Are the poor becoming poorer?

Published: September 29, 2011

The writer is a former chief economist of the Planning Commission and is based in Lahore [email protected]

Going by common perceptions, the answer to the question raised here is an obvious yes. One has only to step out of one’s house to see how bad things are for the already deprived. Perceptions and casual observations, however, cannot replace systematically collected data. In fact the absence of data makes perceptions worse confounded. Estimates of food insecurity have had a field day for that very reason. Important though these estimates are, they cannot surrogate for the true extent of poverty.

The job of collecting scientifically sound data is entrusted to the Federal Bureau of Statistics (FBS), which forms the basis of estimates for poverty as well as income distribution. This estimation has to be done by the Planning Commission (PC). Recently, both these organisations have been shirking their respective responsibilities. The FBS is supposed to conduct the Household Integrated Economic Survey (HIES) with a certain regularity. It has just made public the HIES 2010-11, but failed to produce it for 2009-10. Indeed the last available HIES relates to 2007-08. There is some conflict of interest here as well. Money for the survey comes out of the development budget controlled by the PC, which uses it for poverty analysis. A lot of foot-dragging was witnessed before the PC-I for the survey was approved.

The statistics division, the controlling division of the FBS, is part of the ministry of finance. The latter has had even more serious problems with the HIES and the poverty numbers based on it. All this started when the poverty number estimated by the PC on the basis of HIES 2001-02 was not to the liking of Finance Minister Shaukat Aziz. He deputed his economic adviser to force the FBS to conduct a post enumeration survey based on five per cent of the original sample. Normally such surveys are conducted soon after the main survey to check the validity of results. In this case, the exercise was carried out after a lapse of two years. No one except its manufacturers took its results seriously. By the time the HIES 2004-05 was carried out, Shaukat Aziz had become prime minister and his economic henchmen had done advanced planning. They played with the main survey to get the desired poverty number. In the report issued with the recent survey, the FBS has come clean on the issue by not mentioning HIES 2004-05 in its statement that: “The Income and consumption module [for HIES 2010-11] is exactly the same which has been used previously for the HIES 2001-02, HIES 2005-06 and HIES 2007-08.”

It was the dubious nature of the HIES 2004-05 that led the present government to first reject the poverty number of HIES 2005-06 and later ignore the HIES 2007-08 for poverty estimation. This was unwise, as the alternative estimates encouraged by the PC, were nothing more than casual empiricism.

Efforts should have been made to clean up the mess made with the survey under Shaukat Aziz’s orders. There is no excuse now for the PC to shy away from its responsibility of telling the nation about the true extent of poverty and inequality. Its Centre for Poverty Reduction and Social Policy Development should perform its function “to disseminate an objective assessment of the poverty situation”. Until then, we have no reliable basis to conclude whether or not the poor are becoming poorer.

Published in The Express Tribune, September 30th,  2011.

Reader Comments (3)

  • khan
    Sep 29, 2011 - 11:57PM

    The writer informs us that Shaukat Aziz lied and cheated to make himself and Musharraf look good. Sad to say one bunch of liars and cheats have been replaced by another lot. Given a choice I’d always opt for the non-uniformed ones. Why? Simply the civilian crooks have a shelf of five years and face being dumped at elections.The uniformed ones are like Egyptian mummies they go on seemingly forever, way beyond normal existence.

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  • meekal ahmed
    Sep 30, 2011 - 12:11AM

    Good work PT. Glad to see you back with economics and letting others worry about the name “Abbottabad”!

    I hope the lastest survey whenever it sees the light of day will factor in the flow of workers’ remittances. In addition to what comes through normal banking channels, I heard from the SBP that another 50% comes in through the hundi market. That is a lot of money pouring into the economy and surely some if not a great deal of it has had a mitigating effect on urban and rural poverty.

    Or put another way, absent this inflow, what would poverty look like with three years of double-digit inflation and no very good safety nets for the poor?Recommend

  • Sep 30, 2011 - 6:02PM

    off course poor is getting poorer and humanity is dying in Pakistan ruthlessly. We should take this issue serious as it may lead to a revolution that will wrap up all the politicians and they will find no chance to escape. Revolution starts from the poverty and takes all the way to a change.
    news pakistan

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