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EDITORIAL: Surely, neither the government nor the people needed yet another research report to tell them that Pakistan’s poverty level has increased over the years “due to lack of social security programmes, increasing foreign debt, and disproportionate allocations of the Gross Domestic Product (GDP), among other important factors”. These facts, and the reasons for them, are known to everybody for a long time.

Indeed, as the 7th Triennial Poverty and Vulnerability Report compiled by the South Asia Alliance for Poverty Eradication (SAAPE) points out, “Pakistan spends less than 2 percent of its GDP on social protection, significantly below the global average of 11.2 percent.

Only 9.2 percent of the population is covered by at least one social protection programme, with particularly low coverage for vulnerable groups: children (5.4 percent), persons with disabilities (1.7 percent) and the elderly (5.8 percent).“ It also mentions how just 10 years ago the country’s debt was less than its defence expenditure, but now it is four times higher.

These are sobering figures because they point out how Pakistan’s deepening economic crisis isn’t just a matter of fiscal mismanagement; it is a direct driver of rising poverty.

The latest warning from the World Bank that nearly 40 percent of the population is living in poverty is a damning indictment of the country’s economic trajectory. This is not merely a statistic; it is a stark reality for millions of Pakistanis struggling to survive amid high prices, stagnant wages, and dwindling opportunities.

Everybody knows that a big reason for this mess is the country’s unsustainable debt burden. Successive governments have relied on external borrowing as a crutch rather than pursuing meaningful economic reforms.

With mounting debt servicing obligations consuming a vast portion of national revenues, there is little fiscal space left for critical social spending. The result is underfunded education and healthcare systems, crumbling infrastructure, and an economy unable to generate sufficient employment.

The consequences of this economic model are clear. As the government cuts subsidies and raises taxes to meet International Monetary Fund (IMF) requirements, the burden falls disproportionately on the poor. Basic necessities have become unaffordable for many, and social safety nets remain inadequate.

The recent surge in electricity tariffs and fuel prices, dictated by the need to meet fiscal targets, is yet another blow to those already teetering on the edge of survival.

The government must acknowledge that rising debt is not just an economic statistic but a pressing social issue. The obsession with short-term fixes must be replaced with a commitment to long-term fiscal discipline and inclusive economic growth.

Addressing poverty requires more than rhetoric; it demands concrete action to ensure that economic policies do not continue to disproportionately harm the most vulnerable segments of society.

All stakeholders have talked endlessly about abandoning the cycle of debt dependency for the longest time. They also know the painful reforms that are needed to turn things around. But nobody’s had the political will needed for it so far, which is why the economy is imploding and the country came so perilously close to sovereign default just a year and a half ago.

If those in charge of the country do not understand the desperate need to change track even now, they might not have more time or opportunities in future.

Copyright Business Recorder, 2025

Comments

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KU Feb 01, 2025 01:04pm
We have all heard ''if flowers were fools, it was spring time'', well its now ''if flowers were crooks''. Easy to predict govt-characters n their emergency measures n celebrating it, is in offing.
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