Professional Documents
Culture Documents
Introduction
most conspicuous.
are living below the poverty line if the old standard of $1 per day
Asia have the highest number of people living below the poverty
line i.e. 303 million people in Africa and 437 million in South Asia.
The Europe and Central Asia have 10 million people living below
million people living below the poverty line ($1 per day as
standard).
1
As far as Pakistan is concerned, the certain reasons like instable
million. And in the 1990s - between 1990 and 1995 - the number
the problem.
2
1.2 Objectives of the Study
The objectives of the study are as follows
1.3 Methodology
We have collected the data by reviewing different articles from
2. Revi ew of
Liter atur e
now, the poverty bomb goes off” describes that in 1960, about 19
3
required to achieve a daily intake of 2,250 calories per person.
4
Pakistan's economy has traditionally been fuelled by five pumps:
large and vibrant black economy. These five pumps have been
Pakistan was 32.6 per cent of the total population (35 per cent of
rural and 26 per cent of urban) having almost doubled from 17.3
from 8.4 per cent in 1970-71 to 6.2 per cent in 1997-98 and that of
the richest increased from 41.5 per cent to 49.7 per cent over the
poverty forces the poor to minimize risks and as a result they opt
5
prevents risk taking. To preserve security of livelihood they opt
national per capita income grew by less than one per cent per
annum; the growth rates of 6.7 per cent per annum from 1997 to
1988 and five per cent between the second half of the 1980s and
the early 1990s fell to 4.1 per cent and to 3.3 per cent thereafter.
6
markets, state institutions and local structures of power that
access over input and output markets and extortions by the local
from the landlord as many as 57.4 per cent work on the landlord’s
owner cultivated portion of the land without any wages at all, and
substantially below the market wage rate for unskilled labor. That
health is a major trigger that pushes people into poverty and the
Thus the analysis and evidence within this new poverty paradigm
7
poor to get better access over markets, governance, and the
building for the poor and action research over the last two
perpetuate poverty.
released last week, the IMF said the economic outlook was
to put the nation on a better footing. The report came just days
8
for the country, under a $1.3bn poverty reduction program.
Two weeks ago, the State Bank of Pakistan came out with its
Pakistan between 1993 and 1999. During this period, the level of
9
declined to 6.9 percent from 7.9 percent in 1987, and the income
to 6.5 from 5.2 for all areas. While poverty has intensified in the
indicators are the worst in South Asia. The report explains that
10
K J M Var ma, 2003 in his article “Pak
country's state bank said the level of poverty rose to 33 per cent
from 20 per cent in the last 15 years, even though the economy
the GDP growth remaining at 5.1 per cent in the fiscal year 2002-
during the 1990s. Not only the income poverty but also the
11
Anjum Altaf , 2003 in his article “Op-ed:
the biggest and most basic reason for poverty. East Asia is a well
than one dollar a day has fallen almost two-thirds, from 720
The political and economic choices of such ruling groups are not
12
Development Division vide a letter number 1(41) poverty/PC/2002,
be the official poverty line. The letter implied that the poverty line
place to place, and every country marks its line with reference to
poverty line. They remain silent on this issue and follow the
are those basic needs that one has to have in order to live a
modest living? What are the minimal needs? Do they vary for
question was put to The Asian Development Bank, their reply was
13
a total of 32.2 percent of total population of Pakistan is living
well below the poverty line, and that the ADB refers to these
their criterion for demarking the poverty line, stated that the IMF
their crop yield could not match the cost of production, forcing
them to borrow from the bank, or other sources, for both the next
14
that at the end of day the common people suffer the most and are
never reach them. The rulers and policy makers in Pakistan have
policies? Were they not credible then? One thing is for certain
and that is the inflation will continue to rise and the poverty line
will be re-defined yet again, as the divide between the rich and
poor widens. Till such a time the poor will keep struggling as they
the terrorists & the terrorism from the world. The crisis of
15
market rises and foreign exchange increases hides a more
are the officially recorded figures - the real figures are believed
increasingly difficult for the ordinary citizen to pay fat utility bills
derailed in 1996. The gap between the rich and the poor is
economics has its own force. Militancy and greed cannot become
the defining images of a new century that began with much hope.
16
Pakistan is lagging more in human development than in economic
during the 1990s was not pro-poor because the growth rate was
was reduced. The income poor in Pakistan not only suffer from
17
gap between the rich and the poor in the country widened in the
period 2001 and 2005 (when the two surveys that have provided
the data were held). The ratio of the income of the richest 20 per
cent and the poorest 20 per cent went up from 3.76 to 4.15. The
these services more costly and less affordable for the common
man. The government’s own figures say that the poor are now
The poor are spending 50 per cent more on transport and 11 per
never be achieved.
period was 130 million with most of it coming from China. In Sub-
18
by 100 million during the period. The Central and Eastern Europe
on global level has declined, the gap between the rich and poor
the large income gaps at the initial level. In a world of six billion
people, one billion have 80 percent of the income and five billion
recent years. The real GDP has grown at an average rate of over
7.5 percent per annum during the last three years (2003/04 to
percent per annum, the real per capita income has grown at an
19
July – December 2005. Total remittances inflows since 2001-02
billion. Over the last five years the government has spent Rs.1332
20
kapra aur makan—food, cloth and shelter. Amartya Sen aptly
year. Under the CPI, poverty headcount dropped by 10.6 per cent,
under the SBI it dropped five per cent. Those two estimates
population are just above and just below the official poverty line.
21
estimated rate of price inflation between 2000-01 and 2004-05 of
the poverty line also implies that families are quite vulnerable to
falling into poverty with the slightest run of bad luck. A drought
—all of these can cause families to fall into poverty. The 2004-05
poverty data show that rapid growth did reduce poverty quite
rural infrastructure.
in their article “Central Board of the Rich” say that Pakistan's tax
This has also been observed by the State Bank of Pakistan (SBP)
22
below the poverty line for most of the time but not always during
a defined period. Of the rest of the poor, 32 per cent were found
extremely poor are households that are always below the poverty
line, all the time during a defined period. On the other side of the
is widening the existing divide between the rich and the poor. The
without evaluating its impact on the economy and the life of the
3.15 per cent (Source: Central Board of Revenue (CBR) Year Book
the middle class is being pushed into lower middle class category
while the total number of persons living below the poverty line is
23
also increasing at an alarming pace. The priority of our rulers --
they will have to find ways and means to come out of this tangle
percentage of total revenue is only 21.06 per cent and not 31.73
04 is a dismal 2.1 per cent and not 3.02 per cent as claimed by
the CBR. It proves beyond any doubt that the tax system is
24
? Imposing indirect taxes on goods and services under the
collection tool;
25
imported goods, if we take into account customs duty, 15 per
cent sales tax, and mandatory value addition of 10 per cent and 6
per cent income tax.) But the mighty sections of society such as
taxes rise to over three-fourth (78 per cent).GST claims 9.3 per
only 5.9 per cent of the income of the richest 10 per cent. In
cent higher than on the highest decile. But CED is the most
regressive tax. Its burden on the lowest decile is 100 per cent
higher than on the highest decile. The customs duties are the
rice from GST. This, however, does not imply zero-rating of GST
26
production are all subject to sales tax. That is why though the
nominal tax rate on these items is zero, the effective tax rate on
taxes is 0.3 per cent, while the burden of indirect taxes is 13 per
incomes halved from 0.6 per cent in 1987-88 to 0.3 per cent in
2001-02. The progressively of the tax rate has also declined over
this period. This can be discerned from the fact that while the
income has doubled from 0.1 to 0.2 per cent for the 7th decile,
the corresponding burden for the 10th decile has declined by half
from 4.3 to 2.1 per cent. "The preceding incidence analysis of the
tax regime shows that the richest 10 per cent of households bear
27
3. Analysis of Data
3.1 P as t Anal ys is
1960’s
stands out as the decade with the best performance. The growth
the period of 1960’s was good for the economy although there
were certain factors such as Indo-Pak war 1965. Ayub khan’s era
28
presence was seen everywhere, directing and encouraging the
reducing poverty.
10
0
Real GDP
Agr(%) Manu(%) CPI(%)
%
1970’s
29
The 1970’s did not prove to be very pleasant for the economy and
this era were that the most of the industries nationalized in that
no. of people living below the poverty line in 1970 was 46.53% of
30
14
12
10
0
Real GDP % Agr(%) Manu(%) CPI(%)
60
40
20
0
pop.b elow poverty
% 46.53
1980’s
31
Manufacturing (%) 8.2%
CPI (%) 7.2%
Trade deficit (%of GDP) 8.9%
Current account deficit 3.9%
% of GDP
Pop. below poverty (%) 30.68%
in 1980
economy as the real GDP growth rate rouse to 6.5% and the
financial ads and resources. Thus the no. of people living below
poverty in Pakistan.
32
9
8
7
6
5
4
3
2
1
0
Real trade CAD(%of
Agr(%) Manu(%) CPI(%)
GDP % deficit GDP)
40
30
20
10
0
pop.b elow poverty
% 30.68
1990’s
33
Trade deficit (%of GDP) 4.4%
Current account deficit % of 4.5%
GDP
Pop. Below poverty line (%) in 22.11%
1990
full tenure. Thus we can conclude that it was the time of total
Pakistani Rupee.
the 90’s. Still the policy in the end of the 90’s proved to be
34
10
9
8
7
6
5
4
3
2
1
0
Real GDP trade CAD(%of
Agr(%) Manu(%) CPI(%)
% deficit GDP)
30
20
10
0
pop.b elow poverty
% 22.11
2004-2005
35
Real GDP (% growth rate) 8.4%
Agriculture (%) 7.6%
Manufacturing (%) 12.5%
CPI (%) 9.3%
Trade deficit (%of GDP) 1.3%
Current account deficit % of 1.4%
GDP
Pop. Below poverty line (%) 23.9%
Since 2004 to 2005 again it was the era of economic growth for
another 170 years before it can stake a claim for a place in the
36
14
12
10
0
Real trade CAD(%of
Agr(%) Manu(%) CPI(%)
GDP % deficit GDP)
30
20
10
0
pop.b elow poverty
% 23.9
The graph 1.10 shows the overall trends in the poverty since
1963-1999.
37
Graph 1.10 Poverty trends in Pakistan 1963-1999
38
should control corruption properly. Circulation of money in few
5. Appendix
Tables
1.1 Different factors contribution in Pakistan Economy 1960’s
Graphs
39
1.7 Population below poverty line in Pakistan 1990
6. Bibliography
By Shah N. Khan
By K J M Varma,
By M Ziauddin, http://www.twnside.org.sg
40
Anal ysi s by Shahzeb Jillani, BBC World Service, Urdu
section
Response s, 2006
By T . Kurosaki, www.google.com.pk
By Qurat-ul-ain, http://qurratulain.wordpress.com
2004
7.
Refer ences
www.worldbank.org
41
Wiikipedia search engine
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