Poverty a stark spectre for 79m Pakistanis: Report

Published: February 22, 2012
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Independent expert highlights startling inaccuracies in official poverty figures. DESIGN: FAIZAN DAWOOD

Independent expert highlights startling inaccuracies in official poverty figures. DESIGN: FAIZAN DAWOOD

ISLAMABAD: 

As the government continues to shy away from calculating official poverty figures, an independent expert has claimed that around 43 per cent of the population is living below the poverty line in Pakistan.

According to a study titled “Institutional Imperatives of Poverty Reduction”, by 2011-2012 as much as 43.1 per cent, or 79.1 million persons in the country will be destitute. The research was undertaken by Akmal Hussain; a professor at Beaconhouse National University and a well known expert on the topic of poverty.

The academic says his estimates are based on the elasticity of food price inflation with respect to the incidence of poverty. His research concludes that 40.7 per cent of Pakistan’s population would be classified as being ‘poor’ last year, compared to 38.5 per cent in 2009-10.

Last year, the government carried out the Household Integrated Economic Survey (HIES) which provides basic information for working out poverty numbers. The exercise has yet to produce any official numbers on poverty trends in the country.

The most recent official figures are from 2005-06, when poverty was estimated at 22.9 per cent. The Pakistan Peoples Party led government did not accept the 2007-08 HIES that projected a reduction in poverty to 17.2 per cent, and there have been no official numbers available since then.

While talking to The Express Tribune, Hussain said that his own estimates were based on certain projection, but he was confident that they did not fall too far from the mark. If poverty were to be calculated using HIES 2010-11, the number would be close or even higher than his projections, he said. Offering his services, he said that he would provide even accurate figures for the government if it was willing to provide him with the raw data.

There are reports that the Planning Commission might take him up on the offer. It is considering assigning the job either to him, or to the Pakistan Institute of Development Economics.

The paper also challenges the poverty estimates of the Musharraf regime, terming them incorrect. Instead, the study tries to establish that from 1999 to 2007-08, the incidence of poverty has increased by 3.8 percentage points from 30 percent in 1998-99 to 33.8 percent in 2007-08, with an additional 16 million people entering the category of poor over the period.

Musharraf’s government had claimed that it reduced the percentage of population below the poverty line from 34 percent in the year 2000-01, to 23 percent in the year 2004-05; that is, a reduction of 11 percentage points. This was meant to show that almost a third of Pakistan’s poverty stricken populace had been brought up within a period of four years. The author argues that if this was true, it would be one of the most remarkable economic achievements in the history of developing countries; including the Soviet Union under Stalin, and China under Mao. Even India had managed only a 10 percentage point reduction in poverty with its high average annual growth rate of 8 per cent.

The study also states that an analysis of the sources of growth, during the period 2000-01 to 2004-05, shows that the composition of growth during the period was pro-rich rather than pro-poor.

GDP growth during the period was overwhelmingly pro-rich since the sectors which contributed it were neither producing goods for the poor nor directly providing employment to them, claims the author. In fact, labour force survey data from the government shows that unemployment rates rose sharply from 6.1 per cent in 1999 to 8.3 per cent in 2004. Therefore, the nature and composition of GDP growth during this period could not be expected to have substantially reduced poverty, says Hussain.

Hussain said that the regime’s decisions to take 2001 as the base year for estimating poverty and measuring inflation on the basis of the Consumer Price Index, instead of inflation data of Pakistan Living Standard Measurement Survey (PLSM), led to the incorrect poverty estimates.

Taking the base year as 2000-01, which was plagued by bad harvests, and comparing it to the year 2004-05, which was comparatively much better, exaggerated the magnitude of poverty reduction. Similarly, the then government’s poverty estimate used an inappropriate inflation rate based on the consumer price index, which covered only 16 urban centers. It did not take into account prices in rural areas where the majority of the poor reside. Inflation rate data based on both urban and rural areas had been available with the PLSM survey but was never used, the study opines.

Published in The Express Tribune, February 22nd, 2012.

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Reader Comments (20)

  • gp65
    Feb 22, 2012 - 4:42AM

    Some observations:
    1. I have repeatedly seen taunts that we Indians try to project a fake picture of ‘India shining’ when in fact there are any many areas of poor people’s lives that still need significant work.
    2. The fact is that in India itself BJP government’s ‘India Shining’ campaign was discredited in 2004 itself when BJP failed to get re-elected to the Center. It has never been used since then. In fact all urls provided to substantiate gaps in India’s development are usually from Indian sources itself showing that the debate is alive and well in India about problems needing to be addressed and there is no attempt to cover up reality.
    3. It does appear as though Pak governments have been deliberately understating the level of poverty in Pakistan. It is wonderful to see this article. Hopefully there will be other journalists who will do ground level investigation to determine what the true level of hunger, literacy and other human development indices are. After all if the government deliberately understated poverty, could it not be doing the same for other indices? The goal here is not to gloat. It is just that problems have to be recognized before they are addressed and knowing the nature of deprivations would allow appropriate policy response.

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  • Akhtar
    Feb 22, 2012 - 6:39AM

    Unless a Islamic Caliphate is established, there will be no end to poverty, corruption, & all the ills of Pakistan!

    Please understand HuT. Supporting HuT is supporting Islam. Every Muslim must share his wealth with other Muslim brothers & support them, not exploit them. Sharia will eliminate all law & order problems like that of Afghanistan during Talibs rule. Drugs problem will also disappear.

    Please support HuT!

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  • Ameer
    Feb 22, 2012 - 9:37AM

    Atleast now ppl of Pak stop bashing India for her poor..Atleast we don’t manipulate our poverty figure..

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  • khan
    Feb 22, 2012 - 10:17AM

    kindly report correct numbers.. the actual figure is double that.. 86% in utmost poverty in this country…

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  • Rakib
    Feb 22, 2012 - 10:33AM

    The design by Faizan Dawood is heart-rending. It is remarkable not only for its sombre symbolism but also as a mirror to the reality of the Subcontinent. The design does caution the statistics-obsessed ones from reducing humans altogether to a set of digits, in their game of one-upmanship.

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  • vasan
    Feb 22, 2012 - 10:36AM

    “As the government continues to shy away from calculating official poverty figures”
    This is the answer to all those pakistanis who think their land is a land of milk and honey compared to India. They are in the same mess as Indians. The only redeeming feature for India is the trendline which unfortunately is negative for pakistan.

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  • Yuri Kondratyuk
    Feb 22, 2012 - 11:10AM

    Well, the first step to solve a problem is to acknowledge it.

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  • Feb 22, 2012 - 11:20AM

    It was preposterous to suggest that poverty in not increasing with an average GDP growth rate of 4% over the last 20 years in Pakistan, with a population growth of 2%! The real growth rate then translated to 2% and if you count global inflation that amounts to negative growth!!!

    It is also equally preposterous to suggest that India is not growing or poverty in India is not decreasing. And, we have UN telling us that poverty is indeed decreasing at a rapid pace. In fact, India is the only to meet the Millennium Development Goals in South Asia. This report only reinforces that fact.

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  • Feb 22, 2012 - 11:25AM

    @Akhtar:

    There are 57 Islamic Nations, I think, why haven’t a single one achieved success with the economic model? And, why dont a single notable Economist supports this Islamic way of doing Economics, can you explain? And, what is your qualification to pontificate on this, can you enlighten us?

    If you keep following the Quran, you would also have to disagree with the Darwinian Theory of Evolution, you have to go against science, you have to go against Rational Thinking!

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  • Zalim singh
    Feb 22, 2012 - 11:34AM

    Not just the poverty figures. Even the figures of GDP for Pakistan is mostly cooked up. Last thre years saw fantastic growth of GDP from Pakistan- far exceeding India’s , where as there is no real growth there.

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  • Pakistani Agnostic
    Feb 22, 2012 - 11:45AM

    @khan:
    So you mean to say 146 million people of this country live in poverty. Clearly, you and i live on different planets.
    There are at least more than 50 million Middle Class Pakistanis/ Afghanis in this land along with a unspecified number of elite families.

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  • isloo
    Feb 22, 2012 - 11:48AM

    Jaye Bhutto and Jaye Jamhuriyat :) If these both slogans continue, let me assure you there wont be any poverity in the country :P

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  • saad saeed
    Feb 22, 2012 - 12:58PM

    @isloo:
    Just a minor addition in your statement. “THERE WONT BE ANY POOR IN THE COUNTRY”. The are rapidly committing suicides

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  • Ishrat Salim
    Feb 22, 2012 - 2:42PM

    Reply to Brute force…it seems u r one of very unfortunate person who has not read Quran properly….Quran has all the answers which in today`s world of Science & technology is agreeing to most of the ” Shahada ” pointed out in Quran more than 1400 yrs ago…Quran does make one think rationally, depends how one interprets it…distortions taken place only because the Quran & its verses are not being interpreted properly….Recommend

  • Shyam
    Feb 22, 2012 - 3:18PM

    Pakistan has done a wonderful job of reducing poverty and improving their economy. However instead of a Finance Ministry they should rename it to the Fudging Ministry

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  • Shyam
    Feb 22, 2012 - 3:23PM

    Maybe the regular suicide bombings/ target killings/ Balochistan killings have led to the decline in poverty rates.

    Kill all the poor = easiest way to removing poverty

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  • vasan
    Feb 22, 2012 - 4:15PM

    Ishrat Salim : By observing all that is happening and attributed to the so called followers of Quran, I am glad I did not read Quran lest I get indoctrinated by the interpreter as well, as I dont know Arabic

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  • let there be peace
    Feb 22, 2012 - 6:42PM

    What is the definition of poverty he used? how did he measure it? nothing is mentioned in article. is it real data or just someone’s wild theories. how can we know that?

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  • let there be peace
    Feb 22, 2012 - 7:12PM

    @Akhtar:
    Most Islamic nations are either poor, or in case of those with oil money (unearned money) people are living under brutal dictatorship.
    The only Muslim majority country with some good standards of living and freedom consistently is Turkey which was made secular with force by the military. (Malaysia’s wealth and lot of power is all in hands of 25% Chinese origin non-Muslim population)
    Scandinavian nations are considered to be the richest, happiest, and most peaceful ones on earth. Majority of their people are Atheists/Agnostics and certainly more than 95% of their population is non-Muslims.

    Based on these FACTS (unlike imaginary stories of glories of Islamic past) do you still think Pakistan should be ruled by a Khalifa and Mullah council?

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  • gp65
    Feb 22, 2012 - 7:33PM

    @let there be peace: “What is the definition of poverty he used? how did he measure it? nothing is mentioned in article. is it real data or just someone’s wild theories. how can we know that?”

    It appears that he did not have access to raw data on people’s income. SO he has modelled based on the actual inflation rate to be used, the nature of growth Pakistan has and the labour force movements and other publicly available data to arrive at this number. The fact that planning commission takes him seriously leads us t believe that he is probably not talking in air.

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