OECD /KOREA POLICY CENTRE PAKISTAN: FAILURE OF POVERTY REDUCTION EFFORTS by Saifur Rahman Sherani...

OECD /KOREA POLICY CENTRE

PAKISTAN: FAILURE OF POVERTY REDUCTION EFFORTS

bySaifur Rahman Sherani

PAKISTAN PROFILE• Area 796,000 Sq. km• Population 164 million• Population Average Annual

Growth Rate 1.7%• GNI US$ 144

Billion• GNI per Capita US$

770• Domestic Debt Rs. 1,787

Billion (US$ 28 billion)• External Debt US$ 45

billion

POVERTY PROFILE

• Poverty Line 2,350 calories per adult equivalent (Rs. 944 in 2006 prices)

• Population Below Poverty Line: 23.9%• Regional variations: • NWFP (rural) and FATA 44%• Balochistan 47%• Punjab (rural) 32%• Below $ 1 a day 17%• Below S 2 a day 74%

OFFICIAL POVERTY ESTIMATES

FY 1999 FY 2001 FY 2005 FY 2006 FY 20090.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Perc

ent o

f Pop

ulati

on B

elow

Pov

erty

Lin

e

POVERTY REDUCTION STRATEGY 2003

• Accelerating economic growth while maintaining macroeconomic stability.

• Improving governance.• Investing in human capital.• Targeting the poor and the vulnerable.

SOCIAL INDICATORS 2007

• Adult Literacy Rate 50%• Combined Gross Enrolment ratio 40%• Net Primary enrolment ratio 68%• Life Expectancy 64 years• Newborn with Low birth weight 37%• Children Underweight 30%• Infant Mortality 77• Under 5 Mortality 99• Maternal Mortality per 100,000 320

Budgetary Expenditure as % of GDP2007

• Education 1.86%• Health 0.61%• Water supply and Sanitation 0.19%• Rural Development 0.25%• Food Subsidies 0.06%• Food Support Programme 0.04%• Population Planning 0.08%

Social Assistance (Zakat) Disbursed

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

Zakat 5254 8009 5330 3692 4520 4600

500

1,500

2,500

3,500

4,500

5,500

6,500

7,500

8,500

Paki

stan

Rup

ees M

illio

n

INCREASING POVERTY

• Food Crisis • Energy Crisis – 4,000 MW power shortage• Cottage Industry Shutdown• Textile units: 70% closed• Increasing Unemployment• Inflation 23%• Food Prices Increased 200%

Government Management

• Shortage of wheat - four fold increase in prices• (2007 Wheat production 24 million tonnes) • Exported 1.5 million tonnes – $208 /tonne• Imported 2.5 million tonnes - $400 / tonne• Shortage of Power and industrial shut down • Load Shedding • Shortage of gas and increasing prices of fuel

Rush for Wheat Flour

POLITICAL TURMOIL AND INSTABILITY

• Military Rule October 1999 to 2008• Popular Leadership Exiled and imprisoned• Emergency PLUS 2007• End of Supreme Court March 2007• Superior Judiciary in Chains• Army Operation in Balochistan 2005 to 2008• Army Operation in Islamabad 2007• Wave of Suicide Bombings • Political Murders – [Former Prime Minister, Governor, Chief Minister]

Marriot Hotel Islamabad

War on Terror

• US Attacks in FATA 2003 – to date• Military Operation in NWFP 2007• Military Operation in FATA 2004 to date• Internal Displacement About 2 million people• [Internal Displacement Monitoring Centre – No estimates]

RETURN TO CIVILIAN RULE

• Elections February 2008• Resignation of Military Ruler August 2008• Constitutional Amendments not Reversed• New Political Government - 55 federal

ministers – 20 more to be appointed• Foreign Exchange Reserves Depleted• Financial Crisis• IMF loan obtained

FROM DISCONTENT TO DESPAIR

• Poverty and Destitution Increasing• Ever increasing Food Prices• Increasing Unemployment• Social Assistance as Political Patronage

through elected representatives• Federal cabinet of 55 ministers• Import of 250 bullet proof vehicles

Poor Sell Kidney for Survival

PRIVATE SOCIAL ASSISTANCE

• EDHI Langar (soup-kitchen) in all major cities• Imran Khan 50% Subsidy on baked Bread• Private Charities – Food distribution• Zakat

QUEUE FOR FREE FOOD

Government InitiativesPlanned in April 2008 yet to be Implemented

• Federal Programme: • Benezir Income Support Programme Federal

Government - Rs.34 billion• Rs. 1,000 per month to 2.83 million poor• Provincial Government:• Punjab Government Food Stamp Rs. 21.9

billion for 1.8 million Poor

Pakistan’s Public Expenditure on Social Assistance and War on Terror

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Social Assistance 5.363 7.65 6.307 0 65.9

War on Terror 259.13 300.78 360.9 484.367 677.793000000001

50.0

150.0

250.0

350.0

450.0

550.0

650.0

750.0

PAK

RU

PEES

BIL

LIO

NS

DISASTERS

• Drought 1999 - 2003• Floods in Balochistan and NWFP 2005 and

2007• Earthquake in Northern Pakistan 2005 100,000

killed • Earthquake in Balochistan 2008• Suicide Bomb Attacks 116

Public Policy Issues

• Respect and Acceptance of Constitutional Rights of Individuals by the State

• Restoration of Independent Judiciary• Bring Transparency and End Corruption • Pro-poor Public Policy • Strengthening of Planning• Preparation of PRSP - 2

THANK YOU