Mahbub-ul-Haq Centre's 2012 report on "Governance for People's Empowerment" stresses on the need to go beyond traditional measures of poverty based on income to incorporate multiple deprivations suffered by the poor, such as lack of access to education and health when estimating the extent of poverty in Pakistan.
The last available official estimates for poverty released by the Government of Pakistan are more than 6 years' old. According to these estimates, the proportion of people living below the calorie-based-income poverty line was 22.3 percent in 2005. This measure of poverty may be misleading as it ignores multiple deprivations suffered by the poor. In broader terms, poverty is a denial of opportunities-the opportunity to have access to good quality education and health-care facilities and the opportunity to earn a decent living. It is the inequality in opportunity for poor people to develop their potential that is deemed more unfair than the inequality in income alone.
The report reveals the latest estimates for the Poverty of Opportunity Index (POPI), pioneered and developed by Dr Mahbub-ul-Haq in 1998 for Pakistan and a few other select South Asian countries. The POPI goes beyond what is captured by traditional measures of poverty to include poverty of opportunity in health and education, in addition to income poverty. In recent years, the United Nations and the World Bank have also developed indicators such as the Multidimensional Poverty Index and the Human Opportunity Index that aim to capture the multiple deprivations suffered by the poor across the world.
The incidence of poverty for Pakistan, as measured by POPI, is much higher at 29.2 percent compared to calorie-based national income poverty estimates at 22.3 percent. This shows that income-based poverty line estimates only tell-part of the story-individuals living above the income poverty line may still suffer deprivations in education, health and other living conditions.
It must be noted that since POPI estimates are based on latest available official data, which is more than 6 years' old in Pakistan's case, the actual extent of deprivation experienced by the poor may be higher. Some estimates based on Asian Development Bank and World Bank data suggest that poverty has increased by an additional 18.9 percentage points since the government's last estimation in 2005-06. According to these independent estimates, total poverty in the country may be as high as 41.2 percent, with more than 74 million people living below the poverty line.
Comparing POPI estimates for Pakistan with other countries in the region also reveals interesting insights. Even though income-based poverty estimates in India is much higher than in Pakistan, the former has a lower incidence of poverty as measured by POPI (27.8 percent) because India's record is better in terms of providing education opportunities for its people. The report suggests that a broader measure of poverty like POPI is useful for policy purposes as well. Policy makers need to understand that poverty alleviation efforts should not only focus on income transfers, but also on building the basic capabilities of the poor to earn a living.
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