KARACHI, May 21: Pakistan cannot achieve the objective of poverty alleviation unless it undertakes progressive land reforms and achieve growth with equity, says Dr Hafiz Pasha, a well-known economist and assistant general-secretary of the United Nations.
Delivering a lecture on “Pro-poor policies for development” organized by Applied Economic Research Centre at University of Karachi here on Tuesday, he said that although the macroeconomic indicators of the country were showing positive signs as reserves crossed $10 billion mark, exports registered 20 per cent increase, interest rates were at record low, etc., still number of the poor was growing.
He said that to address the problem of rising poverty — some 50 million people are living under the poverty line — the government needed to go further with the poverty reduction strategy.
He said there were two approaches for achieving sustained and equitable growth, that is, land reforms and the export-led growth.
The economist quoted the example of Japan and South Korea where major land reforms led to economic stability, whereas in China export-led growth policy reduced poverty by a considerable margin — 340 million people — as the country was registering 7 to 8 per cent GDP growth annually.
He said Pakistan opted for second approach — export-led growth — but unfortunately the country could not drive the desired results because no proper attention was paid on rural development. “Unless the government follows pro-poor growth policy poverty alleviation is not possible,” he added.
Mr Pasha was in favour of diverting resources to sectors where the poor are concentrated i.e the agriculture sector (majority of labour force is associated with this sector) as the key element which could do a lot to reduce poverty.
He said the government should focus on development of rural areas and especially concentrate on Balochistan and NWFP.
He also suggested that the fiscal space of Rs60 billion created by retiring expensive debts should be utilized in expansion plan which would trigger more investment and ultimately level of expenditure by the poor would also start rising.
He said financial reforms could not deliver results unless the fiscal reforms were pursued and a system of good governance was introduced to put the entire process of economic reforms in that direction which led to alleviation of poverty and achieving prosperity.
But, Mr Pasha said, this could only be possible if focus was on eliminating the root cause of the poverty i.e. inequality.
