Poverty rate: Three years on, govt decides to redraw the line

Poverty numbers may be released in a couple of months: Planning Commission.

ISLAMABAD:

As pressure mounts on the government to spill out the number of people living below the poverty line, it has finally agreed to bring a three-year drought to an end.

After dragging its feet for over three and a half years, the government surrendered to the demand of firming up latest poverty figures, an exercise that may establish how much Pakistan Peoples Party led-government did for the welfare of masses.

“The Planning Commission will analyse data collected by the Statistics Division and may firm up poverty numbers in a couple of months,” said Planning Commission Deputy Chairman Dr Nadeemul Haque while talking to The Express Tribune. He said the government will hire competent people to carry out the analysis, as the Planning Commission does not have required expertise.

The current government had refused to endorse 2007 poverty figures and still considers 2006 figures as the last authentic available numbers. In 2006, 22.3 per cent people lived below the poverty line. According to 2007 unofficial statistics, the level fell to 17.2 per cent.

“The 2008 poverty figure was a fraud that was not even endorsed by any renowned economist or poverty expert,” said Dr Haque.

The poverty figures were missing in the Economic Survey of Pakistan 2010-11 for the third straight year. However, the survey did suggest that the poverty rate may have increased to 43 per cent.

Any person earning less than $1.25 per day is considered poor and below the poverty line, according to the World Bank.

Haque sees economic growth as the goal that will automatically address the poverty issue. He said that the Centre for Poverty Reduction and Social Policy Development was abandoned and replaced with the Growth Centre.

The exact number of people living below the poverty line will be available after a couple of months but experts widely expect that at least four out of ten people are living below the poverty line. The government recently released the Household Integrated Economic Survey 2010-11 that provides a glimpse of poverty and inequality in the country.

This survey showed that average monthly household expenditures increased 53 per cent while average monthly income rose 50 per cent over the last three years.

Data shows that the lower and middle classes were affected the most by spurt of inflation and declining incomes. There was an average increase of over 58 per cent in monthly household expenditures of the middle class against an increase of slightly over 50 per cent in income.

For the lower middle class, the increase in income was only 44 per cent while average increase in consumption was 55 per cent. For the poorest of the poor, the increase in average monthly expenditures was 53 per cent against 45 per cent increase in income.

The Statistics Division said that HIES provides the requisite data on consumption to the Planning and Development Division for poverty estimates, leaving the government with no other option but to firm up the numbers.

The Asian Development Bank (ADB) estimates that every 10 per cent increase in food prices pushes 2.2 per cent of Pakistan’s population below the poverty line. The finance ministry had estimated that food prices have surged 94 per cent since its last poverty survey. If ADB’s estimates hold across several years, poverty in Pakistan has increased to 43 per cent.

According to the Economic Survey, nearly three-fourth population lives very close to the poverty line and very small changes can push very large number of people below it, while relatively medium-paced economic growth can also bring several million people out of poverty as well.

Published in The Express Tribune, October 6^th, 2011.