Fighting poverty without data

Updated 14 Sep 2020

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Scavenger children, who collect recyclable items from garbage to earn their living, wait for a garbage truck in this file photo. — AP
Scavenger children, who collect recyclable items from garbage to earn their living, wait for a garbage truck in this file photo. — AP

The chances to succeed in Pakistan are increasingly determined by factors beyond one’s control — the economic status of the family you are born into, nationality, gender, religion, sect, etc. Most watchers believe that Pakistan is becoming more inequitable and the poverty trend line is looking up again.

The wealth of absurd proportions amassed by the elite in Pakistan is another subject but the disparity in the recorded salaries of top-tier executives and regular white-collar workers is astounding. An educated person earning in the band of Rs70,000-80,000 per month will need 20 years to earn what many CEOs make in a month. Families pay more for a meal in an elite restaurant than what a blue-collar worker earns in a month after backbreaking hard work.

Global research suggests that the hope of tackling poverty is bleaker in societies where income disparity is increasing. It will also be a drag on growth and its sustainability.

The growing discontent and polarisation over exacerbating social and political divisions are dangerous. It can disrupt the economic rebuilding process and shake people’s confidence in the democratic order. Unfortunately, the PTI team, instead of digging deeper for a clearer understanding of the causes, failed to furnish whatever routine exercises to gauge poverty and living trends were in place. It’s a pity that in this day and age, the numbers that separate life from death for many millions in Pakistan are five years old. What is worse is the fact that no one in the hierarchy in Islamabad sounded bothered.

Relevant statistics on inequality have not been updated since 2015-16

Ironically, the PTI claims that the Ehsaas programme has widened the social security net, but even the most devout champions of human dignity and justice in the ruling party’s dream team were caught unawares on the specifics of inequality/poverty as the basic relevant data has not been updated since 2015-16.

The search to locate the culprit for this gross negligence moved in circles. The officers in the Ministry of Finance that releases the annual economic health report — Pakistan Economic Survey — blamed the Planning Commission. The higher-ups in the Planning Commission targeted the Pakistan Bureau of Statistics (PBS), which defended itself by bouncing the buck towards the Ministry of Finance that holds the purse strings to fund such extensive exercises.

“We are a specialised data collection body, but we do what we are told and facilitated to do,” a top gun said sometime back while explaining the gaps in the operations of the PBS. “The sweetness of the pie depends on the amount of sugar used. The capacity and performance are a function of not just the will and capacity, but also the resources at hand,” a senior lady officer of the PBS responded when the credibility of certain reports were challenged.

The recent documents of multilateral agencies pointed to the escalation in human suffering in Pakistan based on the growth rate, but their observations lacked proper substantiation as they also borrow numbers from the national data pool that has yet to be updated. The Pakistan Economic Survey actually dropped the chapter on ‘poverty and inequality’ some years back. Why did they do that? My guess is as good as yours.

A member of the writing team of the survey in the Finance Division told Dawn the poverty chapter has not been dropped, but renamed. “The survey has same 16 chapters for the past many years. In 2011-12, the poverty chapter was given the name ‘social safety’ and now it is called ‘social protection’.”

On current poverty data, he said: “We can’t invent numbers. It is the mandate of the Planning Commission to calculate the poverty status based on the Household Integrated Economic Survey (HIES) findings and the income disparity status. The data of HIES 2018-19 has now been released. The Planning Commission will soon constitute a technical committee to work out poverty and inequality numbers. Hopefully, the next survey will share the outcome of the exercise.”

The gentleman did not try to defend the delay and agreed it had consequences.

An officer of the Planning Commission, confirmed to Dawn that a committee was indeed constituted last Thursday to initiate work on HIES data to calculate poverty and disparity.

Earlier, an economist at the Pakistan Institute of Development Economist (Pide) said the findings of the last poverty committee were withheld in the PML-N period not because of an embarrassingly high poverty rate, but the fact that the picture emerged was found to be too rosy to be credible by the political leadership of the time. From 24.3pc in 2015-16, the poverty rate dipped to 12pc in 2017-18 in the report that was discarded. She said she did not want to predict the poverty rate, but believed that the income disparity had persistently been increasing over the past two decades.

In April this year, the World Bank released “Poverty and Equity Brief Pakistan”. The document states: “… since 2015, the pace of poverty reduction is likely to have halted due to macroeconomic crisis and associated slowdown in growth. In this context, the outbreak of the recent Covid-19 pandemic and the containment measures adopted by the government are expected to increase poverty in the country.

“The informal sector and daily-wage workers employed in the formal sector are expected to bear most of the costs of the expected slowdown in internal demand. The informal sector accounts for 72pc of employment while informal workers in the formal sector account for another 5pc of the total. The expected reduction of employment and incomes in the informal sector will have negative impact on poverty, particularly in urban areas.”

Pakistan is slipping on the Human Development Index and is placed with other Asian neighbours in the lower-middle-income economies category in the World Social Report 2020 with a message: “The future course of these complex challenges is not irreversible. Technological change, migration, urbanisation and even the climate crisis can be harnessed for a more equitable and sustainable world or they can be left to further divide us.

“Governments are key players in creating more equitable societies, protecting the most vulnerable from the negative effects of these trends and ensuring that their benefits as well as adaption costs are broadly and equitably shared.”

The World Social Report is a publication of the Department of Economic and Social Affairs of the United Nations Secretariat.

Published in Dawn, The Business and Finance Weekly, September 14th, 2020