Poverty Alleviation – what can be done

The subject has many similarities in past for the people of Pakistan. The news was presented by Mr. Masood Raza, a prominent anchor of Dunya news network who also works as a field journalist for the famous TV show AAJ KAMRAN KHAN KAY SATH  (Details:   https://www.youtube.com/watch?v=kONTJKvIZ8I).  The report was well presented and significantly caught the attention of majority of viewers in Pakistan. The key element of the story was the need of the suicide victim, the father of four children to get warm clothing for his children. He was financially constraint to meet their demand and burnt himself by pouring kerosene oil over his body. I was deeply moved by this news as most of kindhearted fellow citizens must have felt remorse for the slain father. It triggered a series of unlimited thoughts in my mind searching for causes behind such reprehensible act and the solution to curtail their recurrence in future. With this objective in my conscience I began to search internet for the brief analysis to the problem and its solutions. This piece of writing reflects some of my thoughts and the perceived solutions to this issue.

Problem

Poverty in Pakistan has explicitly grown over last couple of decades which has provided impetus to inequality in our society. UNDP reports show that inequality in Pakistan has grown despite the fact that consumption-based poverty has dropped from 57.9 percent to 29.5 percent between 1998-99 and 2013-14, and multidimensional poverty – which includes health, education and living standards – has also fallen from 55.2 percent to 38.8 percent between 2004-5 and 2014-15. However, there is a sharp increase of 5 percent in both income and consumption poverty over the last eight months in Pakistan. This increase is caused by huge economic mismanagement, lack of direction and the spill-over effect of cumulative losses of revenue due to the significant drop in purchasing power.

From 1999 to 2018, income inequality and overall economic disparity in the country increased from 30.5 to 41.1 on the Gini Index, which measures income inequality. Income disparity has aggravated since 2000 with multiplying adverse impact on the socioeconomic and cultural fabric of society. Macroeconomic and structural impediments to development have undermined the transformational processes which were envisaged in the policy of poverty alleviation. Amidst disturbing scenes of increasing deprivation, the question arises: do we need to invest in poverty programs anymore?

Against the backdrop of ever-increasing economic disparity and income inequality, the net impact of poverty alleviation programs has been equal to naught. In some instances, the impact of poverty alleviation programs on the overall economic health has been negative. Donor-funded poverty alleviation programs are politically damaging because they absolve the state of its responsibilities towards its people. It is the primary responsibility of the state to provide basic services and to uplift the poor through an inclusive and irreversible socioeconomic graduation program. When the state is unwilling to reduce its non-development expenditures, tax the rich and provide relief to the poor, it is no more an economic issue but a political question. The state uses donor funds as a political instrument to neutralize the debate on political and economic reforms.

Solutions

The brief analysis suggests multidimensional approach to resolve the problem of ever-increasing poverty in Pakistan. The poverty ridden population lives under the influence of feudal and political landlords who have vested interests to gain power in the country through legal or illegal means thereby deliberately neglecting this population. Therefore, to launch any poverty alleviation program requires undivided support of this section of society. This is by no means an easy job. The history of our country proves that governments in preceding times have miserably failed to implement any reforms for the uplift of poor in this country. PPP and PML(N) governments floated BISP (Benazir income support program which had an excellent structure but due to unchecked political interference and poor governance the program could not deliver its designed objectives. PTI government has launched EHSAS program modifying the structure of BISP however it lacks support of provinces particularly Sindh and Baluchistan.

SMEs

Small and medium size enterprises (SMEs) can play a significant role in reducing the poverty. The share of SMEs is 40% in GDP growth however it constitutes 90% of all enterprises in Pakistan. This sector lacks much needed attention from the government. SMEDA small and medium enterprise development authority was established in 1998 by the government which is dormant at present. The body provides excellent framework for its operations and utility to absorb large number of people in the job market. The only impediment in its function is the availability of financing which needs political, constitutional and legal support. n

NGOs

Non-governmental organizations (NGOs) is another platform which can help alleviate poverty. The most potent problem in this sector is corruption which has crippled its foundations and ensued distrust in the public. It requires professional and competent managers to run its affairs in order to deliver and meet its objectives. There is no dearth of wealthy persons who are around the corner to contribute towards their establishment and performance of its functions. There are number of well managed organizations like TCF, Edhi foundation, Saylani welfare trust, Alamgir welfare trust and many more spread across the provinces but their contributions are meager considering vast population of our country. Many organizations have been blacklisted by the government due to their illegal activities against the state vis a vis national security.

PPAF

The Pakistan Poverty Alleviation Fund (PPAF) was established by the government in 1998 as an apex institution for wholesale funding of local partner organizations to address multidimensional poverty across Pakistan. The World Bank funded poverty alleviation program was a soft loan extended to the government of Pakistan under a contractual obligation with the International Development Assistance (IDA). The funding was provided in three phases known as PPAF I, II and III from 2000 to 2015 with a combined worth of almost $1 billion as poverty alleviation grants and microfinance support. The soft loan was extended by the government of Pakistan to the PPAF as grant to help achieve the government’s commitments to meet the target of halving poverty by 2015 under the Millennium Development Goals (MDGs).

Again, this agency is facing gross mis-management issues couple with corrupt practices. There is an urgent need to uplift this agency with strong governance to deliver its product.

EHSAS PROGRAM

The program is based on an emphatical approach of PM Imran Khan to alleviate poverty however it lacks in building up trust with provinces. It is the irony of Pakistan political system that provinces do not collaborate with federation effectively after the inception of 18^th amendment due to political disparities ultimately affecting the society. IMF has rendered its packages 13 times to bailout Pakistan from this menace, but the problem has grown unprecedentedly. The program is the continuation of BISP (Benazir Income Support program) which could not deliver and achieve its objectives. A short investigation conducted by the government revealed that number of government servants and their families have gained illegal benefits from this program which was otherwise meant for the poor.

Final Solution rests with the government

Whatever the plans and programs government aim to launch it needs to exercise effective governance and financial discipline to ensure its accomplishment. Moreover, it also needs to create political harmony with the provinces which is unfortunately missing at present.

Note:  If you like what you just read you can help more by:

1. Subscribing – this way you will be notified anytime a new post gets made
2. Sharing posts – this way you will spread the good words to more people
3. Sharing ideas – this way you can give us your ideas/solutions for new blog
4. Writing blog – this way you can actually contribute to this website and participate in the good work

Feel free to reach out to us for any questions, suggestions and/or areas for improvements.

The writer is a retired Air force officer who has a passion for reading and aims to pen down his thoughts with this beginning.

Squadron Leader Mufti Khalid (Retd) PAF

mufti_khalid@hotmail.com

January 19, 2020