PovertyPoverty refers to the condition of not having the means to afford basic human needs such

as clean water, nutrition, health care, education, clothing and shelter.

Poverty in Pakistan-Challenges

Poverty is one of the major social problems Pakistan is facing. It is one of the most

important and sensitive issue not only for our self but for the whole world. Poverty can

cause other social problems like theft, bribe, corruption, adultery, lawlessness, injustice.

To eradicate the evils of society we have to fight with poverty. We can't control theft by

enrolling thousands of police men. Corruption and injustice can't come to an end through

tight legislation but by demolishing poverty.

A low level of domestic income for an individual results in lack of access to education,

health care, and other communal facilities like lake of sanitation, transportation and

communication.

Poverty is not just about providing food,

clothing, & shelter. There are a lot more

indicators that are needed to improve

poverty such as education, stable

employment with decent wages, health

care, law and order security, minimum

housing standards, & decent recreation

environment all these factors when

combined could have a dramatic affect on

reducing poverty in Pakistan.

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Poverty Rate in Pakistan

Poverty in Pakistan is a growing concern. Poverty rate jumped from 23.9% to 37.5% in

three years after severe economic shocks hit Pakistan last year. Although the middle-class

has grown in Pakistan to 35 million, nearly one-quarter of the population is classified

poor as of October 2006. As of 2008, 17.2% of the total population lives below the

poverty line, which is the lowest figure in the history of Pakistan.

According to the recent data compiled by the United Nations, Pakistan’s Human

Development Index stands at 0.56. It is pretty close to Bangladesh, Yemen, and Nepal. It

ranks 139 out of 179 countries reported in this analysis.

To eradicate poverty in Pakistan we have to fight with the causes and factors of poverty.

Unless the causes and factors of poverty will be settled the poverty will never end.

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Causes of Poverty in Pakistan

Pakistan is a poor country. Its economy is facing fluctuations now a day. At the time of

independence Pakistan has very low resources and capital, so the processes of progress

were very slow. Unfortunately the politicians of Pakistan were all not well aware of

modern global system and the progress processes and the needs of country. Due to bad

policies today Pakistan is facing a lot of problems. The continuous failure of policies

leads the people of country to miserable conditions.

It is difficult to point out all causes of poverty in Pakistan but the major causes of are

given below:

Government Policies

Government extra expenses and Corruption

Population, Unemployment and Lack of Education

Inflation, Smuggling and Large scale Imports

Law and Order situation and Decline in Foreign investment

Increasing Defense expenditure & Race of Weapons in the Region

Role of West and IMF

Our discussion is basically focused on these root causes of poverty. Now let’s have a look

on these causes separately given ahead.

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1. Government Bad Policies

Government is not well aware of present conditions of country. The policies of

government are base on the suggestions of officials which do not have awareness about

the problems of a common man. After implementation the policies do not get effective

result. After the failure of one policy, government does not consider its failure and

announces another policy without studying the aftermaths of last one. Heavy taxes and

unemployment crushes the people and they are forced to live below poverty line. The

suitable medical facilities are not provided to people and they are forced to get treatment

for private clinics which are too costly.

We have collected some bad policies of Pakistani Government which are given below.

Pakistan’s Gold and Copper reserves sold in pennies

Reko Diq is a small town in Chagai District, Baluchistan having the world´s largest Gold

and Copper reserves. Reports emerging from various sources indicate that the US $ 65

Billion natural deposit might have been sold for US $ 21 Billion to Tethyan Copper of

Australia which has taken the contract to develop this mine while Barrick Gold

Corporation of Canada (a JEWS company) and Antofagasta of Chile have a joint-

ownership of the copper-gold deposit at Reko Diq.

The Reko Diq deposit is being

explored by Tethyan Copper

Company Pty Ltd (75%) and the

(BDA) Balochistan Development

Authority (25%). Tethyan

Copper Company is held jointly

(50:50) by Barrick Gold

Corporation and Antofagasta

Minerals.

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Currently the deposit is at scoping / pre feasibility stage. It is a world class copper / gold

porphyry style deposit, typical of the tethyan belt. It has been sold to the Zionist

controlled regimes by the Pakistani Government at a price of $21 billion. Rough

estimates suggest that the gold and copper at the surface accounts for $65 billion worth of

deposits.

UPS and Batteries Imports

Pakistan’s UPS and batteries import is $10

Billion, but we require only $7 Billion on

Kala Bagh Dam Project by which we can

generate 7500MW electricity at 0.60

paisa’s/unit only but our Govt. is not willing

to pay attention on this……..

Privatization

Government is unable to manage the departments and country has low reserve assets. So

the meet the requirements some companies run by government are sold to foreign

investors. The commodities or services provided by the companies are becoming costly.

For example if government sold a gas plant then prices for gas in country rises. Not only

this but Privatization is made on very cheaply basis, lets see…….

Pakistan steel mill cost’s Rs.300 Arab but it is sold in Rs.21 Arab.

Habib Bank Ltd. Cost Rs.140 Arab but sold in Rs.14 Arab.

PTCL cost Rs.700 Arab but sold in only Rs.120 Arab

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2. Govt. Extra Expenditure & Corruption

We have collected some Facts and Figures about High Expense of Govt. Officials which

are given below:

500000000 (5 Crore) per year is spend on the security of President and Prime

minister.

Monthly expense of 1 minister = 30 Lacs

Monthly expense of 96 minister = 288000000 (28 Crore 80 Lacs)

Expence of 96 ministers per year = 3 Arab, 45 Crore, 60 Lacs

National Assembly + Senate = 440 Members

Provincial Assembly = 636 Members

Total = 1076 Members

Every member have luxury and expensive vehicle, none of them is car less and

also none of them is going alone to his office, they Have 4 to 8 vehicles security

squad

So 1076 x 4 = 4304 cars at least!

If each car consumes fuel of 500 daily then :

4303 x 500 = 2152000 per day

2152000 x 30 = 64560000 per month

64560000 x 12 = 77 Crore, 47 Lacs, 20 Thousands rupees per year, and this is

only the estimate of fuel, now you can think yourselves about their eating

expense, their salaries, their visits etc.

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Flags and banners are used by each political party for their publicity. It is a rough

estimate that only in Karachi a party put at least 50000 flags and change after 2

months, so if each party has 50000 then there will be some 250000 flags only in

Karachi. Then what will be the amount of flags through out the country?????

Each flag costs up to Rs.100, why should this money not be used for the help of

poor people?

This is the Direct and visible way of wastage of the nation’s money but there is an

invisible way as well to collect the money and left the people in the Web of Poverty,

which is called Corruption!

Corruption

It is the condition when there is not morality and every one is trying to earn more and

more by using fair and unfair means. Officials waste their time has low efficiency. Only

one relationship that is exists in society is money. One has to pay a heavy cost to get his

right. Law and order conditions are out of control and institutions are failed to provide

justice to a common man. Justice can be bought by money only. But government is

unable to control such type of things. In this whole scenario some corrupt people has

been occupying the resources and common man is living in miserable conditions.

Let’s see an example that whenever there is an increase in the price of electricity, gas or

petrol while state bank of Pakistan doesn’t issue the coins of paisa now.

Suppose if petrol is Rs.71.13 per liter, but we have to pay Rs.72 per liter (87 paisa extra)

Now total Petrol consumption in Pakistan = 50880000 Liter per Day

50880000 x 87 = Rs.44265000 per Day and what will be the amount for months or year.

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3. Population, Unemployment and Lack of

Education

The estimated Population of Pakistan in 2010 was over 169,478,000, making it the

world's sixth most-populous country. The population growth rate now stands at 1.6%.

About 20% of the population lives below the international poverty line of US$1.25 a day.

Pakistan's population has increased from 34 million in 1951 to 144 million in mid 2001.

The addition of over 108 million Pakistanis in just five decades is due to the high

population growth rates in the last thirty years. Continuing high population growth will

amount to Pakistan’s population reaching 220 million by the year 2020. Coupled with

poor human development indicators such as low literacy, high infant mortality and low

economic growth rates, such a large population will undermine efforts being undertaken

to reduce poverty and to improve the standards of living of the populace.

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Over one third of Pakistanis are living in poverty. The impact of population growth on

poverty is obvious, since poorer families, especially women and marginalized groups

bear the burden of a large number of children with much fewer resources further adding

to the spiral of poverty and deterioration in the status of women. This large part of the

population is constrained to live in poor housing and sanitation conditions and lack of

access to safe drinking water. In particular, income poverty leads to pressures on food

consumption and adversely affects caloric intakes and increasing malnutrition in poorer

families and contributes to high levels of child and maternal morbidity and mortality.

Furthermore, rapid population growth contributes to environmental degradation and

depletion of natural resources.

Unemployment

“A person is unemployed if he or she did not worked during the preceding week but

made some effort to find working the past four weeks”

Unemployment rate in 2009 was 7.40 which is doubled in 2010, the current rate is

15.20%

Unemployment is one of the major problems of Pakistan. The level of unemployment is

moving up. The socio economic system of the country and institutions has failed to

provide employment to the increasing labor force. The rate of expansion in industrial

sector is very slow. The increasing labor force has not been absorbed. Increasing output

of general education institutions is the major cause of educated young men’s

unemployment. Technical, professional and vocational institutions are limited in number.

When peoples are unemployed they consume the resources but are unable to contribute in

overall economy, which results in poverty.

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Lack of Education

The literacy rate of Pakistan is very low. Most of people do not have any concept about

the modern earning sources. Most people are unable to adopt technology for their

business needs, that’s why business do not meet international standards and results as

decrease in revenue which lead the society to poor financial conditions.

Literacy ratio in Pakistan still remains

at 56 percent, mainly because of small

budgetary allocations, lack of political

will and delays in disbursement of

funds. In the region, Pakistan has been

ranked higher only than Nepal and

Bangladesh, which have literacy rates

of 49 and 43 percent, respectively.

Other countries have far better ratios:

the Maldives, 96 percent; Sri Lanka, 91

percent; and India, 61 percent.

Sindh has the highest percentage in education which stands at 54 percent followed by

Punjab (52 percent) and the NWFP (40 percent). Balochistan has the lowest ratio — 33

percent. Unesco attributed the low level of literacy rate to factors like weak

organizational infrastructure, low professional capacity, lack of research, non-availability

of proper training institutes, low public awareness and lack of evaluation and monitoring

system.”

Poverty can't come to an end unless we will spend much larger share of our GDP to the

education sector. We have to open more primary and secondary schools especially in our

villages. In the 1971 constitution we made primary education compulsory and free. The

constitution made a pledge to made secondary education free with in next ten years.

Leave the secondary education we are not able to provide even free primary education

both to boys and girls after passing 35 years.

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4. Inflation, Smuggling and Large scale Imports

Inflation is a rise in the general level of prices of goods and services.

Inflation is the Major cause of Poverty. Poverty in Pakistan is increasing due to the

current layer of Inflation. Inflation decrease the purchasing power of society, peoples are

unable to fulfill their needs and results in strengthen the Poverty rate.

Smuggling

Smuggling is the clandestine transportation of goods or persons past a point where

prohibited. It is directly related with inflation; in fact it is the cause of inflation. Pakistan

is recently facing the shortage of sugar and wheat due to the smuggling these items to

neighboring countries.

Pakistan is the 7th largest wheat producing country. Total

wheat consumption of Pakistan is 20 million tones,

while production of wheat last year was 23 million

tones. But the newly elected government in 2008 faced

wheat shortages as a lot of Pakistan’s crop had been

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exported or smuggled out of the country in response to high international prices. In

response to the shortages, and the higher international price, the new government

announced in their budget for fiscal year 2008-2009 that the government would now

procure the crop at Rs 950 per 40 Kg bag, a hike of Rs 300.

Similarly Pakistan is 4th largest sugarcane producing country but facing the swear

shortage of sugar. The price of sugar in Afghanistan is from Rs 75-80 per kg. The price

of sugar in Pakistan is Rs 45-46 per kg. The price difference gives smugglers a chance

which results in shortage of sugar. This condition forced the govt. to import sugar which

increases the price of sugar and again affecting the poor.

Same is the case with Moong pulse. For the first time the rates of dal moong (green

moong beans) have reached a record high level in retail and wholesale markets of the city

due to short production of the commodity in the country coupled with record rates in the

international market. Being a local product, moong pulse in the corresponding months of

previous year was available in the wholesale markets at around Rs 35 per kilogram (kg)

while at retail level at Rs 40 per kg, which was easily accessible in the buying capacity of

a large segment of the population. However, owing to multifarious factors including its

large-scale unhindered smuggling and less than anticipated crop in Pakistan like world

over during the current season, its rates have shot up to record level of Rs 115 per kg at

wholesale level while at retail level it is sold at Rs 120 to Rs 125 per kg pushing the

commodity beyond the buying powers of an overwhelming segment of the population.

Large Scale Import

The import of Pakistan is greater than export. Big revenue is consumed in importing good

every year, even raw material has to import for industry. If we decrease import and

establish own supply chains from our country natural resources the people will have

better opportunities to earn. And it will help to reduce poverty.

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5. Law and Order Situation and Decline in

Foreign Investment

Law and Order

There are lot of problems regarding law and order. Terrorist attacks create uncertainty in

stock markets and people earning from stock are getting loss due to which the whole

country faces uncertain increase in commodity prices. Pakistani firms are unable to sign

agreement with foreign investors due to the prevailing abysmal law and order situation.

According to economists, “although the global economic meltdown was also a reason of

slow growth in FDI, the domestic shocks were major contributors in the declining trend

of FDI. November was the third consecutive month in which the country posted decline

in foreign direct investment. We were expecting some increase in the FDI during the

current fiscal year ahead of positive economic indicators. The ongoing war in the

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northern areas and suicide attacks in different cities had restricted the foreign buyers from

new investment in Pakistan.”

Foreign investment

Foreign investor comes to local markets. They invest millions of dollars in stock markets

and stock market gets rise in index. Then the investor withdraws his money with profit

and market suddenly collapses. Political instability, terrorist attacks, power, gas and

water shortage and weak law order control has led to falling trend in FDI. These are the

major reasons due to which the foreign investors are not interested in investing their

capital in Pakistan. The after math always be faced by poor people.

The share of foreign direct investment, flowing into Pakistan, is negligible when

compared to the opportunities and economic fundamentals of the country. The FDI

inflow into the country is less than one per cent of its total, made globally. Since 1996,

when received highest amount, FDI in Pakistan has been experiencing a declining trend.

Foreign direct investment (FDI) in Pakistan is a major external source to meet obligations

of resource gap, human resource development and goal achievement. The FDI has played

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a vital role in the economic growth of Pakistan. To emerge as a promising nation Pakistan

has to provide conductive environment for external economic flows.

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6. Increasing Defense expenditure & Race of

Weapons in the Region

Background: India achieved its independence from imperial Britain in 1947, after which

it was divided into two countries - India and Pakistan, as per the Mountbatten Plan. After

this partition, Pakistan chose to be an Islamic republic, aligned with United States while

India chose to remain politically neutral, as a secular socialist democracy. These choices

turned out to the turning points in the political and military future of both these countries.

Pakistan’s defense budget for the year 2006-07 was $4.1 billion (~3% of GDP) in

response to India’s hike in defense budget of 2006-07 at $20.11 billion (~ 2.5% of GDP).

Pakistan’s hike in military budget would be partially funded by its government coffers

and partially by borrowing whereas India’s military spending would be entirely off its

own funds. India’s ambitious budget prompted Pakistan to up its own military budget,

despite the country’s widespread poverty and socio-political problems. Apart from its

GDP, Pakistani military also gets a considerable funding from United States. Considering

that India has a far larger economy overall, its military budget is also several times larger,

despite being a smaller share of India’s GDP.

India and Pakistan both are facing the common problem of poverty but at the same time

both are increasing their defense expenditure with the passage of time. India is always

trying to prove its superiority against Pakistan and for that reason India set up different

agreements with other nations related to the purchase of weapons and technologies, and

so Pakistan follows the neighbor and doing the same. But the point to worry is that India

is an Economic power while we are begging from IMF. We have to think about our poor

people first………

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7. Role of West and IMF

The International Monetary Fund (IMF) is the international organization that oversees the

global financial system by following the macroeconomic policies of its member

countries, in particular those with an impact on exchange rate and the balance of

payments. IMF loans usually come with conditionalities, restrictions and requirements

imposed by IMF on the borrowing country

Pakistan is also seeking the help from IMF on very dangerous conditions which are

causing more poverty in the country. Some of the conditions are Listed Below:

Conditions

Pakistan government has to gradually impose the central excise duty (CED) on

services and agriculture sectors at the rate of eight to 18 percent in place of the

general sales tax (GST)

The Pakistani currency will also be devalued after slight changes in the discount

rate and exchange rate will be decreased officially by six to seven percent.

The International Monetary Fund ordered Pakistan to cut military spending by

almost a third.

Put an end to subsidies on all products.

Taxes should be increased.

Govt. expenditure should be stop.

There are some other conditions as well but condition listed above had a worst impact on

the Pakistani society and poverty in Pakistan.

These negative Impact is given ahead :

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Impact of IMF’s Conditions

The reality is that Pakistan's IMF-approved stabilization program is aimed at making the

country a better source of profit for international investors. While Pakistani economy will

have no benefits

Sakeeb Sherani of the Royal Bank of Scotland told a meeting organized by

Pakistan's Centre for Research and Security Studies that the IMF package will

"cause up to three million job cuts in deferment sectors and push another 5.6

million to 7.5 million Pakistanis into poverty over the next two years.”

Shahid Javed Burki, himself a former World Bank vice-president and ex-Pakistani

finance minister has strongly criticized the IMF/PPP-led government's

"stabilization" program saying that it will deflate the economy at a time when

demand threatens to fall dramatically due to world recession while other Asian

countries have introduced stimulation packages to generate growth, Pakistan has

done no such thing. Pakistan is being advised, in fact, to cut expenditure when it

needs to invest in employment generating projects. ... At the present rate, only

high growth in poverty can be expected."

This government is now asking for huge loans from the World Bank and the IMF

which are reluctant to give money due to their own perilous condition. The

Pakistani economy urgently needs $4 billion or it will collapse. The imperialists

will only give this money on their own conditions which include an end to

subsidies on all products. Also they demand privatization which means more

unemployment and infrastructure collapse. All this will force the millions of

peasants and workers to come out onto the streets to find a solution to their

miseries.

The conditions the IMF is attaching to its loan to Pakistan will severely impact the

country's workers and toilers. They include: eliminating all subsidies on energy,

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petroleum products, and fertilizer; slashing government spending, including "non-

priority" development spending; and raising taxes.

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In order to pave the way for the IMF loan, Pakistan's central bank raised its bank

lending rate in early November by 2 percentage points to 15 percent and the

government has let it be known that a further 1.5 percentage point hike will be

implemented in January.The high-interest rate policy the IMF is imposing on the

State Bank of Pakistan has caused consternation among large sections of

Pakistan's business elite, including various trade and industrial lobby groups.

According to an Asia Times Online report, Anjum Nisar, the president of the

Karachi Chamber of Commerce and Industry, has said, "Pakistan's industrial

landscape may soon be marked with dead and sick units and there will be massive

unemployment because of the devastating impact on businesses of the higher cost

of bank loans arising from the interest rate increase."

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Solutions to Remove Poverty from Pakistan

Govt. should make the Policies in Favor of Pakistan, and Pakistani people.

Govt. should not waste national assets and utilize them to remove the poverty

Corruption should put to an end and Judiciary should take some action

against corrupt people.

Population rate should be controlled.

Govt. should make policies to provide employment to the Labor force.

Education budget should increase and policies should be made to Boost up

the Literacy rate.

There should be price control in the state to decrease the inflation which will

give some benefit to the poor.

Smuggling should be stop by enforcing the Law and Order.

Law and order situation must be improved to bring back the Foreign Direct

Investment (FDI).

Govt. should think first about the healthcare, education, energy crisis instead

of Defense and Armory.

We should relay on ourselves instead of IMF

By taking these steps Poverty rate will be reduce and there will be a relief for the poor

THANKS!

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