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<b>Poverty may have risen in Pakistan, says ADB</b>

ISLAMABAD : <b>Poverty in Pakistan is estimated to have risen in fiscal year 2008-09 with high domestic inflation caused by soaring food and energy prices, says the Asian Development Bank (ADB).</b>

In a report titled ‘Summary poverty reduction and social strategy’ discussing Punjab’s efficiency improvement programme, the ADB states the Punjab Multiple Indicators Cluster Survey (MICS) indicates that the impact of food price increases on poverty level is substantially greater than the impact of energy price rises.

The report is quite significant in the context of a recent acknowledgement by the World Bank that poverty had declined by 5.1 per cent to 17.2 per cent in Pakistan in 2007-08. However, the WB is also of the view that poverty may have increased in 2008-09 owing to higher inflation as well as low growth.

<b>The ADB states “overall a 20 per cent increase in food prices will lead to an 8pc increase in the poverty head count, from 36pc to 44pc, with the negative impact of food price shocks falling disproportionately on rural poor, as opposed to the urban poor.”</b>
It says Punjab experienced strong annual growth of 7-8pc between 2002-03 and 2007-08, leading to a significant reduction in poverty. Federal poverty estimates, based on the 2005-06 Pakistan Socio-economic Living Standard Measurement Survey, indicated a 12.2pc decrease in people living below the poverty line from 34.5pc in 2000-01 to 22.3pc in 2005-06. While the magnitude of the decline is disputed, the trend is widely accepted.

The report says the key issue is whether the trend can be sustained and the pace of poverty reduction is fast enough. Even with a poverty level of 22.3pc, roughly 35 million people still live below the poverty line. This is higher than the number of poor in 1996-97. Furthermore, rural poverty is substantially larger than urban areas.

The government’s efficiency programme echoes the thrust of the Poverty Reduction Strategy Paper-II (PRSP-II), focusing on the delivery of public services in an efficient and effective manner.

Although the programme is categorised as a general intervention, it has a pro-poor focus with increased expenditure on social safety nets. In the face of recent dramatic food shocks, the government has decided to provide food security for poor households through the Punjab food support scheme, Sasti Roti scheme, free medicine initiative, support for deserving students and green tractor scheme.

The Punjab food support scheme, estimated to cost Rs10.8 billion, provides Rs1,000 per month for 1.8 million poor families. Under the Sasti Roti scheme, bread is provided for the poor at Rs2. The Finance Department has indicated that Rs6.1 billion will be spent under the scheme in fiscal year 2008-09.

The free medicine initiative is expected to cost Rs1.8 billion this fiscal year. The support for deserving students is likely to cost Rs3 billion and the green tractor scheme Rs2 billion.

The challenge of poverty alleviation remains huge. Pakistan, being a signatory to the Millennium Development Goals (MDGs), is committed to achieving the MDG target for poverty by halving it between 1990 and 2015. <b>The estimated level of poverty in 1990 was 26 per cent which needs to be cut to 13pc by 2015 if the target is to be met.</b>

Based on the 2007 Punjab Economic Survey, 20pc of the provincial population is poor, with a higher concentration of poor in rural areas at 44pc. This means roughly 18 million people in the province are living below the poverty line and vulnerability is high.
<b>
Social indicators are poor in Punjab and malnutrition is high, with one-third of children under five years being underweight, posing a serious health problem. Infant mortality and maternal mortality rates are double than MDG targets.

Literacy rate for children of 10 years is 56pc in Punjab and dropout rate is 30pc. Only half the population is served piped water and has a covered sewerage system. Lack of human development is a hindrance to social and economic progress. Furthermore, the province faces a large infrastructure deficit which hampers economic growth. Lack of productive employment opportunities is another serious problem.</b>

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