July 14, 2003	Monday	Jumadi-ul-Awwal 13, 1424

The economic managers and advisors of this country are most concerned about poverty alleviation. On June 18, while approving the $123 million tranche from the Poverty Reduction and Growth Facility (PRGF), the IMF staff expressed its satisfaction on the recent track record of Pakistan regarding poverty-related spending.

Earlier, donors in the Pakistan Development Forum meeting on 13 May 03 had urged the government to increase budgetary allocation in relation to poverty alleviation. Various experts view the rising emphasis of donors on poverty alleviation as a continuation of previous policies. In a situation where doctrines of market economy are universally imposed in all the contexts, the concurrently rising number of poor is viewed as a potential threat.

Since 1988 onwards, Pakistan has been shackled under the infamous economic policy frameworks imposed by the international donor agencies, mainly the IMF and the World Bank. This bench mark sadly coincided with the much needed political change which led to the creation of a democratic government after 11 years of an autocratic regime. The era of Structural Adjustment Programmes was ushered into the nation’s history with a whole range of clandestine stakeholders, men in the khaki being the most prominent.

Times that followed displayed the lost struggles of at least four democratic governments to implement their manifestoes across the tightening noose of donor prescriptions. Finally, much to the pleasure of the donor community, an unmeditated coup in 1999 removed the democratic government to install a complying brand of regime which continued to faithfully bow to donor pressures even sacrificing fundamental well- being of the peoples. Among the most fashionable paradigms recently unveiled by the donors is the ‘poverty reduction strategy’ which is integrally tied up to the conventional working norms of the donors themselves.

The government bowed faithfully and prepared an Interim Poverty Reduction Strategy Paper (I-PRSP). Engendering growth, governance reforms, creating income generating opportunities, improving human development and reducing vulnerability to shocks were the five strategy components.

In order to fulfil the contractual obligation of conducting public consultations, some closed door events were held with a select brand of non-government organizations and opinion holders to seek their views for incorporating in the so- called proposed poverty reduction strategy. These consultations were remarkably similar to the type which were held by the World Bank to finalize its country assistance strategy a few years ago - which were met by fracas from among the common folks. It is most amusing to note that the nexus of the very agents that caused poverty are now talking about its reduction.

However, it must be clearly understood that the root cause of poverty in this country cannot be addressed by the donor tailored draft of PRSP and disbursement of loans. It requires an independent and honest assessment of the overall social and economic scenario thereafter leading to appropriate strategies. Few conceptual matters shall help understand the overall backdrop that led to the crippling of the socio-economic status of a wide majority of people.

According to the conventional definition, poverty is defined as a state of possessing extremely low or no income. Donor’s bench mark of 1-2 US$ per day per household is an indicator in this reference. This perception regards poor as such people who are unable to purchase the essential items due to their acutely low buying power. Thus, they are reduced to the status of weak participants in the market economy practices. The proponents of globalization, on the contrary, wish to see a world which is full of financially capable individuals who could purchase and consume their products to the optimum. Thus, having a massive chunk of poor people not capable to purchase and consume obviously makes an undesirable existence! Hence all the uproar about poverty and its reduction.

It is a well-known fact that the prevailing poverty has been caused by the continuing implementation of donor influenced economic policies and procedures. Introduction of green revolution technologies without safeguarding the livelihoods of the landless peasants and artisans; over whelming emphasis on export oriented enterprises without reference to the domestic context that could generate employment in terms of goods and services; gradual reduction of import duties/controls that retarded the local production base; poor governance that encouraged massive smuggling of consumer items hitting the local manufacturing; absence of workable land reforms that reduced the possibilities of effective subsistence farming eventually leading to exodus to cities; reduction/removal of welfare support to the needy to help build up their livelihoods; mindless downsizing and retrenchment of staff, mostly lower grades from state and public controlled enterprises and exorbitant expenditure in defence heads at the cost of social sectors are only a few policy indicators that spiralled poverty on a continuous basis. It is also worth noting that most of these policy prescriptions are still applied with renewed vigour. It therefore sounds preposterous to expect any well intentioned relief for the poor who have been consciously reduced to poverty at such a massive scale.

A genuine cause of poverty is the breakdown of the socio-economic relationship that promoted subsistence to a wide segment of populationa. For instance, the agricultural production during the 1940s and 50s was mainly structured on a barter system of transactions. The peasants provided farming and allied services to the landlord; artisans supported the rural life through the skillful practice of their trades; landlords organized the distribution of the produce amongst all the stakeholders in kind while transported the surplus to the market to obtain cash. There were communal assets in the form of grazing grounds, community lands, water courses/bodies and access paths. The landlord allowed the peasants to live in settlements built on his land, often without any rent or charge.

Each member of the community valued the importance of these assets since they were a mean of subsistence to the peasant/artisans and a catalyst for profit that accrued to the landlords. Not that this system was perfect. It had several weaknesses that needed to be improved. But the capacity of this system to provide basic means of livelihood was well established. Once the modus operandi changed to mechanized production, the whole set of inter- relationships changed. Currency became the real determinant of any person to acquire a good or service. Thus with the departure of barter and arrival of cash economy, poverty amongst the subsistence seekers multiplied exponentially. There has been no safeguard means for the poorest and incapacitated individuals who lost the chances of a decent survival.

Creation of viable infrastructure that could directly affect the day- to- day performance of poor is essential. Conservative estimates show that about 48 per cent of the population is without access to safe drinking water while 63 per cent is not connected to any sewerage system. A sizable produce in agricultural areas perish on the way due to the absence or dilapidated conditions of farm- to- market roads. In cities, more than 70 per cent of the employment is generated in the domain of informal sector. Attempts are normally made to allocate finances for various development schemes prepared in the infrastructure sector.

However, the lion’s share normally goes to the mega projects. Despite the fact that such projects hardly benefit the poor, incur high capital costs and have extended operation and maintenance overlays, they are assigned higher priorities. Preference given by donors/federal government, risk of losing overheads in kick backs and lobbying efforts by large scale contractors are few reasons for choosing mega projects. Poor people need small scale initiatives. Development of water standposts, secondary sewers to connect household/lane level sewers, secondary roads to inter-connect localities and basic power supply are few type of small scale projects that can improve living conditions and help eradicate poverty by increasing productive capacity of the people.

The government claims to support the poor by opening up some avenues to access relief. Funds from Zakat, Baitul Maal, marriage assistance and health support programmes are claimed to be accessible to the poor. However, the overall impact of these attempts is extremely minuscule compared to the magnitude of the problem. Poor targeting, insignificant amounts and lack of proper monitoring gives rise to a very limited coverage and impact of such programmes. It is often assumed that by doling out money, poverty can be stemmed!

Poverty reduction strategy focuses on governance. This happens to be among the most ironic of injunctions especially coming from such quarters who have done their best to destroy all forms and formats of basic civilian institutions. There are several examples to prove this fact. Planning Commission of the country was traditionally entrusted the task of analyzing the overall developmental needs in various sectors and prepare five- year development plans and perspective plans. These plans, which evolved from a reasonably sound institutional framework were meant to guide the government machinery in addressing their respective priorities in a coordinated manner.

Over the period of time, the Planning Commission had acquired the professional capabilities in various sectors to adequately address the planning and developmental issues. Without providing adequate time to germinate, the Commission was reduced to a non-entity. Its actions were replaced by a plethora of free standing institutions and programmes without any kind of people’s control. Special funds for poverty alleviation were created to fight out poverty without any comprehension of the poverty phenomenon itself. Under self- appointed governments, the understanding about poverty became more than myopic.

A whole super structure of local institutions was created without having the slightest of understanding of the manner in which society is organized or functions. The result is obvious. Every where in the country, there is a tussle between the local and upper tiers of government.

Strategies to reduce poverty are framed in the same secretive manner which is the trade mark of self- appointed regimes. It is most amusing to note that strategies for poverty reduction are formulated without consulting the poor themselves. Similarly PRSP is not being discussed at the elected fora including local councils, provincial and national assemblies. Despite the fact that some quarters from the donors themselves have suggested an open debate on this issue in the parliament, no heed is paid to this sensible advice. The documents of poverty reduction are posted on web sites knowing too well that the real poor cannot access a computer and do not understand English. Only those select members of civil society, NGOs and professional groups are likely to be invited to this consultative process who are already baptized to the donor’s agenda.

If the present regime is willing to prove at least its representative status, few fundamental steps need to be taken without delay.

One, an open debate about the overall causes and effects of poverty must be launched. All cross sections of the society should be allowed to contribute to it. Two, scores of researches and independent studies have been already undertaken by researchers and institutions about poverty and its spread. Findings and recommendations of these studies must be scientifically reviewed and assessed by a relevant institution, such as the Planning Commission.

Three, based on these inputs a working paper on the issues related to poverty and means to holistically address them may be floated at the elected fora, including the local councils, provincial assemblies and parliament.

On the basis of the national consensus evolved for addressing the poverty, negotiations and dialogue must be made with all interest groups, including donors. Four, policy instruments that affect the livelihoods of people must be immediately checked and revisited. This also accounts for providing protectionist cover to few sectors of enterprises that are in the state of infancy.

Five, direct assistance must be only targeted to those who are economically incapable in all respects. All others must be provided with catalytical assistance to help acquire a compatible earning opportunity. Once economically capable, the society can address almost all other issues by itself. And six, infrastructure development must be based upon the up-scaling of various pilot projects that now have a successful existence in this country and are being replicated on self- help.