MOST Pakistanis consider the ‘gap between the rich and the poor as a very big problem,’ and many don’t think their children will grow up to be financially better off than them, according to a survey by a Washington-based research organisation.

The findings of the Pew Research Centre survey showed that more than three quarters of respondents in Pakistan view inequality as a major challenge.

Pakistan was one of three south Asian countries, besides India and Bangladesh, where the multi-stage survey was conducted, and it has the largest number of people who view inequality as a major problem. Compared with Pakistanis, more Indians and Bangladeshis are pessimistic about the future of their children, though less worried about growing inequality.

“The findings of such surveys may not reflect reality, but they often indicate some important trends that could help the planners in the formulation of growth and investment policies that benefit larger sections of the population, instead of only a few powerful and moneyed lobbies,” noted Shahid Zia, an economist.

‘Higher growth and investment alone do not guarantee a remedy. Even our public investment policies are consolidating inequalities of all kinds — income, regional, gender, etc — and favouring the wealthy classes and developed areas’

The Pew survey confirms the strong correlation between actual inequality and the public’s view about it. But Shahid believed that the public’s concerns over growing disparity in our society would never find a place in the policymaking process.

“In Pakistan, policymakers rarely care about what the people think and how their growth and investment decisions affect them. The gap between what our planners believe and what our people, who are affected by their policies, think is widening just as fast as inequality is increasing,” he added.

The major sources of inequality are as deeply rooted in a government’s economic planning and policies and political choices it makes as in the way the economy is structured.

In his recent landmark work, ‘Capital in the Twenty-first Century,’ renowned French expert on global inequality, Thomas Piketty, points out that “…the history of inequality is shaped by the way economic, social and political actors view what is just and what is not, as well as by the relative power of those actors and the collective choices that result”.

Pervez Tahir, chief economist of the Planning Commission of Pakistan during 2000-7, agrees. “Inequality in Pakistan is mostly structural in nature; the slowdown in the recent years has only entrenched it deeper.”

“Policies and laws have been formulated so that they favour the wealthy and help widen inequality, instead of addressing it and bridging the gap between the rich and the poor,” he concluded. “Look at the labour laws and taxation, for example; they help the rich amass more wealth, rather than reduce income disparity.”

Like Shahid, Tahir also believed that the public’s concern over growing inequality in society was never on the economic agenda of any government.

“There is no policy to decrease inequality. They [the planners] only talk about it, but reduction in inequality has never been the objective of any government policy. The government under Gen Pervez Musharraf distorted the numbers to show that its growth policies had helped reduce the incidence of poverty in the country.”

Pervez is of the view that inequality could not be reduced by pushing growth alone. “Indeed, a higher growth rate will somewhat help close the gap. But it will not remove the structural reasons. For this, governments will have to revamp the laws and correct the policies that benefit only a handful of wealthy people at the expense of the rest of the population. This will only be the first step towards attaining economic justice.”

Piketty believes that the history of inequality is deeply political, and rejects the belief that there exists a natural, spontaneous process to prevent the destabilising, inegalitarian forces from prevailing permanently; growth is never balanced.

This means that a structural decrease in inequality is not possible without making tough political choices and putting in place economic policies that directly target the problem.

“Higher growth and investment — both public and private — alone do not guarantee a remedy. Even our public investment policies are consolidating inequalities of all kinds — income, regional, gender, etc — and favouring the wealthy classes and developed areas and regions,” said Pervez.

Unless the government aligns its growth and investment policies with the needs of the people, chances are that inequality will continue to rise and the public’s faith in the future weaken.

Published in Dawn, Economic & Business, October 20th, 2014