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Poverty of numbers

August 13, 2018

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If one trusts the government’s findings, the steep fall in poverty incidence in Pakistan over the past decade must have deepened the people’s romance with democracy. Can this also be taken as evidence of an effective state intervention that enabled people to break out of the poverty trap and earn a living in dignity while chipping in their share in economic recovery?

Despite the temptation to answer in the affirmative, supporting data is lacking to form a definitive opinion. In official publications, the government attributes the poverty reduction trend to a robust inflow of remittances, growth in the informal sector associated with rising urbanisation and expansion in social protection initiatives.

Not all experts were convinced about the projected poverty rate, but many agreed that it has fallen. They added several other factors, such as a spike in consumerism, spur in the services sector, expansion in mobile telephony, technological advancement and a pick-up in manufacturing/agriculture, might have contributed to the improvement in the wellbeing of the masses.

According to the recently launched National Poverty Report, poverty has fallen by 20 percentage points in eight years (2008-2016). The Benazir Income Support Programme (BISP) claimed credit for a third (seven percentage points) of this reduction in absolute poverty in its publications.

Poverty has fallen by 20 percentage points in eight years (2008-2016). The Benazir Income Support Programme claims credit for a third of this reduction in absolute poverty

The BISP did provide some income relief while creating a valuable social impact. It targeted poor women as they received BISP funds on behalf of their families. Still, it is hard to justify its claim in the absence of verifiable evidence.

Dr Kaiser Bengali, who was instrumental in the launch of the BISP, was not convinced. “Both claims – overall poverty reduction and the BISP’s contribution to it – are false. The first is a product of the World Bank-inspired poverty data manipulation that was initiated under the watch of former premier Shaukat Aziz in the mid-2000s – an art that our finance ministry has perfected.

“About the second claim, can it be expected that Rs1,000-1,500 will enable any family to move out of poverty? The series of poverty surveys are means for the creditors to sell their loans and for Pakistani vested interests in the government, NGOs and development professionals to make easy money,” he said in his response to a Dawn query.

Pro-poor projects, including the BISP, can be made more effective if the incoming Pakistan Tehreek-i-Insaf (PTI)-led government, which claims to be welfare-centric, walks its talk. Currently, the BISP is working at about half the permissible staff strength and without a chairperson.

The BISP has initiated work on possible strategies to move beyond cash transfers. It aims to put in place a framework for a poverty graduation programme that will assist potential climbers through training and micro-credit schemes to be economically active instead of being dormant human assets. The said programme, if implemented effectively, will improve endurance of climbers and prepare them to absorb shocks that can knock them back to poverty.

Despite their differences, the past two governments remained committed to the income support programme. The PPP is credited for forging the initiative in 2008 and bringing the poverty number from 44 per cent to 29pc in 2013. The PML-N government expanded the size and depth of the BISP and brought poverty down to 24pc at the end of the third year (2016) of its term. The incoming government can build on these gains by promoting projects that enjoy a good reputation.

Talking to Dawn, BISP Secretary Omer Hamid discussed the impact of the BISP, “Its contribution extends beyond tangibles: over 7pc beneficiaries graduated out of poverty in the last 10 years due to unconditional cash transfers (UCT) and conditional cash transfers (CCT). Women have been empowered as transfers are in their name. It nudged families to get women acquire identity cards. Poor women received exposure to technology as the BISP employs Benazir debit card and the biometric verification system. Economic empowerment improved the social status of women and there is evidence that their role in decision-making strengthened significantly. About 2.2 million children benefitted from Waseela Taleem and got enrolled in primary schools in 38 districts. Some 70,000 mother leaders were identified who are leading their communities,” he said.

About the poverty graduation programme, he said: “We will soon be launching a pilot of the BISP Graduation Model (BGM). The aim is to transform cash grant recipients into income-earning individuals either through self-employment or wage employment in public programmes if market fails to absorb them.

“Business incubation will be launched for self-employment and the other model will be direct cash provision to start a business. In the first model, a community mobilisation method comprising of skills, asset transfers, community investment grants etc will be used.

“In the second model, Rs60,000-70,000 will be given with a business plan to graduate out of poverty in two to three years,” he added.

Defending these ideas, Mr Hamid said both models are developed in collaboration with experts from MIT, Harvard and London School of Economics. “The Asian Development Bank (ADB) has pledged $50m to test these models,” he said.

“On what basis do they claim denting poverty if there is no information on the recipients’ graduation from the programme?” remarked a critic.

Naveed Akbar, a senior officer at the BISP, confirmed to Dawn that thus far not a single recipient of the programme has been dropped from the list of beneficiaries (5.7m people) for outgrowing the need. “We intend to drop those who no more qualify for the stipend after the completion of the second National Socio-Economic Registry (NSER) survey. We expect 10-12pc of recipients to graduate out of poverty based on the trend noticed in 14 districts that have so far been covered by the said survey,” he said. He added that it would take at least six more months to complete the survey.

An economist with interest in the multi-dimensional concept of poverty was happy that the focus of the BISP has widened to include complementary initiatives. “It is good that in a country like Pakistan where at some point the government stopped reporting the inequality assessment to avoid embarrassment, the BISP has improved its capacity and developed the NSER based on Poverty Scorecard Survey (2010-11) to identify eligible households through the application of a Proxy Mean Test, a method to scientifically assesses the poverty level based on the welfare status on a scale of 0-100. Today, the BISP database contains information on the status of over 27m households across Pakistan barring two FATA agencies,” he said.

“There are several dozen social sector-related departments and agencies that benefitted from this data base to improve design and reach of their programmes,” he added.

A cynic was not impressed though. “Instead of making an effort to provide job avenues to the left-out population, the government is making Pakistanis a nation of beggars. The social security net is not treated as an ultimate destination for the able-bodied poor. It is supposed to be a transitory arrangement of support till people get into gainful employment.

“In a patronage-ridden system in Pakistan, the BISP is treated as a ticket to free money till death and beyond. Politicians often use these cards to appease their restless constituents demanding jobs. How do they manage that is left for readers to imagine,” he said.

Published in Dawn, The Business and Finance Weekly, August 13th, 2018