Poverty reduction expenditure

Estimating the effects of government spending on the reduction of poverty is complex, and rendered more so because the government continues to be unwilling to place a figure on the numbers that are living in poverty. Poverty is a moving target in terms of quantifying as increasing numbers dip in and out of poverty or hover just outside it, again adding to the complexity; but there are some new figures on how the government spends monies allocated for poverty reduction and they paint a picture that suggests large sums are being spent in areas not immediately identifiable as ‘poverty reduction’ (PR). Taken together the federal and provincial governments spent Rs462.7 billion on PR in the first quarter of fiscal year 2017-18. Around three-quarters of that — Rs354 billion — has gone to meeting non-development recurring expenditures, including salaries, not unlike robbing Peter to pay Paul. This represents an increase of Rs44 billion over the same quarter in the last fiscal year.

Despite this expenditure those that study fluctuations in poverty levels and quality of life say that there has been little or no change and that worryingly there has been a constant increase in inequality, the gap between those identifiably poor — and the strata above that are wealthier and not only in financial terms. Poverty is sectoral and multidimensional. Money is not the only factor; it can mean a poverty of education, health services or access and infrastructure.

Part of the reason for the low impact of expenditure is that salaries were paid in departments of health, education, law and order services and justice, and it is unexplained why social security spending actually fell by 18.5 per cent largely down to low spending in this bracket by Sindh. The finance ministry tracks expenditure, and poverty reduction analysis ‘clubs’ road building, environmental protection, education, healthcare, agriculture, rural development, law and order, justice administration and subsidies — which may be conveniently compact but does little to enhance the understanding of the layman. Poverty reduction needs to be addressed in a more ‘joined up’ manner than it is currently, and the latest figures tell us that the poor are always going to be with us.

Published in The Express Tribune, January 6^th, 2018.

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