Poverty

Aslamoaliqum

POVERTY IN PAKISTAN

Group Members • Nabila Amin (07108155) • Hiba Riaz (07108159) • Anum Mir (07108157)

Presented to:

sir Najeeb Nasir

ABOUT POVERTY IN PAKISTAN • Pakistan is a poor country. Its economy is facing fluctuations now a day. At the time of independence Pakistan has very low resources and capital, so the processes of progress were very slow. Unfortunately the politicians of Pakistan were all not well aware of modern global system and the progress processes and the needs of country.

Poverty in Pakistan

ABOUT POVERTY IN PAKISTAN • Due to bad policies today Pakistan is facing a lot of problems. The continuous failure of policies leads the people of country to miserable conditions. The major problem in the country is poverty which is becoming the cause of crime and social disorder.

CAUSES OF POVERTY •

It is difficult to point out all causes of poverty in Pakistan but the major causes of are given below: 2. Government Policies: Government is not well aware of present conditions of country. The policies of government are base on the suggestions of officials which do not have awareness about the problems of a common man. They implementation the policies without studying its after effects.

CAUSES OF POVERTY

2. Corruption: Another cause of poverty is corruption. There is not morality and every one is trying to earn more and more by using fair and unfair means. Only one relationship that is exists in society is money. One has to pay a heavy cost to get his right. Law and order conditions are out of control and institutions are failed to provide justice to a common man. In this whole scenario some corrupt people has been occupying the resources and common man is living in miserable conditions.

CAUSES OF POVERTY 3.Division of Agricultural Land:

Pakistan is an agricultural country. Most of people are farmers by profession. One has land which is fulfilling the needs of his family but he has to divide the land into his children when they got young. After division the land is not sufficient to support a family. Now the families of his children are suffering and spending their lives below poverty line.

CAUSES OF POVERTY 4. Materialism: In our society social bonding are gradually becomes thinner and thinner. A race of material object has been started even no one tried to understand the problems of others. Every one is gradually changing from human to a bioman. At last every one has lose his trust on others which effect our social and economic system and it is another cause of poverty.

CAUSES OF POVERTY 5.Lack of Education:

The literacy rate of Pakistan is very low. Most of people do not have any concept about the modern earning sources. Most people are unable to adopt technology for their business needs, that’s why business do not meet international standards and results as decrease in revenue which lead the society to poor financial conditions.

CAUSES OF POVERTY

CAUSES OF POVERTY 6. Large Scale Import:

The import of Pakistan is greater than export. Big revenue is consumed in importing good every year. If we decrease import and establish own supply chains from our country natural resources the people will have better opportunities to earn.

CAUSES OF POVERTY 7. Law and Order:

There are lot of problems regarding law and order. Terrorist attacks create uncertainty in stock markets and people earning from stock are getting loss due to which the whole country faces uncertain increase in commodity prices.

CAUSES OF POVERTY

8. Fluctuated Foreign investment:

Foreign investor comes to local markets. They invest millions of dollars in stock markets and stock market gets rise in index. Then the investor withdraws his money with profit and market suddenly collapses. The after math always be faced by poor people.

CAUSES OF POVERTY

9. Privatization:

Government is unable to manage the departments and country has low reserve assets. So the meet the requirements some companies run by government are sold to foreign investors. The commodities or services provided by the companies are becoming costly.

CAUSES OF POVERTY

10. Moral Culture: The main reason for poverty is the social dishonesty and irresponsible behaviour of people. Every one is trying to get rich by using unfair means. A shop keeper is ready to get whole money from the pocket of customer. This irresponsible behaviour continuously increases and produces loss for county.

CAUSES OF POVERTY

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN There may be differences on the precise measurement of poverty but it is widely believed that the incidence of poverty in Pakistan has increased during the decade of 1990s. According to some studies, the caloric-based poverty has in fact doubled from 17.4% in 1987-88 to 32.6% in 1998-99. Similar results are obtained on approaches based on basic needs and poverty of opportunity trends..

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN • What are the factors responsible for this outcome? • First and foremost, economic growth rate has declined from the historical level of 6 per cent to 4 percent and with population growth rate of almost 2.5 per cent and more, the increase in per capita incomes has been insignificant.

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN 2. The poor performance on economic growth is accompanied by rising income inequality and high open unemployment rates. Overall unemployment is estimated at well over 10 per cent and underemployment even higher. The Gini coefficient has risen.

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN 3. The high fiscal deficits of public sector inherited from the 1980 have not allowed much space for undertaking redistributive policies and poverty oriented.

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN

4. The poor governance of public sector institutions and cornering of public goods by the well-to-do segments of the society in a general environment of congestion and shortages have led to reduced access to these services by the poor. The worrisome aspect of this poor governance is that opportunities for human capital formation for those below the poverty line have diminished considerably both for the current cohorts and the future additions to the labour force.

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN

5. In an era of growing globalisation, financial integration and technological revolution of the 1990s Pakistan has not benefited very much. While the world exports were growing at 5 per cent annually during the last five years Pakistan’s exports have remained stagnant. Foreign direct investment flows to Pakistan have remained modest in relation to the size of its economy and spurt in information technology has by passed the shores of Pakistan so far. On the other hand, we have expanded our external debt burden to a level that is beyond our full servicing capacity.

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN • It is this particular area of liberalisation of trade and investment regime, financial integration and technological revolution which together constitute the key elements of globalisation that I will focus today. What are the transmission channels for globalisation to poverty reduction?

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN • At the first level globalisation aids economic growth • At the second level, rapid economic growth of the right pattern does help alleviate poverty.

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN • This transmission at the first level takes place through four distinct channels: (b) through international trade (c) through international capital flows (d) through international labour flows and (d) technological change particularly

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN (a) International trade: • In the medium – to long term, trade will help the poor, since labour is the primary asset of the poor which is used in the exportable of developing countries. • Increased trade will result in gains for relatively abundant factors (labour in most low-income

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN • Consumers get cheaper products (nearer world prices), at least in the medium-to long-term. • Short-term lay offs and retrenchment of labour in inefficient industries.

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN (b) International Capital Flows: • Long-term capital inflows (FDI) are beneficial for labour in the developing countries if these are destined towards labour-intensive sectors. • Short-term flows reward economic discipline and punish policy failures. • Management of exchange rate becomes critical as external financial flows lead to an appreciation of exchange rate.

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN (c) International labour flows: • In both the long and short-run, international migration generally helps the poor. • With more trade and capital flows, the need for labour to move is, however, lower. • ‘Race to bottom’ in the developed world.

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN (d) Technological Change: • Assimilation and adoption of technology improves efficiency in resource use. • New products and new processes broaden the choice of consumers • Solutions are found for gains in productivity.

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN • policies that facilitate unhindered flows of international trade, capital and participation in labor flows are given below:• reduced tariff and removal of non-tariff barriers • removal of price distortions • flexible regulations and legislation of labour • healthy and sound financial sector and capital markets • investment in skill development and technological assimilation and • macroeconomic stability .

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN

IMPACT OF GLOBALIZATION ON POVERTY IN PAKISTAN • The reduced burden on agriculture implies a slower migration to urban areas. • poverty reduction. But growth alone is not sufficient to make an inroad. Poverty targeted interventions, • investment in human development and social safety nets are additional and complementary steps which will • reinforce the movement towards poverty reduction. Domestic policies, institutions and governance can either • accelerate or hinder the process of transmission from economic growth to poverty reduction.

Poverty rate soars in Pakistan: According to the Pakistan finance prime minister Shaukat Tareen : poverty rate in Pakistan has climbed to 28 percent. The government is trying to bring rate of inflation down to 9 percent.

Poverty cause inflation in the economy.

The global growth recession is projected to cause inflation to ease. The rapid rise of food and energy prices over the course of 2007 and the first half of 2008, coupled with tight capacity in many countries (following years of very fast growth fueled by ample liquidity) caused headline and core inflation to pick up throughout the world. Headline inflation increased by 5 percentage points or more in most developing countries, and more than half of developing countries had inflation rate in excess of 10 percent by the middle of 2008.

Muted inflationary pressures in the global economy

Poverty cause population explosion and illiteracy forcing for economic suicides • 40% of Pakistan’s population lives below poverty line and any rise in inflation effects this group the most. But it is the same group that has been ignoring the fact that small families can help them cope there problems more effectively.

Poverty cause population explosion and illiteracy forcing for economic suicides Today the rising food price is affecting almost 77 million people in Pakistan. And with this figure in place it can be stated that 17 million people are food insecure. There is a need of more than 23.3 million dollars to spend on the daily needs of the poor people.

Poverty cause population explosion and illiteracy forcing for economic suicides

Due to the poor performance of usual indicators of economic stability the country is dependent on external financial resources. 1990 is considered as a “lost decade” in economic history of Pakistan yet it saw a reviving phase which too did not last for long. In order to avoid such results and to tackle the menace of poverty, the matter in question is growing population and low literacy rate in Pakistan.

Poverty cause population explosion and illiteracy forcing for economic suicides With 40% living below poverty line, growing population with a rate of 2.6 % and unemployment rate almost 12% are enough to exhaust economic resources. In order to have better per capita income and palliate poverty, the rising trends of population growth must be controlled.

Poverty cause population explosion and illiteracy forcing for economic suicides

Poverty cause population explosion and illiteracy forcing for economic suicides Education trends based on specialized fields have to be encouraged. Economic expert’s say that if these adverse trends continue the economic downfall in Pakistan will accelerate its pace in near future.

Pakistan poverty map

Pakistan poverty map

Pakistan - Poverty Reduction Strategy Paper The PRSP presents an informative description of the trends and spatial patterns of poverty. The analysis of diagnostics is grounded in evidence from the last two rounds of the Pakistan Integrated Household Survey/PIHS (1 998-99 and 2001-02), which has been institutionalized as the primary source for poverty and human development data. The poverty estimates in the PRSP use the newly developed official poverty line for Pakistan, and establish baseline figures from the 1998-99 PIHS round.

Pakistan - Poverty Reduction Strategy Paper

The focus on human development indicators in the diagnostics highlights the need to expand access to and improve governance of service delivery. Given that vulnerability is a key concern in Pakistan, the staffs also welcome the focus on transitory poverty and its clear links to the fourth pillar of the strategy, namely targeting the poor and the vulnerable.

Pakistan - Poverty Reduction Strategy Paper There are areas where the diagnostics could have been linked better to the poverty reduction strategy outlined in the document. While the links between employment and poverty are stressed, the diagnostics do not clearly identify sectors where growth and employment generation would have the greatest impact on poverty. The links between livestock and crop farming and rural poverty should be explored more fully to underpin the stated objective of improving agricultural productivity. While the measures on housing finance emphasize the growth-enhancing aspects of housing construction, its role in reducing vulnerability could have been shown more clearly through relevant poverty diagnostics.

Pakistan - Poverty Reduction Strategy Paper The staffs are of the view that future analytical work on these issues will be important for finetuning and prioritizing within the broad poverty reduction strategy outlined in this document.