Now that there are indications to suggest that the policy regime which is already in its eighth year has secured its continuity for the next five years at least, it is important to reiterate that its most disturbing fall-out has been the widening rich-poor gap. To be fair, the gap was not created by the regime. But its strategy of growth above all has widened it and there is nothing in the pronouncements of its main protagonists that it is likely to do any more than continue attempting to alleviate poverty – which amounts to first inflicting a wound and then dressing it.

In a recent interview with the networks, General Musharraf observed that slogans like roti, kapra aur makan are raised to hoodwink the people. He does not believe in sloganeering and has always talked about changing the condition of the people. Unfotunately, the perceptions are very different. As much as 56 per cent of respondents reported worsening of their economic condition in the survey conducted by the International Republican Institute.

If one is skeptical about an externally sponsored survey reaching this particular result, then we may look at one of our own. Data released by the government in the latest Economic Survey, despite some creative accounting, provide corroborative evidence. Between 2001 and 2005, the period for which substantial poverty reduction is claimed, 60 per cent of the population experienced a reduction in its share of the pie, with the economic condition of the bottom 20 per cent worsening the most. A staggering 93 per cent of the gains concentrated in the top 20 per cent bracket.

Ever since the market struck back after the collapse of the statist development models in the eighties, issues of income distribution took a back seat in policy making as well as academic teaching. The focus shifted to absolute poverty as some sort of a doable public good, compared to the difficult issues of relative positions involving endless debates on fairness and equity. However, as poverty has not been falling as fast as was predicted, there is a renewed interest in distributional issues.

With a view to exploring these issues, Nadia Saleem, a lecturer, and myself are jointly giving an MPhil course entitled “Economics of Poverty and Income Distribution.” at the G.C. University, Lahore. MPhil is a higher teaching-cum-research degree after the Masters level and the admission requires a reasonably good level of academic attainment and the satisfactory passing of a test conducted by the HEC.

Before starting the actual teaching so as to avoid influencing their opinions, the students were asked to return a questionnaire stating the major economic problem of Pakistan. The choice was limited to unemployment, inflation, poverty, income inequality and energy crisis. The results of the analysis, carried out by Ms Saleeem, are given in the pie chart. To our surprise, 50 per cent of the students chose income inequality as the major economic problem. Inflation was next, chosen by 28.6 per cent. Unemployment occupied the third place, being the choice of 14.3 per cent. Poverty came at the end with 7.1 per cent indicating it as their choice. There were no takers for energy crisis.

The economics curriculum at the universities being what it has been in recent years, we had not expected income inequality to be the choice of an overwhelming majority. Our expectation was that the students would either choose what affects them most personally, i.e., unemployment. Or it would be inflation, which they experience at level of household and are also taught in classes with a fair degree of detail. With a view to understanding a bit more about the majority choice, another questionnaire was circulated to find out more about the backgrounds of the students. This was even more revealing.

First of all, 71.5 per cent of those choosing income inequality were women and 28.5 per cent were men. We cannot read too much in this result as 78.6 per cent of the entire student body consists of women. In terms of the age composition, those choosing income inequality were a mature group of students: 57.1 per cent belonged to age group 22-28 years and 14.4 per cent to 30 years and above. Looking at the employment status, 57.1 per cent are employed, 28.5 per cent were unemployed and only 14.4 per cent had never been employed.

It seems that that the mature students, who are or have been in employment, have a better idea of the inequalities and injustices prevailing in the society. None of them had yet seen the data on increasing inequality in the country. They had neither done any formal reading nor received any formal instruction in the field income distribution. Their identification of income inequality as the major economic problem facing the country was based purely on the basis of a keen observation of the reality on the ground and the ability to interpret it on the basis of their overall knowledge of economics.

The results of this obviously limited survey are presented here not as representing some overall tendency or trend. Finding that will require a much larger and more systematic sample. Our purpose was only to illustrate the point that perceptions of a rising rich-poor gap exist and may well be expanding into a world of us and them. This does not augur well for the long term sustainability of the growth process in particular and the stability of the social fabric in general.

Inclusive growth, participatory processes, and programmes to improve access to physical, financial and social assets need to move well beyond rhetoric. What is worrying is the fact that inequality, which had begun to decline between 1999 and 2001, should start rising again in 2005. Worse, the sectors which have shown the highest growth, such as the financial sector, also register the highest Gini coefficients, i.e. the technical measure of inequality.