Wednesday, August 10, 2016

Pakistan's Poverty

Today, high-income countries with 16 percent of the world's population represent 55 percent of income while low-income countries with 72 percent of the population account just over 1 percent. 

In Pakistan, while consumption-based poverty dropped from 57.9 percent to 29.5 percent between 1998-1999 and 2013-2014 and multidimensional poverty — which includes health, education and living standards — fell from 55.2 percent to 38.8 percent between 2004-2005 and 2014-2015, inequality has actually grown. In 1987-1988, the Gini coefficient, which measures income inequality, was 0.35; by 2013-14 it had risen to 0.41. Pakistan's richest 20 percent now consume seven times more than the poorest 20 percent.

Back in 1968 the renowned economist Dr. Mahbub ul Haq identified 22 families which then controlled two-thirds of Pakistan's industrial assets. In a 1973 article in The Times, Haq called for reforming Pakistan's economic, social and political institutions to help prevent the concentration of such immense wealth amongst the few.

Regional disparities are stark. The government's Multidimensional Poverty Index released recently found that 54.6 percent of rural Pakistanis experienced poverty compared to 9.3 percent of those in cities. Multidimensional poverty stands at 31.5 percent in Punjab but rises to 73.7 percent in Fata. While multidimensional poverty in Islamabad, Lahore, Karachi, and Rawalpindi is below 10 percent it exceeds 90 percent in Killa Abdullah, Harnai, Barkhan, Sherani Kohistan. Hence, some Pakistani districts are as well-off as any developed country while others are on par with the poorest in sub-Saharan Africa.

Inequality's insidious effects pervades families. As women are mostly engaged in unpaid family work, their very real economic contribution is unaccounted for. Women own less than 3 percent of land which impacts on their economic empowerment. Their participation in the labor force is a mere 18 percent compared to 71 percent for men. This is the lowest in South Asia after Afghanistan.

Pakistan's institutions, incentives, laws and norms continue to conspire to create rent for the rich and burdens for the poor. These include tax exemptions on select sectors and indirect taxes which disproportionately affect the poor. The richest districts in Pakistan receive, on average, five times more public funds than the poorest, further aggravating inequality. The high cost of running for elections systematically excludes poor Pakistanis from political institutions. Discrimination on the basis of gender, economic status, religion and social identity restricts upward mobility.

Pakistan's response to inequality has been superficial, focusing on symptoms rather than the root causes. As a result, inequality has persisted and even grown. Time to end capitalism. It is time for socialism

The World Socialist Party (India): 257 Baghajatin ‘E’ Block (East), Kolkata – 700086,
Tel: 2425-0208
E-mail: wspindia@hotmail.com

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