KARACHI, July 9: A latest research report on social development in the country, reveals that during the two years since 1999 about 350000 people have been rendered unemployed, while 7 million people have been pushed below the poverty line.

The report of the Social Policy and Development Centre, a private sector research organization which also receives core funding from the Canadian International Development Agency, launched its 4th annual review (2001) on growth, inequality and poverty at a ceremony here on Tuesday.

Former federal finance minister Sartaj Aziz presided over the ceremony, which, among others, was also attended by economist and former finance minister Dr Hafeez Pasha, and planners in the government as well.

Referring to the trends in GDP and unemployment, the report says that the unemployment rate which increased from an average of 3.5 per cent during 1981-1990 to 5.7pc during 1991-2000, went up further to 6.7 pc in 2000-01.

The percentage of population below the poverty line, which had fallen from 31 pc in 1979 to 17 pc in 1988, rose again to 33 pc in 1999, while at present 38pc of the population subsists below the poverty line.

In his presentation, acting managing director of the SPDC, Dr Kaiser Bengali, observed that as far as the poor were concerned, Pakistan had returned nearly where it had been about 35 years back. He said that the remarkable increase in poverty had taken place only due to the fact that neither the benefits of development nor the cost of economic adjustments appeared to have been distributed equitably.

Referring to the analysis on income and regional inequity trends in the country over the last two decades, as given in the 243-page report, Dr Bengali said that terrorism was a buzzword today, but those who were concerned about terrorism should pay close attention to the problem of inequality.

“While poverty causes hardships and deprivation for those caught in the poverty web, inequality causes a sense of grievances and injustice, promotes despondency and anger, and general social and political instability and even violence”, he added.

He further viewed that increase in poverty had generally been attributed to low GDP growth in the 1990’s, but low growth in itself could be poverty inducing.

It is highlighted in the SPDC review that the income share of the richest 20 per cent of the population has increased from 44pc to 47pc during 1988-1998, while that of the poorest 20 per cent has declined from 9 pc to 8 pc, for that reason the purchasing power of the richest segment rose by 23 per cent and that of the poorest segment rose by a meagre 2 pc.

The report further shows that the richest households spend less than one third of their income on food, while the poorest households spend nearly half their income on food.

Dr Bengali said that the reasons for growing inequality in the 1990’s lay in economic liberalization, the move towards market economy and the retreat of the public sector as an equalizing force. “Market-determined outcomes tend to serve those who are better endowed and reinforce inequalities and this is what appears to have happened”, he added.

The report also highlights the regional inequality among and within the provinces. The analysis of the deprivation level in the 100 districts of the country shows that a north-south divide has emerged in the country with the percentage decrease in the deprivation index being highest in the Punjab and the lowest in Balochistan.

In the case of the deprivation index for Sindh, it is reported that the situation in the rural Sindh has deteriorated and the urban Sindh has stagnated. Hyderabad, the second least deprived district of Sindh ranks 12th in terms of in the national ranking.

Dr Bengali said that the last one and half decade had seen the failure of the five-point programme and of the social action programme.

“The thrust of macroeconomic policy since 1988 has been the pursuit of stabilization objectives at the cost of growth objectives. All stabilization objectives were achieved till 2001, but it is intrusive to see a to how these targets were achieved,” he said.

Summing up the comments and presentations, Sartaj Aziz said that the report showed that contrary to the general perception about failure, Pakistan’s development journey had been fairly positive in the economic field. Per capita income had increased three and half fold, to Rs5128 in 2001, but the distribution of income between the rich and the poor had tilted more in favour of the rich.

Referring to the social sectors, he pointed out that there had been improvement with reference to the literacy rate, the number of universities, doctors and health centres.

“Though in comparative terms there is positive progress in the social sector, the overall social indicators compare less with the SAARC countries, particularly when it comes to literacy, quality of education, clean drinking water, child and infant mortality, public transport, housing, poverty and unemployment,” he added.

Referring to the deprivation index prepared by the SPDC, he said that the provincial deprivation indices clearly established the need for more financial allocations to the more deprived provinces and districts.

He said that several non-economic factors such as the sanctions since October 1990, the difficult law and order situation, the tensions with India and the negative fallout of the war in Afghanistan had adversely affected the climate of investment.

Stressing the need for devoting at least half of the fiscal space of about Rs78 billion, created this year by debt relief, to public investment in expanding social and economic services, Mr Aziz said that it was necessary as only large public investment could compensate the fall in private, foreign and domestic investment.

Earlier, the executive director of the Pakistan Centre for Philanthropy, Shahnaz Wazir Ali, held the report as a landmark in the social research field and viewed that the government could benefit from such reports while setting up its development agenda.

A Canadian High Commission official in Karachi, Even Due, said that the SPDC annual reports were getting better and better. “We support the centre for its works on poverty reduction measures,” he said.