How to curtail rising poverty rate?

Written By: M. Osman Ghani

Undeniably, there is an unprecedented surge in the country’s poverty level on the back of rapidly growing food and utility prices, along with shrinking income and employment opportunities. In addition, closure of a large number of industrial units due to energy crisis and terrorism, has also aggravated the situation. According to a few unofficial survey results, some 35-45 per cent of the population lives below or near the poverty line today.

Both acute and chronic factors are attributed to the sharp fall in living standards and prevalence of endemic poverty.  Acute causes of poverty may include the impact of soaring global food, energy and other commodity prices that enter a country through imports and unfavourable balance of trade. On the other hand, chronic causes of poverty may be deeply-rooted traditional and cultural behaviour and values of a nation, their social and family obligations, level of education, training and future outlook etc. Poverty, as a social problem is a deeply embedded wound that encompasses every dimension of culture and society. It includes low levels of income for members of a community, lack of access to services like education, markets, healthcare and communal facilities, like water, sanitation, roads, transportation, and communications. The factors that contribute to it are mainly socio-economic which need to be addressed for the uplift of individuals living in despair. Poverty is now a major problem confronting the global economic system and it has inflicted extensive harm to millions across the globe.

The simple transfer of funds to individuals and families will not eradicate or reduce poverty. It will merely alleviate the symptoms of poverty in the short-run. Poverty as a social dilemma calls for a much more comprehensive solution, which forms its basis in a clear, conscious and deliberate removal of the core factors that spread poverty. These include (1) ignorance, meaning lack of information and lack of knowledge, (2) high disease rate; accompanied with high absenteeism in productive works. AIDs, malaria, hepatitis and other diseases may drastically reduce productivity of affected families, societies and even countries, (3) apathy, (4) dishonesty and corruption and (5) dependency etc. They may in turn, contribute to secondary factors such as lack of markets, shabby infrastructure, inefficient leadership, bad governance, unemployment, lack of skills, absenteeism, and dearth in capital. Each of these factors contributesto the prevalence of poverty and their elimination is central to remove the menace of poverty from society.

On the contrary, poverty at a global level has numerous historical causes: colonialism, slavery, war and conquest. Many nations of Europe, faced by devastating wars were reduced to bare poverty, where people were forced to live on charity, barely surviving. Within decades they had brought themselves up in terms of real domestic income, to become thriving and influential modern nations of prosperous people. Many other nations have remained among the least developed in the world, even though billions of dollars of so-called aid money was spent on them since the chief factors of poverty were not attacked but only their symptoms. At the national level, a low GDP does not translate into paucity, rather it is a symptom of poverty.

In Pakistan, sky-rocketing food and energy prices, persistent acts of terrorism, and natural calamities suchas last year’s devastating floods have not helped curtail the poverty rate, which is increasing by a staggering proportion at the moment. Diagnosing the key challenges faced by Pakistan’s economy, Asian Development Outlook 2011, noted security concerns, excessive expenditure and poor infrastructure as major causes of poverty. Furthermore, shortfall in the energy sector has impeded growth by a wide margin. The report also expressed concern over rebound of inflationary pressures in the wake of rising POL prices. It said that inflation in Pakistan was the highest in the region, fearing that it might touch 16 per cent mark by the end of the year.

During the last 3 years food prices in the country have more than doubled. Chairman and a renowned economist of the Institute of Islamic Banking & Finance, Dr. Shahid Hussain Siddiqui, a banker of International repute and an eminent economist, said that due to successive bad policies of the government nearly 100 million people of Pakistan are compelled to live on starvation or on poor quality of food intakes. The present government has raised wheat prices to Rs950 per 40 kg, and according to some economic experts, wheat prices in Pakistan have almost tripled since 2008 making the life of the common man more difficult. The elevated food prices have impacted people’s ability to obtain the required calories to live a healthy life. The majority of Pakistanis now spend half of their income on buying essential food items alone and very little is left to spend on healthcare and children’s education.

As the Federal Bureau of Statistics reveals, the consumer price index rose by 17.7 per cent in February 2011 compared to the same period last year. The phenomenon of soaring food prices is expected to continue in near future as well. The World Food Programme also painted a grim picture of food security in the country, where mal-nutrition levels are on the rise despite good agricultural crops.

To address the intensifying poverty level and spiralling food prices, it is central to accelerate GDP growth through enhanced investment activities (both by the public and private sectors), promote economic activities through expansion of small and medium enterprises, drive export-oriented manufacturing and promote human capital via better education, training and skill development.

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