Poverty is a multidimensional phenomenon. It cannot be restricted to the unavailability of food only. It is about food security and the certainty that the food chain won’t be broken abruptly or behave unpredictably. A hope can be entertained that prices of commodities would remain the same for a certain period without the formation of any cartels. Precious earnings would not be eviscerated.
Poverty also includes the inability to attain bare minimal standards of living, affordable clothing, and have access to health facilities and clean drinking water. Additionally, it includes lack of access to educational, economic, and political opportunities and resources. Consistent low incomes in households make people prone to poverty. Such households are at the margins of subsistence and highly vulnerable to risks and economic shocks.
Possession of tangible and intangible assets also explains the poverty profile of an individual. A low savings rate would not allow investing into any tangible or intangible asset. This could hurt economic sustenance and restrict exploiting any incentives that could be reaped. A disproportionate reliance on informal sector employment opportunities also creates uncertainty because economic bubbles may burst, leaving the employee jobless with no recourse to any other opportunity.
Since Pakistan is a predominantly agriculture-dependent society with shrinking industrial sprawl; a hallmark of low incomes and savings rates has calibrated poverty in terms of very low per capita ownership of land, livestock, house and other physical assets. Presently, the diversification of asset ownership is restricted to certain economic models prevalent in the country. A mix of livestock and land is owned largely by the agrarian class, whereas land and other physical and intangible assets are held by the landed and business class. What is striking, however, is the low savings rate due to high inflation and fuel prices.
Pakistan has made considerable headway in alleviation of poverty in the recent decade. In 2004-05 around 23.9 percent of the population lived below the poverty line in the country. Since then the performance in alleviating poverty is nothing short of a miracle considering the fact that the country sustained its biggest earthquake and largest floods in 2010 and 2011 which affected more than two-thirds of the country’s population. Poverty declined to 11.2 percent in 2018-19. Poverty in both rural and urban areas is declining with a poverty headcount of 12.5 percent in urban and 30.7 percent in rural areas, as per latest statistics.
mong the major causes of poverty are unemployment, low literacy, poor skill sets and lack of economic opportunities. Unemployment is running in double digits at 11 percent of the population. This is a huge factor in driving people to poverty. It is also interlinked with literacy rate. The matters get worse when unemployment and literacy are further studied on urban, rural and gender bases. Statistics also indicate that the plight of the female population is far worse than of the male.
Poor skill sets are a barrier against entry in the labour markets. Fact of the matter is that people are not prepared for vocational and skill-based training. The labour market requires specialized training to train people as masons, carpenters, electricians, goldsmiths, mechanics, and so on. There is no demand and supply management for people who are entering the labour market and no plan has been made to give them requisite training. Moreover, the dynamics of the rural and urban market are also ignored as no quantification is done. Lack of economic opportunity can only be addressed if a broad strategy to absorb people in the labour force is formulated. Expansion of industry and investment in the manufacturing sector could increase the participation of people. As the economy slows down, the prospect of job contraction is becoming increasingly problematic with the narrowing of economic opportunities.
