Solace among confusion: 5% decline in poverty ‘surprises’ govt

According to the survey, poverty has declined from 17.2 per cent in 2008 to slightly over 12 per cent in 2011.

Shahbaz Rana May 05, 2012


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.


Riaz Haq | 11 years ago | Reply

@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.

Rationalist | 11 years ago | Reply

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.

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