According to the UNDP report, both the poverty and inequality is on the rise in Pakistan. Even though PM Imran khan and government ministers are claiming to protect the poorest sections of Pakistani society, but despite these claims- the poverty has increased in the first 9 months of PTI government. Both the income and consumption poverty has increased 5 (five) percent in that period.
Now the PTI government has the choice here, continue to blame the previous governments of PML-N and PPP for all the ills and problems or critically think and review the results of economic policies of past three decades. The problem is if the PTI government continues to blame the previous governments instead of economic policies and socio-economic structure than it will not be able to change the course. It will continue to implement the same economic policies and structural changes that created the poverty and inequality.
Previous governments did play their part to create the situation in which we find ourselves in. their lack of vision, mismanagement of economy and misplaced priorities did play the role. But IMF dictated neoliberal economic policies are not to solve the economic problems we are facing today. There is no country in the world which reduced poverty, inequality and economic disparity on the basis of IMF policies.
According to UNDP report, inequality 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.
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.
The privatisation of public sector industries, companies, banks and outsourcing of services has transferred the state owned means of production to the private sector. The neoliberal economic policies of privatisation, deregulation, free market and structural adjustments have contributed directly in the rise of inequality in Pakistani society.
Rich people are getting richer and poor people are getting poorer as the result of these economic policies. The wealth has concentrated in fewer hands in the last three decades.
Poverty alleviation programmes in Pakistan have failed to achieve the desired outcomes over the years. When we look at the state of multidimensional poverty in the South Asian context, Pakistan is among the worst performing countries in terms of human development.
Rich people who skipped paying their taxes and accumulated illegal assets for years? PTI gifts them tax amnesty scheme. Greedy stockbrokers who artificially pumped the market for years and then plunged it through massive selloffs? PTI gifts them a 25bn package for even more pumping. Honest middle class and poor people who voted in hopes of better opportunities? PTI gifts them higher taxes and subsidy withdrawal. This government’s stance on poor people is clear as day for everyone to see.
Against the backdrop of ever-increasing economic disparity and income inequality, the net impact of poverty alleviation programmes has been very little. In some instances, the impact of poverty alleviation programmes on the overall economic health has been negative. Donor-funded poverty alleviation programmes 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 programme. It is the constitutional obligation of the state to provide free education, health, decent housing, public services, transport and employment to its citizens. But unfortunately, it is not on the high priority of the Pakistani state to provide all basic needs and services to its poor citizens.
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.
The second dimension of poverty is socio-political, embedded in social and political structures of exclusion. The impact of development interventions at the household level will be minuscule without reforming the social and political structures of inequality and exclusion. In a feudal rural structure like Pakistan, household poverty is only an offshoot of the political and social system of control and subjugation. The power relations of subjugation can be reversed through investing in the community institutions of the poor. The community institutions created through RSPs will wither away if the government does not invest in them.
The third dimension of poverty is the impact of globalization and neoliberalism imposed through international financial institutions. If the first and second dimensions of poverty are addressed, the impact of the third dimension on the poorest segments of society can be minimized.
Pakistan’s economy needs drastic structural reforms as a prerequisite to attain sustainable and consistent growth. It needs industrialization, investment in renewable efficient energy, productive sectors, workforce capacity, science and technology and rural development programmes.
Pakistan must also introduce land reforms, progressive taxation and economic protectionism to help grow indigenous industry to reduce reliance on imports. For all of these reforms to take place there has to be a strong system of political accountability to force the state to prioritise the welfare of its citizens through equitable allocation of resources.
The launch of the Ehsaas programme by Prime Minster Imran Khan is a good initiative but in practice it will not work unless the burden of economic meltdown is shifted on to the rich and affluent classes as well as big corporations. PM Imran Khan seems sincere to reduce poverty but it will need different kind of inclusive policies. Good intentions and sympathy with poor alone will not do it. Pakistan is one of the worst ranked countries in the world on the Gini Index – it is one of those countries that have the highest income disparity between the rich and the poor.
Most importantly, the government needs to demonstrate that the poor will be protected, vested interests will be restrained from reaping rents and monopoly profits and that it is sincere in its goal of moving the economy out of the current economic mess. Pakistan needs economic policies that can cater the needs of the poor and also can spur the economic growth and development. It needs policies that can create new economic opportunities and can increase real incomes of the poorest sections of the population.
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16 June, 2019