The fight against poverty

Humanity has long suffered from extreme poverty, facing hunger and starvation throughout history. However, the situation has dramatically improved due to scientific and technological revolutions, leading to reduced hunger and fewer food shortages.

Still, the dream of eradicating poverty or extreme poverty remains unrealised. Pakistan is one of the most affected countries, with almost 40 per cent of the population living below the poverty line. Unfortunately, policymakers appear largely indifferent to this issue.

The fight against poverty is a prolonged struggle that humanity has yet to win. The urgency of the situation demands prioritisation, and there is an immediate need to wage an all-out war against poverty. Additionally, the current definition of the poverty line – $2.15 a day – is inadequate and needs revision. Even by this definition, the Global South is severely affected by poverty and extreme poverty.

According to World Bank figures, around 716 million people are living in extreme poverty worldwide, an increase of 23 million from last year. While the number of people suffering from extreme poverty has decreased over the last two centuries, the battle is far from over in countries like Pakistan, where poverty is rising day by day.

Severe deprivation, including the inability to meet basic needs, is rampant in much of the country. Pakistan ranks 52nd on the list of the world’s poorest countries, according to the International Monetary Fund (IMF). The dire situation is further illustrated by Pakistan’s position at 161 out of 192 countries on the Human Development Index (HDI). Few countries in Africa, Asia, and the Middle East experience such widespread deprivation and lawlessness.

As an ally of China, Pakistan could follow the Chinese model to reduce poverty, though other economic models – American, European, Indian, Taiwanese, or Singaporean – could also be pursued for economic growth and development. An immediate start to a comprehensive poverty reduction programme is needed, as current social safety net initiatives like the Benazir Income Support Programme (BISP) are inefficient and insufficient to tackle poverty.

One challenge in addressing poverty is accurately measuring it in monetary terms. The current definition of the poverty line does not account for all aspects of poverty. Poverty extends beyond food security and encompasses the entire Human Development Index and socio-economic indicators. The international poverty line is an average of poverty lines in the world’s poorest countries.

In Pakistan, a labourer earning Rs600 a day is technically above the poverty line, but in reality, he or she is enduring extreme poverty. With such high food inflation in Pakistan, this amount is barely enough to survive, as the labourer struggles to secure even two meals a day, let alone meet other social needs. This is why an upward revision of the international poverty line is urgently needed.

Infrastructure development is key to economic growth, which contributes to poverty reduction. The resources for infrastructure development could be arranged by sacrificing some of the non-development expenditure. Pakistan needs to develop farm-to-market roads, which are absolutely necessary for growth and to reduce poverty as part of sustainable development on a long-term basis.

GDP growth can contribute a lot to poverty reduction, subject to the conditions that fair distribution of wealth be ensured through a better transparent taxation system. There is also a need to achieve GDP growth of not less than six per cent for at least a decade to effectively fight against poverty. The debt trap along with other issues are hurdles on the way to achieving such figures of growth in the short term. These issues may be addressed at the earliest opportunity to achieve that goal.

Massive industrialisation and investment are other areas of concern for Pakistan to promote large-scale manufacturing to enhance exports. The hurdle in the way of the manufacturing sector is the rising cost of production. That needs to be addressed to enhance production through manufacturing; the best strategy for that could be to functionalise the special economic zones as suggested in the CPEC between Pakistan and China.

Besides industrialization, developing industrial clusters, internet-based e-commerce and the use of artificial intelligence (AI) may contribute a lot to economic development and would also reduce poverty in return. Technology is the key now. There is a need for more focus on such initiatives to address the issues of poverty and unemployment. IT and telecom are the new key initiatives to address issues that are hampering our economic growth.

Even though poverty reduction has been a significant focus for the government and international organisations, poverty is rising – engulfing almost 40 per cent of the population of Pakistan, pushing them below the poverty line. Government initiatives have been in the form of a poverty alleviation fund providing microfinance and livelihood support, BISP cash transfer to poor families, and the Ehsaas programme for poverty reduction launched in 2019.

Besides government efforts, various NGOs and civil society organisations (CSOs) have also been contributing a lot to reducing poverty in Pakistan, prominent among them the Pakistan Poverty Alleviation Fund (PPAF), Save the Children and Oxfam in Pakistan.

International organisations including the United Nations, World Bank and the Asian Development Bank have been sponsoring multiple programmes and projects to address the issue of poverty in Pakistan. The UN has been working on sustainable development and poverty reduction. The World Bank has been supporting poverty reduction initiatives through various projects and programmes. The Asian Development Bank has been providing loans and technical assistance for poverty reduction. The IMF has also been emphasising addressing issues of poverty by extending social security programmes for the poor to reduce poverty through BISP and Ehsaas.

Poverty reduction is not possible without economic growth and development in the country. The crucial decision long awaited here is to activate the local government system. An inclusive political system needs to be evolved through consensus to achieve the goal of a stable economic system. No system whatsoever can deliver without consensus and basic tenets/principles on which the entire foundation of the building is based. A national dialogue is the need of the hour to achieve political and economic stability. Once the goal of economic stability is achieved, then all other programmes can take shape to achieve the desired results of economic growth and poverty reduction. The SCO Summit may be the start of such stability in the days to come.

There is a need to devise a strategic plan to start ambitious poverty reduction programmes to save the poor from the brunt of high food inflation. The non-development budget should be reduced to enhance public sector development spending to achieve high growth that would contribute to poverty reduction in return.

The fight against poverty has a long way to go in Pakistan to mitigate its worst effects. But that is the only way to proceed, whatever the strategy is adopted to achieve this goal. In fact, our survival hinges upon economic growth and poverty reduction.

The writer is a former additional secretary and can be reached at: hassanbaig2009@gmail.com