Fighting Poverty in Pakistan

An excellent article!

As a side note, if I had 75 lakh rupees, I would not waste it on a cricket bat; I would invest it in an educational facility.

Ciao

A really well written article.

Regards,

Faruk

Re : romair # 8
The rise in property prices in Pakistan is most probably due to the adverse investment climate for Pakistani’s in the post 9/11 scenario. Pakistanis are apprehensive of investing in the west and are moving their money to Pakistan. Real estate is looked upon as a safe bet. If the economic fundamentals do not support the rise there will be a correction.
There was phenomenal rise in property prices in Mumbai in the early nineties. Property prices were the highest in the world. There was a correction and they have not risen for 10 years while property prices have been rising steadily everywhere else in the country.

Regards,

Faruk

What comes through (to me, anyway) from this article is that the growth rate (which would fluctuate over years) is insufficient to help the poor, even if it is “high” for a certain time period. The other key ingredient, which must be supplied over the long run in a sustained manner, is the education of the masses, which in turn will provide all other kinds of secondary benefits leading to a better “trickling down” of the benefits of such growth to them. I am sure Mr. Aziz is aware of this fact, but keeping a positive outlook is perhaps a requirement of his job, and he can only work with the tools that ARE available to him, and act only according to his own training!

I do disagree with the author regarding the linkage he draws between an increasing suicide rate and the state of the economy. The vast majority of individuals living under the same conditions of hardship do not automatically turn to suicide as the “ultimate answer”. In most cases, the depression that leads to such decisions is a REAL disease of the mind which needs to be recognized and treated. There are times when specific events may trigger an act of suicide (if a depressed condition already exists). Examples would include instances such as when numerous individuals committed suicide in India upon death of certain popular movie stars or politicians. However, poverty (being a chronic condition), is unlikely to provide such a trigger. (It just IS.)

Suicides and income

At the macro levels suicides especially teenage suicides increase with income and educational levels, japan and kerala are good examples where suicide rates are comparable.
Pakistans case is different similar to what happens during draught in most parts of india. The crop failures results in unpayable debt burden and many mature age men take this option. In pakistan the crop failure sympton is ever present, where the failure of the civil society leaves no hope for any reasonable person.
The violence of the jihadic criminals, the arbitary actions of the police, ever present exploitation by the military can only compound the travails of poverty. A country where army has farming rights, where it makes corn flakes to cement, which has the highest number of armoured cars, where it has siezed the fishing rights to a lake...wel any one who is alive in pakistan lives in a dark hole.

Romair..romair

Before you post the next one on 10 billion in reserves for pakistan, cut the following out and paste on your bedroom wall...it is from jang of today. Note the details..8.30 in the morning...the killers cooly walked away. That has the hall mark of a jihadic killing, the cold blooded dont care for a damn and wantom killing. The man must have been from another sect, religion, ahmadia. Like so many of the doctors ho were killed.

That is collapse of civic society and no amoount of $, not even a trillion dollar housing project can change. To change that you have to sink deep into your hearts, the history, the pak.org history, the vaues that made ghori to be honoured with name of a missile while abdus salam will not even get a promary school named after him. That is the ore social value of pakistan which impressed so much the stuka the dost mitters of india


Open letter to the President

Sher Khan

Dear General:

For most people of this country, April 1 this year was just another day in the daily grind for survival, 11 billion dollars or so in our foreign exchange reserves and mega projects notwithstanding. For my extended family and me, it will always remain etched indelibly in our memories as the day when Saleem Azeem, my younger brother ten years my junior, was held up, shot twice in the head at point blank range no more than one hundred metres from his home in Karachi DHA Phase 8, as he was being driven to work along with his 22 year old daughter at about 8:30 am.

He died instantly, slumped on his daughter`s shoulder. The murderers casually walked to their getaway car and drove away. On hearing the shots Saleem`s 20 year old son came out to see what was happening, to find his father shot dead in cold-blooded murder. This episode, lasting not more than a minute or so, turned our whole world topsy-turvy forever.

Saleem was no terrorist, gangster, mafia don, smuggler, sectarian leader, fundamentalist rabble-rouser. He was not a politician, had no feud or even a quarrel with any body, and had never harmed any one in his entire life. He was just a 55-year-old business executive working with a multinational, who chose to return to Pakistan after a four year stint in Sri Lanka to be in his own country, just going off to work for a living. A more lovable and caring person would be har

Excellent article. Any mention of SPDC means the writing is a must-read anyway. Kudos to the SPDC team for consistently bringing excellent social development literature to the table.

Interesting how we sit up and listen when the IMF or the WB tell us we are doing poorly. The situation as some of the readers mentioned is not as simple as who to lay the blame on. The money that you desperately need for your grandiose (sometimes redundant projects, like the Kalabagh Dam) can only come from these multilaterals. Being a third world country is no fun, you have to listen to the dictates of the hand that feeds, even when you know the cons outweigh the pros. The structural adjustment facilities the social action programs...all of them added to the numbers below the poverty line not just in Pakistan but in several other nations as well. According to one study, 12 out of 15 African nations that were included in WB economic programs did more poorly in poverty statistics than non-participant nations.

But then that is only part of the story. Each country has the right to take its own actions. If we take the example of India`s fiercely independent inward-looking economic policies of a couple of decades ago we can see one reason why it is dictating the global market right now. I am not saying that is necessarily the way to go for Pakistan, but searching for indigenous solutions to our growing income inequality certainly is. The Pakistani leadership is in a position to take some bold steps right now, it has done so on many levels already so why not now abolish a meance like feudalism? If India did it years ago, so can we. The poorest of the poor is the landless peasant who sells his labor to the landowner for a non-existent fee, his future generations are mortgaged by the landowner, who is also the village moneylender. This is the worst form of economic abuse.

If combating poverty has to be a priority it has to be many-pronged approach. Literacy and employment growth are certainly two of the most important factors, but then so is improving rural economic sustainability, since that is where the bulk of our population lives. If there are improvements in rural infrastructure, there will be sustainable rural economic growth which will also help decrease rural migrants to the cities, in turn easing pressure from the limited employment and housing opportunities in the cities.

Ghazal

I was actually kinda proud to be indian today morning.Getting ready almost all the news channels i clicked on, BBC, CNN. NDTV, DD,Headline news , STAR all had blurbs of Condoleeza Rice and Natwar Singh`s press conference where she used the two terms ``global factor`` and ``global influence`` when alluding to India.They showed photos of Natwar meeting Bush and said Bush described india as a ``global power``.The chinese have now officially mentioned that they welcome india for a permanent seat at the UNSC.Meanwhile the stock market has been crashing in Mumbai.Too much of a good thing i guess!!.Anyways, we all know that the stock market is just a legal scam anywhere in the world.The indian economy is real now, its` strength is real and more so its` potential.That the world is acknowledging us is what makes me happy.

I raise a toast to the average indian, exemplified by the middle classes, not sophisticated or intellectual, but doggone intelligent and hardworking, now reaping the fruits of their labor.They drive the same cars as their counterparts in the west, enjoy the same lifestyle ,and what with airlines competing to enter india and indian carriers allowed unfettered access the world over , vacationing abroad is becoming as common as a vacation in india.Air India`s low cost arm, Air India Express is offering an inaugral airfare of Rs.2750.00 from new delhi to dubai this month!!!.Hey, even an autorickshaw driver can take a trip outta the country for the weekend.The india of today is exemplified by young people like Shahzad kalim, 24 years old and winner of Lakme Fashion House, a reality show on STARONE!!.His parents wanted him to be a doctor someday, but instead he chose fashion, went on this show and caught the attention of Donatella Versace, who was in Mumbai and was one of the judges in the finals!!!!.Good luck to him and all the other young indians who are breaking out of the stereotype of doctor, engineer, accountant treadmill.Also, the kid from the lower middle class suburb of Mumbai who went on to become the first ``indian idol`` is all set to release his first album.Good luck to him too!!!.

Also, saw a blurb of Musharaf describing the LoC as a ``soft border`` to two white tv interviewers!!!.Reality my friends.I like Mush.He knows when to fold and does it in style.Good man.`

I forgot to mention in my earlier interact #24.......excellent article, and more so intelligent interacts, except mine!!!..Yes , there is a reason why i`m trying to bring up india as an example in the south asian region.If we(indians) can do it and get the world to respect us, pakistan can too.If pakistan can do it independantly, all power to them, but i believe that if pakistan were to join india in creating a free market for south asia, all the peoples of the region will benefit.India by itself is a big market.You have to give the devil its` due.pakistan should be more accomodating towards india for its` own advantage!!!.

ghazalmir11 #23

`` Interesting how we sit up and listen when the IMF or the WB tell us we are doing poorly. The situation as some of the readers mentioned is not as simple as who to lay the blame on. The money that you desperately need for your grandiose (sometimes redundant projects, like the Kalabagh Dam) can only come from these multilaterals. Being a third world country is no fun, you have to listen to the dictates of the hand that feeds, even when you know the cons outweigh the pros. The structural adjustment facilities the social action programs...all of them added to the numbers below the poverty line not just in Pakistan but in several other nations as well. According to one study, 12 out of 15 African nations that were included in WB economic programs did more poorly in poverty statistics than non-participant nations. ``


`` But then that is only part of the story. Each country has the right to take its own actions. If we take the example of India`s fiercely independent inward-looking economic policies of a couple of decades ago we can see one reason why it is dictating the global market right now. I am not saying that is necessarily the way to go for Pakistan, but searching for indigenous solutions to our growing income inequality certainly is. The Pakistani leadership is in a position to take some bold steps right now, it has done so on many levels already so why not now abolish a meance like feudalism? If India did it years ago, so can we. The poorest of the poor is the landless peasant who sells his labor to the landowner for a non-existent fee, his future generations are mortgaged by the landowner, who is also the village moneylender. This is the worst form of economic abuse. ``

Indian economic policies of the past were a disaster. If India had launched its reforms in the mid-1970s instead of 1990 you would be looking at a economy twice or thrice the size.
You are right about every country seeking its own path to success.

GDP growth is a necessary but not sufficient condition for poverty reduction and if we have learnt anything from the past several decades of Third World (lack of) economic development, it is that institutions and incentives matter.

Is there any ``magic bullets?`` Sure there are. Build adequate infrastructure (roads, power plants, etc), build enough schools, keep the tax rate, inflation rates, and govt budget deficits low, keep investment high, keep the bureaucracy (relatively) honest, and keep increasing both exports and the value-added/high-tech component of exports. You may not be guaranteed to succeed spectacularly, but at least you are guaranteed not to fail spectacularly either.

This is, of course, a very simple policy prescription. As Von Clausewitz said, ``winning a war is a very simple matter; but in war it is the simplest things that are the hardest.`` For better or worse, this is the best government we`ve had in a veeeery long time. Scary isn`t it? Bad as he is, Musharraf still looks good in comparison.

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Side note to the hyper progressives and professional critics of the SDPC, have you bothered to work out the correlation (I won`t say causation... yet) between

``In the mean time, the level of poverty deteriorated to 34 per cent of the total population at present as against 30.6 per cent in the 1990s. This tells us that the poor in Pakistan are getting even poorer.``

And the fact that we breed like rabbits?

Lets not hold the people responsible for their own actions. Quick blame the usual suspects! Army! IMF! WB! DC!

Our TFR was still well above 5 (some say just above 6!!!!) during the 1980s and 1990s while India`s was about 3-3.5 in that time period (Sri Lanka`s was even lower). Maybe Malthus was right (in this context at least). The poor and stupid will breed themselves down to the lowest possible level.

Why is our TFR so high? Are we too stupid to realize the connection between population growth and poverty growth? I don`t think so. If you look at Orangi, it has a pretty low TFR and the women there actually want to know about contraception. Is it Islam? Probably not. Other muslim countries have much lower TFRs. So what gives? I vote for the particulary stupid and Saudi-influenced brand of Islam we`ve got. People have other candidates?

As so many posters have iterated over and over again that GDP growth - althought it does contribute to the bottom line - its not the only requisite for poverty alleviation...Strengthening of the social institutions is equally if not more important.

GDP growth requires a freer market economy - free from the shakles of Govt beauracracy - a fact that is not yet accomplished by the GOvt at present...

Secondly it requires strong instituitions of remedial recourse ie a strong judiciary - which the present Govt has actualy weakened

Also civil security ie- the police force needs to be decentralized- and held locally accountable in the metropolitan areas - a task in which the army is an actual impediment
because a weak police ensures a stronger army strangehold. Moreover the paindoo siblings of the army generals are often found in the police forces - thereby creating a patronage system for the army families.....


Sooner or later the GDP growth will also slow down because of the aforementioned reasons...

Social spending ie - infracstructure and most importantly human resource development is an essential component of GDP growth. GDP growth requires access to Capital - which an efficient Banking system and a stable macroeconomic polices can provide , - raw materials - both for agriculture or industrial sector - which requires a well developed infrastructure to reduce transaction costs - and a skilled labor force - which is in short supply - because of an archaic educational infrastructure.... and last of all a multi-faceted intelligensia which is able to to generate ideas on the basis on which both GDP growth and social development can be on par - The last component is completely missing in the Pakistani body politic - There are no well developed institutions that nurture economic or social policy goals in pakistan. Part of it is cultural - and the values the culture espouses - Its is inherently tribal - consequently broad based thinking does not exist - and the value system tends to produce technical coolies ( you need not go to Pakistan to see this - of the 1.5 M Pakistani emigres to North America , many with advanced technical qualifications ( primarily physicians and engineers) - a cohesive broad based vision does not exist - even in specfic disciplines , for a variety of reasons, -this intellectual complacency can easily be contrasted with emigre populations of both the INdians as well as the jewish communities) - consequently leadership in soci-economic policies is primarily based on political loyalties as opposed to intellectual capital. Consequently debates revolve around abdicating responsibility and a messianic belief of a Mehdi - be it MUsharraf or Shaukat Aziz to resolve all issues....

fuzair #27

`` GDP growth is a necessary but not sufficient condition for poverty reduction and if we have learnt anything from the past several decades of Third World (lack of) economic development, it is that institutions and incentives matter. ``

necessary not sufficient is the right pharse. But I will be surprised if sustained economic growth does not lift people out of poverty. This assumes that there are no cultural or govt restrictions.

`` Our TFR was still well above 5 (some say just above 6!!!!) during the 1980s and 1990s while India`s was about 3-3.5 in that time period (Sri Lanka`s was even lower). Maybe Malthus was right (in this context at least). The poor and stupid will breed themselves down to the lowest possible level. ``

Pakistan received a lot of $$$ from the West for supporting anti-Soviet rebels in Afghanistan and from the Gulf states in terms of remmittances for low skilled workers. The $$$ from the West have flowed in temporarily post 9-11.

In July 2002, the Asian Development Bank published a detailed study titled the Poverty in Pakistan: Issues, Causes, and Institutional Responses.

In this paper, the ADB first made the following observations:

1. The % of people living below the poverty line increased from 26% in 1991 to 35% in 1999.


2. The starkest increase in povert was in rural areas where % of people below poverty line increased from 24% to 40%!


3. Rural poverty is highest (44%) in NWFP.


4. Within Punjab, the poorest districts are in Southern Punjab (Dera Ghazi Khan, Bahawalpur, Rahim Yar Khan, Bahawalnagar, Muzaffargarh, Layyah and Rajanpur)


5. Although overall poverty level is 35%, the overall poverty level for females is 52%.


6. The average fee of a government school in Pakistan is Rs 1,675 per year. The average fee of a private school is Rs 4,477 per year.


7. 65% of children in Balochistan and Sindh do not get basic immunization from diseases such as TB, tetnus, measles and polio each year


8. A typical poor Pakistani household is headed by a 40-year old male with 7 or more children who (like their parents) will never go to school, will never get basic immunization and live in a village.

The ADB report then goes on the enumerate the causes of poverty in Pakistan:

1. Pakistan agricultural sector grew only 1.75% whereas manufacturing and services sectors grew by 4.5% during the 1990s. Since agricultural sector employs 65% of the workforce, its sluggish growth impacts more households.


2. Government investment in social sector decreased from 9% of GDP to 5.5% during the 1990s. But the private sector did not fill this gap. Private investment stagnated at the 7.5% level throughout 1990s

In Pakiland, the Army is the land developer.

In India, the Army leaves the major cantonments in cities and hands over its
properties to the civilians.

That is the difference between Pakis and the dhoticlad-bania-yindoo

Of course, some indian-punjabi fools go to Pakiland and tell us we are all the same
because we eat similiar food.