Rapid and sustainable GDP growth rate is taken as the most effective measure to reduce poverty, especially while devising a strategy to achieve Millennium Development Goals. All the developing countries had speeded up their efforts to achieve a high economic growth rate, surpassing the 8% per annum in certain cases, particularly countries like China, India, Pakistan (from 2003 to 2005) and some African countries like Ghana etc.
But at the end of the day, it was revealed that despite the statistically calculated reduction in poverty, based on the increased per capita income of these countries, the plight of the majority of the downtrodden was not lessened.
No doubt, poverty has fallen in some of the urban pockets of these countries, but according to the report by the commission on measurement of economic performance and social progress, set up by the French government recently, poverty statistics, based on household income and expenditure surveys of various segments of society in quite a number of developing countries, have depicted a static status of poverty among the major sections of poor.
Positive quantitative change in per capita income of the targeted countries has not brought a qualitative change in social well-being of a major chunk of the population living below the poverty line. With the exception of the industrial and business hubs in these countries, the poor living in the less-developed or rural areas are not better off economically, as well as socially.
As one recalls during the mid-decade of 2000, when Pakistan had recorded an economic growth rate of 8% and statistics revealed an almost 10% reduction in poverty, quite a large number of people from low-middle income brackets were pushed below the poverty line due to lack of job opportunities, pay cuts or loss of jobs, due to the restructuring process in quite a number of public sector organisations and above all due to rising food inflation, which resulted in the depletion of their assets.
Actually, these are distributional issues relating to resources and services, which falsify a positive official data on poverty released by the relevant governments. The above said French Commission views poverty reduction, through increase in per capita income and economic growth rate, in conjunction with non-income dimensions of the poor people's well being.
It is a common scenario with low-income, developing countries, in particular, that they, while recording declining poverty data, based on the economic growth rate and increasing per capita income, continue to have more poor people due to a higher population growth rate than the percentage with which poverty is declining in these countries.
Secondly, the increasing share of the private sector in the economy, both in respect to social services as well as the process of production, is a favourable indicator of fast and sustainable growth of the economy, which is essential for alleviating poverty in the country.
But a cut or the altogether elimination of public sector services would adversely affect a major section of poor. A reduction in the provision for subsidised or cost-free services like education, healthcare and transportation would, in reality, aggravate poverty, particularly in the low-income developing countries. Whereas the standard official poverty statistics, not based on standard household survey measures of well-being in fact, overstate the improvement in the well-being of the impoverished population due to the increasing role of the private sector in providing essential and social services.
As is evident in the case of Pakistan, where the initiative of the private sector to promote quality education at all levels has in reality, resulted in increasing the financial burden on poor families in quest of quality education. Even the poor want to send their children to private schools, which are running on profit with exorbitant tuition fees. According to the official statistics available in this respect, almost 25% of the children from low and middle-income families are enrolled in private schools for primary education.
Household income and expenditure survey results, forming a criteria for determining the level of poverty, also are misleading. In this regard, inequalities within households, need to be taken into account as women and children in a family are given lesser weightage. Measures taken for the well-being of families are to be divided by household size, and per-capita income and consumption at the family level, which in turn, needs to be based on realistic figures, pertaining to each member of the family with emphasis on gender and age group.
In Pakistan, where women, particularly in rural areas, are totally ignored in census surveys, one cannot rely on information relating to the well-being of impoverished families just on the basis of the economic growth rate, resulting in improved per capita income.
Due to Pakistani women's inaccessibility to social services, like education healthcare and their lacking in ownership of physical assets, their percentage in the economically disadvantaged population has exceeded 70%. Thus the poverty rate, reflected in official statistics, is always lower than what the realistic income distribution in the country would show.
In Pakistan, poverty continues to be much higher in the rural and less-developed urban pockets. In terms of the number of the poor, about 35 million out of a total of 47 million impoverished poor were found to be living in the rural areas in the 1990s and the difference in the incidence of poverty among the rural and urban, which was 5% in 1991 increased to 14% by the year 2000 due to the disproportionate impact of the overall economic growth rate.
Similarly, developing countries, which have been subject to structural changes in all sectors of their economies, are faced with a situation of diverse impact on various tiers of the poor, based on their geographical location as well as their access to economic opportunities.
These structural changes resulted in providing better employment and work opportunities to some poor people, whereas a large number of the poor were laid off from their jobs. Thus by increasing working efficiency of the restructured units, instead of bringing economic well-being to all, enhanced the incidence of poverty.
In Pakistan, during the late nineties and the early decade of 2000, the financial sector and various state-owned organisations gained significant momentum in their profitability, business expansion and overall operational efficiency, thus providing benefit to some skilled labour, but consolidation and the restructuring approach laid of a sizable number of semi-skilled and unskilled workforce, thus mitigating the expected well-being of the working class.
On the other hand, the growth rate of the agriculture sector, either remained stagnant or slowed down, resulting in the plight of the poor farmers. Thus the high economic growth rate and improved per capita income could not reduce the incidence of poverty, despite official figures depicting a 10% reduction in the number of poor during the said decade. Statistical measurements of poverty gives unrealistic figures in case of a high death rate among the poor.
The death of the poor, both in cases of natural disaster or man-caused disaster in certain regions of a country, brings misery and suffering, thus aggravating poverty, but statistics showing a lesser number of poor due to catastrophic deaths in that region, show an overall improvement in the number of people coming out of the poverty net.
As such the emphasis of Commission on the measurement of economic performance and social progress on the use of household surveys, covering a set of data, based on gender inequalities within households, environmental, rural and urban disparities and birth and death rates of a country, is the realistic approach to determine the level of poverty. It is expected to give a true picture, enabling governments to formulate economic policies leading to sustainable well-being than short-lived relief for the poor.
Comments
Comments are closed.