- Need to prioritise human development, economic growth and promote inclusive progress in societies
Rising GDP growth rates and equal access to opportunities, irrespective of gender, income, religion, or ethnicity, are closely linked to decreasing poverty but the goal of all human undertakings should not be economic growth; instead, human development should be the ultimate goal. The deliberate governmental attempt to establish a connection between economic growth and human development indicators is the source of this phenomena of poverty alleviation. Focusing public policy on nutrition, health, education, and asset redistribution through fiscal policy tools is essential for any meaningful shift in the human development metrics. Since Pakistan’s public policies are not working well, there is no clear correlation between periods of rapid economic expansion and advancements in the social sector.
We all aware of the fact that, Pakistan has not performed as well as its low-income counterparts, such as Bangladesh, on certain indicators, such as female literacy and infant mortality, even during its periods of higher growth. Programmes for social policy that are implemented inefficiently can be partly blamed for the issue. The Social Action Programme (SAP), for instance, was designed to address Pakistan’s social development shortcomings when it was first introduced in 1991. The initiative was unable to make a major impact even with large funding going into SAP (Social Policy and Development Center (SPDC). In actuality, primary enrollment declined during the 1990s while enrollment in private schools rose, a sign of growing discontent with public education. Its inability to be financially sustainable and cost-effective are the primary causes of its collapse. Even though local governments are responsible for providing the majority of essential services, many operations had to go through higher level government departments, which resulted in overstaffing and increased infrastructure expenditures.
The low social development metrics are not a result of a dearth of efforts, but rather of an improper execution strategy. However, since 2002, the nation’s poverty rate has been continuously declining, despite the unpredictable growth rates.
Welfare benefits include asset ownership, better housing, and higher school enrollment particularly for girls are linked to this decline in poverty. Nevertheless, the failure of SAP is but one illustration of how public service policies do not ensure that they truly reach the intended population. Thus, the canvas of development holds the key to solving the poverty conundrum rather than the paradigm of growth but as per World Bank development index the entire this growth is the outcome of heavy inflow of foreign aid, wave of revolution in media and political system i-e from dictatorship to democracy.
Depending on the kind of system in place in the nation, the effects of foreign aid can differ. Democratic governments are more likely to uphold their half of the bargain with donors and implement the conditions placed on the help that is provided. Additionally, foreign aid may help advance democracy to a limited degree by supporting civil organisations, press freedom, and election processes with technical support from donors, among other things. A steady stream of foreign aid can slightly raise the caliber of a democracy’s institutions. Furthermore, a democratic government allocates aid more effectively. To combat poverty, a combination of increased foreign aid and democratic presence may be more successful.
Foreign aid can have a variety of effects, but generally speaking, it supports democratic changes by assisting in the establishment of the systems and infrastructure required for growth. They do, however, also note that donors can have a bias in favor of democratic nations, indicating that there are more factors at play than just democracy when it comes to the relationship between foreign aid and democracy. Another significant facet of foreign aid by refuting the idea that help promotes economic expansion. Nonetheless, by enhancing the infrastructures for health and education in recipient nations, foreign aid may promote development even in the absence of growth, depending on the kind of regime. Similarly, a key component of reducing poverty is the media’s function in conjunction with democracy.
Democracy ensures social welfare security by giving the impoverished the ability to hold the government accountable through elections and the free press. The impoverished may experience social and economic marginalization as a result of limited media access since they lack the knowledge necessary to choose a qualified and reliable candidate where Pakistan’s decreasing poverty rate is a conundrum, given the country’s sluggish economic growth and subpar public service delivery.
Pakistan is headed in the right direction when it comes to reducing poverty and providing for the social sector, and the long-term effects of the current initiatives will be evident. Nonetheless, there is still a significant misalignment of priorities, with a continued emphasis on targeted goals rather than more universal outcomes like health and education, which are more likely to support productivity and long-term development but the misconduct and misutilisation of aid over the past years will generate doubts to the donors leading to rise in poverty and decline in social welfare exerting pressure on poor and deprived community which was already combating with the aftershocks of Covid-19 and high inflation.
Sources reported that, in 2023 poverty in, Pakistan shot up to 39.4% as of last fiscal year with 12.5 million more people falling into the trap due to poor economic conditions where almost 95 million Pakistanis now live in the vicious circle of poverty so, there is no doubt in the fact that, Pakistan is facing serious economic and human development crises and it is at a point where major policy shifts are required as Pakistani models are no longer working. World Bank reports that, the poverty in Pakistan increased within one year from 34.2% to 39.4% with 12.5 million more people falling below the poverty line of $3.65 per day income level.
It is observed that, Pakistan has the capacity to collect taxes equal to 22% of the GDP but its current ratio is only 10.2% showing a gap of more than half that propose reduction of distortive exemptions to generate taxes equal to 2% of the GDP. It wanted an increase in taxes on land and property to collect another 2% of GDP in revenues and generate another 1% of the GDP from the agriculture sector. In addition, withdrawal of income tax exemption are mandatory from the power generation projects and to the real estate investment trusts.
Furthermore, expenditure cuts are also the need of time which includes reduction of federal development and current expenditures on provincial nature projects, reducing spending on loss making entities, and improving quality of development spending to save about Rs1.4 trillion which almost saved the amount to 2.7% of the GDP. There are a lot of stop and go and a lot of policy reversals, needed to be incorporated and the amount saved through these sources are necessary to disburse to poor’s through different programmes of BISP and other schemes but immediate relief is required to tackle this controversial situation to safeguard our community from falling into the dark holes of poverty which demand better utilization of aids that support growth, generate employment and improve the living standard of poor where media has the responsibility to spread awareness to literate the community to elect the right government that formulate policies supporting poverty alleviation which is only possible through political stability, fear actions and policy shifts.
The author is MD IRP/ Faculty Department of H&SS, Bahria University Karachi