Solace among confusion: 5% decline in poverty ‘surprises’ govt
Survey takers and economic managers were left scratching their heads in disbelief when an official survey found that poverty levels had fallen 5% despite negligible growth and double-digit inflation.
Their biggest challenge at the moment is to explain how nearly seven million Pakistanis have come out of the vicious cycle of poverty.
According to the survey, the incidence of poverty has declined from 17.2 per cent in 2008 to slightly over 12 per cent in 2011. It was conducted by a committee constituted to calculate the incidence of poverty on the basis of Pakistan Social and Living Standards Measurement Survey 2010-11.
“The biggest challenge in front of us is how to explain this figure to the masses and economists when the economy grew at an average rate of 2.6 per cent and average inflation remained above 15 per cent during the last four years,” a member of the committee told The Express Tribune requesting anonymity due to political sensitivity attached to the figure.
He said poverty declined to slightly over 12 per cent with sharp declines in both rural and urban poverty. He said rural poverty declined more than urban poverty but, “the behaviour was the same and consistent with previous years’ results.”
In 2007-08 when the Pakistan Peoples Party-led coalition government took over, poverty had been assessed at 17.2 per cent. But the government decided not to release the figure saying poverty was at 35-40 per cent. It shared 40 per cent figure with Friends of Democratic Pakistan in its maiden meeting held in Tokyo.
It is facing the same dilemma exactly after four years, as its own people are now telling that poverty has declined to 12 per cent.
According to the United Nations Multi Dimensional Poverty Index, half of the country’s population lives below the poverty line.
After the government’s refusal to officially release poverty statistics in 2008, the World Bank had presented the figures in its Country Partnership Strategy report.
According to that report, “The percentage of people living below the poverty line in Pakistan fell from 34.5 per cent in 2001-02 to 17.2 per cent in 2007-08. Rural poverty also declined from 27 per cent to 20.6 per cent and urban poverty came down from 13.1 per cent to 10.1 per cent during that period.”
In 2007-08 the country’s estimated population was 164.7 million. By that account in 2008 as many as 28.3 million people lived below the poverty line. In 2010-11, the estimated population was 175.3 million and around 21.5 million people were in abject poverty.
The committee member said that poverty has been worked out on the basis of consumption method. According to this method, if a person takes 2,350 calories per day that costs him slightly over Rs1,700 per month that person is taken as above the poverty line.
The official said that the committee has not formally submitted the poverty report to the Planning Commission, but it is expected to submit the report over the next couple of weeks. However, the committee has already shared its findings with the commission.
A senior government official, who also wished to remain anonymous, said that the concerned authorities were considering the poverty figure and framing their mind whether to release it or not. It is not yet clear whether the government would publish the poverty estimates in the Economic Survey of Pakistan 2011-12.
The committee member, while giving justifications for the decline in poverty despite harsh ground realities, said that poverty declined because of higher support price of major crops, especially wheat, healthy trend in inflows of remittances and impact of assistance provided by both the government and private sectors in the flood affected areas of the country.
Published in The Express Tribune, May 5th, 2012.
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@vassan: "Below Pak Rs 1700 a month is considered as poverty?? Wah Wah what a shame."
Pak Rs 1700 a month works out to $1.56 a day in terms of purchasing power. This is well above the Indian govt's poverty line of just $1.03 in PPP dollars.
The 2011 World Bank data showed that India's poverty rate of 27.5%, based on India's current poverty line of $1.03 per person per day, is more than 10 percentage points higher than Pakistan's 17.2%. Assam (urban), Punjab and Himachal Pradesh are the only three Indian states with similar or lower poverty rates than Pakistan's.
http://www.riazhaq.com/2011/05/world-bank-on-poverty-across-india-in.html
As we have recently heard, the GDP numbers have been manipulated by the establishment in the past decade. So, by corrolary, one is reasonable to assume that the poverty numbers coming out of Paksitan are just a bogus.
To get a more reliable number of poverty, a reasonable GDP figure has to be arrived at. Pakistan's real GDP in dollar terms is probably around $120B dollars calculating from the base of around $70B and assuming an average 5% growth over 12 years ago. This gives us a per capita figure of around $700 per year which works out to less than $2 per day per person. Mind you, because of inequality of income, a very large percentage of the population makes much less than the $2 per day figure. Based on this analysis, the figure of 17.2% poverty must be a huge lie. It is more reasonable to believe that in a country where the real dollar term average per capita income is less than $2 per day, the true poverty rate is probably around 60% similar to other thirdworld countries with similar per capita gdp.
@Salma and @Neha,
Fully agreed on both points. As an overseas Pakistani, I'm aware that it's easy for people like me to talk about these crippling issues from a distance, and I would hate to be dismissive of the lives of tens of millions of Pakistanis - the real representatives of the country - by suggesting that things aren't so bad. But this report is ultimately very good news, and whatever the reasons are, I can only pray that the ones benefitting the most from this are the poorest.
Needless to say, there is still a long, long way to go before we can truly take pride in poverty alleviation - but it is news like this which reminds me that Pakistan is not yet a completely broken dream.
Hasan
As we have recently heard, the GDP numbers have been manipulated by the establishment in the past decade. So, by corollary, one is reasonable to assume that the poverty numbers coming out of Pakistan are just a bogus.
To get a more reliable number of poverty, a reasonable GDP figure has to be arrived at. Pakistan's real GDP in dollar terms is probably around $120B dollars calculating from the base of around $70B and assuming an average 5% growth over 12 years ago. This gives us a per capita figure of around $700 per year which works out to less than $2 per day per person. Mind you, because of inequality of income, a very large percentage of the population makes much less than the $2 per day figure. Based on this analysis, the figure of 17.2% poverty must be a huge lie. It is more reasonable to believe that in a country where the real dollar term average per capita income is less than $2 per day, the true poverty rate is probably around 60%.
We surely have got richer and it is the unreported economy which does not let us make the 2+2=4 in explaining it. Not to say that their aren't any poor but the life of the majority has improved. It is probably our ever increasing wishes that don't let us accept this fact. There is more of perceived/subjective poverty than actual one. And those mentioning the dollar a day thing they should know that it is not a US$ but a purchasing power parity dollar.
We surely would be the only nation in the world that instead of celebrating a success (reduction of poverty in this case) try to find fault in it. Come on folks, show some positivity!
Whew! That's a relief!
I believe these figures. . There is a great deal of undocumented (underground) economy. People have got richer (they have more gadgets) but they don't pay taxes!
The results of the 2010 global wellbeing survey of 124 nations conducted by Gallup revealed that Pakistan ranked 40th with 32% of Pakistanis saying they are thriving. By contrast, India ranked 71st with 21% of the Indians thriving and China ranks 92nd with only 12% of the Chinese considering themselves “thriving,” the highest level of wellbeing.
Pakistanis are a resilient people. But the only tangible explanation for Pakistanis ranking ahead of their neighbors in the wellbeing Gallup survey can be found in the strength of Pakistan's rural economy. It is being spurred by the higher food and commodity prices resulting in the transfer of additional new tax-free farm income of about Rs. 300 billion in the current fiscal year alone to Pakistan's ruling party's power base of landowners in small towns and villages in Southern Punjab and Rural Sindh, from those working in the relatively economically stagnant urban industrial and service sectors who pay bulk of the taxes. The downside of it is a bigger hole in Pakistan's pubic finances which is being funded with increased foreign aid and loans.
http://www.riazhaq.com/2011/04/poll-finds-pakistanis-happier-than.html
i thought only current indian govt is idiot enough to propose that at 32 rs one is above poverty line. heck, their counterparts in pakistan are even more smart. politicians are everywhere the same, bunch of idiots.
PSLM is the most accurate measurement tool survey with no control by govt?? this data needs to be analyzed through research to understand the causes instead of jumping to conclusions. Wonder the ones in this discussion saying it has increased by 50% what formula or survey they have done because even WB etc have no survey like PSLM but depend upon extrapolation of data - we also know WB during Musharraf's time happened to be part of fudged figures of showing lower poverty.
BUT here it is not the govt fudging figures by the FBS data; which raises some interesting research questions. Pakistan is weak in qualitative research and we always wish to believe the negative without having a clue of evidence from the ground realities. This should be studies further and international organizations should carry out some field research to help us understand instead of making statements from their posh offices which doesn't lend them credibility either.
What a joke!!! Poverty increased by at least 50% during these last 4 years.
after gdp figure fudging i find it difficult to digest. moreover international agencies are quoting povrty rate in pakistan at a mind boggling no of 60% and the govt of pak is giving out 1/5 of the no. its hard to digest. pakistan faced wrath of god inform of floods, earthquakes and terror attacks which took away jobs and businesses of milllions and moreover gdp to suffered a lot, exports and production is not good but still people are getting richer. how???
I wonder how much of that 5% is due to deaths.
I don't know about the situation of whole pakistan but in the area where i live poverty has declined for sure.people who once were living miserable life are now living prosperously.i don't see even a single person without a bike or jeep.iam not sure if all this happend due to govt policies or because of increase in the price of "Guwar" which jacked up to 35000 rupees (per 100 kg bag) from four thousand rupees per bag.
@vasan: Indian government has also used similar criteria.
Unbelievable at first. But they say they calculated poverty based on calories consumed by a person. But considering Pakistan has very fertile land and abundance of food, its not impossible. It would be interesting to know what is actual poverty situation in Pakistan from those who know ground realities.
Below Pak Rs 1700 a month is considered as poverty?? Wah Wah what a shame. It is below the level of US 60 cents a day. Fantastic way to make Pakistanis not poor, or rather richer even. Pak can teach the world about how to get poverty out. Lots of cooking of statistics and economic numbers. Way to go, Pakistan.