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Today's Paper | March 10, 2026

Published 13 Feb, 2006 12:00am

Income inequality and rising poverty

THE degree of income inequality determines the level of poverty in a given society. While probing into the causes of these inequalities, one comes to know of factors responsible for uneven opportunities which multiply the number of have-nots.

Constraints are imposed through various developed and underdeveloped capital market conditions to impede capital accumulation at the national level. At the individual level, gender disparity, economic, social and cultural factors cause inequality of opportunities. Resultantly, in the low income developing countries, the gap between rich and poor continues to be widened.

At individual level, inequality of opportunities begins with family origins and is reinforced region-wise within the country. There exists a wide disparity in social and economic sector opportunities available to rural and urban population.

In addition to one’s inaccessibility to health and educational facilities, some of the causes of inequalities are; cattle rustling, domestic violence, corruption, isolation and lack of awareness on policy issues affecting their day-to-day life.

Consequently, children of rural poor as well as less-developed urban area families, despite having access to formal education develop skills much more slowly, thus economic opportunities remain out of their reach.

In almost all the less-developed countries, the poor have no say in the policy-making and the representatives at the various tiers of assemblies/governments never bother to consult the poor regarding their socio-economic needs and thus the concept of self-reliance remains an unachievable goal and the poor remain passive recipients of the state’s benevolence, in one form or the other.

Despite the poverty reduction strategies in force in developing countries, inequalities of opportunities continue to persist because of the peculiar economic, socio-culture and political environments causing immense harm to natural process of human development, which is a key to overall development process.

Participation of the various civic groups and the poor need to be encouraged as it would promote transparency and accountability in the whole system. At the same time, these masses would become aware of their rights and the denial of which, they would resist.

In order to arrest the growing inequalities, the policy-makers ought to bring in policies and measures that would help in the uplift of have-nots. At domestic level they need to invest in human resources, create just and fair environment—– an attribute of freedom, embodied in true democracy— to enable the poor to have an access to justice for preserving their rights to property / resources.

For promoting the participation of the poor in the economic process, the infrastructure must be in place. At international level, they need to focus on functioning of global markets and to perceive any future external threat to economy and to take corrective measures well in time. Further, in order to have greater access to export markets for their products, they must dismantle fiscal and trade barriers.

Accelerating the economic growth rate should be the focal point of strategies to be undertaken to lessen income inequalities and eradication of poverty. The World Bank study on Latin American countries showing poverty trends from 1980 to 1996 reveals that every percentage point decline in economic growth rate enhances poverty by two per cent.

The focus of the social sector development must be on improving educational standards and health care and these two vital ingredients of social development must be evaluated on the basis of their impact on development of human capital, which is essential to sustain high growth rate. Education and health policies should be geared to produce highly skilled and energetic workforce capable of making use of new technologies for all income-generating pursuits.

Although structural reforms undertaken by majority of developing countries during the last one decade have enabled them to attain high economic growth rate, yet despite substantial increase in their social spending, no improvement is visible in status of economically disadvantaged segment of their population.

Little attention has been paid towards removing social disparities particularly in the area of education and health sector. They have failed to remove disparities with regard to standards of education being imparted to children from various income groups.

Students from low income families do not have access to quality educational institutions. As such they generally lag behind in their professional life also due to lack of professional acumen, hence poverty perpetuates from generations to generation in such families.

In case of Pakistan, no doubt concerted efforts are being made both at federal and provincial level to achieve Millennium Development Goal (MDG) for providing education to all and maximizing access to technical and higher education, yet education policy in force does not recognize need of bringing in uniformity regarding standards of education in all educational institutions.

Similarly, poor of the country do not have access to proper health care facilities, hence apart from comparatively high mortality rate of child at birth and of women at reproductive age gaining ground, poor health environment reduce the efficiency of workforce. Resultantly, this deprived class of population remain impoverished despite a high overall economic growth rate and increased per capita income.

It is unfortunate that in majority of developing countries political power has been a close preserve of privileged classes like big landlords and business tycoons etc, who are least concerned about the welfare of the downtrodden.

Socio-economic disparities can be removed only through a transparent and democratic process of governance. Countries striving to remove disparities need to scale up development efforts and instead of being guided by imported ready-made strategies for eradicating poverty and squeezing gap between rich and poor, one should be guided by a realistic approach towards poverty reduction.

All economic and social development strategies must articulate a clear national plan for enhancing the poor’s access to economic and social opportunities. Besides, that risk management strategies need to be in place to deal with the shocks associated with natural calamities.

The availability of the proper infrastructure proves to be a strong motivating factor for bringing the deprived class into the mainstream of economic process.

Development strategies of majority of low income developing countries are devoid of integrated approach towards improving infrastructure. Inefficient and inadequate utility services and poor transport system is the common feature of low income agrarian economies. In Pakistan alone, inadequate energy resources prevent uninterrupted supply of electricity to various industrial concerns, hence cost of production increases and losses are normally made up by laying off staff or reducing their remunerations.

In fact, widespread socio-economic disparities in developing countries is giving rise to terrorist activities. To arrest its rising trend and for putting humanistic values in practice, there is need to develop due concern for equity. To achieve this, strategies must have focus on substantial increase in investment in human capital, promotion of micro, small and medium size businesses and microfinance institutions and access to quality education for all.

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