Poverty Politics!

Low growth, high inflation, natural disasters and internal displacements: these are the issues that have dominated the countrys socioeconomics for the past three and a half years. Yet the so-called democratic czars in high places appear oblivious to the upshots of these adverse events. Poverty experts suggest that poverty incidence has increased in Pakistan since 2008. Some put the headcount poverty index at 40 percent; some put it around 30 percent. The rising trend in poverty is also found in the "Household Integrated Economic Survey, 2011", too. It reveals that average household expenditures rose faster than household incomes since 2008. The impact of floods is besides this. Yet the government is not willing to put a number on the poor, even as it tries to address the issue through cash grants. It is unfortunate that the poverty measurement process in Pakistan is not deemed transparent by independent economists. The Musharraf-era decline in poverty, from 34.5 percent in 2002-03 to 17.2 percent in 2007-08, is viewed with suspicion, along with the income and budgetary accounts. The current regime is also given flak for sitting tight on the data and not releasing poverty estimates for over three years now. The regime is not endorsing the seemingly low 17.2 percent poverty figure of 2007-08 (validated by the World Bank) as a baseline. Perhaps they don want to lose political capital by admitting that they presided over a worsening human development landscape. Apparently, Pakistan is not the only country mired in such controversy. Poverty measurement is a bone of contention in quite a few developing countries. So much was the disagreement over the estimation of official poverty line in India that the Congress government recently had to outsource it to McKinsey & Co. In Pakistans case, this controversy has begun to cause polarization among policymakers and economists. It is painfully obvious that the big picture is being missed out here as the intellectual discourse has been limited to credibility of poverty estimates. The focus needs to be on precise identification of poverty incidence, designing targeted social safety nets for the poor, and putting economic growth and job-creation at the heart of agenda. Take the current methodology for instance. The consumption-oriented official poverty line does not capture povertys essence in that it misses out on important social, economic, environmental, gender and governance-related dimensions of poverty. There are multiple deprivations which cause poverty, and go beyond just calorie intake. Some developing countries have moved on to using "Multi-dimensional Poverty Index", developed by the "Oxford Poverty & Human Development Initiative". MPI identifies poverty on the basis of deprivations on multiple dimensions, which include health, education, living standards, empowerment, and psychological wellbeing. The dimensions vary across demography to identify poverty incidence more meaningfully. It is time to stop making mockery of the misery of poor and the vulnerable. One way to put this sorry episode behind is to establish an autonomous institution for poverty measurement, which also involves independent economists, academics, and poverty experts. This institution should critically re-examine the poverty methodology and employ better indicators, such as MPI, for effective identification of the poor. For a new, credible start, the poverty estimates of previous regime need to be revisited. If those estimates are found to be credible, then the 2007 numbers should be accepted and new estimates for later years should be prepared for later years. Based on the track-record of this regime, it would perhaps be naïve to expect any reforms at all!