August 19, 2002	Monday	Jamadi-us-Saani 9, 1423

After the World Bank, the Asian Development Bank (ADB) has started saying that poverty in Pakistan is rising despite all-time high resource allocation for the purpose.

The ADB’s latest report, “Poverty in Pakistan: Issues, Causes and Institutional Responses” released last week has concluded that one-third of Pakistan’s population faces acute poverty with no chances of any improvement in the near future. The report deals with the period till 1999 and discusses the issue in the light of data provided by the Statistics Division and other relevant sources.

According to the report, poverty was reduced in the 70s and 80s but it increased in 90s and it continued to rise beyond 1999.The country chief of the ADB, Marshuk Ali Shah, and ADB’s principal economic advisor, Naveed Hamid, said without mincing words that poverty in Pakistan was on the rise. Is this not some thing alarming to hear, specially when the government had spent about Rs30 billion during the last financial year alone? It has allocated over Rs40 billion this year [2002-03].

Ever since the events of 9/11, international donor agencies and bilateral creditors have extended substantial funds for improving social indicators, aimed at alleviating poverty. For the first time, the United States extended $600 million cash as part of the budgetary support in 2001 followed by $300 million by Japan. In addition, the IMF too offered $1.3 billion Poverty Reduction and Growth Facility (PRGF) at a nominal interest rate for reducing poverty. Similarly, the World Bank offered considerable funds for removing poverty, specially in the rural areas.

However the question is, where have these funds gone which were also meant for reducing poverty. The local ADB chief in the past had faced difficult situation for criticising the government. But he was categorical in saying that poverty was increasing, which meant that present spending was having nominal effect. “You again want me to be criticised by some officials”, he said when asked why could not he say that there was a failure on the part of the government to effectively address the issue of poverty. But he said that he and his colleagues believed that the government should make more efforts to check poverty. Generally, it is observed that the concerned officials waste their energies and government’s money to get printed fascinating reports and papers like Interim-Poverty Reduction Strategy Paper (I-PRSP) only to secure funds from international donors. Also there have been national and international conferences both in and outside Pakistan to deal with the issue of poverty in Pakistan but without much effect.

The interesting thing is that the donors continue to offer funds to Pakistan despite the fact that there is a failure to address the issue of poverty. The ADB chief was at a loss when a reporter reminded him as to why his Bank and other donors were extending funds when there was no improvement on the ground and that why were they risking their money. “You are right that we are risking our money but we are doing so because the direction of the present government is right and its fundamentals are correct”, answered Mr. Shah.

Earlier, the controversial Social Action Programme (SAP) was launched about ten year ago the purpose of which was also to reduce poverty specially by increasing education and providing health facilities. SAP eventually met with failure although the World Bank and the government spent over $500 million. People had taken away air-conditioners, chairs etc. from the SAP offices but no responsibility was fixed on any one for the failure of the programme. The World Bank eventually stopped paying any thing on account of the SAP and then forced the present government to wind up this programme in all the four provinces. The remaining funds of about $120 million were diverted for drought and some educational programmes by the World Bank.

The government has been allocating substantial funds as part of the Food Support Programme which is designed to mitigate the impact of the increase in wheat prices that has followed the withdrawal of subsidies on wheat flour. Under the programme a cash payment of Rs2000 is given to poor households in two by-annual instalments. The total disbursement under the food support programme was Rs837 million in 2000-2001 that had increased to Rs 1.08 billion in the first half of 2001-2002. What effect this programme has created, is anybody’s guess specially when seen in the context of the ADB that poverty is increasing in Pakistan.

Then ‘zakat’ and ‘bait ul maal’ programmes had also been pursued by the government. Zakat distribution covers institutions and individuals both. Fifty per cent of zakat disbursement goes to eligible social, health, education, and religious institution while remaining are offered to needy individuals. In 2000-2001, Zakat collection was estimated at Rs5 billion and the number of estimated beneficiaries were about 1.9 million.

Under the Pakistan Bait ul Maal programme which was established in 1992, Rs327 million were provided to the needy people during the past financial year. But overall one does not see its effects specially when the donors maintain that poverty in Pakistan is on the rise.The Khushhal Pakistan programme was also launched to support the poor people. The government established the Kushhali Bank to cover 30 districts as it has the portfolio of Rs 7.6 billion. This bank must have offered funds to large number of people so far but the question is whether it has reduced poverty in Pakistan. The micro-financing has also been provided by the recently set up Micro Finance Bank by the Agha Khan Foundation.

Previously population control measures had failed to have any visible impact on poverty profile. And now directly poverty related efforts are not paying and this is a very alarming state of affair which requires the attention of the highups in Pakistan.