Pakistan’s Progress Towards Eradication of Poverty

Preamble

Pakistan remains strongly committed to achieving its Sustainable Development Goals (SDGs) by 2030. Goal 1, No Poverty, has been high on the agenda with the launching of a social protection system for designing and implementing targeted social and economic policies aimed at reducing poverty and income inequality over the years. This blog presents the current situation of Pakistan and highlights the significance of Sustainable Development Goal 1. The blog also shows Pakistan’s progress in achieving poverty alleviation targets and presents a way forward.

Research Questions

1. What is the importance of SDG 1?

2. What is the current state of poverty in Pakistan?

3. How far has Pakistan progressed in achieving its poverty alleviation goals?

4. How can Pakistan ensure the successful eradication of poverty?

Introduction

Eradicating poverty in all its forms remains one of the greatest challenges facing humanity. While the number of people living in poverty has significantly dropped over the years, there are still many who are struggling for basic survival. According to the Planning Commission, at present, poverty in Pakistan stands at 24 percent compared to 29.5 percent in 2013-14. With a poverty line of Rs 3000 per adult per month, Pakistan has over 50 million people below the poverty line. Recent estimates show that this number can increase by 10 million due to the coronavirus pandemic and a fall in household consumption (Pakistan Economic Survey, 2020). Successive governments in Pakistan have laid great emphasis on macroeconomics in an attempt to pave the way for development and create more jobs as a ‘trickle-down’ effect, but poverty and inequality are increasing at a persistent rate (Dawn, 2020). Pakistan has a multi-sectoral poverty reduction strategy with targeted interventions such as the Benazir Income Support Program (BISP), improved access to microfinance, private philanthropy, and social safety initiatives. Economists and policymakers still argue that the best way to alleviate poverty is to have high economic growth. That is only possible with increased public-sector spending and the pursuance of pro-poor policies. Therefore, Pakistan has come a long way in fulfilling its SDGs targets with a clear reduction in goal 1 (No Poverty).

Importance of SDG 1 (No Poverty) in Pakistan

In 2015, globally, about 736 million people lived on less than US $1.90 a day, lacking food, sanitation, and clean drinking water. Rapid growth in countries has lifted many out of the poverty trap but certain sections of the society such as women, transgender, and migrants, remain vulnerable as they are likely to remain poor due to unavailability of work, education, and property. The world has experienced an overall reduction in poverty as currently, 10 percent of the world’s population lives in extreme poverty as compared to 36 percent in 1990. But this does not mean that the picture is better for those in the poverty trap. Almost 50 percent of those in poverty are people under the age of 18, and 1 in 10 out of those is extremely poor. Pakistan is a lower-middle-income country with a population of 216 million, making it the sixth most populous country in the world. It is among the top nine countries predicted to increase the global population by more than half till 2050. A UNDP study of 70 countries, including Pakistan, predicts that the coronavirus outbreak may set global poverty levels back by nine years with an additional 490 million people falling into multidimensional poverty (Dawn, 2020).

The Government of Pakistan is sticking to structural adjustment programmes laid out by the IMF and the World Bank instead of pulling people out of poverty. This makes matters worse as there is rising inflation and further augmented misery of the poor. Pakistan is continuously seeing a rising number of cases of people committing suicide due to poverty. Last year, a 45-year-old man committed suicide by setting himself on fire due to extreme poverty (Dawn, 2020). According to the Finance Minister, in 2013, if $2 was the minimum daily wage, then more than half of the country would have lived below the poverty line (Dawn, 2014). Pakistan failed to achieve almost all Millennium Development Goals (MDGs) due to lack of institutional capacity, financial constraints, flawed policies, lack of political will, absence of monitoring mechanisms, and lack of human resource capacity. In comparison, the SDGs have the potential to change the fate of the people as elected representatives have shown interest in implementing the goals at the national level. Since the SDG mandate is huge, it’s planning, resource allocation, and implementation are left to provincial governments, and there is a need to work with the private sector, international organisations, local NGO’s, and civil society organisations.

Pakistan’s Progress on SDG 1 (No Poverty)

To accelerate the alleviation of poverty, Pakistan has focused on human development in three basic dimensions. Long and healthy life, access to knowledge, and a decent standard of living. According to the UNDP Human Development Report 2019, Pakistan’s ranking in the global Human Development Index (HDI) declined to 152 based on health, education, and gross national income (UNDP, 2019). Pakistan has shown progress in its HDI over the years, but it is not comparable to other countries in the region. Expenditure on pro-poor sectors in 2016-17 stood at 9.5 percent, while it slightly dropped to 8 percent in 2018-19. Recognising the need to protect the poor and vulnerable, the government is carrying out several social safety net programs. The Benazir Income Support Program (BISP) is a federal unconditional cash transfer for the poorest segments of the society. Its budgetary allocation had been increased from Rs 102 billion to Rs 180 billion in 2020. This makes BISP’s performance fall into the top five social safety nets in the world. Pakistan Poverty Alleviation Fund (PPAF) is another flagship poverty reduction strategy for the country. The fund is dedicated to microcredit, enterprise development, community-based infrastructure, energy projects, social mobilisation, and capacity building institutional assistance for partner organisations. (Pakistan Economic Survey, 2020) (Planning Commission, 2016)

Pakistan’s government has taken several other steps to eradicate poverty in the country. Firstly, the creation of a dedicated Poverty Alleviation and Social Safety Division helps synergise the efforts of various organisations working for poverty alleviation and social protection in the public and private sectors. Second is the launch of the Ehsaas program, which includes inflation-adjusted direct cash transfers, asset ownership programs, access to finance for the youth, and graduate and undergraduate scholarships for the poor and needy. In the backdrop of the COVID-19, the Government of Pakistan also introduced a relief package of Rs 144 billion to provide immediate cash relief to almost 12 million families under the Ehsaas program. Moreover, the coverage for the Prime Minister’s Health Insurance scheme was expanded to provide free medical treatment to approximately 80 million people. The government has finalised the National Nutrition Program in order to upscale and ensure the food security situation of the country. Work has also been completed on ‘Panagahs’ in several major cities to provide shelter to the homeless. Lastly, Pakistan bait-ul-maal is significantly contributing toward poverty alleviation by providing assistance to the destitute, widows, orphans, and other needy persons irrespective of their gender, caste, creed, and religion. (Pakistan Economic Survey, 2020)

Way Forward for Pakistan in Achieving SDG 1 (No Poverty)

Pakistan’s poverty alleviation programs are marred by slow growth, macroeconomic imbalances, escalating global trade tensions, high-income inequality, and climate change. Coupled with the socio-economic impact of COVID-19, it is feared that more people will fall under the poverty trap. Additional programs based on conditional cash transfers and other social protection measures are needed. This can be achieved using the research capacity of BISP. Having an updated registry with updated data of citizens is also vital to realise the changing status of different households. If this information can be collected on a national level, the BISP can become a safety net for the entire country. Lastly, sensitisation at the district and local level is key to ensuring the effective adoption and localisation of SDGs.

Conclusion

Pakistan is making tremendous efforts for the implementation of SDGs given the limited amount of funds and meagre budget allocation. Poverty continues to plague Pakistan. Although some improvement has been seen compared to past records, the growing population and menace of coronavirus have put Pakistan’s progress in danger. Several social security and poverty alleviation programs have been established to help the poor and needy. With efforts to sensitise the public at a local level, Pakistan can gain further progress in its SDG 1 (No Poverty), eventually eradicating poverty in the country.

Key Takeaways

1. According to the Planning Commission, at present, poverty in Pakistan stands at 24 percent compared to 29.5 percent in 2013-14. With a poverty line of Rs 3000 per adult per month, Pakistan has over 50 million people below the poverty line.

2. Pakistan has a multi-sectoral poverty reduction strategy with targeted interventions such as the Benazir Income Support Program (BISP), improved access to microfinance, private philanthropy, and social safety initiatives.

3. The world has experienced an overall reduction in poverty as currently, 10 percent of the world’s population lives in extreme poverty as compared to 36 percent in 1990.

4. Almost 50 percent of those in poverty are people under the age of 18, and 1 in 10 out of those is extremely poor.

5. Since the SDG mandate is huge, it’s planning, resource allocation, and implementation are left to provincial governments, and there is a need to work with the private sector, international organisations, local NGO’s, and civil society organisations.

6. Pakistan has focused on human development in three basic dimensions. Long and healthy life, access to knowledge, and a decent standard of living.

7. The Benazir Income Support Program (BISP) is a federal unconditional cash transfer for the poorest segments of the society. Its budgetary allocation had been increased from Rs 102 billion to Rs 180 billion in 2020.

8. Sensitisation at the district and local level is key to ensuring effective adoption and localisation of SDGs.

Bibliography

Dawn. (2014). Over half of Pakistan lives under poverty line: Dar. Retrieved from Dawn: https://www.dawn.com/news/1110248

Dawn. (2020). Another Karachi resident sets himself on fire ‘due to poverty’. Retrieved from Dawn: https://www.dawn.com/news/1532266

Dawn. (2020). Picture of Poverty. Retrieved from Dawn: https://www.dawn.com/news/1585483/picture-of-poverty

Dawn. (2020). Reducing Poverty. Retrieved from Dawn: https://www.dawn.com/news/1590155/reducing-poverty

Pakistan Economic Survey. (2020). Pakistan Economic Survey 2019-20. Finance Division, Government of Pakistan.

Planning Commission. (2016). National Poverty Report 2015-2016. Planning Commission of Pakistan.

UNDP. (2019). Human Development Report 2019.