Poverty in Pakistan

Theory of Poverty: [1]

Poverty cannot be described it can only be felt. One knows more about poverty when he is hungry and cannot purchase food, he and his children want new clothes but they can’t purchase it because of low income, he’s sick and doesn’t have money to have medicine, he wants to send his children to school but can’t bear educational expenditures. The world Development Reports define poverty as “pronounced deprivation in well being’. Poverty can be measured by following three methods, i.e. Head Count Ratio, Basic Needs Approach, and Poverty of Opportunity.

According to Head Count Ratio, the persons who fall below the poverty line as determined in the country are regarded as poor. In Pakistan, for instance, the persons who earn income which cannot meet the daily intake of about 2350 calories per person are considered to fall below the poverty line. Basic Need’s Approach suggests the measurement of ‘poverty’ with reference to income distribution. According to this approach if the persons of a fixed income group cannot purchase basic needs, i.e. food, clothing, housing, education and basic health facilities, they are considered to fall below the poverty line. The third approach which is ‘poverty of opportunity’, if due to fall in income, health or education the human sufferings increase the people are considered to have fallen below the poverty line.


Poverty in Practice: [2]

Global environment:

Globally considerable progress has nevertheless been made in different parts of the world in reducing poverty. The proportion of people living in extreme poverty on global level fell from 28 percent in 1990 to 21 percent in 2001 (on the basis of $1 a day). In absolute numbers the reduction during the period was 130 million with most of it coming from China. In Sub-Saharan Africa, the absolute number of poor actually increased by 100 million during the period. The Central and Eastern Europe and the CIS also witnessed a dramatic increase in poverty. While incidence of poverty declined in South Asia; Latin America and the Middle East witnessed no change.

Proposal to tackle the problem:

The recent trends in global and regional poverty clearly suggest one thing and that is, that rapid economic growth over a prolonged period is essential for poverty reduction. At the macro level, economic growth implies greater availability of public resources to improve the quantity and quality of education, health and other services. At the micro level, economic growth creates employment opportunities, increases the income of the people and therefore reduces poverty. Many developing countries have succeeded in boosting growth for a short period. But only those that have achieved higher economic growth over a long period have seen a lasting reduction in poverty East Asia and China are classic examples of lasting reduction in poverty. One thing is also clear from the evidence of East Asia and China that growth does not come automatically. It requires policies that will promote growth. Macroeconomic stability is therefore, key to a sustained high economic growth.

Although extreme poverty on global level has declined, the gap between the rich and poor countries is increasing, even when developing countries are growing at a faster pace than developed ones – perhaps due to the large income gaps at the initial level. In a world of six billion people, one billion have 80 percent of the income and five billion have less than 20 percent. This issue of global imbalance is at the core of the challenge to scale up poverty reduction.

Case of Pakistan: [3]

Poverty has many dimensions in Pakistan. People have not only low incomes but they also are suffering from lack of access over basic needs. The major challenge of today is poverty reduction. In Pakistan, Poverty Reduction Strategy was launched by the government in 2001 in response to the rising trend in poverty during 1990s. It consisted of the following five elements:-
(a) Accelerating economic growth and maintaining macroeconomic stability.
(b) Investing in human capital.
(c) Augmenting targeted interventions.
(d) Expanding social safety nets.
(e) Improving governance.

The net outcome of interactions among these five elements would be the expected reduction in transitory and chronic poverty on a sustained basis. The reduction in poverty and improvement in social indicators and living conditions of the society are being monitored frequently through large- scale household surveys in order to gauge their progress in meeting the targets set by Pakistan for achieving the seven UN Millennium Development Goals by 2015.

Pakistan’s growth performance over the last four years is enviable in many respects. Sound macroeconomic policies and implementation of structural reforms in almost all sectors of the economy have transformed Pakistan into a stable and resurgent economy in recent years. The real GDP has grown at an average rate of over 7.5 percent per annum during the last three years (2003/04 to 2005/06). With population growing at an average rate of 1.9 percent per annum, the real per capita income has grown at an average rate of 5.6 percent per annum. The strong economic growth is bound to create employment opportunities and therefore reduce unemployment. The evidence provided by the Labour Force Survey 2005 (First two quarters) clearly supports the fact that economic growth has created employment opportunities. Since 2003-04 and until the first half of 2005-06, 5.82 million new jobs have been created as against an average job creation of 1.0 – 1.2 million per annum. Consequently, unemployment rate which stood at 8.3 percent in 2001-02 declined to 7.7 percent in 2003-04 and stood at 6.5 percent during July – December 2005. The rising pace of job creation is bound to increase the income levels of the people.

In recent years the role of remittances in reducing poverty has been widely acknowledged. Remittances allow families to maintain or increase expenditure on basic consumption, housing, education, and small-business formation. Total remittances inflows since 2001-02 and until 2005-06 have amounted over $ 19 billion or Rs.1129 billion. Such a massive inflow of remittances particularly towards the rural or semi-urban areas of Pakistan must have helped loosen the budget constraints of their recipients, allowing them to increase consumption of both durables and non-durables, on human capital accumulation (through both education and health care), and on real estate. To the extent that the poorer sections of society depend on remittances for their basic consumption needs, increased flow of remittances would be associated with reduction in poverty.

Although, growth is necessary but it is not sufficient to make any significant dent to poverty. Realizing this fact the government had launched a directed program under the title of Poverty Related and Social Sector Program some five years ago. Over the last five years the government has spent Rs.1332 billion on poverty-related and social sector program to cater to the needs of poor and vulnerable sections of the society. Such a huge spending on targeted program is bound to make a significant dent to poverty. The Household Integrated Economic Survey (HIES) – a component of Pakistan Social and Living Standards Measurement (PSLM) Survey provides important data on household income, consumption expenditure and consumption patterns at national and provincial level with rural-urban breakdown. The information pertaining to income and expenditure of the households are used to estimate poverty. The HIES is specifically designed to monitor poverty status of population by collecting information on consumption expenditure at the household level. With a representative sample size of 14706 households, it covered 5808 and 8898 households in the urban and rural areas of the country, respectively. The Survey was started in July 2004 and the entire field operations were completed in June 2005. The poverty line is based on 2350 calories per adult equivalent per day. It is also comparable with poverty line of 2000-01 as it was also based on 2350 calories and calculated from Pakistan Integrated Household Survey (PIHS). The poverty line of 2004-05 is adjusted by the inflation rate during the period 2001-2005.

The latest estimate of inflation – adjusted poverty Line is Rs.878.64 per adult equivalent per month ─ up from Rs.723.40 in 2001. Headcount ratio, i.e., percentage of population living below the poverty line has fallen from 34.46 percent in 2001 to 23.9 percent in 2004-05, a decline of 10.6 percentage points. In absolute numbers the count of poor persons has fallen from 49.23 million in 2001 to 36.45 million in 2004-05. The percentage of population living below the poverty line in rural areas has declined from 39.26 percent to 28.10 percent while those in urban areas, has declined from 22.69 percent 14.9 percent. In other words, rural poverty has declined by 11.16 percentage points and urban poverty is reduced by 7.79 percentage points.

Consumption inequality increased marginally during the period. These findings are consistent with the developments on economic scene that have taken place in Pakistan since 2000-01. A strong growth in economy, rise in per capita income, a large inflow of remittances and massive spending on poverty-related and social sector programs were expected to reduce poverty in Pakistan. It is important to note that the methodology and the estimates of poverty have been endorsed by the development partners such as the World Bank, the Asian Development Bank, the United Nations Development Program (UNDP) and the Department for International Development (DFID), UK. The service of world renowned poverty expert, Professor Nanak Kakwani was hired by the UNDP to independently look into the methodology as well as poverty estimates. He also authenticated both the methodology and estimates. In order to maintain consistency across years, it is essential that we apply the same agreed upon methodology over the years, irrespective of its weaknesses and strengths.

Conclusion: [4]

Pakistan has emerged as ‘Asian Tiger’ with reference to the Economic growth during last couple of years. And government of Pakistan spent about Rs.1332 billion to reduce the poverty. And as a result poverty reduced from 39.26 to 28.10 percent (rural) and from 22.69 to 14.9 percent (urban). By having a close look at the facts it is revealed that although a heavy amount has been spent on poverty reduction but the attained results are not up to the mark as poverty percentage stands quite high. Actually government has spent all this amount only on first strategy of poverty reduction, i.e. Accelerating economic growth and maintaining macroeconomic stability, while other four strategies have been left either untouched or neglected.
Government only targeted high macro economic growth; the level of investment in human capital has not been seen at even a low extent. Augmentation in targeted interventions has also been misdirected. Employment opportunities should have been created with in the industrial or agricultural sector in order to accelerate the production of basic needs so that consumer goods should have been in the reach of low income group. While services sector was expanded without any planning, which resulted in a situation that mobile is kept by every one but they don’t have access over basic needs.
After that social safety nets have also been neglected, there’s no proper pronouncement by government in this regard. And finally ‘improvement in Governance’, which has been left untouched. For a long time, whenever senior government personnel visits a major city like Karachi, all the traffic on the roads is diverted in the streets and all the work being done is stopped in order to ensure the security of the official. By this way those who earn on daily wages, have to suffer loss in daily wages. I quoted this example because when rulers are so ‘insecure’ in their own homeland how can they improve the governance or develop their country or how can they ensure the safety of the whole country?

Concisely, in spite of all efforts of government poverty still stands as an iron wall for Pakistan’s economy. And to break this iron wall we are in need to apply all five poverty reduction strategies at utmost level.

References:

1- Economics of Pakistan, M.Saeed Nasir
2- Reports of World Bank
3- Economic Survey 2005—06

Ayub’s Era at a Glance

History:

The master mind behind the fall of Chaudhary Muhammad Ali and the overnight conversion of Muslim League members of the assembly into the Republican Party in 1956 was no one else but President Iskandar Mirza. Further more in the exercise of Political setup of Iskandar Mirza, the politicians of East Pakistan suffered from limitations imposed from West Pakistan. This created political instability through out Mirza’s regime. The situation became extreme when the state of insecurity generated by Iskandar Mirza himself was at its peak. In these circumstances Iskandar Mirza and Ayub Khan Jointly made a conspiracy plan by which Ayub Khan imposed a Martial Law in the country (8th October 1958) and became the chief Martial Law Administrator. Rightly said by Mushtaq Ahmed (Politics of Crisis pg.25), that the major reason for the imposition of Martial Law in the country wasn’t the defects in the constitution but it was the ‘Politics of Power’. Well, Iskandar Mirza was forced to resign after 19 days of the imposition of the Martial Law and was exiled.


Ayub’s Era at a glance:

He was the same Ayub Khan who was pointed as the head of Punjab Boundary Force in August 1947, to look after the safe migration of Muslims from India to Pakistan. But he didn’t fulfill his duties and remain drunk and the history painfully saw the massacres of Muslim men, women and children and rape of Muslim women on the cost of “Bottle of vine”.

President Ayub ruled Pakistan for a little more than ten years. During his regime Pakistan had undergone some achievements but there had been a lot of unsolved structural problems also which account for his era. In a brief context Ayub’s era didn’t eliminate the basic problems of the society in Pakistan. The major aspects of Ayub’s era can be discussed as follows:

  • Before Ayub’s era country was smarting under the shadows of dark forces on the political horizon. In this scenario Ayub’s regime didn’t bring any hope of freedom but the order and discipline, characteristic of all Martial Law regimes.
  • After abrogating the constitution of 1956, the press & Publication ordination 1960 was employed to clip the wings of criticism of the regime.
  • The commission appointed by Ayub to design the political frame work for the future was headed by former Chief Justice of Pakistan Muhammad Shahabuddin with ten other members five from East Pakistan and five from West Pakistan, composed of retired judges, lawyers, industrialists and landlords, it went about to work in a businesslike manner.
  • The commission proposed a presidential from of government and Basic Democracy found no place in the future democratic process. And the recommendations were neglected by the regime.
  • The constitution formed under the guidance of Ayub Khan removed the word ‘Islamic’ and declared that Pakistan will be a republic under the name of ‘Republic of Pakistan”, which was lately rectified as ‘Islamic Republic of Pakistan’ through first amendment. Further the constitution began with the words “I Field Marshal Muhammad Ayub Khan” and not eh words “We the People of Pakistan” do hereby declare and promulgate the constitution, meant he had no respect for the popular sanction. For its provisions fundamental or otherwise, he alone was responsible. In a nut shell the president had acquired the completely free hand in the management of the affairs of the state in the light of his own experience.
  • Ayub introduced a new political system, known as the Basic Democracies, in 1959. It created a four-tiered system of mostly indirect representation in government, from the local to the national level, allowing communication between local communities and the highly centralized national government. Each tier was assigned certain responsibilities in local administration of agricultural and community development, such as maintenance of elementary schools, public roads, and bridges. All the councils at the tehsil (subdistrict), zilla (district), and division levels were indirectly elected. The lowest tier, on the village level, consisted of union councils. Members of the union councils were known as Basic Democrats and were the only members of any tier who were directly elected.
  • Ayub’s regime also increased developmental funds to East Pakistan more than threefold. This had a noticeable effect on the economy of the province, but the disparity between the two wings of Pakistan was not eliminated.
  • His regime also initiated land reforms designed to reduce the political power of the landed aristocracy.
  • Ayub also promulgated a progressive Islamic law, the Muslim Family Laws Ordinance of 1961, imposing restrictions on polygamy and divorce and reinforcing the inheritance rights of women and minors.
  • In 1959, soon after taking office, Ayub ordered the planning and construction of a new national capital, to replace Karachi. The chosen location of the new capital in the province of Punjab was close to the military headquarters of Rawalpindi, which served as an interim capital. Islamabad officially became the new capital in 1967, although construction continued into the 1970s.
  • The first election under the constitution of 1962 were on non part basis, however, the political parties were revived in the second election which were held in 1965. Ms. Fatima Jinnah was the presidential candidate of Combined Opposition parties (COP). Ayub khan won the election but the results were disputed and COP demanded that direct election should be substituted for indirect elections.
  • Ayub was skillful in maintaining cordial relations with the United States, stimulating substantial economic and military aid to Pakistan. But unfortunately the war of 1965 brought a sense of defenselessness and deprivation among the people of East Pakistan. And after that The East Pakistan demanded for autonomy under the presentation of six points.
  • In 1969 a mass movement spread by People’s Party in West Pakistan and by Awami League in East Pakistan destabilized Ayub’s regime and on March 25 1965 Ayub resigned from his office and handed over the charge to Commander in Chief of the Army General Yahya Khan, instead of the speaker of the national assembly, hence violated himself in ‘self assumed Constitution’.

Conclusion:

The characteristics of Ayub’s era discussed above show some successful decisions and some not so successful decisions of Ayub. In my opinion Ayub was a man of great determination but the he was lacking the quality of ‘listening to others’. He always did what he thought better in the light of his own experience.

His regime can be characterized with some developments but he couldn’t maintain the national harmony among the distant provinces of Pakistan, i.e. East Pakistan and West Pakistan.

Related Readings:

1- Mushtaq Ahmed, Politics of Crisis pg.25
2- M.A.K Chaudhary, Martial Law ka Siyasi Andaz pg.95
3- Kamal Azfar, Pakistan: Political and Constitutional Dilemmas pg.75-76
4- Gul Shehzad Sarwar, Pakistan Studies pg.382—389

Web References:

1- Encarta
2- Wikipedia

Imperialism

Imperialism is a broad term which has a variety of meanings. Generally it is a practice by which powerful nations or peoples seek to extend and maintain control or influence over weaker nations or peoples. Some scholars associate imperialism solely with the economic expansion of capitalist states, and some others reserve it for European expansion after 1870. Although imperialism is similar in meaning to colonialism, and the two terms are sometimes used interchangeably, they should be distinguished. Colonialism usually implies formal political control while Imperialism refers, more broadly, to control or influence that is exercised either formally or informally, directly or indirectly, politically or economically.

Imperialism dates from antiquity, it took many forms throughout the history. History of Imperialism can be divided into four major eras; ancient world, European Imperialism (1400—1750) Imperialism till 19th century and Modern Imperialism.
In the ancient world imperialism manifested itself in a series of great empires that arose when one people, usually representing a particular civilization and religion, attempted to dominate all others by creating monopoly of control. The empire of Alexander the Great and the Roman Empire is a salient example in this regard.

European imperialism (1400-1750) aimed at overseas colonial expansion. In this period many competing states established political control over territories in South and Southeast Asia and in the New World. Imperial systems were organized according to the doctrine of mercantilism: Each imperial state attempted to control the trade of its colonies, in order to monopolize the benefits of that trade.

In the mid-19th century the imperialism of free trade appeared. The practice endured in this period even though mercantilism and the pace of formal empire building declined significantly. European, especially British, power and influence were extended informally, mainly through diplomatic and economic means, rather than formally, through direct colonial rule. The imperialism of free trade, however, was short-lived: By the end of the 19th century European powers were once again practicing imperialism in the form of overseas territorial annexation, expanding into Africa, Asia, and the Pacific.

Since the end of World War II, when most of the formal empires were dissolved, what might be called modern economic imperialism has come to predominate. Control is exercised informally and less overtly. European powers have continued to affect significantly the politics and the economics of their former colonies, and they have consequently been accused of neocolonialism, the exercise of effective sovereignty without the formality of colonial rule.

Causes of Imperialism are in variety, historically, states have been motivated to pursue imperialism for a variety of reasons, which may be classified broadly as economic, political, and ideological and reactive. Theories of imperialism break down similarly, according to which motive or motives are viewed as primary.

Economic explanations of imperialism are the most common. Believers of this school of thought hold that states are motivated to dominate others by the need to expand their economies, to acquire raw materials and additional sources of labor, or to find outlets for surplus capital and markets for surplus goods. The most prominent economic theories, linking imperialism with capitalism, are derived from those of Karl Marx. Lenin, for example, explained the European expansion of the late 19th century as the inevitable outcome of the need for the European capitalist economies to export their surplus capital. Similarly, contemporary Marxists explain the postwar expansion of the U.S. into the Third World in terms of economic imperatives. In modern times US hold on Iraq and Afghanistan reveals the same kind of motive.

Secondly, some people are of the opinion that, the political determinants of imperialism, contending that states are motivated to expand primarily by the desire for power, prestige, security, and diplomatic advantages vis-à-vis other states. In this view, late 19th-century French imperialism was intended to restore France’s international prestige after its humiliating defeat in the Franco-Prussian War.

A third set of explanations focuses on ideological or moral motives. According to this perspective, political, cultural, or religious beliefs force states into imperialism as a “missionary activity.” Britain’s colonial empire was motivated at least in part by the idea that it was the “white man’s burden” to civilize “backward” peoples. Germany’s expansion under Hitler was based in large measure on a belief in the inherent superiority of German national culture. The desire of the India to promote their cultural heritage in Kashmir and to maintain political stability in the territory is also examples of imperialism driven by moral and ideological concerns.
Finally, some explanations of imperialism focus not on the motives of powerful states but rather on the political circumstances in weaker states. The argument holds that powerful states may not intend to expand, but may be forced to by instability on the periphery; new imperial actions result from past imperial commitments. The British conquest of India and the Russian colonization of Central Asia in the 19th century are classic examples of reactive imperialism.

Because imperialism is so often viewed as economically motivated, discussions of its effects also tend to revolve around economic issues. Disagreement arises between two school of thoughts. One holds that imperialism implies exploitation and is responsible for the underdevelopment and economic stagnation of the poor nations, and others argue that although the rich nations benefit from imperialism, the poor nations also benefit, at least in the long run.
The political and psychological effects of imperialism are equally difficult to determine. Imperialism has proven both destructive and creative: For better or worse, it has destroyed traditional institutions and ways of thinking and has replaced them with the habits and mentality of the Western world.