Poverty in Pakistan (SDG Goal 1)

Defining absolute poverty, Victor Fuchs (1956) proposed, “Any family be classified as poor if its income was less than half of the medium family income”. (William, 1983) In the words of Amrata Sen, “to live in poverty is sad, but to offend or to (be) harmful to society, creating problems for those who are not poor is, it would appear, the real tragedy”. And goes on to state, “A person’s ability to avoid starvation will depend both on his ownership and on the exchange entitlement mapping that he faces” (Sen, 1981) Gerald Meier defines poverty “as the inability to attain a minimum standard of living”. (Meier, 2000) According to the World Bank Report 2000-2001, “Vulnerability is the risk that a household or individual will experience an episode of income or health poverty over time. But Vulnerability also means the probability of being exposed to a number of other risks (violence, crime, natural disasters, being pulled out of school)”. (World Bank -IBRD, 2001).

SDG 1, “No Poverty” of UN Sustainable Development Goals, underlines to “end poverty in all its forms everywhere”. And states that “More than 700 million people, or 10 per cent of the world population, still live in extreme poverty today, struggling to fulfil the most basic needs like health, education, and access to water and sanitation, to name a few”. SDG1 has seven targets as follows: Target 1.1 “By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25 (Rs. 312) a day”. Target 1.2. “By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions”. Target 1.3. “Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable”. Target 1.4. “By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance” Target 1.5. “By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social and environmental shocks and disasters”. Target 1.6. “Ensure significant mobilization of resources from a variety of sources, including through enhanced development cooperation, in order to provide adequate and predictable means for developing countries, in particular least developed countries, to implement programs and policies to end poverty in all its dimensions”. And Target 1.7. “Create sound policy frameworks at the national, regional and international levels, based on pro-poor and gender-sensitive development strategies, to support accelerated investment in poverty eradication actions”.

Pakistan’s First SDG Status Report 18, May 2022 shows that on SDG 1, “Overall, the report assesses Pakistan’s progress on the SDGs as “modest.” Pakistan’s progress on SDG 1 (no poverty) is steady. Poverty consistently declined in the period from 2014-2015 until 2018-2019, with 9.3 million people lifted out of poverty, based on the national poverty line.”

But in 2020-2021 Covid-19 forced the government to enforce a partial lockdown of businesses and educational institutions, therefore growth rates came down to minus (-) 0.5% and when in 2021-2022 when the economy started to increase the PTI government was changed and now after June 2022 the different economic indicators show that poverty is increasing with increase in the cost of living and decrease in GDP growth rates. Today in 2022, World Bank cercaria for minimum poverty line is US $ 4 a day (Rs. 1,000 at Rs. 250 for one US $) for an individual. In Pakistan, the minimum wage is Rs. 25,000 a month or Rs. 833.33 a day which is below the Rs. 1000 a day international poverty line. The per capita income of Pakistan is US $ 1,538 or Rs. 384,500, which comes to Rs. 1,053 a day or a fraction more than the international poverty line. In context to Target 1.1, in Pakistan, the World Bank estimated that the poverty ratio in Pakistan stood at 39.3% in 2020-21 and is projected to remain at 39.2% in 2021-22 and might come down to 37.9 per cent by 2022-23 (almost 90 million people of Pakistan’s 230 million population), but the inflation rate in the country in July 2022, has gone up to record 25%, with year-on-year transport index rose by 64.73%, perishable food items up by 33%; non-perishable food items by 28.12%, education by almost 10%, and health by 11.22% (source: Dawn August 2, 2022). All this is against the backdrop of growth rates declining from 6.0% to 4.0%, US $ increasing to Rs. 250 a dollar and energy costs (fuel, petrol, electricity, gas) skyrocketing in the past few months. Businesses are struggling under pressures of input costs, a bank rate increase of 15% and an inflation rate of an average of 25% bringing down the employability of less skilled and illiterate labour force both in the industry as well as in agriculture.

In context to the remaining 6 targets of SDG 1, the current floods have shown that the response of the government and the institutions that have to deal with disaster management is insufficient and that family members of the poor and vulnerable and their economic assets are being swept away pushing them into more poverty. It is estimated that 39.3% of people of Pakistan live at the poverty line of Rs. 312 a day, and 50% live below Rs. 500 a day. Almost 80% of people of Pakistan live at or below the minimum wage of Rs. 1,000 a day or the poverty line of US $ 4. this 80% is about 184 million people out of 230 million. With inflation going up to 25%. Their daily income of Rs. 1,000 is eroded and their purchasing power parity comes down to only Rs. 750 a day. Covid-19 has also not helped the poor people that have been affected, because even if they recovered, their productivity and income earning capacity have drastically diminished, not to mention families where the bread earners had died from this disease or because of the recent drought and floods in the country pushing the family into absolute poverty.

It should be noted, that we have only talked about economic poverty or the ability of an individual or household to earn an income equal to their minimum consumption standards. When we add multidimensions of poverty to this equation, the picture becomes more blurred and uncertain for the general population of Pakistan. Multidimensions of poverty are Economic Dimension = when minimum consumption levels are greater than the income of a family. Political Dimension = when institutions made to protect the poor are used to exploit the poor. Social Dimension = poverty breeds socially unacceptable behaviours & criminality. Educational Dimension = when a large number of children (50% in Pakistan) do not go to school and another 50% drop out of school before class 6 and level of skills given at schools are not good to help them earn an income. Health Dimension = when the poor do not have access to cheap, preventable and curable health facilities as well as clean drinking water. Environmental Dimension = when poor people living off marginalized land (land that is not productive and healthy) pollute their own environment, because poorer people do not have facilities of sewerage and clean water. Judicial Dimension of Poverty = when the judicial system is so expensive that the poor cannot have access to justice. Historical Dimension = historically poor are still poor even today and from slaves they became peasants, then became a labour and now unemployed labour is poor. Human Dimension = poor people are not statistics, but humans who see their loved ones die of poverty every day. Racism is a dimension of poverty when the powerful do not allow people of other races and ethnicities access to access to income and empowerment.

The federal and the provincial governments have no sustainable policies to mitigate against threats of climate change, floods, droughts and other natural or manmade disasters that are affecting the lives and livelihood of the poor people of the country. Pakistan is going through all three shocks – political shock – where the political parties are locked in a struggle for power ignoring the plight of the people; economic shock – where the economic indicators are not in favour of the general public, but rather in favour of the rich and powerful elite; and environmental shock – where drought, floods and mismanagement threaten whole communities that have to migrate from their places of livelihoods.

In context, the federal, provincial and local governments (when functional) in Pakistan have not only helped enhance the viability and productivity of its economy but have also enhanced the structures or good governance and transparency in its institutions, increase the skill base and protect the health of its population, mitigate environmental degradation and adverse effects from climate change and promote inter-provincial harmony, gender equality as per Constitution of Pakistan and promote accountability for its political, judicial and administrative functionaries so that poverty in the country is not only reduced but safety nets are created that do not let people slide into poverty and that help pull people out of poverty in all its dimensions. Industrialization, institutional robustness and mass skill-based scientific education for the future generations of Pakistan is an answer through a viable economic and social policy of the government. Otherwise, the downslide of economic, political and institutional indicators is fast becoming unsustainable. Kindly abide by the guidelines of UNO Sustainable Development Goals (SDGs) for achieving the targets by 2030 which is only eight years in the future. With the world economy in recession, out-of-the-box solutions and a holistic approach are needed to bring the people of Pakistan out of their current predicaments. Be warned that if these issues go on a downward spiral the trajectory of failures would be catastrophic both in economic terms as well as in social and political terms. Actions not words are needed now.