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Poverty in Pakistan declines significantly: WB report

Updated Nov 18, 2016 09:36am

ISLAMABAD: Pakistanis saw a substantial increase in their welfare, according to the World Bank publication titled ‘Making Growth Matter’.

Statistics released by the bank show that the ownership of motorcycles in the bottom quintile has increased from 2 per cent to 18pc, televisions from 20pc to 36pc and refrigerators from 5pc to 14pc.

Housing quality in the bottom quintile also showed an improvement. The number of homes constructed with bricks or blocks increase while mud (katcha) homes decreased. Homes with flushing toilet almost doubled in the bottom quintile, jumping from 24pc in 2002 to 49pc in 2014.

It is well-known that an increase in income results in households spending less of their budget on food, and more on non-food items. In Pakistan, the 25 percentage point decline in poverty between 2002 and 2014 was associated with a 10 percentage point reduction in the share of expenditure devoted to food.

There was also an increase in dietary diversity for all income groups. For the poorest, the share of expenditure devoted to milk and milk products, chicken, eggs and fish rose, as did the share devoted to vegetables and fruits.

In contrast, the share of cereals and pulses, which provide the cheaper calories, declined steadily between 2002 and 2014. This shift in consumption also increased the amount that people spent per calorie over time. For the poorest quintile, expenditure per calorie increased by over 18pc between 2002 and 2014.

Rural households apparently chose to move away from cheap calorie-dense foods towards more nutritious and lower-calorie foods – and their consumption patterns also became more closely aligned to those of urban households.

The government, supported by the World Bank, recently undertook a validation exercise to substantiate the poverty data from the intervening years, identify key shortcomings in the methodology and to lay out the next steps for creating a credible and autonomous system for monitoring poverty and inclusion.

The success, and changing community perceptions of wellbeing, led the government to update its poverty measurement methodology and define a new, more inclusive poverty line.

The new poverty line identifies 29.5pc of the population and 6.8 to 7.6 million households as poor, setting a higher, more inclusive standard for pro-poor policies.

Published in Dawn, November 18th, 2016