Opinion

In Pakistan, about 47 million people are living below the poverty line, says an Asian Development Bank report released on August 12, 2002. The report untitled, "Poverty in Pakistan, Issues, Causes and Institutional responses" was released by the Country Director, Mr. Marshuk Ali Khan and Bank's Principal Economic Adviser, Mr. Naveed Hamid at a Press Conference. The excerpts from the report and the observations made by the Bank officials in the Press Conference, which have appeared in the Press have highlighted the grave problem of Poverty, with which the country is faced. We should indeed be grateful to International Agencies for carrying out studies for us and for identifying our ailments, but it has to be realized that ultimately it is for us, Pakistanis, to consider and adopt remedial measures for resolving problems including poverty. It is not necessary for us to swallow with line, hook and sinker all the solutions that are given to us by others. It is really the wearer, who knows, where the shoe pinches. We are, in a much better position than others to resolve our problems. Accordingly, it is suggested that while we may pay full attention to what others are telling us, we should think hard as to where things have gone wrong and then devise our own plans to resolve/manage the problems.
According to ADB report, the level of poverty increased from 26% of the population falling below the poverty line in 1993 to 32% in 1999. Two questions arise in this regard. One is that International Agencies were in the field during this period also as they had already lent large sums of money to Pakistan. What wake up calls and other noises did they make in the media during this period for increase in poverty levels? Secondly, it is suggested that the funds allocated under Special Action Programme and those disbursed under Bait-ul-Maal and Zakat Programmes should be tabulated and highlighted by the media so that the general public can ask questions from the politicians before the General Elections. It is hoped that politicians would also have learnt some lessons by now and would include poverty alleviation in their manifestos.
The ADB report states that the number of people falling below the poverty line is increasing after 1999 also and is estimated to have increased to 35%, i.e. the level of increase is the same as was witnessed during the period of 1993-1999. One factor, which is aggravating the problem of poverty and which does not appear to have received attention in the report is the population explosion, which is taking place in the country. Unless some urgent measures are taken to check the population growth, it may be difficult to check poverty. As more and more people get added in the population, they need more and more water, food, clothing, housing and employment. If increases in population cannot be controlled, we should either find or generate more resources or otherwise we have to give up all ideas of alleviation of poverty. Large numbers of refugees from Afghanistan are further compounding the problem of poverty in Pakistan.
It is in the interest of Pakistan that stability returns to Afghanistan and Afghans can go back to their country with honour and dignity. It would be pointless to go on counting on the help and donations of foreign countries for providing assistance to them.
It comes as a surprise that the Bank officials maintained during the Press Conference that poverty in Pakistan is rising, although substantial local and foreign funds are being spent to address "this is very serious issue of poverty". It is obvious that this calls for a hard look at the policies, which have been pursued hitherto in this regard. In this connection, it is understood that the Government spent about Rs 30 billion during the last year alone. For the year 2002-2003, Rs 40 billion are reported to have been allocated. Then come the foreign loans and other funds received from International Agencies and foreign countries after the attack of terrorists in USA on September 11. The question arises as to where these funds have gone or are still going, which were/are meant for reducing poverty. The government has also been allocated substantial funds as part of the Food Support Programme. Total disbursement under this Programme amounted to Rs 837 million in 2000-2001, which increased to Rs 1.08 billion in the first half of 2001-2002. Programmes launched under Zakat and Bait-ul-Maal and Khushal Pakistan are also for support of the poor.
Micro-Finance Bank launched by the Aga Khan Foundation is another step in the same direction, but the net result is increase and not decrease in poverty. If the assessment of ADB is to be believed, it means that the money being spent is, somehow, not finding its way to the poor. In fact, some analysts now feel that middle class is almost disappearing and that almost 50% of the population is drifting towards "below the poverty line". This may need looking into.
There was a time, when other countries looked towards Pakistan as a role model for economic development. All this has now changed and we have now to look to other countries for role models. In this context, we may be well-advised to look towards Peoples Republic of China, which attained independence two years after us, but is already well on its way to becoming the second largest well-developed economy of the world, after USA. It is moving towards this goal rapidly by sheer dint of hard work and on the basis of achieving self-reliance. Poverty stands almost eliminated in this country. According to the Bank officials, political instability, law and order situation and the situation on the borders could continue to cause problems in addressing the issue of poverty. ADB report cites poor governance as one of the primary causes of poverty. The report states further that the effects of poor governance have compounded the economic causes of rising poverty. At the same time, social factors such as the highly unequal distribution of land, low level of human development and persistent ethnic and sectarian conflict were also serious impediments in the way of achieving long-term poverty alleviation. To the list of social factors, one may also like to add unequal distribution of wealth resulting in complete elimination of middle class, lack of employment opportunities as a result of World Trade Order, redundancies in existing establishments, etc. We appear to be placing more and more reliance on large-scale private sector organizations, which appear to have failed to establish any models of enterprises worth emulating. Another curse, which is assuming more and more dimensions, is the informal economy, which is also giving rise to concentration of wealth in a few hands and is thus aggravating poverty. This also does not appear to have received attention in ADB report.
According to ADB report, poverty is concentrated to rural areas, where 70% of our population is residing, but where it is stated that feudal social structure, illiteracy and over reliance on agriculture have been categorised as the main culprits. One can agree wholeheartedly with ADB for taking steps to reform the feudal social structure and to improve illiteracy, but one cannot agree to shaking off reliance on agriculture, which is the backbone of our economy. It still employs 50% of the workforce, is a source of raw materials for our local industry and makes significant contribution to our foreign exchange earnings through direct exports as well as through agricultural based products. It is a matter of satisfaction that we are now surplus in the production of wheat, while in the past, we had to depend heavily on imports for feeding our population. We have vast areas of land for cultivation and a well-organized irrigation system. The Bank Adviser is of the view that the fight against poverty needed to focus on creating jobs in non-agricultural sectors. He said, the recent drought and falling international prices of wheat were hitting the farmers hard. He also said that agriculture is not a means to resolve poverty. It is not possible to agree with this view of Bank Adviser. Other countries are also subsidizing agriculture in order to keep it going. With the increase in population, more and more agricultural products would need to be produced in the world and also in Pakistan. By accepting the advice of Bank Adviser we will be courting a disaster for ourselves. The remedy lies in reforming the agricultural sector by introducing new technologies and practices for improving productivity and by setting up more dams for storage of water to mitigate the effects of drought. In the interest of poverty alleviation and for moving the wheel of agricultural production forward, urgent attention also needs to be given to reform the present feudal structure. In this connection, it may be pointed out that of the total number of farmers, 93% are small farmers, who own less than 5 hectares. Out of these 47% own less than 2 hectares. The small farmers cultivate 36% of the cultivable area. The remaining 7% are big landlords, who cultivate 64% of the cultivable area. Several attempts have been made in the past since 1958 at land reforms, but little change has occurred since people place a high value on land ownership. They monopolise all resources. On the other hand, the small farmer has little access to credit, machinery and other productivity enhancing inputs. In addition, the small farmer is risk averse, is less diversified in crops and has little marketing flexibility.
If poverty is to be tackled properly in the rural areas, the imbalance between the big landlords and small farmers would need to be corrected by carrying out land reforms in right earnest. A highly skewed pattern of distribution of land has contributed to poverty and vulnerability of a large number of rural households. The incidence of poverty in rural areas is much higher (29.3%) as compared to urban areas (12.8%). In order to strengthen the small farmers and to improve their lot, it is necessary that co-operatives be introduced for them. It is unfortunate, that over the years, co-operatives have also become a tool of repression and exploitation of the small farmers in the hands of big landlords.
The original object of cooperative movement was to provide loans to small farmers through their own Associations (Co-operatives) so as to free them from the clutches of traditional money lenders popularly known as Mahajins or Sahookars, who used to charge exorbitant rates of interest. With the passage of time its scope was extended to other areas. These included supply of seeds, manure and agricultural implemments as well as marketing of farm products. Over the years, the concept of co-operatives has been abused so that it has lost its original shape and objectives.
New Sahookars have come into being in the shape of commission agents, industry owners, sugar mill owners, owners of ginning factories, suppliers of fertilizers and pesticides and last but not the least new co-operatives headed and composed of influential persons. If poverty alleviation is to be achieved in rural areas, the role of co-operatives will need to be strengthened, small farmers will have to be inducted in the co-operatives and the role of middleman will have to be minimized in the whole process. A wholly wrong system of marketing has come about, which works only for the benefit of the middleman who has the money and the small farmer is left in the lurch all the time.
As regards illiteracy, it has been stated in the ADB report that Pakistan's education indicators are the worst in South Asia and adds that Pakistan's public sector spending on education and health is barely 2.1% of G.D.P., which is significantly lower than other countries in the region. The report has further stated that 70% of the adult Pakistani women are illiterate and that is the highest rate in South Asia. As far as the rural areas are concerned, the less said the better. It is understood that in the rural areas the big landlords are strongly opposed to opening up of schools lest their supremacy in their areas is challenged, although they themselves may go abroad for receiving higher education.
It would thus be seen that in the interest of poverty alleviation also, serious attention to form sector is necessary. For this purpose, the following recommendations are made, some of which are also given in ADB report:

getting the policy and institutional framework right
increasing agricultural productivity in crops, orchards, livestock, dairy products, forestry and fisheries and providing subsidies where needed. We should first think of our own priorities and then think of the requirements of World Trade Order. The developed countries are also placing great emphasis on agriculture and provide heavy subsidies in one form or the other. In this connection one may recall measures taken by UK in combating 'foot and mouth' disease in their livestock.
strengthen the research and extension services.
introduction of new and high yielding varieties.
developing agri-business for exports and rural small and medium enterpris- es for generating employment opportunities.
promoting rural urban linkages by improving communications, particularly rural roads.
expanding rural economic infrastruc- ture, especially for irrigation, drainage and water resources and enhancing credit in rural areas.
investing in infrastructure in areas where incidence of poverty is high and where the lack of infrastructure is a critical barrier to development.

The poverty is increasing in urban areas also, which is clear from the law and order situation, rising costs of fuel and utilities, inflation, lack of employment opportunities and redundancies in existing establishments. It appears that some of the unemployed have taken to arms and are indulging in anti-social activities while some are even going to the extreme limit of committing suicide. The middle class, is virtually disappearing from the scene and the whole society in the urban and rural areas is getting divided into two classes i.e. the filthy rich persons, and the very poor persons. The public sector is particularly coming in for sharp criticism. In the press conference, the Country Director of ADB is reported to have said that Water and Power Development Authority (Wapda) and the Karachi Electricity Supply Corporation (KESC) are responsible for major haemorrhaging of national resources and need major reforms. It is pointless to blame one or the other for mishaps in these organisations but if changes in management are needed, these should be brought about. We should look for new talent with good track record for which we need to spread our nets much wider than we have done so far. There is no dearth of talent in the country and it is not necessary that we look to foreign lands for this talent, which in any case may not understand the ground realities in Pakistan. It is quite possible that even the present management may be able to turn the public sector organisations around provided interference in their affairs is stopped and the selection of personnel is made on merit.
Our society is ridden at present by internal strife, corruption, nepotism and sectarian feelings. If we are interested in achieving progress, it is important that we eliminate corruption, nepotism and patronage and further reduce the gap between the rich and the poor. This will not be possible unless we adopt the 'value system' already available with us, cardinal principles of which are, simple living, love and tolerance for all, respect of law and life, providing cheap and speedy justice on the doorsteps, ensuring merit and fair-play in all dealings, always speaking the truth and ensuring accountability and transparency in all matters. Lust and greed for money should go and instead surplus resources should be put in the service of the needy.
We also have to learn to live within our means. The Bank officials have said that all the countries of the world are relying on generation of their own resources, but our internal resources fall far short of our actual expenses. In order to bridge the gap, we should, on the one hand reduce our expenses and on the other try to generate more resources. For this purpose, CBR will need to be reformed, also our businessmen and others will also have to learn to pay taxes.
When talking about poverty alleviation, we all conveniently tend to ignore the disabled, which is also a large segment of our population. The conservative estimate places their number at 15 million. They are the poorest of the poor. They are a burden on the exchequer and on their families and are making no contribution towards the economy. United Nations have already formulated Standard Rules for providing them equal opportunities along with the able bodied persons and have circulated these to the Member States for enacting suitable legislation for them. It is unfortunate, that no legislation has been enacted in our country for the welfare of the disabled persons. So far, which is making it impossible for them to join the main stream of economic activity. It is strongly urged that this large segment of population be also brought into the mainstream of National Economy as soon as possible.