Q.1 Strategies for the alleviation of poVERTy (CSS 2005)
Solved Essay: Poverty Alleviation
“Poverty anywhere is a threat to prosperity everywhere”. It is a scrooge and one of the worst curses and miseries that a human can face. According to Homer. “This, this is misery! The last, the worst, that man can feel”.
Poverty can be measured either in absolute terms, for example, the number of those who cannot afford more than two pairs of shoes, or in relative terms, for example, the number of the poorest ten percent of house-holds. In either sense it is a concept, which is defined arbitrarily. Poverty exists not only because incomes are low, but also because the needs of certain low income households are high.
Poverty has many dimensions, which include economic, political, social, environmental and human dimensions. In economic terms a county, a region or a household is poor when the per capita income of a country or the income of a household is very low. Similarly the purchasing power of a poor country or household is below a certain minimum standard; there are low medical care and health facilities, productivity is very low and there is illiteracy.
In political terms a country, a region or a group of people are poor when they do not have a voice in the community or dependant on other more powerful groups or individuals in order to express their own rights and choices.
In social terms poverty in a country, a region or a household breeds all types of socially unacceptable behaviours like drug addiction, crime, prostitution, violence ad terrorism in a family or in a community. These factors degrade human self-respect, moral and social values of the society as a whole and as a result more and more people in the community become intolerant and rude towards each other in their day to day life.
In environmental dimension, poverty destroys the living environment not only of those who live in poverty but of all other human beings as well as non-human living things that depend on the same resources and ecosystem on which those living in poverty depend and survive. People living in poverty cannot change their behaviours easily because of lack of resources, knowledge about their own surroundings and education. Thus by destroying their own living environment, the poor in reality are destroying their own resources on which they survive in the long run.
Poverty in its human dimension is the most important of all, because poor people live in conditions that are miserable, conditions in which some members of their family die of hunger, disease of famine. Poverty in its human dimension exists, when a child is down with a curable disease and the parents have to take a decision whether to take the child to a doctor and buy expensive medicines or purchase other essentials of daily use. It exists when parents of a child sell their child into slavery or prostitution because of lack of resources to feed or care for that child and when government institutes fail to protect the rights of the poor.
Poverty has emerged as the most important issue for Pakistan. Poverty redressal requires economic growth accompanied by an improvement in access to social services. The reason that economic growth has failed to trickle down to the poor in Pakistan is the slow improvement in social indicators Economic growth and social sector development are interdependent as one reinforces the other. In fact economic growth is necessary for poverty reduction but poverty reduction itself is necessary for sustained growth.
The estimates of poverty are not consistent in Pakistan. According to caloric based (2250 calories per person), the incidence of poverty declined sharply from 46.5 percent in 1969-70 to 17.3 percent in 1987-88. However, poverty increased significantly in 1990’s rising from 17.3 percent in 1987-88 to 22.4 percent in 1992-93 and further to 31 percent in 1996-97. The recent estimates suggest that poverty has further increased from 32.6 percent in 1998-99 to 33.50 percent in 1999-2000. This shows that the incidence of poverty has increased in 1990’s. Similar trends have been observed in the case of urban and rural poverty.
The main reasons for increase in poverty during 1990’s can be attributed to the relatively lower rate of economic growth, rising unemployment, stagnant real wages, declining flow of worker’s remittances and bad governance. In addition to the factors mentioned above the high population growth also puts pressure on the meagre social services thereby causing social distress.
Painting a broad picture of third world poverty is not enough. Before anyone can formulate effective policies and programmes to attack poverty at its source, one needs some specific knowledge of poverty groups and their economic characteristics. It is not sufficient simply to focus on raising growth rates of Gross National Product in the expectation or hope that this national income growth will “trickle down” to improve levels of living for the very poor. On the contrary many observers argue that direct attack on poverty by means of poverty focused policies and plans can be more effective and one cannot attack poverty directly without detailed knowledge of its location, extent and characteristics.
National Economic development is central to success in poverty alleviation. But poverty is an outcome of more than economic processes. It is an outcome of economic, social and political processes. To attack poverty requires action at local, national and global levels. The following actions are required to be taken by poor people, government, private sector and civil society organizations.
Growth is essential for expanding economic opportunities for the poor. The question is how to achieve rapid, sustainable and pro-poor growth. A business environment conducive to private investment and technological innovation is necessary, as is political and social stability to invite public and private investment.
The poor should be empowered in the true sense. Empowerment means enhancing the capacity of the poor to influence the states institutions that affect their lives by strengthening their participation in political process, and local decision-making. It also means removing the barriers political, legal and social that work against particular groups and building the assets of poor people to enable them to engage effectively in markets.
Enhancing security for poor people which means reducing their vulnerability to such risks as ill health, economic shocks and natural disasters and helping them cope with adverse shocks when they occur.
The ultimate cause of the unequal distribution of personal incomes in most third world countries is the unequal and highly concentrated patterns of asset ownership (wealth). The principal reason why less than 20 percent of their population receives over 50 percent of the national income is that this 20 percent probably owns ad controls over 90 percent of the productive and financial resources, especially physical capital and land but also financial capital (stocks and bonds) and human capital in the form of better education. It follows that perhaps more important line of policy to reduce poverty and inequality is to focus directly on reducing the concentrated control of assets, the unequal distribution of power, unequal access to education and income earning opportunities.
Policies to enforce progressive rates of direct taxation on income especially at the highest levels are, what are most needed in this area of redistribution activity. Unfortunately, in many developing countries the rich do not show a larger part of their income and assets. Further, they often also have the power and ability to avoid paying taxes without the fear of government.
Pakistan is facing twin challenges of reviving growth and reducing poverty. This requires rapid economic growth keeping in view the factors responsible for slow growth and rising poverty, the government has formulated a comprehensive economic revival programme aimed at reviving economic growth and social development. The government has adopted a multi-pronged approach to promote pro-poor economic growth and reduce poverty.
Engendering growth by correcting macroeconomic imbalances and stabilizing the economy has been made the central pillar of the government’s economic revival programme. The government has adopted a sound macroeconomic framework aimed at both stabilizing the economy and stimulating growth. It comprises five building blocks namely tax reforms, expenditure management, prudent monetary policy, external adjustment and debt management.
Implementing broad based governance reforms are essential ingredients of the government’s poverty alleviation strategy. Without governance reforms the enormous task of reviving growth and reducing poverty cannot be addressed. Sagging growth and rising poverty are in part results of the poor performance of the government institutions in Pakistan. In fact, poverty in Pakistan is not merely an outcome of economic ills but also a result of mis-governance over the past years. The main element of reforms are devolution of power at grass roots level, civil services reforms, access to justice and financial transparency.
The care principle of Pakistan’s poverty alleviation strategy is to empower the people and to create greater opportunities for increasing real income by improving access to productive assets mainly housing, land and credit. Access to credit is the surest way of empowering the poor and improving their income generating opportunities. In addition to the already existing financial institution, the government has now established the “Khushhali Bank” or “Micro Finance Bank” for the provision of micro credit to poor communities.
The effects of sluggish economic growth are clearly reflected in Pakistan’s performance in the social sectors; Human development is essential for attracting investment and generating the capacity for future sustainable growth. Pakistan’s progress on almost every social indicator e.g. education, health and nutrition is poor as compared with that of other developing countries. In order to address this situation, the government has prepared comprehensive human development strategies aimed at the effective utilization of the available resources through improved institutional mechanisms.
The government’s key social safety net for reducing vulnerability to exogenous shocks is the reformed system of Zakat and Usher. The system of collection and distribution of Zakat has recently been reorganized. However, its potential and scope in fighting poverty is yet to be fully realized. The food support programme is another social safety instrument of the government for the poorest.
In spite of all these cataclysmic facts, one may hope that according to the economy revival plan of the government, the time will be changed and the economic development rate will be enhanced and at the same time the level of poverty will be decreased. Now the time has come that if we want Pakistan to rise up to that extent where the prosperity; integrity, solidarity and economic stability will be all around, then every Pakistani will have to work as far as in him lies. By working with whole dedication, concentration and conviction we may achieve a strong Pakistan dreamt by Quaid-e-Azam, and by going this way, the day will not be far away when Pakistan will bear the palm and it will show its mettle to the rest of the world.