Panel seeks to settle poverty numbers controversy

Wants to find out whether claims of poverty reduction are correct.

ISLAMABAD: In a bid to find out the ‘truth’ in the government’s claim of about seven million people coming out of poverty in the first three years of its rule, a special panel has asked all its members to give presentations by using the same methodology applied by the government.

Headed by Planning Commission Deputy Chairman Dr Nadeemul Haque, the technical group on poverty assessment, in a meeting held here on Thursday, took the decision that all members of the panel would give presentations in the next meeting.

The panel was debating raw data of the Household Integrated Economic Survey 2010-11, released by Pakistan Bureau of Statistics (PBS) after holding it for months.

The data was unveiled on the directive of the deputy chairman of Planning Commission after donors pushed the government to bring an end to the controversy. The decision to release the data was taken in the first meeting of the technical group held in the first week of September.

A committee, constituted by the Planning Commission, has worked out that 12.4% of the population lives below the poverty line. According to the methodology applied, if a person is able to consume 2,350 calories per day – which cost Rs1,745 per month – then the individual is assumed to be living above the poverty line.

Based on this methodology, the committee found that the poverty level came down to 12.4% in 2011 from 17.2% in 2008, pulling seven million people out of poverty.

However, economists and poverty experts challenged the outcome, forcing the government to withhold the figure. The experts argue that with average 3% annual growth and constant double-digit inflation, how poverty can decline in the country.

During the technical group meeting on Thursday, it was observed that real GDP per capita went up by 3% during the decades of 70s and 80s that resulted in decline in poverty. However in the last few years, the GDP per capita has increased by just 0.5% to 1%, putting a question mark over claims of decline in poverty.

PBS, in a presentation to the technical group, stressed it had nothing to do with the poverty-calculation methodology, which was set by the Planning Commission.

Giving the reason for the decline in poverty despite sluggish economic growth, PBS officials were of the view that over the years the informal size of the economy had grown significantly, which was not reflected in the real GDP.

The decision to seek individual presentations was taken in the same context by agreeing to the notion that either there was a need to review the poverty-calculation methodology and add more indicators or change their weight to make them more realistic, the officials added.

Another participant of the meeting said a move to get the technical group approve the methodology was thwarted as the members were not willing to endorse the data without seeing it.

Some of the most important members of the committee – Dr Akmal Hussain, Dr Ashfaque Hasan Khan, Dr Kaiser Bengali and Dr Pervez Tahir – did not attend the deliberations because of other engagements.

Published in The Express Tribune, September 21^st, 2012.