FeaturedNationalVOLUME 19 ISSUE # 28

Subsisting beneath the poverty threshold

The Multidimensional Poverty Index (MPI) in Pakistan is currently gauged at 39.5 percent, illuminating that over a third of the populace subsists beneath the poverty threshold.

According to the recent analytical study by the Pakistan Institute of Development Economics (PIDE), more than a third of the nation’s denizens endure multifaceted poverty, grappling with deficiencies in health, education, and living standards. This infers that an average multidimensionally impoverished individual in Pakistan is bereft of nearly half of the weighted indicators utilized in MPI computations. In essence, each multidimensionally impoverished individual in Pakistan is, on average, deprived in almost half of the 15 weighted indicators applied for MPI evaluations.

Pakistan’s national MPI, which is derived from the conjunction of the proportion of impoverished individuals and the average severity of poverty, is positioned at 0.191. This denotes that the impoverished in Pakistan endure 19.1% of the deprivations that would manifest if the entire populace were deprived in all indicators. Additionally, the prevalence (headcount ratio) of multifaceted poverty in urban regions is registered at 17%, whereas in rural territories, more than half of the population (51%) is multifaceted impoverished.

In terms of the percentage contribution of each of the 15 indicators, the predominant contribution emanates from years of schooling (33.15%), followed by health facilities at 18.95% and school attendance at 10.7%. When the indicators are aggregated by dimensions, the paramount contribution is attributed to education at 49.4%, followed by living standards at 26.5%. Concurrently, deprivation in health, at 24.1%, renders the least contribution among the dimensions. Multifaceted poverty has observed a slight increment from 2019-20 compared to 2014-15. The percentage share of the multifaceted impoverished has risen from 38.6% in 2014-15 (the preceding MPI assessment) to 39.5% in 2019-20. This marginal escalation signifies a divergence from the historical trajectory of multifaceted poverty in Pakistan.

Over the preceding 15 years, multifaceted poverty in Pakistan has consistently diminished. However, the trend from 2014-15 to 2019-20 is contrarily directed. For the first time in 15 years, the population share of the multifaceted impoverished in the country has surged. The regional distribution of MPI reveals that the increment has predominantly occurred in urban areas. The headcount ratio in urban locales has risen from 9.5% in 2014-15 to 17.3% in 2019-20, indicating an almost 50% augmentation in urban poverty. Although multifaceted poverty in Pakistan remains predominantly concentrated in rural zones, its share is in continual decline. Rural poverty has receded from 54.2% in 2014-15 to 51.9% in 2019-20.

Among the four provinces of Pakistan, Balochistan exhibits the highest incidence of multifaceted poverty. Data indicates that 70% of the populace in Balochistan is classified as multidimensionally impoverished, followed by 48% in Khyber Pakhtunkhwa and 45% in Sindh. Punjab has the lowest incidence (headcount ratio) of multifaceted poverty in the nation. With 30% of its population identified as impoverished, it stands as the sole province with a lower headcount ratio than the national average of 39.1%.

Except for Sindh, multifaceted poverty has diminished across the provinces. For example, in Balochistan, the headcount ratio has declined from 72.4% in 2014-15 to 70.5% in 2019-20, in Khyber Pakhtunkhwa from 49.1% to 48.8%, while in Punjab, the share of the multifaceted impoverished has decreased from 31.0% to 30.4%. In Sindh, however, the headcount ratio has increased from 43.1% in 2014-15 to 45.2% in 2019-20.

According to estimates, 44.1% of Pakistan’s populace is classified as multidimensionally ICT impoverished. This implies that nearly half of the nation grapples with severe deprivation in the availability, access, and affordability of ICT services, compounded by a profound lack of digital literacy. The intensity, reflecting the average deprivation each person endures, is 43.7%. Hence, a multidimensionally digitally poor individual in Pakistan is, on average, deprived in 43% of the weighted indicators used in the MPI evaluations.

The ICT MPI value for 2019-20 stands at 0.191, indicating that the average population identified as multidimensionally poor in Pakistan endures 19.1% of the total deprivation that would be experienced if everyone were deprived in all indicators. Digital poverty in Pakistan is predominantly concentrated in rural regions, where the incidence (headcount ratio) shows that more than half (53.10%) of the rural populace is multidimensionally poor. In contrast, the scenario in urban areas is comparatively better, with 28.5% of the urban population classified as ICT poor.

Multidimensional ICT poverty in Pakistan is chiefly driven by the availability of ICT. At the dimension level, ICT availability constitutes more than half of the ICT MPI, with a 55.6% contribution. ICT literacy and access follow, contributing 30.7%, and ICT affordability and access round out the dimensions with the lowest contribution of 13.7% to the national MPI.

At the indicator level, the use of computers, contributing 22%, holds the highest percentage contribution to the ICT MPI. This is followed by basic ICT items for communication, modern ICT items, and internet access, each contributing 15%. The third highest contribution to the ICT MPI among the indicators is the affordability/access of ICT for communication, contributing 10%.

Regarding the provincial spread of multidimensional ICT poverty, Balochistan exhibits the highest prevalence, with 59.8% of its population identified as multidimensionally ICT poor. This is followed by 47.9% in Sindh and 43.6% in Khyber Pakhtunkhwa. Punjab has the lowest incidence (headcount ratio) of multidimensional ICT poverty in the country, with 37.7% of its population classified as poor, making it the only province with a lower headcount ratio than the national average of 44.1%.

In its latest report, the World Bank warned that 40% of the population has slipped below the poverty line. Pakistan’s economy has been beleaguered by persistent financial challenges in recent years, resulting in a subdued economic performance marked by high inflation, dwindling foreign exchange reserves, and sluggish growth.

The plight of multidimensional ICT poverty in Pakistan is a stark reminder of the urgent need to address digital inequities. With 44.1% of the population facing severe deprivation in ICT services and literacy, the country’s digital divide is profound. Predominantly affecting rural areas, this form of poverty underscores the necessity for targeted interventions to improve ICT availability, access, and affordability. As Pakistan grapples with broader economic challenges, addressing multidimensional ICT poverty is crucial for fostering inclusive growth and ensuring that digital advancements benefit all segments of society.