FeaturedNationalVOLUME 15 ISSUE # 11

Impediments to poverty alleviation

Around one million people lost their jobs last year and 800,000 to one million more people are feared to be rendered jobless this year as the economy has slowed down. Economists say Pakistan’s economic meltdown is pushing more people below the poverty line, as the country has taken tough measures to implement conditions attached to an International Monetary Fund (IMF) bailout package.

According to former Finance Minister Dr. Hafiz A Pasha, 18 million more people may slip into abject poverty due to low economic growth and double-digit inflation under the Pakistan Tehreek-i-Insaf government. His claim and estimates on lost jobs cannot be verified but experts fear the national poverty ratio, which was 31.3pc in June 2018, could jump to over 40pc by June 2020. By June this year, four out of every 10 Pakistanis will be poor, according to Dr Pasha.

The PTI came to power on the back of promises to provide 10 million jobs, but is struggling to retain even existing jobs as the country’s economic growth plummeted from 5.8 percent to 3.3 percent in the last fiscal year, and is predicted to slow down further to 2.4 percent in the current fiscal year. Prime Minister Imran Khan has launched an ambitious plan for social safety and poverty alleviation in the country. His steps sound innovative and sincere but the key question is their implementation and funds, especially at a time when Pakistan’s economy is in dire straits and it is finding hard even to run its day-to-day affairs.

Kicking off the “Ehsas” (compassion) programme, the premier announced the government would amend the Article 38(D) of the Constitution, which includes a clause for the provision of food, shelter, clothing, education and healthcare to the people. In its current form, the clause is only a policy recommendation and the government wants to make it a fundamental right, so the state can guarantee the five basic needs of the people. Experts say if the government passes the legislation, anyone will be able to move courts for their fundamental rights and it would put extra burden on courts and the government. The provision of the basic needs, under the 18th Amendment, is the responsibility of the provinces now. If the federal government takes them into its own hands, the provinces will consider it interference into their affairs.

Experts say Prime Minister Imran Khan is impressed with China’s efforts to lift its population out of abject poverty and his model is based on the Chinese experience. According to the World Bank, China has lifted 500 million people out of extreme poverty over the last three decades. Today, poverty in China is mainly referred to the rural poor. Poverty in China, as measured by the percentage of people living on the equivalent of $1.90 or less per day in the 2011 purchasing price parity terms, fell from 88pc in 1981 to 6.5pc in 2012. The percentage of people living below the international poverty line continued to fall to 4.1pc in 2014 to 2pc in 2018, with President Xi Jinping upbeat about completely eradicating poverty by 2020.

Bringing government departments, like Bait-ul-Maal, Poverty Alleviation Council, Benazir Income Support Programme and Zakat councils, to a single platform will improve coordination among them. Another initiative is the promise of allowing a fixed proportion of state land for shops and kiosks to be set up by the poor, but one can ask why thousands of shops on state land had to be razed during clean-up operations? Interest-free housing loans, promises to implement labour laws and the promise to include household labour in pension schemes are all good measures on paper, but their implementation will be the real issue.

Critics say the prime minister’s plan of poverty alleviation will meet the fate of his election promises. He had promised 10 million jobs and five million houses to the underprivileged. He had announced the provision of cheap electricity, gas, fuel and essentials to the people after coming to power. Instead, their rates have doubled in the first year of the government. They also point out the inability of the government to legislate for the scheme after its failure to forge coordination with the opposition, without which no constitutional amendment can be passed.

If the amendment is passed, it will redefine the common man’s access to food, shelter, clothing, health and education as fundamental rights. It will also change the relationship of the state with its people. The government is holding a new survey for the poverty alleviation programme. The Benazir Income Support Programme was also launched after a comprehensive survey, but still misuse of funds and corruption have been detected in it many times in the past. The government will have to ensure a fair survey for fair distribution of funds.

The government has modeled its poverty alleviation plan on the Chinese experience. China lifted 740 million people in rural areas out of poverty between 1978 and 2017, or about 19 million people each year, according to the National Bureau of Statistics. No other country in the world has managed to improve the living conditions of so many people over such a short period. The gradual opening-up of the economy to external investments for export production provided vast numbers of jobs for people from rural villages in China. The government constructed transportation, logistics and communication networks that made China the “factory of the world”. Chinese policies aim to give the poor a roof over their heads, guarantee food, clothing and basic medical services, and provide their children with nine years of compulsory education. Funds and resources were provided for agricultural subsidies and cheap loans to rural farmers. Funds also went into rural revitalization, to integrate regional development and build infrastructure connecting villages to markets so that farmers could sell their products more easily.

China was able to alleviate poverty because its economy was growing at an unprecedented level in the world. On the other hand, Pakistan’s economy is in tatters. The country is left with little resources after debt servicing and necessary expenditure. It will have to improve its economy to lift people out of poverty. The country’s economic growth is expected to slow down to 3pc in the next few years. In the meager growth rate, more people are feared to lose jobs and fall below the poverty line. It will be a miracle if the government maintains the current level of poverty and jobs in the next few years.