Three of every 10 Pakistanis officially poor

Published: April 8, 2016
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Government changes calculation methodology, classifies 59 million as poor. PHOTO: ISRAR UL HAQ

Government changes calculation methodology, classifies 59 million as poor. PHOTO: ISRAR UL HAQ

ISLAMABAD: 

The government has readjusted the country’s poverty line to bring the headcount in line with prevailing socioeconomic conditions and has officially recognised that three out of every ten citizens are poor – a ratio that was earlier just one out of ten.

In absolute terms, 59 million are now being recognised as poor against the earlier figure of 20 million.

Defining poverty

Ministers of planning and finance on Thursday unveiled a new methodology in the presence of international development partners to calculate the percentage of people living below the poverty line.

Pakistan has shifted from a formula based on food energy intake to one based on the cost of basic needs aimed at making the definition of poor more realistic. However, the government again did not change the unemployment definition, which has also become obsolete, recording a 5.9% jobless rate.

Under the new methodology, the poverty ratio was 29.5% in 2013-14, which according to the old definition stood at 9.3%, said Ahsan Iqbal, Minister of Planning and Development, while unveiling the methodology.

After the readjustment, the poverty line is now equal to Rs3,030 per adult per month, up from Rs2,350. According to the new definition, the poverty ratio was 64.3% in 2001 against the old estimate of 34.6%, said the minister.

Finance Minister Ishaq Dar insisted that despite the increase in numbers, poverty was on the decline, no matter which formula was adopted. On the basis of the old methodology, the percentage of people living below the poverty line fell around 25 percentage points from a high of 34.6% in 2001-02 to 9.3% in 2013-14. Dar took credit of taking a bold but politically sensitive step aimed at resolving an eight-year-old dispute over the actual level of poverty.

According to the new methodology, the poverty ratio dropped from 64.3% in 2001 to 29.5% in 2013-14. The poverty in rural areas was high compared to urban areas. Over one-third of the rural population is classified as poor against less than one-fifth in urban centres.

‘Rural development key to poverty reduction’

In absolute terms, the new poverty line will allow up to 7.6 million households to be classified as poor against 3 million households who were considered poor earlier.

In addition to the 59 million poor, 20 million people were classified as vulnerable and any economic shock may pull them below the poverty line, said the planning minister.

“Adoption of the new poverty line will help in the inclusive distribution of benefits and services, especially to the most vulnerable,” said Patchamuthu Illangovan, Country Director of World Bank. He said the government had taken a bold step to adopt a more inclusive poverty line.

Last time, the headcount of poor was calculated in 2001. Since then, ground realities had changed altogether and there had been many structural reforms, liberalisation measures, social safety nets, higher remittances and natural calamities, said the planning minister.

He stressed that it was not unusual for countries to revisit their poverty threshold when it got as low as it had in the case of Pakistan. The resetting would bring the headcount of poor in harmony with the prevailing socioeconomic conditions, Iqbal said.

He said the government had decided to set the reference group – the basket of food and non-food items on which poverty is calculated – at 10-40%.

“Setting aside politics, we are committing ourselves to a greater challenge because continuing with the 2001 poverty line would have tagged roughly 20 million people as poor and the readjustment raises it to 60 million, so we are raising the bar for ourselves.”

The minister said the government had incorporated suggestions of all poverty experts besides seeking advice from renowned development experts like Martin Ravallion and John Gibson who reviewed the findings.

Published in The Express Tribune, April 8th,  2016.

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Reader Comments (18)

  • wiserneighbour
    Apr 8, 2016 - 8:57AM

    so people who come here and mention about India’s poverty, just look at your self first.Recommend

  • Haji Atiya
    Apr 8, 2016 - 9:17AM

    Figure closer to illiteracy levels of 60% though there is no direct cause and effect in this country like maybe there is some others.Recommend

  • Last Man Alive
    Apr 8, 2016 - 11:13AM

    Hussain Nawaz, Hasan Nawaz, Maryam Nawaz, “Shaheed Rani”,

    Rehman Malik, Saifullah Family and hundreds and thousands

    others like them have looted this country and transferred its

    wealth through offshore companies to render millions of

    Pakistanis “officially poor”.Recommend

  • Raw is War
    Apr 8, 2016 - 11:32AM

    Musharaf’s legacy. Musharraf claimed he reduced poverty from 30% to 10%. He was just cooking his records like all his other data on economy (like fantastic growth of GDP etc). Now the correction is being done again and Pakistan is back to square one.Recommend

  • Adnan Siddiqui
    Apr 8, 2016 - 11:45AM

    If govt admits to 30%, reality would be closer to 50%.Recommend

  • jay
    Apr 8, 2016 - 12:50PM

    ” poverty is the worst kind of violence ” mahatma gandhi…Recommend

  • Quaid e azams grave
    Apr 8, 2016 - 2:34PM

    Spending more money in Indian Kashmir will solve our poverty issueRecommend

  • Kushal
    Apr 8, 2016 - 3:46PM

    Buy more choppers, make more nukes and think that you are equal to India.Recommend

  • Woz ahmed
    Apr 8, 2016 - 5:35PM

    Buses and metros will drag all out of poverty…..

    World Bank says we will add another 100 million to our population in next 35 years, there is a direct correlation between falling birth rates and basic education and health spending, when will we learn ?Recommend

  • SHKT
    Apr 8, 2016 - 6:05PM

    ooh, so many hate comments from Indian people. Makes you wonder if they ever have anything better to do. Guess there is no cure for compulsive obsessionRecommend

  • Alladitta
    Apr 8, 2016 - 8:08PM

    If illiteracy is 60% then it means those percent can’t afford school. Why are books still being cooked. Why don’t we start being honest with ourself. Recommend

  • Np
    Apr 8, 2016 - 10:17PM

    @SHKT:
    Are you surprised? No matter what India is doing -launching. a MARS mission or a Digital India mission, we see Pakistanis bringing up India’s poverty…often pretty outdated numbers. As you sow, so shall you reap.Recommend

  • ramdar
    Apr 8, 2016 - 10:49PM

    @SHKT:
    ”hate comments from Indian” No, it is just sarcasm from a few out of 1.3 billion Indians who were teased by Pakistanis on comparative poverty situation.Recommend

  • abood
    Apr 9, 2016 - 12:36AM

    Only solution is to make less babies.Recommend

  • brar
    Apr 9, 2016 - 1:36AM

    When you failed to conduct census and economic survey and you don,t know about the total population of your country no figures can be genuine it may be three out of ten, one out of ten and 4 out of ten, conduct census and economic survey and present the true figures.Recommend

  • Sandip
    Apr 9, 2016 - 2:47AM

    I smell some conspiracy against the great general Musharraf and his following generals. How can the government just wipe away all of Musharraf’s great achievements as if they were nothing.Recommend

  • Zahid
    Apr 9, 2016 - 2:52AM

    Nawaz Sharif family Ishaq Dar involved in money laundering and invest in offshore companies poverty became higher in Pakistan these corrupt politicians only filling their pockets they are not worrying about poor Pakistani people
    Where is planning minister ?Recommend

  • Haji Atiya
    Apr 9, 2016 - 7:41AM

    @Alladitta:
    @Zahid:
    He is planning his getaway ! 60% illiteracy can imply more than not the ability to pay for school ! Many females are barred from attending schools for various reasons which you and I know, also there may be a lack of schools in certain areas, or even parents may prefer to have their kids work or beg in the streets instead of going to school, etc. Recommend

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