Hunger and Poverty in Pakistan 2000-2008

Poverty and hunger often go together. The affordability of food is usually a bigger issue than its availability in most poor nations, according to research published by Indian-born economist and Nobel Laureate Dr. Amartya Sen. With few exceptions, rising incomes and reductions in poverty rates are known to lead to lower hunger levels.



Pakistan experienced significant declines in poverty and hunger from the year 2000 until 2008, according to figures published by the World Bank and the International Food Policy Research Institute in their separate reports published recently.

Per Capita PPP GDP


As per capita income rose over 50% to nearly $2500 in purchasing power, poverty in Pakistan decreased from about 34.5% to 17.2% and hunger went down with it during Musharraf years from 2000 to 2008, as reported by World Bank and IFPRI as lagging indicators. The global hunger index score, published annually by the International Food Policy Research Institute(IFPRI), is a number between zero and 100, with lower figure signifying less hunger.



Based on hunger data collected from 2003 to 2008, IFPRI reported that Pakistan's hunger index score improved over the last three consecutive years reported since 2008 from 21.7 (2008) to 21.0 (2009) to 19.1 (2010) and its ranking rose from 61 to 58 to 52. During the same period, India's index score worsened from 23.7 to 23.9 to 24.1 and its ranking moved from 66 to 65 to 67 on a list of 84 nations.

At 22.67% improvement in its hunger score since 1990, Pakistan has improved less than India's 23.97% reduction, explained mainly by little or no progress in Pakistan during the lost decade of the 1990s under Bhutto and Sharif governments.

In spite of the progress Pakistan made until 2008, the hunger situation in Pakistan (and Sri Lanka) is still rated as serious on a scale ranging from low level hunger to extremely alarming, and for the rest of South Asia, including India, the situation is described as alarming by the world hunger report 2010.



On the 11th anniversary of General Musharraf's coup this year, the dominant and self-serving political rhetoric on the airwaves of Pakistan completely obscures Musharraf government's positive role in significantly enhancing Pakistan's economic growth, and reducing hunger and poverty on his watch. Instead, Musharraf's enemies are focusing entirely on his missteps to try and hide their own major failures since 2008...failures that have brought Pakistan's economy near collapse, reminiscent of the bad old days of the 1990s that ended with Musharraf's coup in 1999. How long can they fool the people of Pakistan? Only time will tell.

Related Links:

Haq's Musings

IMF Country Report on Pakistan Poverty

Haq's Musings

Musharraf's Coup Revived Pakistan's Economy

State Bank of Pakistan Quarterly Reports

World Bank Poverty Report on Pakistan

Musharraf's Economic Legacy

Ishrat Husain: Structural Reforms in Pakistan's Economy

Pakistan's Economic Performance 2008-2010

Incompetence Worse Than Corruption in Pakistan

Pakistan's Circular Debt and Load Shedding

US Fears Aid Will Feed Graft in Pakistan

Pakistan Swallows IMF's Bitter Medicine

Shaukat Aziz's Economic Legacy

Pakistan's Energy Crisis

Karachi Tops Mumbai in Stock Performance

India Pakistan Contrasted 2010

Pakistan's Foreign Visitors Pleasantly Surprised

The "Poor" Neighbor by William Dalrymple

Pakistan's Modern Infrastructure

Video: Who Says Pakistan Is a Failed State?

India Worse Than Pakistan, Bangladesh on Nutrition

UNDP Reports Pakistan Poverty Declined to 17 Percent

Pakistan's Choice: Talibanization or Globalization

Pakistan's Financial Services Sector

Pakistan's Decade 1999-2009

Pakistan's Economic History 1947-2010

South Asia Slipping in Human Development

Asia Gains in Top Asian Universities

BSE-Key Statistics

Pakistan's Multi-Billion Dollar IT Industry

India-Pakistan Military Comparison

Food, Clothing and Shelter in India and Pakistan

Pakistan Energy Crisis

IMF-Pakistan Memorandum of Economic and Financial Policies

2010 World Hunger Index Report

Comments

There are 10,000 people dying everyday due to hunger and malnutrition. This short film shows a forgotten portion of the society. The people who live on the refuse of men to survive. What is inspiring is the hope and spirituality that never left this people.

http://www.cultureunplugged.com/play/1081
Riaz Haq said…
Here is a quick comparison of different sectors of the economy in India and Pakistan in terms of employment and GDP contribution:

Country....Agri(emp/GDP)..Textiles..Other Mfg..Service(incl IT)

India........60%/16% ...........10%/4%.....7%/25%...........23%/55%

Pakistan......42%/20%...........12%/8%......8%/18%...........38%/54%



Assuming India's PPP GDP of $3.75 trillion (population 1.2 billion) and Pakistan's $450 billion (population 175 million), here is what I calculated in terms of per capita GDP in different sectors of the economy:

India vs. Pakistan:

Agriculture: ($833 vs. $1,225)

Textiles: ($1,242 vs. $1,714)

Non-Textile Mfg ($11,155 vs $5,785)

Services ($7,246 vs $3,654)

It shows that Indians in manufacturing and services sectors add more value and produce higher value goods and services than their Pakistani counterparts.

The income range in India is much wider from $883 to $11, 155 accounting for the much bigger rich-poor gap relative to Pakistan's range from $1225 to $5,785.
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Riaz Haq said…
Here's Dr. Ashfaque H. Khan, Dean of NUST Business School, opposing SBP's latest 0.50% discount rate hike in Pakistan:

...another objective of tightening monetary policy is to discourage the government from borrowing heavily from the SBP to finance fiscal deficit. Government borrowing from the SBP is the main source of the surge in reserve money growth. During the last four-and-a-half-months, the government has borrowed Rs265 billion, against Rs16 billion in the corresponding period last year. As a result, reserve money has grown by 18.4 per cent, against 9.7 percent last year.

Perhaps the SBP believes that a rise in discount rate will discourage the government from borrowing from the central bank. The SBP has forgotten that by raising the discount rate by 100 basis points in the current fiscal year, it has increased the interest payment of the government by almost Rs50 billion. Thus, everything being held constant, the budget deficit will increase by Rs50 billion. Hence, more deficit, more borrowing, a further hike in the discount rate, further increase in interest payment, and further increase in budget deficit. Do we want to create a vicious circle?

Perhaps the SBP believes that by increasing the discount rate it will encourage commercial banks to participate actively in auction of government debt. In other words, it will shift government borrowings from the SBP to scheduled banks. Government borrowings from the scheduled banks stood at Rs76 billion, against Rs164 billion in the same period last year. Perhaps the scheduled banks are deliberately avoiding participation in the auction to the extent they should have been. They have thereby signalled that they need a higher interest rate.

Should the SBP, as monetary authority, be guided by the animal spirit of the scheduled banks, or should it be in the driving seat? Perhaps the governor of the SBP would like to be guided by the scheduled banks. I personally believe that the hike in discount rate was unwarranted and the status quo should have been maintained. The hike was an act of overreaction and could have been avoided.
Riaz Haq said…
There seems to be consensus developing among Pakistani economists that "prompt measures needed to control rising inflation", according to a report in Daily Times:

LAHORE: Pakistan is fast heading towards higher inflation and to overcome this grim scenario; improvement in governance coupled with a drastic cut in expenditure and revenue generation is crucial.

The doom and gloom scenario needs an urgent handling. Good governance, good policies, good institutions, good macroeconomic management are the drivers of economic growth that have gone dormant for quite some time. This was the crux of the speeches delivered at Economic Dialogue 2011 held at Lahore Chamber of Commerce and Industry on Tuesday. Senior economist Dr Akmal Hussain said the country is facing its gravest economic crisis in history after 1971. He said the economy is in deep recession, poverty along with high inflation is a recipe for disaster.

Unfortunately, he added, the government has zero fiscal space. He warned that Pakistan was heading towards higher inflation if immediate improvement in governance is not accompanied with cut in expenditure and substantial increase in revenue.

The former WB Executive Abid Hassan said that the institutional decay has now started taking its toll and the government should take appropriate measures on emergent basis to stop this decay. He said that with every passing day the country is going deeper and deeper into the economic mire. “Today we have reached a situation where even an economic stimulus would not work. The government should concentrate on tax collection and controlling unnecessary expenditures. Unless and until these two measures are not taken, the economy would not be able to be back on rails,” he said. The PIDE Vice Chancellor Dr Rashid Amjad said that the present day doom and gloom scenario could be changed by overcoming the acute energy shortage being witnessed by the country. The issue of circular debt needs to be taken care of by those sitting at the helm of affairs. “PSDP has a multiplier effect on the employment and economy. It should not be cut,” he said.

Former chief Economist Planning Commission Dr Pervaiz Tahir blamed the political chaos for our economic woes and termed the dictatorship democracy cycle as mother of all ills.

Energy sector expert Munawar Baseer, ex Executive committee member Almas Hyder and LCCI President Shahzad Ali Malik while appreciating the input provided by the economists said that most of the issues and challenges faced by the country are more of political. The political leadership while realizing the sensitivity of the situation should come up with a solid solution with close coordination with the chambers. “The policies are being made in isolation without the consultation of real stakeholders and that’s why the economic situation today has become more complex and directionless,” he said. The speakers said that the business community should be involved for the sake of correct decision-making.

They urged the government to evolve a more realistic and pragmatic framework by putting an end to inter-provincial disparity and the disparities within the province. The government should re-do its priority list and concentrate on the few areas that come on the top of that priority list.

It is very unfortunate, the speakers said, that the country has become the most inhospitable for both the local and the foreign investors for security reasons.

“Our inability to reach a consensus on water issue and inability to tap hydrocarbon potential of Balochistan has virtually pushed us to the wall,” they said. staff report
Riaz Haq said…
A quick comparison of the figures from Pakistan Center for Philanthropy and Bain and Co confirms the fact that the rich in India are only half as philanthropic as their Pakistani counterparts.

Here's an excerpt from a report by Arpan Seth of Bain:

In 2006, India’s giving totaled close to $5 billion. That would translate into $7.5 billion in 2009 based on gross domestic product (GDP) figures if the rate of giving remained steady. According to Bain analysis, philanthropic donations
would amount to 0.6 percent of India’s GDP. In Brazil, the rate of giving is 0.3 percent and in China, just one-tenth of 1 percent, so we are faring well when
compared with other emerging nations. But this is cold comfort given the enormous needs of the poor and disadvantaged in India."

The fact is that the lack of philanthropy by the rich in India is common knowledge, and it has come under criticism in the media recently.

Here's an excerpt from a recent news story in London's Daily Telegraph:

"Azim Premji, the founder of Wipro, a software and call centre to cooking oil empire, is India's second wealthiest man, and one of the world's richest 50 tycoons with a personal fortune of $18 billion.

The donation means he will succeed the Microsoft founder Bill Gates, who has given $1.6 billion to charitable projects in India, as the country's largest individual donor.

The announcement of his gift came amid criticism that too few of India's growing number of millionaires and global billionaires take philanthropy seriously or give enough of their wealth to charitable causes.

The Prince of Wales sought to bridge the gap in charitable giving on the Indian subcontinent when he hosted a dinner for some of the regions wealthiest businessmen and sought to persuade them to set an example by giving to well-run charities. He invited Ratan Tata, owner of Jaguar Land Rover, steel baron Lakshmi Mittal, property magnate K.P Singh and Mukesh Ambani, the world's richest Indian, to launch the British Asian Trust to encourage Asian billionaires to give more. "
Riaz Haq said…
Here's an Op Ed "Economic Growth Versus Human Development" by Prahlad Shekhawat published 02 July, 2011, Countercurrents.org:

Conventional indicators of development are being seen as unsatisfactory. The need for higher GDP leads to productive systems and consumption patterns that are not in harmony with the carrying capacity of the environment and our planet. GDP does not measure indicators of well-being, fair and equal distribution, unpaid labor and social sector indicators which assess the provision of effective employment, health and education.

India has consistently achieved the second highest rates of GDP growth but moved down to 134 position in the Human Development Index in 2009, compared to 128 a year before. The 2010 report puts India far behind in terms of achievements in tackling multidimensional poverty. The report concludes that economic growth has not lead to human development or less inequality. Similarly India is lagging far behind in its meager efforts to fulfill the United Nations Millennium Development Goals. Since many years the composite Human Development Index has been combining income, health, education and gender equity. The 2010 report there is a proposal to enlarge the measures to include new indicators like equity, environmental sustainability and empowerment through people’s participation

Moving away from one sided focus on economic growth as a panacea and an end in itself developed is being redefined in terms of more meaningful, multidimensional and sustainable measures. According to the Research Group: Wellbeing in Developing Countries at the University of Bath, the concept of wellbeing examines three perspectives: ideas of human functioning, capabilities and needs, the analysis of livelihoods and resource use, and research on subjective wellbeing and happiness.
----
The recent report of the Commission points out that there is no consensus yet as to which indicators provide the greatest value, and how they should be applied in guiding public policy. The Commission’s most significant finding seems to be the need to track three distinct policy goals separately: economic, performance, quality of life, and environmental sustainability. Combining many dimensions of well-being would dilute clarity and provide numerical results with little practical utility.

Can the Indian Government respond by setting up a similar and much needed commission in India on the Impact of Economic Growth on Human Development, under the Chairmanship of Amartya Sen. India and its government celebrates Amartya Sen as a matter of Indian pride because he won the Nobel prize, yet completely ignores his advice that economic growth is a means for human development and not an end in itself
Riaz Haq said…
Here's a report in The News on the PPP's unwillingness to face rising poverty in Pakistan:

The World Bank has said that poverty assessment is underway in Pakistan, which will provide the basis for an update on poverty trends, sources said on Saturday.

But the government is making efforts to drag its feet away from revealing any poverty figures in a bid to avoid controversy, they said. In its latest report on Country Partnership Strategy (CPS), the World Bank took conscious decision to sticking the poverty figures of 17.2 percent on the basis of survey done in 2007/08.

The figure of 17.2 percent was not endorsed by the PPP-led government, despite validation extended by the World Bank, they said. There is a sharp divide among the economists over this issue as some are favouring to concede poverty figures validated by the World Bank, but some close to the incumbent regime are raising doubts about the credibility of the data compiled by the Federal Bureau of Statistics (FBS).

“There is a need to form high-powered committee with clear cut terms of reference to decide this matter once and for all,” the sources said, adding that the methodology of calculating poverty figures should also be analysed to update it in accordance with the ground realities. Now, the Federal Bureau of Statistics (FBS) has once again accomplished Pakistan Social and Living Standard Measurement (PSLM) Survey 2010/11. But the Planning Commission has not yet done analysis to come up with the latest poverty figures, the sources said.

However, the World Bank’s country partnership strategy report said that as reported there are indications that Pakistan saw an impressive decline in poverty trends during most years of the last decade, with the poverty rate falling from 34.5 percent in 2001/02 to an estimated 17.2 percent in 2007/08.

Over the last two years, the WB said, there have been signs that poverty levels may be rising, due to the downturn in the economy, floods and inflation. The rapid post-floods recovery in parts of the agriculture sector (those not hit by back-to-back floods), market price for wheat, and a surprisingly strong growth in remittances would likely to have benefitted the poorest (mainly rural) income groups, according to the report.

While Pakistan’s overall level of inequality remains steady and relatively low as compared to other developing countries, some of the volatile border regions and some rural areas within other provinces have a higher than average level of poverty, it said. Increased migration to the cities has also strained their capacity to deliver the much-needed basic services.


http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=84002&Cat=3
Riaz Haq said…
Pak threat to Indian science

Hindustan Times

Pakistan may soon join China in giving India serious competition in science. “Science is a lucrative profession in Pakistan. It has tripled the salaries of its scientists in the last few years.” says Prof C.N.R. Rao, Chairman of the Prime Minister’s Scientific Advisory Council.

In a presentation to the Prime Minister, Rao has asked for a separate salary mechanism for scientists. The present pay structure, he says, is such that “no young technical person worth his salt would want to work for the Government or public sector”.

He adds, “You needn’t give scientists private sector salaries, but you could make their lives better, by say, giving them a free house.”

Giving his own example, he says, “I have been getting a secretary’s salary for the last 35 years. But I have earned enough through various awards.

But I can raise a voice for those who aren’t getting their due.” Last year, Rao won the prestigious Dan David Award, from which he created a scholarship fund. So far, he has donated Rs 50 lakh for scholarship purposes.

The crisis gripping Indian science seems to be hydra-headed. “None of our institutes of higher learning are comparable with Harvard or Berkeley,” points out Rao. The IITs, he says, need to improve their performance: a faculty of 350 produces only about 50 PhD scholars a year. “That’s one PhD per 5-6 faculty members,” says the anguished Professor.

Rao fears that India’s contribution to world science would plummet to 1-1.5 per cent if we don’t act fast. At present, India’s contribution is less than three per cent. China’s is 12 per cent.

“We should not be at the bottom of the pile. When I started off in the field of scientific research at 17-and-a-half, I had thought that India would go on to become a top science country. But now, 55 years later, only a few individuals have made it to the top grade,” he laments.


http://www.hindustantimes.com/News-Feed/NM13/Pak-threat-to-Indian-science/Article1-124925.aspx
Riaz Haq said…
Here's an ET report on social sector development during Musharraf years:

According to the report’s HDI list, between 2000 and 2007, which roughly corresponds with General Pervez Musharraf’s regime, the Human Development Index rose 18.9 per cent — an annual average of 2.7 per cent.

From 2007 to 2012 it only went up by 3.4 per cent, just under 0.7 per cent per annum. Somehow, things got even worse in the last three years of that time frame, with HDI increases crashing down as low as 0.59% — a negligible average annual increase of under 0.20 per cent.

The 2013 Human Development Report “The Rise of the South: Human Progress in a Diverse World” is instrumental in the context of Pakistan, especially given the challenges faced today due to poor policy choices that have been confronted in the report.

Meeting a small group of journalists here, Marc AndrĂ© Franche, UNDP Pakistan’s Country Director launched the report and said it is important for what it says and there are lessons to be learnt from countries with preconditions similar to Pakistan.


http://tribune.com.pk/story/527474/human-development-report-2013-the-rise-of-the-south-as-others-rise-pakistan-parks-the-bus/

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