ISLAMABAD: The World Bank has said that Punjab is the most economically unequal province of the country, and this inequality is the highest and increased the most in the urban areas.

Between 2002 and 2014, the consumption of the poorest 40pc grew by less than that of the top 60pc, and the gap was wider in the urban areas.

This is particularly true during two periods of high consumption growth – 2002-05 and 2011-14, which resulted in widening inequality, with the Gini coefficient increasing from 27.5 in FY2002 to 29.7 in FY2014, according to the most recent report released by the World Bank.

Stating that the poor are concentrated in the rural areas, the report says that the poverty rate in rural Punjab was twice that in urban areas, and four out of five of Punjab’s poor lived in the rural areas as of FY2014.

While remarkably high, the difference between urban and rural poverty rates in Punjab (13.4 percentage points) was the lowest compared with other provinces, and rural Punjab still experienced poverty reduction at a similar pace as urban Punjab.

Most of Punjab’s districts have done better than those in other provinces. By FY2015, Punjab had 12 of the 20 richest districts in Pakistan and none of the 20 poorest districts.

Poor concentrated in rural areas; low participation of women in labour seen as major challenge

Based on the poverty line established in 2014, Punjab reduced monetary poverty by 35.9 percentage points in 13 years; from 61.2pc in FY2002 to 25.3pc in FY2014.

This pace of reduction was the second-fastest in the country; slower than 46.5 percentage points in Khyber-Pakhtunkhwa, but faster than the 30.8 percentage points in Sindh and 14.4 percentage points in Balochistan.

The Punjab’s labour market was able to accommodate its fast growing labour force. Between 2002 and 2014, the working-age population of the province increased by an average of 3pc a year.

Despite the strong demographic pressure, enough jobs were created to maintain the unemployment rate at a very low level – around 3 to 4pc – and the share of the employed in the working-age population remained constant at around 50pc.

The report cautions that still-low levels of labour force participation remain a concern, saying that in FY2014, labour force participation in Punjab was only 53pc, mostly due to the low level of female labour market activity.

Women’s economic empowerment remains an important challenge in Punjab, with only one in four women being economically active in 2013-14, despite gains in literacy and education levels.

The report says that economic progress was accompanied by an increase in paid employment. The shift out of unpaid work was particularly noticeable in rural areas, where the share of paid employment increased by 10.2 percentage points among male workers and by 15.3 percentage points among female workers.

Among men, this shift was accompanied by a more from agriculture into industry: by FY2014, 26.5pc of rural men worked in manufacturing, up from 19pc in FY2002, whereas rural women tended to stay within agriculture, but towards paid work.

In urban areas, the shift towards paid employment was less significant, but there was a shift from low-skilled services into manufacturing, among both men and women.

Punjab also saw a 9.6 percentage point increase in the share of adults completing lower secondary school between 2002 and 2014. Households with at least one adult with lower secondary school education or higher were less likely to be poor.

Looking within Punjab, districts that achieved higher rates of poverty reduction also did well on lower secondary school completion rates overall, and among women.

Enrollment levels have shown virtually no improvement over the past decade, in both primary and middle school, with children from the poorest families continuing to fare the worst, particularly in rural areas.

Published in Dawn, May 29th, 2017