June 11, 2006	Sunday	Jumadi-ul-Awwal 14, 1427

KARACHI, June 10: How many poor people are there in Pakistan? After trying to find a convincing answer to this question in the last five years, the government has finally come out with a figure of poor people on the basis of a survey report of the year 2001 that was considered ‘flawed and inaccurate’. But to government’s misfortune, no one is ready to believe official headcount of poor, even though the data and information on poverty carry endorsement of Pakistan’s donors.

According to the government headcount, endorsed by the donors, without which officials feel credibility remains doubtful, the number of poor people in Pakistan had come down to 36.45 million in 2004-05 from 49.23 million in 2001. In the year 2001, the percentage of poor in Pakistan was 34.46 per cent more than one-third of the entire population, which has now come down to 23.9 per cent which is less than a quarter.

But even with the endorsement from the donors, many people in Pakistan are not ready to believe the government headcount and there are many questions being raised.

The first question is about making the findings of a survey report basis of the claim of fall in the number of poor people in Pakistan that was doubtful and flawed for the government and still remains a defective document. The Pakistan Household Integrated Household Survey (PIHS) 2000-01 was carried out as a normal, routine and periodical exercise. The Economic Survey 2001-02 informed the public of completion of survey exercise and that the findings and report would soon be made public. It was never made public and was suppressed.

The information and data collected in the PHIS was processed in April 2002. But all the findings were concealed. Sometimes in the year 2002, a World Bank mission led by an Indian lady economist Tara Vishwanath visited Pakistan and carried out a study. During the course of the study, Shaukat Aziz, then finance minister, had a meting with Ms Tara Vishwanath. It was an unpleasant meeting in which there was a sharp difference in poverty perception between the Pakistan government and the visiting World Bank mission. The World Bank then published a comprehensive document entitled “Pakistan: Poverty Assessment, Vulnerabilities, Social Gaps and Rural Dynamics”.

The official figures on poverty were announced in a meeting of the Pakistan Development Forum in 2003. It was stated that poverty increased by six per cent during 1996-97 to 1999 when Nawaz Sharif was Prime Minister. The increase in poverty was only 1.5 per cent in 1999-01 when President Musharraf and his team were running the government.

Poverty ratio was then calculated at about 34 per cent. But in the recent announcement, the government considers 34 per cent poverty ratio in 2001 flawed and inaccurate and has put it at 36pc. It gives the government a credit of bringing down poverty level from 36 per cent to about 24pc in just five years. All this achievement is being claimed on the basis of a survey report that was declared flawed and inaccurate when it was framed and even now after all processing its credibility has been put into doubt, as the ratio of poor has been increased from 34 to 36 per cent.

Strangely, the government’s recent report on poverty does not give a province-wise breakdown. Each and every province and district have distinct economic, geographic features and population complexion. Why is the government shy of informing poverty incidence in urban and rural Sindh and other parts of the country?

One of the factors contributed to bringing down the poverty level in the country is the inflow of about Rs1.1 trillion remittances during five years. Such a massive inflow of remittances, particularly towards the rural or semi-urban areas of Pakistan must have helped loosen the budget constraint of their recipients, allowing them to increase consumption of both durables and non-durables, on human capital accumulation (through education and healthcare) and on real estate. The conclusion is that poor sections of population depend on remittances.

The question is how many parts of the country receive remittances. Do remittances flow in Jacobabad, Nawabshah, Larkana, Dadu, Sibi, Kalat, etc? Is the poverty level in these districts of Sindh and Balochistan same as that of rural areas of Punjab, NWFP and Kashmir where remittances are flowing in? The third question is how the government can claim an improvement in employment when agriculture growth is abysmally low. Agriculture engages about 43 per cent of labour force. A drop in agriculture is bound to have rendered many thousands jobless as is evident from a jump in urban migration.

Social scientists and economists see growing poverty a big challenge for the country and growing disparities in income as a big threat to stability.