KARACHI, Dec 20: Three well-known Pakistani economists and a foreign diplomat expressed a unanimous view on Monday that poverty could not be tackled only with economic growth but there had to be a strategy for equitable distribution of income , employment generation and a focus on social sector development also.

Pakistan's current economic growth model in which rising poverty is the most conspicuous feature came under sharp review of Sartaj Aziz, a former Finance and Foreign Minister, Dr Hafiz Pasha, Assistant Secretary General of the United Nations, and Dr Kaiser Bengali, Managing Director of the Social Policy and Development Centre (SPDC).

They spoke along with Margaret Huber, Canadian High Commissioner in Pakistan. The occasion was the launch of SPDC's annual review of social development 2004 titled "Combating Poverty: Is Growth Sufficient?

Noor-ul-Huda Shah, a prominent television playwright, also spoke as special guest to highlight the gender discrimination and class inequalities in Pakistani society. "The economic growth, unless it does not generate employment and without social sector development, is no answer to the poverty," Dr Hafiz Pasha remarked.

Dr Pasha, who was first managing director of the SPDC, praised his successor for maintaining independence in economic research. The Canadian high commissioner appreciated Pakistan's achievement of robust economic growth and hoped that the poverty alleviation would be given apriority.

"In this document, we have not only diagnosed the causes of poverty, but have also offered options to reduce poverty," Dr Kaiser Bengali remarked while making a presentation on the annual review of the SPDC. The document has also identified key elements of inequality and has given an analysis.

The document's prescription for poverty reduction is based on three pillars. They are accelerated GDP growth, improved asset/income distribution, and enhanced human and social development.

Growth, particularly in commodity producing sectors, according to the document, was the key condition to address the poverty. But for a sustained growth, macroeconomic stability and infrastructure remain the prerequisites.

The view that growth alone cannot reduce poverty is supported by the fact that every rupee of increase in GDP accrues 34 paisa to the richest 10 per cent of population and only three paisa to the poorest 10 per cent.

Its model-based simulation results show that even if the GDP growth is maintained at 6 per cent a year over the next five years, but the unemployment remains constant at 8.7 per cent, the poverty is likely to increase by 1.7 percentage points.

The SPDC document emphasises reduction of income inequalities a more potent tool for poverty reduction than the growth. A one per cent reduction in inequality is likely to reduce poverty by 8.5 per cent. A one per cent in per capita income is expected to reduce poverty only by 3.6 per cent.

The SPDC document reviews and analyses Pakistan's development history right from the beginning. It classifies this history into three phases. The first was the growth-oriented development model without any meaningful regard for equity and social justice, which was followed in Ayub Khan's decade of sixties.

It culminated into a social commotion and a political upheaval. The second was the growth with equity strategy from 1973 to 1977. It was primarily state managed after the separation of East Pakistan and inflation financed.

The document reveals that in 1977-78, the development budget for the first time exceeded the current expenditure budget. The growth strategy from 1978 onwards was without any vision and it thrived on the commissioning of development projects and reaped the fruits of policies of 1970s, with particular reference to remittances from overseas workers.

During 1988 to 2002, Pakistan maintained an annual growth rate of four per cent. The incidence of poverty also increased from 23 to 33 per cent during this period. The review proposes non-inflationary strategy to finance a development budget of Rs75 billion more by shifting resources from the current expenditure. It can reduce unemployment by 1.8 per cent and poverty by 44.4 per cent.

Dr Kaiser Bengali informed the audience that the UNDP Millennium Development Goal had set a target to reduce poverty to half by 2015. But if Pakistan manages to maintain the GDP growth rate at six per cent and the inequality remains the same, the poverty can be reduced at the most to 19.5 per cent by 2015.

Pakistan's taxation system has been described as more regressive that places more burden on the poor than on rich people. The study reveals that the poorest of 10 per cent families in Pakistan contribute 16 per cent of their income as indirect taxes, while the contribution of the richest 10 per cent is less than 10 per cent.

The richest families contribute only 0.3 per cent of their income in terms of income tax. The review makes a strong case for enhancing the share of income tax in total tax revenue for raising development and social sector expenditures.

The SPDC document also establishes property ownership as one of the principal variables impacting poverty, with land owning emerging as the critical determinant of the rural poverty. Higher land inequality is associated with higher level of deprivation and poverty.