Friday, October 15, 2010

Pakistan's Poverty and Hunger Declined in 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

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

50 comments:

varun said...

Of course the poverty declined. Because one third of them joined the politics, one third of them got selected in the Pakistan cricket team and the remaining got wiped out in the floods.

Riaz Haq said...

varun: "Because one third of them joined the politics, one third of them got selected in the Pakistan cricket team and the remaining got wiped out in the floods. "

I know this is hateful comment from you based on your anger and jealousy, but let me just make sure you understand the 17.2% poverty rate data pre-dates the Pak floods by a couple of years, reflecting the situation back in 2007- 2008. Poverty is most likely worse now than it was in 2008.

Anonymous said...

Riaz just a suggesstion:

Why not make a well thought out post about what should be done keeping in mind 3 factors:

1.Politics is the art of the possible so radical stuff like abolishing feudalism is a non starter.

2.No wishful thinking,nobody is gonna write Pakistan a $50 billion check(marshal plan II)

3.India is not going to compromise of kashmir regardless of how much Pakistan or Sunni Kashmiris (accounting for 40% of Indian Kashmir population)scream.The world has moved on nobody is going to push India on this issue and the Indian state with its resurgent pride and chest thumping nationalism is NOT going to cede ground on Kashmir.

I would be very interested in your view of what should be Pakistan's future course of outcome given these constraints.

Riaz Haq said...

anon: "Why not make a well thought out post about what should be done"

In spite of serious political and security situation in the region, Pakistan was doing just fine during 2000-2008 in Musharraf years. It's already made Pakistan the most urbanized nation in South Asia with the largest middle class in the region.

I believe Musharraf could have accomplished what East Asian dictators did in 70s and 80s if he had more time...another decade to continue his consistent economic reforms and growth.

Along with economic growth averaging 7% annually, 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.

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.

anon: "India is not going to compromise of kashmir regardless of how much Pakistan or Sunni Kashmiris (accounting for 40% of Indian Kashmir population)scream."

Since when is it "sunni Kashmiri" issue? Are you desperate as to mis-characterize the basic demand for freedom by the vast majority of Kashmiris?

India will be be forced to compromise not by Pakistan, but by the strong will and the passionate continuing struggle of the Kashmiris themselves.

Anonymous said...

'I believe Musharraf could have accomplished what East Asian dictators did in 70s and 80s if he had more time...another decade to continue his consistent economic reforms and growth.'

Musharraf is history,he has no political base in Pakistan as such the army doesn't like him hawks like hamid gul have openly called him a traitor and the fact is in Pakistan you can't win elections if you don't have support of feudal lords ordering their serfs to vote en masse.


'India will be be forced to compromise not by Pakistan, but by the strong will and the passionate continuing struggle of the Kashmiris themselves.'


Well it hasn't so far..

Regardless of all the committees, concerns,crocodile tears etc etc by the Indian state you know very well that NOTHING is gonna change.its just a ploy to grind you down.

Think of it as the Indo pak equivalent of reagan's defence policy.We spend roughly $10 billion pa in deployment in kashmir.

This makes sure you directly and indirectly spend ruinous amounts on your defence at the expense of everything else which insures you never have the surplus capital to invest in an industrial base of any worth (screw driver assembly of chinese rockets,planes(metal shell only) and bombs doesn't count).
Which is why pakistani industrial output is agro based like sugar,cotton yarn etc...
In this year pakistan has hiked its defence budget but cut its education budget....

Basically from a pure brahmanical(ends justify the means) standpoint the kashmir conflict is in India's best interest.

If it is quickly solved by say demographically swamping 4mn kashmiris with 10 million hindus(ala tibet) then Pakistan will accept it as a fait accompli(like the annexation of junagarh and hyderabad) and scale down its defence budget but the idea is to keep you in an eternal state of tension and war so that you never have time to think of things like an industrial policy etc.

This has worked beyond anyone's wildest dreams...

Though yes Musharaf was by far the most brilliant leader you ever had,infact there was a strong rumor of his ancestors being brahmin converts to islam.ROFL!

But alas a leader can only do so much Pakistani society showed immense collective stupidity of 1971 proportion to unceremoniously kick out such a intelligent and patriotic leader,but objectively his political star has passed and we won't be seeing much of him in responsible positions...

Pavan said...

Good post Riaz. I also think that the national poverty line in
Pakistan was initially set quite high on account of the work of the
late Mahbub ul Haq. This was beneficial for many more. In India it was
the other way around so as to exclude a hundred million or more from
the benefits given by the state. People thought that the proportion of
people in poverty were more in Pakistan! It was only after the UNDP
index universalised the line at a dollar a day, that the difference
became apparent.

Riaz Haq said...

Pavan: "It was only after the UNDP
index universalised the line at a dollar a day, that the difference
became apparent."

The latest poverty data of 17.2% poverty rate in Pakistan from the World Bank is based on $1.25 a day poverty line, not $1 a day.

Anonymous said...

pakistan will burn....
India will prosper.

That is destiny...

varun said...

yes I am zealous of THIS pakistan
http://news.yahoo.com/s/ap/as_pakistan

Pavan said...

Thanks. Pl also see the MPI which is based on the latest available info. Pavan

Riaz Haq said...

MPI is based on 2005 data which was 23% under $1.l25 for Pakistan , and the World Bank poverty figure of 17.2% uses 2008 data for Pakistan.

OPHI 2010 country briefings on India and Pakistan contain the following comparisons of multi-dimensional (MPI) and income poverty figures:

India
MPI= 55%,Under$1.25=42%,Under$2=76%
,India_BPL=29%

Pakistan
MPI=51%,Under$1.25=23%,Under$2=60%,Pakistan_BPL=33%

Pavan said...

Thanks. If we only compare the 1.25 dollar figure, poverty in India is
nearly double that of Pakistan. No one will believe this here. Needs
to be stressed. Pavan

Anonymous said...

http://www.indiatogether.org/2010/oct/ivw-tully.htm

Rahul said...

Mr. Riaz,

The Indians here know that how much poverty,hunger our country has. But our problem with ur blog is how u show it to demonize India. Why don't u make ur blog more as a friendship blog, rather than increasing hate between the two countries.
Whatever ur figures in 2000-08 be, we know what is the current state in Pakistan because of war on terrorism, floods, economic stagnation, sectarian conflict.... But we are not glossing about it. It may be prudent that u write posts which helps to solve these problems, and we would be happy to give u our suggestions for it. But currently u r only increasing the hostility.

Riaz Haq said...

Here's an India blogger Abhinav talking about "India's growth storybody wants to talk about":

Today’s news on the death of fifty people from hunger at Balangir in Orissa is a grim reminder of the little growth story that India has had. It clearly indicates many negative facets of our system, bureaucracy and the public at large. As per the World Food Program, almost half of the world’s population who are deprived of food live in India. Another website of a well known NGO (http://www.bread.org/learn/hunger-basics/hunger-facts-international.html) offers a grim picture of this particular issue especially when the same is getting the least attention by the policy makers across the world. If 50% of the starving residents belong to India, we do not need to look beyond our borders to nail the culprits.

More than six decades post independence and being counted as one of the key growth engines to the world economy, why are hunger deaths still happening in India? Is it because there is a scarcity of food to offer the ones hungry? Clearly that is not the case.

Those leading a life above the poverty line pay taxes to the Central and the State Governments so that it is used for public facilities, amenities and for the benefit of those living the poverty line. Obviously, those in power have to let go of their hunger for corruption or we have to watch the country going down the drains. Otherwise, it would constantly fail to administer the proper distribution of food and nutrition to people who matter.

We all talk about “3 idiots” and how a college principal is called a murderer who is responsible for the suicide of the students in his college. In the same way, aren’t the following responsible for the demise of people from hunger in our country?

1. Politicians responsible for making food security and food distribution laws.
2. Governmental agencies responsible for proper storage of food grains.
3. Bureaucrats responsible for administration and distribution amongst the right people.
4. Local security agencies which must maintain law and order to ensure proper distribution.

And why is it that they are not punished for these deaths. We have poor being imprisoned for thefts but those in power prosper, while the poor suffer. Is there any accountability for what is being and can be done to break this nexus? Would those in urban cities who are fortunate enough to be writing and reading this blog do something about it? Would they start taking candle light walks in memory of those unfortunate who die in India of hunger every day? Will they go beyond the regular candle marches or force those in power to take responsibility and amend their ways?

gunam said...

http://www.ifpri.org/

Original report can be taken from the above url.



http://www.riazhaq.com/2010/10/hunger-indias-other-growth-story.html

Interesting article from the blogger to show obviously india low. However there are some truth and the details are as under :

pg no. 46, statistics collected between 2003-08 and the same is not current. It does not take into consideration the chaos going in the pakistan and impact of the same on the economy and the people.


GNI is made on the basis of the following factors :

a. Proportion of undernourished in the population
b. Prevalence of underweight in children under five years
c. Under-five mortality rate
d gini = a+b+c/3

a. Proportion of undernourished in the population

India started with 24 and had moved to 22 which is 8% progress during this period. IN case of Pakistan, it has moved up from 22 to 23 which shows deterioration by 4.54%

b. Prevalence of underweight in children under five years

India is doing extremely bad in under five under nourished than Pakistan. It has moved from 39 to 25.3 in case Pakistan but India has only moved from 59.5 to 43.5 in the same period. Progress of Pakistan in this period in this category is 35% where as in case of india it is only 26.80%

c. Under-five mortality rate

in category of under five mortality, India started with 11.6 where as Pakistan with 13. During this period India has moved down to 6.9 where as Pakistan has moved down to 8.9. This tantamount to 40.51% progress in case of India and 31.53% in case of Pakistan

d gini

pakistan has started with a great lead in the initial few decades which is reflected in 24.7 vs india's 31.7. As per the statistics, pakistan had a reduction of 22.67% where as india at 23.97% which is marginally in a better rate than pakistan.

Take away from this mis for india is to concentrate on "Prevalence of underweight in children under five years"

Probably Pakistan has to look into Proportion of undernourished in the population as it is deteriorating and Under-five mortality rate where they could work for more progress.

gunam said...

http://genderconcerns.org/article.php?id_nr=19&id=Swat%20Valley%20and%202.2%20million%20IDPs:%20Women%20are%20the%20worst%20sufferers

Probably the impact of this on the gini factor might come out of the report after three to four years probably

Riaz Haq said...

Here are some excerpts from a piece by David Pilling of Financial Times published recently:

(There have ben many a dire warning about Pakistan failing), yet Pakistan has survived. In its partial victories against Islamist militants it may even have made some kind of progress. It is all too easy to think of Pakistan as a failing – even a failed – state. But it might be better to see it as the state that refuses to fail.

To appreciate just how remarkable this is, cast your mind back to this dangerous year’s catalogue of fire and brimstone. First, following its victory in Swat, the army turned its attention on South Waziristan, bombarding militants in lawless areas bordering Afghanistan. Many considered that an important step, given the well-documented links between the Inter-Services Intelligence (ISI) spy agency and tribal militants, part of Pakistan’s quest for “strategic depth” in Afghanistan.

Second, and partly as a result of the army’s offensives, there has been a wave of counter-attacks on hotels, mosques and police stations. Last October, militants mounted a brazen raid on the supposedly impregnable headquarters of the 500,000-strong army. That led to alarm that men with beards and a less-than-glowing feeling towards America were getting perilously close to Pakistan’s nuclear arsenal.

Third, Pakistan has had to adapt to a dramatic shift in US policy towards Afghanistan. In December, President Barack Obama ordered a surge of 30,000 extra troops, a military intensification that has sent militants scurrying across the border into Pakistan. Worse from Islamabad’s point of view, the US president has committed to drawing down those troops from next summer, a retreat, if it happens, that would once again leave Pakistan alone in a nasty neighbourhood.

Fourth, the economic outlook remains precarious. Pakistan just about avoided a balance of payments crisis which, at one point, saw its reserves dwindle to just one month’s import cover. But respite has come at the cost of being in hock to the International Monetary Fund, which has extended some $7bn in loans. With tax receipts at a miserable 9 per cent of output, it is unclear how it will make ends meet.

As if these man-made calamities were not enough, Pakistan has been drowning in the worst floods in its history. At one point, no less than one-fifth of the country was under water.....

Remarkably it has not been. Why not? A partial explanation for Pakistan’s staying power is that it has become an extortionary state that thrives on crisis...

There are more benign explanations too. The strength of civil society has helped. Many refugees from the floods, like those from Swat, have found temporary shelter with the networks of friends and relatives that bind the country together. The army’s response to the floods has also underscored, for better or worse, the efficiency of the state’s best-run institution. Even the civilian administration, weak and discredited as it is, has clung on. If, as now seems plausible, Mr Zardari can survive, power could yet be transferred from one democratically elected administration to another for the first time in Pakistan’s 63-year history.

One should not overstate Pakistan’s resilience. The world is rightly alarmed at the mayhem that rages at its centre. But, if you care to look on the bright side, you might conclude that, if Pakistan can survive a year like this, it can survive anything.

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.

Riaz Haq said...

Here is a Daily Times report on inflation in Pakistan:

In Pakistan, 2007, the rate of inflation was 12.5 percent, during 2006-07 it was 21 percent and in July-March 2010 the inflation has been 11.3 percent. The cumulative rate of inflation was 44 percent in three years, from September 2007 to September 2010.

The main reason of food prices inflation was the increase in wheat, petroleum products, electricity and gas responsible to an overall increase in prices. The rising interest rate, high remittances and depreciation of rupee against dollar also fueled the inflation. This situation directly hit the poor and increased poverty level in the country.

A shortfall in the production of some essential commodities also raised food prices. There are 13 food items in essential items’ list which also includes wheat and flour; sugar, poultry, mash pulse, meat, milk, tea, fresh vegetables etc, that account for almost 23 percent of the total weight in the Consumer Price Index (CPI). Prices of food items in general have made food dearer in Pakistan. For instance, the average price of sugar has risen above 41 percent, wheat prices by 17 percent, chicken 24 percent, beef 13 percent and onion prices by 64 percent since July 2008 over April 2009. With a 23 percent weight in CPI, the contribution of these few items to the overall CPI inflation was 18 percent.

Although the world price of sugar has fallen unexpectedly since its peak in January 2010, but it is still up 21 percent year on year (YoY) basis. Dairy prices, on the other hand, have continued to raise their upward march.

Global price increase enhanced inflation sharply and Pakistan has no exception that has affected both globally as well as domestically. India’s food price inflation soared to 19.2 percent in December 2009, 16.7 percent in March. Similarly, food inflation in Bangladesh rose from 3.3 percent in July 2009 to 10.9 percent in February 2010.

Poverty ratio in Pakistan is rapidly rising due to economic slowdown; high inflation and reduction in subsidies compel 40 percent people of the country to lives around the poverty line, as per SBP estimates.

The country’s population has jumped to 184 million in 2010, 119 million in 1990, of which 73 million Pakistanis have fallen below poverty line, SBP said. The poverty level during 2010 rises by 4 percent to 40 percent, from 36.1 percent in 2009.

In the case of Pakistan, the increase in domestic prices of essential commodities remained relatively quiet as compared to the international price movements. However, since January 2010, international prices for some of the commodities like petroleum have fallen more rapidly than in Pakistan.

anoop said...

Riaz,

Funny how most of your research skills dont extend to the period of '09 and 2010.

Guess, the numbers are not that pretty for Pakistan during this period where "bloody civilians" are in power(but not greater power than what the military possesses).

Riaz Haq said...

anoop: "Funny how most of your research skills dont extend to the period of '09 and 2010."

There is nothing funny about it.

Given the understandable lag in reporting, I have blogged about reports and data on poverty, hunger, disease, etc. released by international organizations recently which only cover the period until 2008.

anoop said...

Riaz,

I know there is nothing funny about poverty but what I am pointing out is obvious deletion of data of years 2009 and 2010.

"Given the understandable lag in reporting, I have blogged about reports and data on poverty, hunger, disease, etc. released by international organizations recently which only cover the period until 2008. "

--> Well, not really, if you wanted to honestly look at it.

http://www.dailytimes.com.pk/default.asp?page=2010\10\31\story_31-10-2010_pg5_13

The above article gets the data from Food and Agriculture Organisation.

It says,"The country’s population has jumped to 184 million in 2010, 119 million in 1990, of which 73 million Pakistanis have fallen below poverty line, SBP said. The poverty level during 2010 rises by 4 percent to 40 percent, from 36.1 percent in 2009."

In the concluding article it says:"On the other hand, the new Governor of State Bank of Pakistan, Shahid H Kardar, said that there is lack of monetary discipline – which is the biggest challenge for the economy. If the country’s monetary system is put on the right track it would definitely help reduce pressure of the government’s borrowings on economy, reduce inflation and ease the burden of poor.On September 7, the currency slid to a record lows versus the US dollar, losing 17 paisa for buying at Rs 86.01 and 18 paisa for selling at Rs 86.06 in the inter bank market.

The other cause of inflation is that the Pak rupee is losing its value against major international currencies. On 7th September, it fell to a record low versus the US dollar, losing 17 paisa for buying at Rs 86.01 and 18 paisa for selling at Rs 86.06 in the inter bank market. The value of Pakistani currency has decreased almost 33 percent in 30 months.

The value of Pak rupee is expected to further reduce both in the inter bank and open markets in the coming days. The result of this unofficial devaluation would be a rise in prices of goods, cost of production and increase in inflation making people hungrier in Pakistan.

There are indications that the growth rate during fiscal year (FY) 2011 would be far lower than estimated, the budget deficit would increase further and the inflation rate may double the target of 9.5 percent."

Coninued..

anoop said...

Another paper which speaks about poverty going through the roof in Pakistan in 2008-2010.

http://www.ausaid.gov.au/country/country.cfm?CountryId=11

It says:"Pakistan's economy has slowed significantly during 2008 and 2009 in the wake of high international commodities prices, record-high inflation, a worsening external position and a slowdown in foreign investment, all of which combined to create a serious current account crisis. This is having a significant and potentially long-term impact on the country's efforts to reduce poverty, as development spending in the social sectors is being squeezed by the parlous state of government finances. With rising food and fuel prices placing increasing pressure on the livelihoods of the poor, and Pakistan's economy under growing strain due to political instability and external shocks, the challenge is to maintain high growth rates and ensure the benefits are broadly spread.

Overall, the government is anticipating a fiscal deficit of 4.9 per cent of GDP with real GDP growth forecast to slow to 2.7 per cent per cent in 2009–10 (from 3.7 per cent in 2008–09). Year-on-year consumer price inflation reached a record high of 25.3 per cent in August 2008 before declining to 11.3 per cent in early 2010. The International Monetary Fund (IMF) estimates that food and non-food prices rose by 23.7 per cent and 18.4 per cent between respectively between 2007–08 and 2008–09, resulting in a 21 per cent reduction in purchasing power. Unemployment in 2010 is estimated at 15 per cent, up from 7.6 per cent in 2006 due to slowing consumption growth and power cuts impacting on industrial outputs.

In November 2008 the Government was forced to accept a US$7.6 billion loan from the IMF, which was augmented to US$11.3 billion in August 2009. The conditions of the loan require an ending of electricity subsidies (causing further price rises), an increase in official interest rates to curb inflation, the ending of government borrowing from the central bank and a sharp reduction in the fiscal deficit through spending cuts and efforts to increase revenue collection. "

Riaz Haq said...

anoop:

The Daily Times figures you refer to are just estimates...not firm data and it offers no comparison with other countries such as India.

If you go by such estimates, then you also have to acknowledge that, according to India's planning commission, there are 100 million more poor in India than there were three years ago.

If you are interested in comparative data, you really have to rely on reports that do comparisons such as the MPI poverty report by Oxford or hunger report by IFPRI which I referred to it in my post. Both of these reports show Pakistan has done relatively better than India.

anoop said...

"The Daily Times figures you refer to are just estimates...not firm data and it offers no comparison with other countries such as India."

--> Nobody goes and physically calculates the number of poor or physically count the Gross Domestic Product. Your arguments are highly partial.

Comparative analysis should be done with countries Pakistan has similarities with. India is a high-growth country with 7 times the number of people than Pakistan, with an active democracy. On none of these Pakistan has. So, how can comparison be even considered.

"If you go by such estimates, then you also have to acknowledge that, according to India's planning commission, there are 100 million more poor in India than there were three years ago. "

--> The odd part is UN tells a different story. Indian planning commission could be using higher standards for measuring poverty levels than the UN.

http://news.outlookindia.com/item.aspx?685779

"According to the 2010 report of the United Nations on the Millennium Development Goals (MDGs), While India is expected to reduce its poverty rate from 51 per cent in 1990 to 24 per cent in 2015, reducing its number of extremely poor by 188 million."

Interestingly it goes on to add: "But the rest of South Asia[Including Pakistan] and sub-Saharan Africa are falling behind in meeting the target of reducing poverty by half by 2015."

Another paper on comparing India and China. Yes, the only country India can be compared with is China, not Pakistan. Frankly, hyphenating India with Pakistan is an insult.

http://www.un.org/esa/desa/papers/2010/wp92_2010.pdf

"It is clear that poverty, as officially defined has been declining continuously since
the early 1970s. However, what is remarkable is that in the recent
period, which is when growth rates picked up, the rate of poverty
reduction decelerated, especially in rural India."

Then you say,"Both of these reports show Pakistan has done relatively better than India. "

--> Thats the problem. You pick and choose reports. How can a country which is growing at an average of 8-9% be beaten by a country growing at an average of 4% this decade? It defies logic.

But, it could be this. Pakistan pre-1990 had better figures compared to India. After 1990s when the reforms started to kick in India started out performing Pakistan,to an extent they are not even considered equals. While Pakistan's political and economic mismanagement started to catch up. Pakistan's stability was compromised and hence, India surged past it in every sector or atleast reduced the lead by a great margin.

India started the 90s from position X and Pakistan 2X. India has moved onto 4X but Pakistan might have moved to 3X. India has comparably done better than Pakistan in the past 2 decades but in relative terms might be behind Pakistan in few aspects.

The important point here is India is seen as a growth story and Pakistan, well you know.

Continued..

anoop said...

In about 10 years, all the "comparative" study you will be doing will start showing opposite results by your own standards. India has reduced its poor by half in 2 decades. Will probably redo the feat in just the following decade.

Lets look at the Human Development Index and see who has made better and faster progress: India vs Pakistan.

http://hdrstats.undp.org/en/indicators/81.html

India's index rating in 1980 was 0.427 and Pakistan's was 0.402. Not much difference was there. Anyway, lets look at 2007 figures. India's rating increased to 0.612 and Pakistan to just 0.572. India(0.612-0.427= .185). Pakistan(0.572-0.402=0.170). China during the same period(0.772-0.533=0.239).

This comprehensively proves that while India has done better than Pakistan, it hasn't done as well as China. Since, China had a head start in reforming the economy this trend might be explained. But, no excuses for Pakistan to lag behind. Its political and feudal structure is dragging it down.

Pakistan on the other hand is barely growing as I pointed in an earlier post as its population growth remains alarmingly high.

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/Regional/Karachi/15-Jun-2009/Poverty-increasing-rapidly-in-Pakistan-warns-survey

The newyork times points this out with respect to Pakistan.

http://www.nytimes.com/2010/02/06/world/asia/06maid.html?_r=1&ref=global-home

"A British Council report last fall estimated that Pakistan’s economy would have to grow by 6 percent a year to keep up with the expanding population, which over the past 20 years has been growing at twice the world average. The economy grew by 2 percent in 2008, the last year for which the government has statistics. "

So, Pakistan is missing the mark by 2 to 3%. That is, its growing at 50% to 75% the required growth. This will push the required growth to levels that Pakistan cannot reach in few years. Considering the political, security and economic instability in Pakistan this is a very real possibility.

P.S. I know I tried to compare India and Pakistan, but I did it to prove a point. Comparing India with Pakistan is like comparing Apples with Oranges.

anoop said...

In about 10 years, all the "comparative" study you will be doing will start showing opposite results by your own standards. India has reduced its poor by half in 2 decades. Will probably redo the feat in just the following decade.

Lets look at the Human Development Index and see who has made better and faster progress: India vs Pakistan.

http://hdrstats.undp.org/en/indicators/81.html

India's index rating in 1980 was 0.427 and Pakistan's was 0.402. Not much difference was there. Anyway, lets look at 2007 figures. India's rating increased to 0.612 and Pakistan to just 0.572. India(0.612-0.427= .185). Pakistan(0.572-0.402=0.170). China during the same period(0.772-0.533=0.239).

This comprehensively proves that while India has done better than Pakistan, it hasn't done as well as China. Since, China had a head start in reforming the economy this trend might be explained. But, no excuses for Pakistan to lag behind. Its political and feudal structure is dragging it down.

Pakistan on the other hand is barely growing as I pointed in an earlier post as its population growth remains alarmingly high.

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/Regional/Karachi/15-Jun-2009/Poverty-increasing-rapidly-in-Pakistan-warns-survey

Riaz Haq said...

anoop:"How can a country which is growing at an average of 8-9% be beaten by a country growing at an average of 4% this decade? It defies logic."

First, a correction: Pakistan has grown at 7%, not 4% for most of the decade of 1999-2009.

Second your argument is that overall economic growth should translate into poverty reduction.

But the facts about India show otherwise.

The reason is simple. Almost all of the income growth in India has been in manufacturing and services sectors. The rest of 70% Indians work force (vs 54% of Pakistanis) work in agriculture and textile where the Indians productivity is only two-thirds of their counterparts in Pakistan.

Here are the figures:

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%

India vs. Pakistan: Per Capita GDP $3,125 PPP ($1,083 nom) vs. $2,570 ($955 nom)

Agriculture: $833 PPP ($288 nom) vs. $1,225 PPP ($454 nom)

Textiles: $1,242 ($433) vs. $1,714 ($636)

Non-Textile Mfg: $11,155 ($3,870) vs $5,785 ($2,142)

Services $7,246 ($2,590) vs $3,654 ($1356)

Data shows that the majority of Indians who work in agriculture and textiles are on average 50% poorer than their Pakistani counterparts, as also reflected in the under-$2 a day per capita income figures for 60% of Pakistanis and 76% of Indians.

It also shows that Indians in manufacturing and services sectors add almost twice as much value as Pakistanis, and produce significantly 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 relatively narrower range from $1225 to $5,785.

The challenge for India is to improve its farmers' productivity and move some of them into higher value added sectors of the economy.

The challenge for Pakistan is to have its manufacturing and services sectors produce more goods and services of higher value, and continue to migrate more of its farmers into other sectors of the economy.

It's clear that farming and textiles continue to be the most important economic sectors with the biggest impact on the lives of the majority of ordinary citizens of India and Pakistan. And just as the US and EU look after their farmers, it is very important for South Asian governments to protect their farming and textile sectors even as they promote diversification of their economies.

anoop said...

"First, a correction: Pakistan has grown at 7%, not 4% for most of the decade of 1999-2009. "

--> First, a correction. Pakistan has gone above the 7% mark only in 2005 and 2007. The average growth rate for Pakistan during this decade(2000-2010) is 5.45%. If you consider the projected growth for the year 2011, which Pakistan will not achieve, as always, then the average comes down to 4.77% for a period of 10 years.

So, I was not off the mark by much. Pakistan is growing at 4.77%,lets say 5% and missing its mark, the bare minimum growth figures by a whole percentage. Meaning, its growing at only a shade less than 5/6th of the growth it needs to generate enough jobs for the guys entering the market now, not considering the guys who are already without a job.

http://www.pakboi.gov.pk/eco-ind.htm

Its no where near the mark of 7% which you claim.

Here, is another chart about Pakistan's real growth rate.

http://www.indexmundi.com/pakistan/gdp_real_growth_rate.html

Here, Pakistan's growth doesn't even touch 7% even once,ironically even during the Musharaff years, which you claim as a miracle.

"Almost all of the income growth in India has been in manufacturing and services sectors. The rest of 70% Indians work force (vs 54% of Pakistanis) work in agriculture and textile where the Indians productivity is only two-thirds of their counterparts in Pakistan."

--> Yes, same as China during the 1990s. Rather than its agricultural sector most of the growth happened in the manufacturing and other export-oriented sectors. A country is growing doesn't mean that all the sectors are growing at the same pace.

Agriculture needs another green revolution. What India is doing now is generating jobs for the educated coming out of the colleges in search for a job. In this decade India will start generating more jobs in the unorganized sector. The kind of transformation which took place in China during the 1990s will happen in India in this decade. I daresay this is already happening.

Again, this will not be uniform in the whole of India. Some states will create more skilled and non-skilled jobs in both the organized and unorganized sectors than others.

Take Punjab's case for instance. There is infact a labour shortage!

http://economictimes.indiatimes.com/news/economy/agriculture/Punjab-lure-labourers-from-UP-Bihar/articleshow/4532144.cms

anoop said...

Continued from above...

Contrast this with Pakistan where established businesses are moving out! Here, is a Pakistani newspaper talking about it.

http://tribune.com.pk/story/68479/a-friend-ofin-pakistan/

It goes:"On a recent visit to Pakistan, a Hindustan Times writer bought government surveys from a bookshop and found that there was a trend of companies trying to exit the stock market rather than entering it. In 1995, Pakistan had 13 manufacturing firms that had a paid-up capital of over Rs500 million, in 2009 there were just two left. In 1990, there were 58 manufacturers in the Rs50-500 million range. Four survived to see 2009. But the bookshop owner’s surprise that someone was buying these dour volumes was far more illuminating: “No one in Pakistan reads about the economy anymore."

So, more people are coming into the job market than Pakistan can absorb. Over a period of 10 years, this are alarming numbers!

Here, are reports which talk about rising cases of suicides in Pakistan attributed to the economic situation.

http://www.fic.nih.gov/news/publications/global_health_matters/2010/0610_suicide.htm

http://www.haqeeqat.org/2010/07/16/suicidism-in-pakistan/

http://www.wateen.net/lifestyle/youth/1696-increasing-trend-of-suicides-in-pakistan

This in a country where the official state Religion forbids suicide.

In addition to economic hardships, the last report also points to social causes like lack of Recreational Activities like Festivals, Movies,etc.

So, my friend, Pakistan has not only stagnated economically but culturally and socially as well, may infact be moving backwards in all these areas. The number of people in Pakistan with extremist views keep growing by the year, apparently due to the actions of foreign countries like India and America.

India might have a big economic problem like Poverty but Pakistan has many more problems than it can possibly hope to fix in addition to poverty.

The status quo of the Pakistan economy will most certainly not change for the next 5 years atleast. May even stretch on another 5 years. So, Pakistan will pay a heavy price for this bad social, political mismanagement which is contributing to economic mismanagement.

Pakistan spends 60% of its budget on Defence and Loan Payments. No wonder it is bankrupt. Indians might be poor but Indian government is certainly not, atleast when compared to Pakistan.

Ahmed Rashid puts it well when he says,"The irresponsible handling of the economy is only deepening the crisis. This year’s $38 billion budget has
seen a 30 percent increase in military expenditures from last year.
This clearly leaves little money for
health and education. With 28 percent of the funds reserved for servicing foreign debt, nearly 60 percent
of the budget is taken up by that and defense.
The entire development pool of $9.2 billion is provided by
foreign donors."

http://www.ahmedrashid.com/wp-content/archives/pakistan/articles/pdf/TheAnarchicRepublicOfPakistan.pdf

So, your army is eating up all the available resource in Pakistan. After the Americans leave Afghanistan and when they stop aid to Pakistan, there will be a huge void left which will make Pakistan officially bankrupt.

India is nowhere close to such kind of existential crisis.

Riaz Haq said...

anoop:

Most of what you say is irrelevant as far as the facts of poverty and hunger reduction in Pakistan are concerned.

There is essentially no disagreement on the fact that India has significantly more hunger and poverty than Pakistan because of serious inequities in Indian society and economy. MPI and IFPRI data clearly show this fact over a period of several years.

And the reason for inequities is that the income and productivity of 70% of Indians who work in agriculture and textiles who make only two-thirds of their Pakistani counterparts as I have shown through data. This does not compensate for the fact that the 30% of Indians who work in manufacturing and service sectors have higher productivity. It just widens the rich-poor gap in India.

The situation in China is very different in terms of their farm productivity and incomes and China's huge emphasis on rural development which is lacking in South Asia.

Riaz Haq said...

The latest HDR 2010 reminds us of the whole reason why Dr. Mabhub ul-Haq argued for using social indicators, not just the GDP, as a measure of a nation's well-being.

There is a description of Mahbub ul-Haq's thinking on page 12 of the Human Development Report 2010. It is titled "From Karachi to Sorbonne--Mahbub ul-Haq and the idea of human development".

Dr. Haq was Pakistan's planning commission's chief in 1960s which was seen as a time of great progress because of rapid GDP growth in Pakistan, and every one expected Dr. Mahbub ul-Haq to crow about it and pat himself on the back.

But, as the report puts it, "The young economist shocked his audience by delivering a stinging indictment of Pakistan's development strategy" for favoring the elite at the expense of the poor. A few years later, late economist Mahbub ul-Haq persuaded UNDP to push for research reports and indicators as an alternative to single-minded focus on GDP.

Riaz Haq said...

Here's a piece published in the Guardian on the need to help the poor in "middle income countries" like India and Pakistan:

One little noticed story of 2010 was that five more developing countries officially lost their "poor" status.

When the World Bank carried out its annual reclassification in July, Senegal, Tuvalu, Uzbekistan, Vietnam and Yemen all graduated to middle-income status – countries that have reached the $1,000 (£644) or so GDP threshold.

Taken by themselves, not big news perhaps, but add to that 22 other countries which, since 2000, are no longer considered officially poor, then a quite profound global change is under way: in short, most of the world's poor no longer live in "poor" countries.

China was upgraded in 2001 (based on 1999 data) and India, Pakistan, Nigeria and Indonesia are among the other states that have become middle-income countries (MICs). Only 39 states are still considered to be low-income countries (LICs).

As we enter 2011, it is likely that more will follow. Ghana, for example, looks set to graduate in 2011, particularly in light of its new GDP figures unveiled last month. The country will join Senegal, Cameroon, Angola and Sudan, which are among the growing number of African MICs.

On the other hand, given the lingering reverberations of the global economic crisis, there is also a risk that some countries might drop back under the threshold, slipping once again into low-income status. Pakistan or the Ivory Coast might have cause for concern in 2011, for example.

On the whole, this is a good news story, but with an underside. Yes, there are fewer poor countries but poverty remains high in terms of absolute numbers in the MICs.

The news raises some pressing and difficult questions for aid and development policy. As developing countries get wealthier and are reclassified, many are still characterised by persistently high levels of poverty. Indeed, roughly three-quarters of the world's poor now live in MICs – 960 million, or a new "bottom billion". And this isn't just about China and India. Even if they are removed from the equation, the share of the world's poor living in MICs has still tripled since 1990.

In light of the above, how should global poverty reduction be done differently in 2011?

First, the LIC/MIC binary: If the focus is poor people not poor countries then the LIC/MIC way of looking at the world needs a rethink. The new UN multidimensional poverty measure might be one alternative tool. But there are many others.

Second, the end of aid and the equity elephant: overseas development assistance (ODA) is becoming less important and equity more important. More equitable countries reduce poverty faster, and stubborn asset, gender or identity inequality (ie caste systems) might begin to explain persistent poverty amid wealth in the new MICs. This entails some thinking on what ODA is for. Any attempt to discuss inequality will be viewed as an infringement on political sovereignty but is domestic inequality solely a domestic issue if it hinders the effectiveness of aid?

And could there be a case for a new multilateralism based on putting resources from donors and new MICs together? Keep an eye out in 2011: the fact that the world's poor are increasingly found in MICs has the power to shake up the entire aid and development industry.

Riaz Haq said...

India's high levels of poverty is no secret to the various international agencies and groups. Now Prime Minister Manmohan Singh has imposed a gag on India’s poverty data, saying no information must go out until it is vetted by the Planning Commission, according to Tehelka.com:

The gag order applies to all central ministries and departments and is apparently triggered by the embarrassment over multiple data on Indians falling under the socially damning Below Poverty Line (BPL).

The official line is that the government wants to have uniformity on all data and thus the need to centralise information flow.

Issued by Cabinet Secretary KM Chandrasekhar on 3 February, the circular says: “It has been observed that some ministries/departments are undertaking surveys on certain sectors relating to their charge and also generating/disseminating data on the same.

“Such data sometimes differ from the data/estimates available in surveys undertaken by the National Sample Survey Organisation (NSSO) and Central Statistical Organisation (CSO) under the M/o (Ministry of) Statistics and Programme Implementation. You would agree that creating multiple official estimates of the same underlying variables is not advisable.”

MS Gill is currently the Cabinet Minister of Statistics and Programme Implementation.

Chandrasekhar’s circular says the ministries must ‘ensure strict compliance’ of the instructions.

The circular adds, “With a view to avoiding duplication of efforts and ensuring consistency between different sets of data and also to ensure reliability of data, it has been decided with the approval of the Prime Minister, that all steps should be taken to avoid duplication of effort and multiplicity of official data/estimates of the same underlying variables.”

The worst recent case of data causing embarrassment to the government was on the poverty estimates. The Arjun Sengupta committee, the National Commission for Enterprises in Unorganised Sector, said 77 percent Indians were living on Rs 20 a day.

The NC Saxena committee said 50 percent of India is poor. The World Bank said 41.6 percent. And then, the Suresh Tendulkar committee, which gave its report to the Planning Commission, said 25.7 percent Indians were poor. This is the Planning Commission estimate as well.

This has not been reconciled as yet, and such confusion affects government delivery systems.

Therefore, says Chandrasekar’s circular, “Where the ministries/departments still wish to collect data pertaining to aspects for which there are already official estimates prepared by the M/o Statistics and Programme Implementation, the reasons for collecting such data need to be stated clearly and the two efforts should be coordinated.

‘Further, any such data should be produced only with appropriate technical oversight, preferably by the National Statistical Commission. Also, the ministries/departments should invariably consult the Planning Commission before publishing any statistical data relating to the economic status of the population, section of the population or any other sector.

“As and when such data is published, there should be sufficient explanation for differences, if any, with the already available official data.”

In essence, the Prime Minister wants to sanitise data. This could trigger another controversy because poverty figures in India are the core of all government social programmes. Poverty alleviation is considered the default core duty of any elected government in India, given the widespread social deprivation among its citizens.

Riaz Haq said...

UN Human Development Report 2010 shows that Pakistan ranks among the top 10 movers in HDI in the decade of 2000-2010.

See table 3 in Let's Talk Human Development.

Riaz Haq said...

Here's an interesting 2004 ADB assessment of Pakistan's rural economy:

....
Despite recent good macroeconomic performance, Pakistan continues to have high levels of poverty. Poverty estimates of 2000-2001, indicate that around one third of the population lives at or below the poverty line, with poverty being concentrated in rural areas. Available international literature indicates a strong and clear-cut relationship between agricultural growth and poverty reduction. The agricultural sector is a major determinant of the overall economic growth and well being in Pakistan, contributing 23 percent of total GDP; employing 42% of the total employed labor force; and accounting for nearly 9 percent of the country's export earnings. Thus, high agricultural growth is essential for significant poverty reduction in Pakistan.

However, in addition to the direct impact of agriculture growth on poverty reduction, there is also a much larger indirect effect through the linkages between agriculture and non-farm growth in rural areas. Non-farm growth is closely linked with agricultural growth since peasant farmers spend a large portion of their incremental income on locally produced non-agricultural goods thus generating employment and incomes in the adjoining areas. The increased demand for non-farm goods leads to a much larger increase in employment, which is a key vehicle for poverty reduction. Available information also points to the increasing importance of non-farm incomes for rural households. The five major sources of income in rural Pakistan are wages/salaries, transfer income, crop income, rental income and livestock income. Livestock is a particularly important source of income for the poor with a majority of poor households, especially the landless and small landowners, dependent on this sector.

In the light of increasingly limited income generating opportunities in the on-farm sector, poor households are increasingly turning to the non-farm sector as a key source of livelihood. In addition, there appears to be a higher incidence of vulnerability to falling into and remaining in poverty, among households which are dependent solely on agriculture. Rural areas that are well connected with the urban areas seem to be more prosperous, in part because the lack of employment opportunities in rural areas results either in labor reallocation or migration. In both cases, human capital plays a positive and significant role and the poorest of the poor neither possess the human capital nor have the resources to migrate. This vulnerable group needs special attention.

Pakistan's Poverty Reduction Strategy Paper outlines four pillars for accelerating growth and reducing poverty. Pillar One focuses on accelerating economic growth, pillar Two on improving governance and devolution, Pillar Three on investing in human capital, and Pillar Four on targeting the poor and vulnerable. Pillars One and Four focus on generating employment, especially in the rural areas, small and medium industries and micro-finance. There are also very strong linkages between income poverty and the other two PRSP Pillars. For example, access to justice, successful devolution, increasing the human capital of the poor, and ensuring effective safety nets are also central factors for increasing the incomes of poor people.
---
To increase incomes of poor households and build social capital, the ADB is funding a Micro-Finance Sector Development Program. As part of its objective to efficiently provide financial and social services to the poor, the ADB assisted with the establishment of the Khushali Bank, a public-private enterprise in partnership with NGOs, under this program. The ADB is also engaged in several rural development projects such as the Malakand, Federally Administered Tribal Areas, Bahawalpur, and Dera Ghazi Khan Rural Development Projects, to enhance household incomes, particularly for the smallholder and tenant farmers, and the landless.....

Riaz Haq said...

World Bank is concerned about the failure of India's anti-poverty efforts, according to NY Times:

NEW DELHI — India spends more on programs for the poor than most developing countries, but it has failed to eradicate poverty because of widespread corruption and faulty government administration, the World Bank said Wednesday.

“India is not getting the ‘bang for the rupee’ that its significant expenditure would seem to warrant, and the needs of important population groups remain only party addressed,” John D. Blomquist, lead economist at the World Bank, wrote in a nearly 400-page study released Wednesday.

India spent 2 percent of its gross domestic product, or $28.6 billion last year, on social programs to alleviate and prevent poverty, the World Bank said, a higher percentage than any other country in Asia and about three times China’s spending.

The programs, central to the Congress party’s platform, include food distribution and health insurance initiatives that are supposed to reach hundreds of millions of households. The report was written at the “request of the government of India” and with full participation from various government bodies, the report said.

The World Bank on Wednesday recommended a radical overhaul of India’s social programs. “Marginal changes alone may not deliver the kind of safety net which a changing India needs for its poor and for its economy,” Mr. Blomquist wrote.

One of the primary problems, the World Bank said, was “leakages” — an often-used term in development circles that refers to government administrators and middle men stealing money, food and benefits. The bank said that 59 percent of the grain allotted for public distribution to the poor does not reach those households.

Instead of distributing food, the government might be better off giving out food stamps or cash transfers that can be easily traced through technology, the World Bank said.

India, the world’s the second-fastest growing major economy, after China, has had an economic boom in recent years that is transforming urban areas and creating a new class of extremely wealthy people. But social problems, including poverty, disease and illiteracy, remain widespread.

About 455 million Indian citizens live on less than $1.25 a day, the World Bank’s poverty line. A United Nations study released last year found more people living below the poverty threshold in eight states in India than in all of sub- Saharan Africa.

Riaz Haq said...

Oxfam is warning that food prices will more than double by 2030, according to BBC:

The prices of staple foods will more than double in 20 years unless world leaders take action to reform the global food system, Oxfam has warned.

By 2030, the average cost of key crops will increase by between 120% and 180%, the charity forecasts.

Half of that increase will be caused by climate change, Oxfam predicts, in its report Growing a Better Future.

It calls on world leaders to improve regulation of food markets and invest in a global climate fund.

"The food system must be overhauled if we are to overcome the increasingly pressing challenges of climate change, spiralling food prices and the scarcity of land, water and energy," said Barbara Stocking, Oxfam's chief executive.
Women and children

In its report, Oxfam highlights four "food insecurity hotspots", areas which are already struggling to feed their citizens.

* in Guatemala, 865,000 people are at risk of food insecurity, due to a lack of state investment in smallholder farmers, who are highly dependent on imported food, the charity says.
* in India, people spend more than twice the proportion of their income on food than UK residents - paying the equivalent of £10 for a litre of milk and £6 for a kilo of rice.
* in Azerbaijan, wheat production fell 33% last year due to poor weather, forcing the country to import grains from Russia and Kazakhstan. Food prices were 20% higher in December 2010 than the same month in 2009.
* in East Africa, eight million people currently face chronic food shortages due to drought, with women and children among the hardest hit.

The World Bank has also warned that rising food prices are pushing millions of people into extreme poverty.

In April, it said food prices were 36% above levels of a year ago, driven by problems in the Middle East and North Africa.

Oxfam wants nations to agree new rules to govern food markets, to ensure the poor do not go hungry.

It said world leaders must:

* increase transparency in commodities markets and regulate futures markets
* scale up food reserves
* end policies promoting biofuels
* invest in smallholder farmers, especially women

"We are sleepwalking towards an avoidable age of crisis," said Ms Stocking.

"One in seven people on the planet go hungry every day despite the fact that the world is capable of feeding everyone."

Among the many factors driving rising food prices in the coming decades, Oxfam predicts that climate change will have the most serious impact.

Ahead of the UN climate summit in South Africa in December, it calls on world leaders to launch a global climate fund, "so that people can protect themselves from the impacts of climate change and are better equipped to grow the food they need".

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...

Overall, the latest World Bank data shows that India's poverty rate of 27.5%, based on India's current poverty line of $1.03 per person per day, is more than 10 percentage points higher than Pakistan's 17.2%. Assam (urban), Punjab and Himachal Pradesh are the only three Indian states with lower poverty rates than Pakistan's.

Riaz Haq said...

Here's an excerpt from a World Bank report on employment in South Asia:

Among the five large countries in the region, employment growth since 2000 was highest in Pakistan, followed by Nepal and Bangladesh, India, and Sri Lanka. Total employment in South Asia (excluding Afghanistan and Bhutan) rose from 473 million in 2000 to 568 million in 2010, creating an average of just under 800,000 new jobs a month. In
all countries except Maldives and Sri Lanka, the largest share of the employed are the low‐end self‐employed (figure 1.2).3 Nearly a third of workers in India and a fifth of
workers in Bangladesh and Pakistan are casual laborers. Regular wage and salaried workers represent a fifth or less of total employment.


http://siteresources.worldbank.org/SOUTHASIAEXT/Resources/223546-1296680097256/7707437-1316565221185/Jobsoverview.pdf

Riaz Haq said...

Based on hunger data collected from 2003 to 2009, IFPRI reported that Pakistan's hunger index score worsened this year to 20.7 (2011) after four consecutive years of improvement reported since 2008 from 21.7 (2008) to 21.0 (2009) to 19.1 (2010) to and its ranking dropped to 59 in 2011 after rising from 61 to 58 to 52.

During the same period, India's index score improved to 23.7 in 2011 to where it was in 2008 after worsening from 23.7 (2008) to 23.9 (2009) to 24.1 (2010) and its ranking moved to 67 in 2011 from 66 to 65 to 67 on a list of 81 nations.

http://www.ifpri.org/sites/default/files/publications/ghi11.pdf

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...

Here's Express Tribune on Saudi Arabia hiring thousands of Pakistani doctors:

Dr Nawaz* (not his real name) is a medical officer (MO) at Mayo Hospital and, like all government-employed doctors in BPS-17, got a Rs15,000 raise last year, taking his monthly pay to Rs44,000. Yesterday, the Saudi Arabian Ministry of Health offered him a job for 6,000 riyals (Rs145,000) a month.

“It’s a handsome offer. I’m going to take it,” said the doctor after an interview with the Overseas Employment Corporation, a Pakistani government agency that is hiring doctors for Saudi Arabia.

At Mayo Hospital, Dr Nawaz has to serve in shifts of up to 48 hours straight. In Saudi Arabia, he will get two days off each week and work eight-hour days.

“Here we have a lot of uncertainty. We cannot get a raise unless we protest and boycott work. I am getting out of it,” he said.

Dr Nawaz has been in a government job for three years and said he would resign before leaving. However, many doctors with more years in government service will likely seek permission from the government to go on leave to Saudi Arabia so they can return to their government jobs upon coming back to Pakistan.

Two private Saudi agencies are also interviewing Pakistani doctors for posts in government hospitals in Saudi Arabia. Saturday was the last day of interviews in Lahore. Interviews in Islamabad will take place from January 11 to 13.

“Around 3,000 doctors have been interviewed in Lahore for different positions including residents and consultants,” an OEC official told The Express Tribune.

He said that the Saudi government had recently built a lot of new hospitals and they were short of doctors. He did not say how many doctors the Saudis aimed to hire from Pakistan.

Residents (trainee doctors) are being offered salaries of between 5,000 (Rs121,000) and 8,000 riyals (Rs193,000), while consultants with a fellowship are being offered between 12,000 (Rs290,000) and 16,000 (Rs387,000) riyals. Senior professors and associate professors are being offered up to 30,000 riyals (Rs725,000) per month.

Last year, the Saudi Ministry of Health hired a thousand Pakistani doctors. Shortly afterwards, government-employed doctors in Punjab went on strike to demand better pay.

“This time they are going to hire more doctors,” said a senior doctor who went for an interview.

“The Indian government has just increased the salaries of public doctors and no Indian doctors are going to Saudi Arabia. They are focusing more on Pakistani doctors this year.” The Pakistan Medical Association warned that the country was losing its best doctors to Saudi Arabia and urged the government to improve the service structure for health professionals to stop the brain drain.

“The government on one hand claims to invest in health and education and on the other it does nothing to stop the brain drain,” said PMA Joint Secretary Dr Salman Kazmi.

“The government announces a pay package for doctors and nurses only when they go on strike or take to the streets. This is no solution. The government needs to develop a structure otherwise we may run out doctors.”

A Health Department spokesman said that the government couldn’t match the salaries offered to doctors abroad, especially when they had only recently been given raises. He said the government spent hundreds of millions of rupees on educating and training doctors and they should consider reasons other than monetary for working in Pakistan.


http://tribune.com.pk/story/318194/saudi-arabia-to-import-thousands-of-pakistani-doctors/

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 story on poverty decline in Pakistan:

Their biggest challenge at the moment is to explain how nearly seven million Pakistanis have come out of the vicious cycle of poverty.

According to the survey, the incidence of poverty has declined from 17.2 per cent in 2008 to slightly over 12 per cent in 2011. It was conducted by a committee constituted to calculate the incidence of poverty on the basis of Pakistan Social and Living Standards Measurement Survey 2010-11.

“The biggest challenge in front of us is how to explain this figure to the masses and economists when the economy grew at an average rate of 2.6 per cent and average inflation remained above 15 per cent during the last four years,” a member of the committee told The Express Tribune requesting anonymity due to political sensitivity attached to the figure.

He said poverty declined to slightly over 12 per cent with sharp declines in both rural and urban poverty. He said rural poverty declined more than urban poverty but, “the behaviour was the same and consistent with previous years’ results.”

In 2007-08 when the Pakistan Peoples Party-led coalition government took over, poverty had been assessed at 17.2 per cent. But the government decided not to release the figure saying poverty was at 35-40 per cent. It shared 40 per cent figure with Friends of Democratic Pakistan in its maiden meeting held in Tokyo.

It is facing the same dilemma exactly after four years, as its own people are now telling that poverty has declined to 12 per cent.

According to the United Nations Multi Dimensional Poverty Index, half of the country’s population lives below the poverty line.
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In 2007-08 the country’s estimated population was 164.7 million. By that account in 2008 as many as 28.3 million people lived below the poverty line. In 2010-11, the estimated population was 175.3 million and around 21.5 million people were in abject poverty.

The committee member said that poverty has been worked out on the basis of consumption method. According to this method, if a person takes 2,350 calories per day that costs him slightly over Rs1,700 per month that person is taken as above the poverty line.

The official said that the committee has not formally submitted the poverty report to the Planning Commission, but it is expected to submit the report over the next couple of weeks. However, the committee has already shared its findings with the commission.

A senior government official, who also wished to remain anonymous, said that the concerned authorities were considering the poverty figure and framing their mind whether to release it or not. It is not yet clear whether the government would publish the poverty estimates in the Economic Survey of Pakistan 2011-12.

The committee member, while giving justifications for the decline in poverty despite harsh ground realities, said that poverty declined because of higher support price of major crops, especially wheat, healthy trend in inflows of remittances and impact of assistance provided by both the government and private sectors in the flood affected areas of the country.


http://tribune.com.pk/story/374384/solace-among-confusion-5-decline-in-poverty-surprises-govt/

Riaz Haq said...

Here's a Bloomberg story titled "Pakistan, Land of Entrepreneurs":

On a warm Sunday morning in November, Arif Habib leaves his posh home near the seafront in southern Karachi and drives across town in a silver Toyota Prado SUV. About half an hour later, he arrives to check up on his latest project: a 2,100-acre residential development at the northern tip of this city of 20 million. He hops out, shakes hands with young company call-center workers who are dressed for a cricket match, and joins them at the edge of the playing field for a traditional Pakistani breakfast of curried chickpeas and semolina pudding. After a quick tour of the construction site, he straps on his leg pads, grabs his bat, and heads onto the field. “The principles of cricket are very effective in business,” says Habib, 59. “The goal is to stay at the wicket, hit the right balls, leave the balls that don’t quite work, and keep an eye on the scoreboard. I feel that my childhood association with cricket has contributed to my success.”

Habib, who started as a stockbroker more than four decades ago, has expanded his Arif Habib Group into a 13-company business that has invested $2 billion in financial services, cement, fertilizer, and steel factories since 2004. His group and a clutch of others have become conglomerates of a kind that went out of fashion in the West but seem suited to the often chaotic conditions in Pakistan. Engro (ENGRO), a maker of fertilizer, has moved into packaged foods and coal mining. Billionaire Mian Muhammad Mansha, one of Pakistan’s richest men, is importing 2,500 milk cows from Australia to start a dairy business after running MCB Bank, Nishat Mills, and D.G. Khan Cement.

These companies have prospered in a country that, since joining the U.S. in the war on terror after Sept. 11, has lost more than 40,000 people to retaliatory bombings by the Taliban. Political violence in Karachi has killed 2,000 Pakistanis this year, and an energy crisis—power outages last as long as 18 hours a day—has led to social unrest. Foreign direct investment declined 24 percent to $244 million in the four months ended Oct. 31, according to the central bank.

At the same time, some 70 million Pakistanis—40 percent of the population—have become middle-class, says Sakib Sherani, chief executive of Macro Economic Insights, a research firm in Islamabad. A boom in agriculture and residential property, as well as jobs in hot sectors such as telecom and media, have helped Pakistanis prosper. “Just go to the malls and see the number of customers who are actually buying in upscale stores and that shows you how robust the demand is,” says Azfer Naseem, head of research for Elixir Securities in Karachi. “Despite the energy crisis, we have growth of 3 percent.”

Sherani of Macro Economic Insights estimates the middle class doubled in size between 2002 and 2012. “Those who understand the difference between the perception of Pakistan and the reality have made a killing,” Habib says. “Foreigners don’t come here, so the field is wide open.” The KSE100, the benchmark index of the Karachi Exchange, has risen elevenfold since mid-2001. Shares in the index are up 43 percent this year alone. Over the past decade, stocks have been buoyed by corporate earnings, which were bolstered in turn by rising consumer spending.
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Today, Habib has 11,000 employees and annual revenue of 100 billion rupees. He plans to expand into commodities trading and warehousing. “I’ve created all my wealth in Pakistan and reinvested all of it here,” says Habib, who drives himself to his cricket matches and is never accompanied by security guards. In 1998, when Pakistan’s share index fell to a record low after the government tested nuclear weapons, Habib bought shares even though “people thought I was mad.”...


http://www.businessweek.com/articles/2012-11-29/pakistan-land-of-entrepreneurs

Riaz Haq said...

Here's an assessment of Pakistan's Rural Support Network Program:

In the global search for poverty alleviation and sustainable development, Pakistan’s ‘Rural Support Programmes Network’ remains little known, yet offers enormous potential for the eradication of rural poverty across the world today.

The power of a collective community vision is what Pakistan's little known 'Rural Support Programmes Network' (RSPN) has used to empower rural communities to alleviate poverty. RSPN, Pakistan’s largest rural development NGO, is one of the most effective rural poverty alleviation models of the previous three decades. Yet its secret is surprisingly simple - community organizing.

The Network consists of eleven Rural Support Programmes, or RSPs. Founded in the early 1980’s, the Aga Khan Rural Support Programme (AKRSP) was created to improve agricultural productivity and raise incomes in poor, remote northern regions of Pakistan. Building on the success of AKRSP, other RSPs spread across the country, out of which came the birth of RSPN in 2000.
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Since its inception, the model has received widespread international recognition. The World Bank's Independent Evaluation Group noted the RSPN's "impressive record of performance”. It has also been described as the NGO encapsulating one of 13 development ‘Ideas That Work’. Founding RSPN Chairman Shoaib Sultan Khan was nominated for Nobel Peace Prize for his work in "unleashing the power and potential of the poor". He has addressed the UN General Assembly to showcase RSPN's proven model of sustainable development.

Yet if the model is really so effective why has there not been an even greater transformation across rural Pakistan, especially given the high concentration of rural poverty? After all, the RSPN model has been widely replicated outside of Pakistan. In 1994, the UN Development Programme requested that RSPN Chairman Shoaib Sultan Khan set-up demonstration pilots of the model in Bangladesh, India, the Maldives, Nepal and Sri Lanka. The success of those pilots led India to subsequently launch a similar countrywide programme that benefited over 300 million poor.

One reason for this discrepancy lies in the very secret of RSPN's success; the RSPN model is an effective but long-term one, where significant results can only be gauged in the long-term over periods of more than a decade. As such, international aid agencies fail to provide the level of support RSPN needs to kick-start the crucial early stages of new programmes across different regions. These agencies have also failed to continue servicing current programmes before rural communities achieve some semblance of self-sufficiency.....


http://www.globalpovertyproject.com/blog/view/603

Riaz Haq said...

ISLAMABAD: Benazir Income Support Programme (BISP) has been a success story for the welfare of the people of Pakistan. Its various initiatives especially Emergency Relief Package (ERP) to help conflict ridden people in tribal areas and victims of terrorism has been a phenomenal step. This was declared by a delegation of journalists from leading newspapers of Indonesia during its meeting with Federal Minister and Chairperson BISP, Madame Farzana Raja in BISP secretariat. The journalists appreciated BISP’s performance and were of the view that the Programme’s success in the social sector of Pakistan has been an overwhelming experience for them. The Indonesian journalists said that the welfare of the people is the primary responsibility of the state and through BISP; Pakistan has been able to achieve this objective to a great extent.
Madame Farzana Raja on the occasion informed Indonesian journalists that BISP has introduced Waseela-e-Haq (Right to Livelihood), Waseela-e-Rozgar (Right to Employment), Waseela-e-Sehet (Life and Health Insurance) and Waseela-e-Taleem (Right to Education) for its beneficiary families which are bringing sustainable economic growth in the society by empowering people from lower strata. Chairperson BISP said that BISP in the lights of the Millennium Development Goals of the UN is striving hard to provide basic health and education facilities to 7 million families. She said that the wellbeing of the people is the primary role of a welfare state. Federal Minister said that BISP is working for making Pakistan a progressive welfare state where most deserving families are provided ample opportunities to become self-reliant.