AS the tide of millennial euphoria and confidence about the infinite march of growth and development has lost steam, the new target is called Sustainable Development Goals.
Interestingly, the Post-2015 Agenda coincides with two very significant events. The SDGs replace the MDGs and the Nobel Prize of Economics goes to Angus Deaton for his work on poverty, bringing poverty and inequality back to the global debates more forcefully.
The SDGs put a special emphasis on ending poverty (in all forms) and inequality across and within countries. The SDGs are all noble causes but the contention remains whether these goals are sufficiently mapping the problems and are effectively designed to resolve poverty issues while the inequality across the globe is widening. Productivity levels across developing and developed world diverge, deepening the divide biased against poor countries.
The contention here is: why did the poverty alleviation efforts not yield any significant impact so far? Pakistan fared badly on all MDGs. According to the World Bank the poverty head count ratio stood at 21pc with $1.25 poverty line.
Pushing poverty line to $2 daily makes 60pc of population poor. And if the multidimensional poverty is taken as a measuring device, results can be more alarming with MPI of 0.230. According to IFPRI’s release on hunger, every 4th person faces hunger and Pakistan joins Ethiopia with 2015 GHI 33.9. Can IFPRI’s GHI awake us? There is a need first to diagnose the prognosis of poverty doctors, their prescription and then see what could be done to turn this tide.
The public sector always missed a systematic poverty reducing policy and mostly tried random projects/programmes to curb poverty levels down. The public sector took the back seat and shifted the burden of reducing poverty on to the private sector. The public sector is running three major poverty alleviation programmes against about 50 for the private sector.
Of the tools of reducing poverty, microfinance remains the most used,covering about 3m active borrowers (56.5pc are female). These projects/programmes, owing to faulty design, never reached the ‘most-in-need’ as the criterion for beneficiaries is the ability to pay back the loans which results in exclusion of the most vulnerable.
Also, the definition of poverty has been reduced to pauperism wherein providing relief equals alleviating the poverty. The central objective is restricted to provide the ‘aid’ in cash or kind at a fixed rate to the selected households for some fixed time, ignoring sustainable exit. It creates dependency and does not build any assets/resources on which the households can rely once they exit from the relief package.
Then there is the issue in skill which may appear to be a sustainable way to get the vulnerable households out of the poverty clutches. But the programmes have some serious flaws. Primarily, the trainings are geared to serve the informal sector of the economy which only leads to the employment in elementary occupations marked by lower level wages, poor working conditions, overstretched working hours and insecure job contracts.
This, in turn, leaves poverty levels unaffected. Once the training is over, the individuals are left at the mercy of job market with no assurance of jobs.
It is argued that the most effective tool to end the poverty in a sustainable way are: good health and education. The failure of the public sector to provide equitable access to health and education has created space for the third mode of poverty reduction intervention. The NGOs appear to be the most promising approach to end poverty. But the limited resources of the private sector may leave it ineffective in terms of the ratio of the deprived which can be reached with these programmes (bear in mind that 124m (61.9pc) are poor at $2/day).
Alternatively, the attempt to reach too many people at the same time ends up with very meagre resources provided per individual/household. However, private sector-run projects and programmes end with very insignificant impact on poverty levels. Also the education programmes are primarily retricted to the ‘universal primary education’ which, given the labour market structure, can only lead to elementary occupations.
Finally, the scope of opaque zakat programme has always been very limited in terms of coverage and the average number of beneficiaries hovers around 1m. Interestingly, the number of poor covered under zakat decreased to 1.04m in 2011-12 from 1.54m in 2010-11.
Common to all these interventions is the fact that, all the poverty alleviation programmes, in general, focused on the individual households and neglected building assets/resources at community level which might yield sustainable resources after the poverty project exits. For example, skill development trainings in informal sector, without coordination with industries will leave the poor trapped in the poverty. No programme (especially microfinance) is catering the needs of the people below poverty line.
We need to develop poverty alleviation programmes with human concerns and not with commercial considerations.
For successful interventions, programmes need to be tailored to local context as socio-cultural settings and physical endowments while the availability of suitable enterprise varies across the country.
Rural poverty in Punjab and Sindh could have different reasons from poverty present in Khyber Pakhtunkhwa and Balochistan. Similarly the treatment of it would require different strategies and indigenous models.
The writer is a research fellow at Sustainable Development Policy Institute, Islamabad.
Published in Dawn, Business & Finance weekly, January 25th, 2016