Rising economic inequality

The growing economic inequality in Pakistan can largely be traced to corruption, mismanagement and a lack of direction. What Prime Minister Imran Khan said on Sunday gives a strong indication of what basically ails the country. He said so far his government had returned a significant amount of the total debt left by the previous governments. When he took over the reins of government in 2018, the country was facing an imminent default. This forced the incumbent to seek economic aid from friendly countries and a $6 billion bailout package from the IMF. The latter is influencing the country’s economic policies, thereby increasing economic inequality in the society where it had already been sharp.

The impact of policies being pursued in accordance with the IMF conditions is being felt in all spheres of the economy as a result of increased gas and power rates, enhanced taxes and cut in spending on the social sectors. With the ever-increasing amount of money going into debt servicing, little is left to spend on development sectors. Thus corruption, debt and debt servicing have resulted in a vicious cycle. The sins of one set of rulers tell upon the sons unto the third and fourth generations.

Corruption has led to concentration of the nation’s wealth into few hands. Around 20% of the population owns the country’s 50% income. This gross inequality has not come into being overnight. The other reason for this is the well-entrenched feudal system in the country. The system became anachronistic in other parts of the world long ago, but it is gaining strength in Pakistan. This is reflected in their strong representation in the legislative bodies. The other reason for the increasing poverty in Pakistan is low female literacy rate. Improved female literacy rate results in better health both for women and other family members and the spread of overall education, hence better income. Bangladesh is now faring much better than Pakistan and India in this respect.

Published in The Express Tribune, April 6^th, 2021.

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