The poverty rate in Pakistan was registered at 61.6 percent in 1998 which has reduced to 21.5 percent by 2018, according to HIES surveys. But on the other hand, it is a fact that 77.60 percent of Pakistan’s population lives in poor conditions (less than $5.50 per day income). Cycle of poverty before starting to think about poverty reduction, it is important to understand. Simply, if there is a poor family then because of poverty their children will grow up in poverty and such poor children have little or no access to education and skills. As a consequence, they would be unable to find suitable work in the future. Their Income will be low then again they become a poor family and this cycle of poverty will remain to continue.
| Interest Free Loan (IFL) Progress (July 2021 to March 2022 ) | ||||||
|---|---|---|---|---|---|---|
| Province / Region Name | No. of Loans | Amount Disbursed (Rs million) | ||||
| Male | Female | Total | Male | Female | Total | |
| AJK | 66 | 730 | 796 | 3.00 | 35.21 | 38.21 |
| Balochistan | 3,061 | 754 | 3,815 | 160.88 | 27.71 | 188.59 |
| GB | 537 | 901 | 1,438 | 28.39 | 47.48 | 75.87 |
| Khyber Pakhtunkhwa | 13,674 | 11,227 | 24,901 | 541.57 | 336.29 | 877.86 |
| Punjab | 130,772 | 202,892 | 333,664 | 4,793.69 | 7,498.78 | 12,292.47 |
| Sindh | 5,326 | 19,298 | 24,624 | 216.44 | 724.60 | 941.04 |
| Total | 153,436 | 235,802 | 389,238 | 5,743.96 | 8,670.07 | 14,414.03 |
| Source: Pakistan Poverty Alleviation Fund, Islamabad. | ||||||
Experts identified that Pakistan’s economy is expected to grow by only 2 percent in the current fiscal year ending June 2023. According to the World Bank’s October 2022 Pakistan Development Update, Inflation and the Poor, the slower growth will reflect disruptions and damages caused by catastrophic floods, a tight monetary stance, high inflation, and a less conducive global environment. Recovery will be gradual, with real Gross Domestic Product (GDP) growth projected to reach 3.2 percent in the fiscal year 2024.
Sources recorded that the trend of a gradual decline in poverty in the last decade was interrupted in 2020 when poverty grew because of the disruption caused by the Covid-19 crisis combined with the effects of conflict and climate change. Surprisingly, the wealth of the top 100 people in this world is enough to eliminate extreme poverty.
The government of Pakistan tried to reduce poverty by introducing different poverty alleviation programs such as Social Security Program for employees, Workers’ Welfare Fund Scheme and Workers’ Children Education Ordinance, the Employees Old Age Benefits Institution (EOBI), Zakat and Ushr department, Pakistan Bait-ul-Mal (PBM), Pakistan Poverty Alleviation Fund (PPAF), Benazir Income Support Program and Ehsaas Program. The Government of Pakistan no doubt, seriously took the above initiatives to decline poverty but these are not enough to attain the goal. It needs innovative and deep thinking to rapidly reduce poverty. Furthermore, the biggest inequality that needs to be addressed is gender inequality as it is the main cause of poverty. So, women’s empowerment is the remedy to declining poverty.
The present government must introduce innovative climate change solutions and must promote climate justice to develop resilience against climate change. Sources recorded that education is an effective tool to reduce poverty and enhance the lives of people in Pakistan. As per UNESCO, if all students in low-income countries had just basic reading and writing skills, an estimated 171 million people could escape extreme poverty.
Statistics furthermore, showed that in Pakistan, 60 percent of labor is dependent on agriculture. In rural areas, it is possible to reduce poverty by adopting sustainable agriculture techniques. The government must offer training related to information technology to poor students and develop ease for Information technology or outsourcing-related work.
Experts identified that it is an effective way to reduce poverty and also bring foreign remittances to Pakistan. No doubt, economic activities and peace is a basic requirements of any poverty alleviation program in the country. The government must offer micro-financing schemes to issue loans to skillful people for small businesses. But to enhance small businesses, efficient and easy cash transfer services are also required. Good health is required for focused working. On the other hand, approximately 10 percent of the world’s population lives on less than $1.90 a day as per the United Nations.
Five percent of people (368 million) worldwide, are living in extreme poverty and the majority belong to Congo, Nigeria, India, Ethiopia and Bangladesh. Statistics showed that globally 40 percent of people do not have access to clean fuels for cooking and 13 percent of people do not have access to electricity. About 22000 children die each day due to living in poverty. It is a fact that at this time there are 2.2 billion children and one billion of them live in poverty in the world. In the previous decade, global poverty has declined by half but it is a reality that 71 percent of the world population is still living in low-income or poor scenarios.
Experts also identified that the cumulative impact of the floods and resort to contractionary monetary and fiscal strategies, along with the large depreciation of the rupee, will lead to the worst-ever ‘stagflation’ in Pakistan. The Stagflation can be expected to have a devastating impact on the people of Pakistan in the form of a quantum jump in unemployment and incidence of poverty.
If the Government of Pakistan assists poor children to get a good education then in the future they would be able to get good career opportunities or develop entrepreneurial setups. It will boost their income, they will not remain poor and such families would come out of the cycle of poverty. So free of cost and purposeful education for poor children, the creation of career opportunities and financing of small entrepreneurial setups are effective ways to break the poverty cycle in Pakistan.