ISLAMABAD, April 5: South Asia is home to the largest number of world’s poor, and in Pakistan vulnerable population of 45 million makes up 25 per cent of those living in poverty due to economic downturn, conflict and unemployment, says the World Bank.
A latest World Bank report — Poverty and Vulnerability in South Asia — released here on Friday said that since poor people were primarily located in rural areas where social protection programmes like insurance rarely exist, they are more vulnerable to poverty and are exposed to various risks like crippling illness and death, economic downturn, conflict, natural, disaster, unemployment, harvest failures, floods, drought and plagues.
“Pakistan’s 20-year-old programme of redistributing wealth through Zakat and Ushr taxes is yet to reach more than two million beneficiaries in any year in a country where many more live below the poverty line,” the report said.
It added that only about half of the direct payments being made, moreover, go to the poorest of the poor, those in the lowest expenditure quintile. “Zakat funds had been highly limited by the relatively low levels of transfers and beneficiaries involved,” the report said.
However, the report pointed out that the collection of Zakat that increased steadily between 1980-81 and 1993-94 have since declined, amounting to only 0.19 per cent of GDP by 1992-93, which implies that even if all the benefits had gone to the lowest quintile of households, the income of this group would have been augmented by only 2 per cent.
The selection of beneficiaries is primarily at the discretion of local Zakat committees, and subject to some patronage at the local level. “Also, the status of beneficiaries is not kept up-to-date, resulting in beneficiaries continuing to receive support for years after their initial entry into the programme, regardless of their current status.”
Among the very poor, the hardest hit include children, the elderly, widows — and women in general because of their persistent lack of decision-making power — the chronically ill, and the disabled, says the report. “In Pakistan, for example, a vulnerable population of 45 million makes up 25 per cent of those in poverty, and they are on the edge of falling deeper into poverty in large numbers as a result of such shocks.”
Highlighting how poverty and vulnerability mutually reinforce each other, the report argues for strategies by governments which analyse the relevant risks and institutional arrangements to cope with them.
Looking for ways in which to build comprehensive social protection into the country strategies and policy choices, the reports suggests incorporating a social protection strategy into a country’s poverty reduction plan. In its operational work, the report said, the World Bank could expand anti-poverty programmes to include ways to mitigate and cope with risk, and insurance schemes which reduced risks could be built into bank-supported projects in health and rural services in the forms of catastrophic health insurance and crop insurance.
The report also proposed that innovative ways of providing social protection need to be piloted, and the bank needs to be prepared to provide financial and technical support. “By focusing on monitoring and evaluation of these innovative tools, best practices can be learned and pilots expanded, both across countries and the region,” the report said.