Economic apartheid

January 10, 2014

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INEQUALITY is rising in Pakistan — in all its unsavoury dimensions. While we may have had a less-unequal society, in relative terms, for much of our existence, that sliver of solace is fast disappearing. The more worrying aspect is that inequality is no longer ‘cyclical (if it ever was) — that is, relating to income disparities arising out of a slowing economy and fewer jobs.

It has institutional as well as structural roots that the elite have been very comfortable with perpetuating, most shamelessly via a duality of education systems — one, near-world class for their own children, the other, a shambolic excuse for a minimal fulfilling of the state’s responsibility (and failing at that too). Hence, through a variety of channels and means, both wittingly as well as unwittingly, a large swathe of Pakistan faces permanent exclusion from economic, social as well as political voice and opportunity.

The statistic that most captures the public imagination with regard to inequality relates to income disparity. On this front, the share of income of the bottom 20pc of the households is around 8pc, while that of the top 20pc households is almost six times larger, at 45pc. Over the past 10 years or so, incomes of the top 20pc households have grown faster than for the others.

However, income is only one measure among many where the unequal-ness of our society manifests itself. In fact, it hardly needs to be argued that at its most perverse, it is the denial of educational opportunity — be it in terms of access or quality — that ensures the perpetuation of what can only be termed “economic apartheid”.

With millions of children out of school, and a vast majority of those counted as enrolled getting an abysmal education, this is clearly amongst the biggest failings of the state. Other manifestations of societal inequality come from lack of access to formal credit, to the skewed nature of the police and justice system that favours the rich and well-connected, to lack of political space and voice for the dispossessed and marginalised.

At its broadest, it is the denial of ‘opportunity’ which enforces this apartheid — the denial of rights and opportunities to a section of society and its systematic relegation based on race, ethnicity, religion, gender or class. Dr Mahbub ul Haq brilliantly devised the Poverty of Opportunity Index to measure this aspect, where Pakistan scores poorly.

For all their faults and ham-handedness, Zulfiqar Ali Bhutto’s policies (nationalisation, expansion of the public sector, export of labour, food subsidies) did foster a greater feeling of inclusion and participation for those at the lowest rungs of the social pyramid. Gen Ziaul Haq’s period, by contrast, expanded and strengthened the urban middle class.

Under Gen Musharraf, a durable effect of economic policies and vast inflows of external capital on the ‘average’ citizen is hard to discern — but the improvement in the well-being of asset-owning elites and those with connections to the power corridors is a defining feature that is probably hard to miss even from space.

Over the last several years — with its beginnings in Gen Musharraf’s ‘golden age’ for the economy — a creeping exclusion from the most basic of rights has been occurring. The explosion in food prices has gradually led to the most basic of food items being excluded from the diets of the vulnerable sections of Pakistani society.

Overall, the food price index has increased 130pc between 2007 and 2013, with wheat, pulses, gram, basic vegetables such as potatoes and onions among others, all recording extraordinary rises. Rice, fish, red meat and fruits are all off the menu for not just the poorest in Pakistan.

Given the backdrop of the steep rise in food prices over the past several years, it is hardly surprising that malnutrition has assumed alarming proportions. An UN inter-agency assessment mission had placed the food-insecure population in Pakistan at 77 million people — in 2008, at the start of the global food crisis. The official National Nutrition Survey (2011) found:

· An across-the-board increase in malnutrition in children, with 67pc of this cohort falling in the malnourished category, across the whole of Pakistan;

· An across-the board increase in ‘stunting rates’ in children in Pakistan (with Sindh faring particularly poorly on this score).

A protein-rich diet is now unaffordable for vast segments of Pakistani society. To make matters worse, a diet that is considered minimal not only in terms of nutritional value but also for the development of the faculties of school-going children and young adults is being denied to millions. This denial will almost certainly stunt their future prospects, consigning them and their progeny to economic and social marginalisation. This is not only unacceptable, but wholly unnecessary and preventable.

Any facet of inequality that is borne out of an unfair distribution of resources or opportunity reflects a fundamental failure of society. This failure needs to be redressed by the state through better and more widespread education opportunities, health coverage, and skills improvement, among other interventions.

A potent tool at the government’s disposal is the Benazir Income Support Programme. By converting it into a conditional and partial cash transfer programme, its non-cash component (in the form of free meals at school, or provision of atta, for example) should be used to supplement the nutritional requirements of underprivileged school-going children across the country. If done right, it can boost enrolment, attendance as well as nutrition.

The writer is a former economic adviser to government, and currently heads a macroeconomic consultancy based in Islamabad.