- Structured CSR initiatives now offer sustainable solutions beyond temporary relief for vulnerable communities
Pakistan, with a population exceeding 251 million as of 2024, faces profound socioeconomic challenges exacerbated by economic volatility, climate change, and structural inequalities. The nation’s poverty trajectory, once marked by significant progress, has stalled and reversed in recent years due to overlapping crises including the COVID-19 pandemic, devastating floods in 2022 and 2025, soaring inflation, and policy inconsistencies. According to the World Bank’s 2025 assessment, the national poverty rate climbed to 25.3% in fiscal year 2023-24, pushing an additional 13 million people into poverty. Under the revised global poverty threshold of $3.00 per day (2021 PPP), extreme poverty stands at 16.5%, up from 4.9% previously. The Pakistan Institute of Development Economics (PIDE) estimates extreme poverty at 22.9% for FY 2025. Regional disparities are stark: poverty rates vary from 3.5% in urban centers like Islamabad to over 50% in rural Balochistan and 76.9% in districts like Tharparkar. Rural poverty remains at 36.6%, compared to 17.8% in urban areas, based on the first digital panel survey in 2025. As of early 2026, the nation continues to grapple with a poverty crisis exacerbated by global inflationary pressures, climate-induced disasters, and structural economic imbalances. However, a transformative shift is occurring in the corporate landscape, where Corporate Social Responsibility (CSR) is evolving from mere philanthropy into a strategic tool for sustainable poverty alleviation. The projected poverty rate in Pakistan for the 2023-24 fiscal year reached approximately 25.3%, with an additional 13 million people pushed below the threshold due to economic shocks. While government programs like Ehsaas and BISP provide a vital safety net, the private sector’s role through structured CSR is now recognized as the “missing link” in achieving long-term economic graduation for the poorest households.
These figures underscore the urgency of integrated strategies for poverty alleviation, aligning with the United Nations Sustainable Development Goals (SDGs), particularly SDG 1 (No Poverty) and SDG 13 (Climate Action). Corporate Social Responsibility (CSR) has emerged as a complementary force to government-led initiatives like the Benazir Income Support Program (BISP) and the Pakistan Poverty Alleviation Fund (PPAF). CSR, encompassing voluntary corporate contributions to social, economic, and environmental well-being, has evolved in Pakistan from ad-hoc philanthropy to strategic interventions. The Securities and Exchange Commission of Pakistan (SECP) introduced voluntary CSR guidelines in 2013, emphasizing board-endorsed policies and reporting. A landmark development was the passage of the Corporate Social Responsibility Act, 2026, by the National Assembly in January 2026, mandating CSR disclosures for listed companies and large non-listed firms, encouraging 1% of net profits for CSR, and providing tax incentives while imposing penalties for non-compliance.
Major corporations such as Engro Corporation, Unilever Pakistan, and Nestlé Pakistan have spearheaded CSR efforts, investing in education, health, livelihoods, and disaster resilience. In 2025, these initiatives contributed to flood rehabilitation and aligned with national priorities amid economic pressures. However, challenges like fragmented implementation, limited rural outreach, and debates over mandatory CSR’s impact on sincerity persist. This article provides a comprehensive analysis of poverty dynamics in Pakistan, the CSR framework, key corporate initiatives, their impacts on poverty reduction, associated challenges, and recommendations for enhanced efficacy. Drawing on data from 2025-2026, including World Bank reports, UNDP indices, and national surveys, it substantiates claims with verifiable references to inform policymakers, corporations, and stakeholders.
Poverty in Pakistan has deep historical roots, influenced by colonial legacies, post-independence economic policies, and global shocks. From 1947 to the 1980s, poverty rates hovered around 40-50%, driven by agrarian dependencies and urban-rural divides. The 1990s saw modest reductions through liberalization, but inequality widened. Significant progress occurred between 2001 and 2018, with poverty declining from 64.3% to 21.9%, fueled by urbanization, remittances, and shifts to non-agricultural employment. However, this momentum slowed post-2015, dropping less than one percentage point annually.
Key Findings
- Poverty Trajectory: National poverty rates have fluctuated significantly, rising from roughly 21.9% in 2018 to over 25% by 2024 due to stagnant growth and high inflation.
- Legislative Evolution: The introduction of the CSR Act, 2026, marks a transition from voluntary guidelines to a more structured, transparent, and impact-driven legal framework for Pakistani corporations.
- Multidimensional Poverty: Poverty in Pakistan is not just a lack of income but a lack of access to health, education, and clean water, which CSR initiatives are increasingly targeting.
- Financial Inclusion: Organizations like the Pakistan Poverty Alleviation Fund (PPAF) are bridging the gap by empowering communities through capacity building and sustainable livelihoods.
- The “Missing Middle”: While large-scale government transfers exist, CSR is uniquely positioned to fund vocational training and micro-entrepreneurship that government programs often struggle to scale.
Pakistan’s journey with poverty reduction has been a “rollercoaster.” Between 2001 and 2018, the country saw a notable decline in poverty from 64.3% to 21.9%. However, this progress has stalled. The national poverty line is currently set at approximately Rs. 3,030 per month, a figure that many critics argue is insufficient to cover basic caloric and non-food needs in the current inflationary environment.
For decades, CSR in Pakistan was synonymous with “Zakat” or occasional donations to hospitals and schools. However, the Securities and Exchange Commission of Pakistan (SECP) and the newer legislative pushes in 2026 have redefined this.
- Voluntary Phase: Initial guidelines encouraged companies to endorse CSR policies at the board level and embed them into their core vision.
- Structured Phase (2026): The CSR Act, 2026, aims to make reporting mandatory for listed companies, ensuring that social investments are measurable and aligned with the UN Sustainable Development Goals (SDGs).
| Comparison: Government vs. Corporate Interventions | ||
|---|---|---|
| Feature | Government Programs (e.g., Ehsaas) | Corporate CSR Initiatives |
| Scale | National; millions of beneficiaries. | Localized; specific community focus. |
| Primary Goal | Consumption smoothing (cash transfers). | Skill development and job creation. |
| Funding | Public exchequer and international loans. | Percentage of corporate profits. |
| Agility | High bureaucratic overhead. | Highly agile and innovation-driven. |
Recent reversals are alarming. The COVID-19 pandemic surged the poverty rate to 24.7% in 2020, followed by the 2022 floods displacing millions and exacerbating vulnerabilities. In 2025, further flooding damaged 2.5 million acres of farmland, affecting 6.9 million people and displacing 3.5 million. Projections for FY 2025 indicate a poverty rate of 42.4%, with 1.9 million more falling into poverty due to population growth at 2% annually. Under the $4.20/day threshold, poverty affects 44.7% of the population. The UNDP’s 2025 Multidimensional Poverty Index (MPI) reports a value of 0.198, with over 30% facing severe deprivations in health, education, and living standards. Pakistan ranks 168th on the Human Development Index (HDI) with a score of 0.544.
Key statistics for 2025-2026 highlight the crisis:
- National poverty rate: 25.3% (World Bank, FY 2023-24).
- Extreme poverty ($3.00/day): 16.5%.
- Rural vs. Urban: 36.6% rural, 17.8% urban.
- Child mortality: 59 per 1,000 births (2023, persisting).
- Out-of-school children: 22.8 million (aged 5-16).
- Informal employment: 85% of jobs.
- Average monthly wage: Rs. 39,042 (2024-25).
Causes include informal labor dominance, low wages, and climate hazards impacting 80% of the multidimensional poor. Government expenditure on poverty reduction reached Rs. 4.256 trillion in 2024-25, with allocations to education (20.73%) and health (15.72%). BISP disbursed Rs. 385.64 billion in 2025, supporting 9.87 million families. PPAF’s community-driven efforts were highlighted in the 2024-25 Economic Survey.
The climate-poverty nexus is acute: 887 million poor globally face hazards, with Pakistan’s poor overlapping with high-risk areas for heat, drought, and floods. In 2026, Pakistan ranks 8th on the Global Climate Risk Index, with projections of 20% higher rainfall intensifying vulnerabilities. Gender dimensions exacerbate issues: women’s labor participation is 21%, with the Gender Inequality Index at 0.536 (145th rank).
Poverty in Pakistan is not merely income-based but multidimensional, as per the UNDP’s MPI, incorporating deprivations in education, health, and living standards. In 2025, 1.1 billion people globally live in acute multidimensional poverty, with Pakistan’s MPI at 0.198. Over half are children, deprived of clean cooking fuel, housing, sanitation, nutrition, and electricity. The HDI ranking of 168th reflects low human development, with 740 million poor in middle-income countries like Pakistan.
Economic shocks have compounded issues: the 2025 floods battered fields and factories, with poverty projected to remain near 40% through FY 2026. Underemployment is a key challenge, with 85% informal workforce limiting income security. The Asian Development Bank reports 21.9% below the national poverty line in 2018, with 4.2% below $2.15/day in 2024.
Poverty varies regionally: Punjab at 32.7%, Sindh higher in rural areas, Balochistan over 50%. Urban poverty at 30.5% in 2025, with rural at 36.6%. Demographics show women and youth disproportionately affected, with 21% female labor participation. Children face high stunting (reduced by BISP’s Nashonuma by 6.4%).
BISP, launched in 2008, aims at consumption smoothing, poverty alleviation, and women’s empowerment. By 2025, it reached 10 million families, reducing stunting by 6.4% and poverty among beneficiaries. PPAF disbursed Rs. 2.19 billion in 2025, forming 171,000 community institutions with 63% women members. Asset transfers to 156,746 women in 2025 enhanced livelihoods.
Despite progress, 65% of BISP beneficiaries remain below the poverty line after 8 years, indicating need for complementary strategies.
The author, is a freelance writer, columnist, blogger, and motivational speaker. He writes articles on diversified topics. He can be reached at sir.nazir.shaikh@gmail.com