According to the Economic Survey FY2022, Pakistan falls among those few developing states whose constitution delineates social security as the civil right of every citizen. It’s the responsibility of the state to provide social security as indicated in Article-38 of the constitution of the Islamic Republic of Pakistan. Other basic amenities include clothing, housing, food, medical relief and education irrespective of caste or race, etc.
The Government of Pakistan has remained prone to a series of challenges, that is economic crises, political unrest, natural calamities, etc. which exacerbate the vulnerabilities of the poor segments. Furthermore, the process of structural adjustment under the IMF programme to stabilise the economy by steep reductions in fiscal and current account deficits has caused tax hikes (especially on consumption), cutbacks in public expenditure and the phasing out of food subsidies. It has led to a depreciation in the exchange rate and enhanced tariffs on public utilities like power and gas. All these adjustments reduce economic opportunities and raise the cost of living which further lower the living standards of poor people.
| Human Development Index And Its Components | ||||||||
|---|---|---|---|---|---|---|---|---|
| Country/ Region | HDI Rank | Human Development Index (HDI) Value (2021) | Average Annual HDI Growth (%) [1990-2021] | Life Expectancy at Birth (years) | Expected Years of Schooling (years) | Mean Years of Schooling (years) | Gross National Income (GNI) per capita (2017 PPP $) | Multidimensional Poverty Index Headcount (%) |
| SDG-3 | SDG-4.3 | SDG-4.4 | SDG-8.5 | SDG-1.2 | ||||
| World | – | 0.732 | 0.64 | 71.4 | 12.8 | 8.6 | 16,752 | – |
| South Asia | – | 0.632 | 1.16 | 67.9 | 11.6 | 6.7 | 6,481 | 29.0 |
| Sri Lanka | 73 | 0.782 | 0.67 | 76.4 | 14.1 | 10.8 | 12,578 | 2.9 |
| Iran | 76 | 0.774 | 0.82 | 73.9 | 14.6 | 10.6 | 13,001 | – |
| China | 79 | 0.768 | 1.50 | 78.2 | 14.2 | 7.6 | 17,504 | 3.9 |
| Maldives | 90 | 0.747 | – | 79.9 | 12.6 | 7.3 | 15,448 | 0.8 |
| Bhutan | 127 | 0.666 | – | 71.8 | 13.2 | 5.2 | 9,438 | – |
| Bangladesh | 129 | 0.661 | 1.66 | 72.4 | 12.4 | 7.4 | 5,472 | 24.6 |
| India | 132 | 0.633 | 1.22 | 67.2 | 11.9 | 6.7 | 6,590 | 27.9 |
| Nepal | 143 | 0.602 | 1.34 | 68.4 | 12.9 | 5.1 | 3,877 | 17.5 |
| Pakistan | 161 | 0.544 | 1.00 | 66.1 | 8.7 | 4.5 | 4,624 | 38.3 |
| Afghanistan | 180 | 0.478 | 1.82 | 62.0 | 10.3 | 3.0 | 1,824 | 55.9 |
Because of high vulnerability to climate change, the Government of Pakistan experienced devastating calamity in monsoon 2022 caused by the heavy rainfall and flash flooding that severely affected one-third of Pakistan taking the lives of greater than 1,700 people, approximately 8 million people have reportedly been displaced and 33 million people have been affected according to Post-Disaster Needs Assessment Report of the 2022 floods.
The floods of 2022 have caused a significant loss to poverty reduction efforts and would result in a rise in poverty and vulnerability of the affected population who live below or just around the national poverty line. Preliminary estimates suggest that as a direct consequence of the floods, the national poverty rate may raise by 3.7 to 4.0 percentage points, potentially pushing between 8.4 and 9.1 million greater people into poverty. Moreover, the depth and severity of poverty will increase for households that were already poor prior to the floods.
The catastrophic floods of 2022 further intensified the condition led to a huge loss of Rs 3.3 trillion and the cost of recovery and rehabilitation is estimated at Rs 3.5 trillion. In response, the Government of Pakistan has taken adequate steps to provide health facilities in flood-affected communities by offering shelter, safe drinking water, food items also health interventions amidst supply chain disruptions. The government offered flood relief assistance of Rs 70 billion to 2.8 million beneficiaries under BISP. A compensated amount of Rs 25,000 has been provided to each flood-affected family to assist them recover from their financial losses.
The Human Development Report (HDR) 2022 revealed that Pakistan has dropped seven places in the Human Development Index (HDI), ranking 161 out of 192 countries which put the country in the ‘Low Human Development category. Switzerland is on top, Norway and Iceland rank at second and third positions, respectively, while India has dropped one spot to 132 in the HDI.
According to the statistics, life expectancy at birth in Pakistan stood at 66.1 years, expected years of schooling are 8.7, while the gross per capita national income is $4,624. Life expectancy at birth in India is 67.2 years, expected years of schooling are 11.9, while the gross per capita national income is $6,590. Bangladesh stands at 129 in the index. Life expectancy at birth in Bangladesh is 72.4 years, expected years of schooling are 12.4, while the gross per capita national income is $5,472 respectively.
Approximately 90 per cent of countries have seen “reversals in human development” during the period under review. Statistics also showed that expenditure on 14 pro-poor sectors is explaining an increasing trend in absolute terms in pro-poor public expenditure. In 2017-18 it stood at 7.2 per cent of GDP, 6.5 per cent of GDP in 2018-19, 6.7 per cent in 2019-20, 6.4 per cent in 2020-21. During 2021-22, total expenditures of these sectors were increased and reached Rs 5630.8 billion, which was 6.7 per cent of GDP which shows the government’s commitment to follow a sustained poverty reduction strategy. The PRSP expenditures as percentage of GDP varies because of rebasing of National Accounts from 2005-06 to 2015-16. No doubt, social protection aims to facilitate marginalized and vulnerable segments of society through public interventions and collective attempts to enhance their standard of living and resilience against risks and vulnerabilities. Social Safety Net (SSN) programmes are non-contributory interventions that target the poor and vulnerable by unconditional and conditional transfers. Since 2020, progress in reducing global poverty has been slow and highly uneven. Nowcasts reveal that poverty reduction resumed in 2021, but only at pre-pandemic rates and not fast enough to recover the ground lost in 2020.
Moreover, the pace of poverty reduction will further stall as the global growth prospects dim due to the Russian – Ukraine conflict and higher food and energy prices that hurt the poor in the short run and may raise the number of poor. Although higher prices may have positive income effects in the long run because many poor households are net producers of food or earn their income in the agriculture sector.
| Pakistan: Prsp Budgetary Expenditures (Rs million) | |||||
|---|---|---|---|---|---|
| Sectors | 2017-18 | 2018-19 | 2019-20 | 2020-21 | 2021-22* |
| Roads, Highways & Bridges | 452,463 | 400,623 | 342,689 | 327,971 | 518,928 |
| Environment / Water Supply and Sanitation | 77,932 | 45,186 | 70,337 | 64,783 | 119,017 |
| Education | 829,152 | 868,022 | 901,013 | 802,226 | 1,101,654 |
| Health | 416,467 | 421,778 | 505,411 | 586,270 | 919,418 |
| Population Planning | 20,451 | 14,328 | 11,381 | 11,257 | 17,968 |
| Social Security & Welfare** | 257,534 | 173,443 | 280,258 | 225,278 | 419,199 |
| Natural Calamities & Other Disasters | 19,062 | 20,933 | 72,353 | 89,138 | 130,043 |
| Agriculture | 277,867 | 256,697 | 377,093 | 327,286 | 388,678 |
| Land Reclamation | 2,730 | 2,538 | 2,418 | 3,054 | 4,666 |
| Rural Development | 42,127 | 11,958 | 29,738 | 49,703 | 68,110 |
| Subsidies | 327,767 | 387,092 | 635,816 | 1,184,070 | 1,252,935 |
| Low Cost Housing | 349 | 704 | 1,766 | 2,242 | 1,780 |
| Justice Administration | 53,461 | 65,937 | 72,737 | 79,866 | 95,207 |
| Law and Order | 390,556 | 430,063 | 457,487 | 480,187 | 593,176 |
| Total | 3,167,918 | 3,099,302 | 3,760,497 | 4,263,331 | 5,630,779 |
| Total as % age of GDP (2015-2016 base) | 7.2 | 6.5 | 6.7 | 6.4 | 6.7 |
By 2030, the poverty rate is expected to be 7 percent, much higher than the target of 3 per cent. Reaching the target looks increasingly hard. This is an urgent need to correct course.
According to the Government of Pakistan, ending poverty in all forms and dimensions by 2030 is the first global agenda of the UN’s SDGs. Therefore, the identification of the poor and the evaluation of the extent of poverty have received considerable attention in the design of cost-effective poverty reduction programs and safety nets.
After the 18th Amendment, social security and safety nets are now provincial subjects. Keeping in view, a social protection framework is required to clarify the roles and responsibilities of federal and provincial governments and also to tap the private sector. The Social protection programs need to be properly monitored and evaluated for assessing their impact on poverty and vulnerability, economic growth, and public welfare. The Benazir Income Support Programme (BISP) is expanding its scope and size. Moreover, it is significant to phase out universal un-targeted subsidies. So, the released funds could be used on expanding the social safety net by bringing the poorest into the safety net.
The social protection system of Pakistan has enormous potential to handle poverty and vulnerability problems and is imperative to enhance coordination between dissimilar agencies. The Government of Pakistan is exploring options to identify and replace high-cost and low-impact investments with investments in social protection. Investments in social protection represent a significant share of public expenditure, and the effectiveness of these investments needs to be enhanced. Priorities need to be gradually shifted from strategies that were designed to support cohesion and social peace, towards measures with higher impacts on the reduction of vulnerabilities and poverty reduction. Another option is to reprioritize spending within the social protection sector.