Saturday, 25 June 2016

Imagining poverty

by Haris Gazdar

How can our economic policy instruments reach the poor?
Photo credit: Wikipedia

There are two views about the economics of poverty reduction. One, that economic growth will trickle down and reduce poverty. Two, that there is no automatic trickle-down and growth may or may not be inclusive. It depends on which sectors grow, whether growth creates new and better jobs, and whether the poor are able to take advantage of economic opportunity.

The first view is largely discredited but this does not mean that we have the magic formula of what inclusive growth would look like or how it might be brought about. Then there is a third view that regardless of growth, and actually in spite of it, there is need for vigorous government action to lift large numbers of people out of extreme poverty.

The budget is a good time to take stock of all these things and to ask whether we see any useful ideas for poverty reduction. But what actually is poverty in a country like Pakistan? There are the usual numbers and debates about them. How many per cent below the poverty line — 9pc or 30pc? Has the ratio gone up or down? How can it have gone down when everyone feels miserable? Is the poverty line appropriate? What is the best way of setting it? Is the data any good — how do we improve it?

Regardless of how we look at the poverty numbers, some things are virtually uncontested. Around half our people do not get an adequate diet and around a third of our families go hungry at times. Around half our children are undernourished — they are physically small compared to a healthy population. And these undernourished children are far more likely to die young than children who have normal weight and height. Nearly two in five children of primary school age are not in school.

And there is more. The poorest are concentrated in the rural areas of Sindh, southern Punjab, Balochistan and southern Khyber Pakhtunkhwa. They are likely to be wage labourers and it is quite likely that women from poor families work for extremely long hours for extremely low wages to support sectors such as cotton, dairy and wheat which sustain the economy.

The poor are likely to belong to ‘low’ castes — or groups which are marginalised from mainstream society and politics due to historical disadvantage based on race, occupation, religion or some combination of these. The poorest are likely to face insecure housing conditions, and have unequal access to justice and the rule of law. In urban areas they are most likely to be migrants from these very regions, classes and communities, subsist on daily wages, and be the first to get evicted when there is ‘need’ for land for decent housing or infrastructure.

How can the instruments of policy reach these people to help improve their lives? Unfortunately, there are no serious answers to this question at the moment. The closest we come to the government’s view on poverty reduction is the annual Poverty Reduction Strategy Paper. It repeats — without elaboration — the self-satisfied notion that economic growth in Pakistan is pro-poor, that it more than trickles — it gushes down. The report then lists and adds up pro-poor government spending, which mostly comes under the mandate of provincial governments.

In fact, virtually all spending on education, health, law and order and other provincial mandates as well as federal and provincial funding on infrastructure is deemed to be pro-poor. If most of what government already does is pro-poor, according to its own words, what more is there to do? Are governments — federal and provincial — really focusing on the poor when they draw up their spending priorities, the majority of which appear to be skewed towards what they call ‘infrastructure projects’?

No amount of infrastructure investment can, by itself, generate enough employment to lift up half the population from the precarious life it leads. But to make sure that people are protected from the most severe forms of vulnerability is not that expensive. At around Rs100 billion, the Benazir Income Support Programme, which is a first and still tentative step in the direction of comprehensive social protection, costs us less than half of what we spend on the annual subsidy to the power sector. The programme does not reduce poverty, but at least it reaches many of the poor, as multiple evaluations have made abundantly clear.

What is needed is something at an even bigger scale, and in many other sectors such as housing, health, education, labour rights and child welfare — not the annual reiteration of what already happens, but something different and real. At the moment, however, there are no ideas on poverty alleviation in the pipeline awaiting implementation. Aside from resources, this poverty of ideas further limits the responsiveness of the state towards the concerns of the poor.

We will know that poverty is a concern in economic policy and budget-making if we could imagine what the federal and provincial government might do for a woman cotton harvester in southern Punjab or Sindh, for her wages and working conditions, for the food security and health of her family, and for her security of housing. Picture this person and then try to imagine what economic policy might have to do with her or him. It is a hard task. Very little trickles that far down, but be aware that down below consists of around half the country.

If we can imagine programmes reaching that woman field worker, and her counterpart in the city, we need to imagine many more such interventions. If we cannot then our imagination is as starved of ideas as our children are of nourishment and learning.

This article originally appeared as an op-ed at