Poverty as a National crisis

Poverty is a multidimensional phenomenon. It cannot be restricted to the unavailability of food only. It is about food security and the certainty that the food chain won’t be broken abruptly or behave unpredictably. A hope can be entertained that prices of commodities would remain the same for a certain period without the formation of any cartels. Precious earnings would not be eviscerated.

Poverty also includes the inability to attain bare minimal standards of living, affordable clothing, and have access to health facilities and clean drinking water. Additionally, it includes lack of access to educational, economic, and political opportunities and resources. Consistent low incomes in households make people prone to poverty. Such households are at the margins of subsistence and highly vulnerable to risks and economic shocks.

A broad survey has been conducted in a study which identified certain key characteristics of poverty. A household having a low literacy profile and minimal education opportunity is vulnerable to poverty. The situation gets further aggravated when vocational skills and training is not made available to the people. Although the economic model exists of a larger than usual household having more earning hands that keep it afloat, yet the incidence of any health or financial accident rips apart the economic equilibrium.

Possession of tangible and intangible assets also explains the poverty profile of an individual. A low savings rate would not allow investing into any tangible or intangible asset. This could hurt economic sustenance and restrict exploiting any incentives that could be reaped. A disproportionate reliance on informal sector employment opportunities also creates uncertainty because economic bubbles may burst, leaving the employee jobless with no recourse to any other opportunity.

Poverty eradication and alleviation can be achieved by following different approaches. A strong argument has been made in favour of providing employment opportunities to people so as to utilize their latent talents, increase the economic activity in different arenas and achieve a sustenance-based economic model. A case in point has been the example of China where in the private sector in collaboration with the government tried to give maximum employment to people. In two decades from 1980 to 2000, more than 300 million people have been pulled out of pervasive poverty.

Since Pakistan is a predominantly agriculture-dependent society with shrinking industrial sprawl; a hallmark of low incomes and savings rates has calibrated poverty in terms of very low per capita ownership of land, livestock, house and other physical assets. Presently, the diversification of asset ownership is restricted to certain economic models prevalent in the country. A mix of livestock and land is owned largely by the agrarian class, whereas land and other physical and intangible assets are held by the landed and business class. What is striking, however, is the low savings rate due to high inflation and fuel prices.

Pakistan has made considerable headway in alleviation of poverty in the recent decade. In 2004-05 around 23.9 percent of the population lived below the poverty line in the country. Since then the performance in alleviating poverty is nothing short of a miracle considering the fact that the country sustained its biggest earthquake and largest floods in 2010 and 2011 which affected more than two-thirds of the country’s population. Poverty declined to 11.2 percent in 2018-19. Poverty in both rural and urban areas is declining with a poverty headcount of 12.5 percent in urban and 30.7 percent in rural areas, as per latest statistics.

mong the major causes of poverty are unemployment, low literacy, poor skill sets and lack of  economic opportunities. Unemployment is running in double digits at 11 percent of the population. This is a huge factor in driving people to poverty. It is also interlinked with literacy rate. The matters get  worse when unemployment and literacy are further studied on urban, rural and gender bases. Statistics also indicate that the plight of the female population is far worse than of the male.

Poor skill sets are a barrier against entry in the labour markets. Fact of the matter is that people are not prepared for vocational and skill-based training. The labour market requires specialized training to train people as masons, carpenters, electricians, goldsmiths, mechanics, and so on. There is no demand and supply management for people who are entering the labour market and no plan has been made to give them requisite training. Moreover, the dynamics of the rural and urban market are also ignored as no quantification is done. Lack of economic opportunity can only be addressed if a broad strategy to absorb people in the labour force is formulated. Expansion of industry and investment in the manufacturing sector could increase the participation of people. As the economy slows down, the prospect of job contraction is becoming increasingly problematic with the narrowing of economic opportunities.

Poverty eradication and alleviation can be achieved by following different approaches. A strong argument has been made in favour of providing employment opportunities to people so as to utilize their latent talents, increase the economic activity in different arenas and achieve a sustenance-based economic model. A case in point has been the example of China where in the private sector in collaboration with the government tried to give maximum employment to people. In two decades from 1980 to 2000, more than 300 million people have been pulled out of pervasive poverty. The argument next proceeds to rationalize income inequality so as to reduce the concentration of wealth in the hands of a few and to let the market dynamics help people make choices for themselves. This solution is also amenable to the resolution of a dual economy issue since it prevents the segmentation of the economy and opportunity.