World financial organisations often issue conflicting reports about the economy of Pakistan and the government efforts to reduce poverty in the country. According to a previous World Bank report, 50 million fewer people lived in poverty in 2011 than in 1991 in Pakistan and the share of the poor living on less than $1.25 a day dropped from 66.5 percent in 1987 to 12.7 percent in 2011. The report also says that Pakistan lags behind the other lower-middle income countries and more than half of its population – almost 90 million people – is still living on less than $2 a day in 2015. The report says that income growth has been the main driver of poverty reduction while the country’s Gini coefficient and the ratio of income held by the top 10 percent compared to income held by the bottom 40 percent have fluctuated over time. However, figures show that income inequality has declined in the country over the years.
The report suggests that the country has converted economic growth into poverty reduction but stronger and more sustained growth is needed to continue reducing poverty to reach the poorest of the poor. It says that equitable income distribution is important, as it can influence the effect of growth on poverty reduction. If income inequality is high, economic gains are more likely to accrue to the wealthy with little left for the poor. If income distribution was more equitable, the poor would gain more from the country’s economic growth, allowing them to consume more and build up enough savings to develop assets such as education and housing. The report says that poverty has steadily declined even when income growth was volatile in the 1990s. However, a recent World Bank report says that 12.7 percent of Pakistan’s population still lives below $1.25 per day, which is categorised as extreme poverty while the international poverty line is two dollars a day or an income of about Rs 205 per day in local currency.
A comparison of regional countries showed that the poverty rate in Sri Lanka and Maldives is significantly less than Pakistan with 23.9 percent and 12.2 percent, respectively. The poverty rate in India and Bangladesh is higher than Pakistan with 59.2 percent and 76.5 percent. The foreign agencies collect information from available sources and are part of the documented economy. No doubt health, education and sanitation conditions are very poor in low-income residential areas, but the private sector is filling the vacuum left by the government. It is not the economy which is responsible for the poverty in Pakistan, but corruption and mismanagement of the government machinery.
