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Is Pakistan Poor?

Mention Pakistan to people from other parts of the world and the assumption will probably be that you’re talking about a poor country, unable to look after its population properly and struggling with massive inequality. Perceptions such as this, once they become established in the international sphere, can be hard to shift, but the truth of the matter is much more complicated. There are undoubtedly poor people in Pakistan, and the gap between the wealthiest and the poorest is wider than the majority of people would consider as acceptable, but then the same statements could be made of many countries all over the world which consider themselves to be ‘developed’. Indeed, the fact that you can walk the streets of any major city in the UK and see people making a ‘home’ for themselves in a doorway or tent, despite the fact that the UK is generally regarded as being one of the wealthiest nations in the world, is an illustration of just how complex it is to make a judgement on whether a country is generally ‘poor’ or not.

One way of examining the economic well-being of a country, particularly if you wish to build a picture of how the people of that country are likely to fare in the future, is to look at the direction of travel of any available statistics on poverty. In Pakistan, this direction has, in recent years, undoubtedly been in the right direction. There are various studies and surveys which can be referenced, including a World Bank study in 2014 which revealed that the percentage of Pakistani people living below the poverty line – defined by them as being 3,000 rupees per person – had fallen from 65% at the turn of the millennium to just under 30%. Is this figure still too high? Undoubtedly, but a drop of more than 30% in just over a decade shows that the right steps are being taken and massive progress has been made. Indeed, measured against the international poverty line, which is set at the local equivalent of $1.90 per day, the percentage of people below the line in Pakistan is only just over 6%, compared to 21% in India and 18% in Bangladesh.

Of course, the history of Pakistan shows that things can become better or worse in a dramatic fashion very quickly, so it’s useful to have a more recent survey of the economic state of play to call upon. The Pakistan 2018 Economic Survey presents a picture which is completely contemporary and shows the same direction of travel. According to the Survey, the headline figure of people in Pakistan living below the poverty line fell from 50.4% in 2005-6 to 24.3% in 2015-16, and drilling down into the figures reveals that this improvement is spread across both the rural and more urban areas of Pakistan. Looked at in the longer term, it could be seen that year on year poverty rates had, according to the Pakistan Economic Survey, dropped by as much as 7% every year (with the exception of 2010-11 which had been blighted by natural disasters).

Taking all of this on board, it’s easy to see that the question of whether Pakistan is a poor country doesn’t really have a simple yes or no answer. Perhaps even more importantly, the answer to the question should be that Pakistani has been a poor country in the past, but is rapidly moving away from being a poor country and is reaching a position at which the definition of ‘poor’ will no longer really apply. This perception is backed up by the International Monetary Fund (IMF). In the past, the IMF has had to loan money to Pakistan, and the conditions which have been set for these loans have been singled out, by many in Pakistan, as being at least partly to blame for economic stagnation of the country. Surveying the economic landscape of 2018, however, the IMF declared that the fiscal outlook of Pakistan is ‘broadly favourable’ and that economic growth is set to continue in the coming years.

The question, therefore, is exactly what has Pakistan done to encourage this economic growth and the move out of poverty? The first and most obvious step has been the move away from the political turmoil which marked the early years of the 21st century. This was formalised in 2008 when the Pakistani People’s Party (PPP) ended military rule, installed a civilian president and moved toward being an open democracy. This democratisation continued in 2013, with the first peaceful transition between two democratic governments in the history of the country. Political stability of this kind is always one of the basic building blocks of a growing economy and has, in simple terms, freed up the people of Pakistan to concentrate on driving entrepreneurial development and pulling in inward investment. The fact that the government is fixed firmly in place and is highly unlikely to fall or be victim to a coup is another vital factor when it comes to pulling in the kind of foreign investment which can be seen at its most impressive in the CPEC (China-Pakistan Economic Corridor).

The impact which this stability has had on falling poverty rates in Pakistan can also be put down to the fact that the stable government has been able to instigate anti-poverty programmes like the Social Safety Net Programme (SSNP). This is an umbrella anti-poverty initiative delivered in different forms across the country, and the largest manifestation of it was the Benazir Income Support Programme (BISP), which offered support to more than 5.29 million beneficiaries and has been shown to have cut poverty rates by as much as 7% on its own.

One final governmental initiative has seen a change in attitude toward agriculture. Agriculture drives 18.9% of the Pakistan GDP and employs 42.3% of the workforce. In recent years, the Pakistan government has taken steps such as providing crop insurance to farmers and investing in technology such as innovative irrigation systems and drought resistant seeds.

The answer to the question of whether Pakistan is poor, therefore, is that it has been in the past, and to some degree it still is, but that it is clearly leaving poverty behind at a rapid rate. The move to political stability, a concerted effort to alleviate low incomes and, lastly, a great deal of hard work on the part of the people of Pakistan, have all seen levels of poverty drop dramatically in recent years, and this is a trend which is set to continue into the future.

 

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