Rising Inequality in Pakistan

Rising inequality is a global phenomenon. Oxfam’s briefings paper ‘an economy for the 99%’ reports only eight men today have the same wealth as 3.6 billion world’s people. In the last three decades seven out of ten people living in a country have been facing inequality. Also the report mentions that in the next 25 years, the world will have a first trillionaire.

Besides this, every year economically stagnated countries cost $1000 billion in the shape of corporate tax dodging. This huge sum can provide education to 124 million children and prevent the deaths of at least 6 million children globally. On the other hand, global inequality has devastating consequences for low income countries like Pakistan.

The per capita income of Pakistan is $1629. Poor families can bear the cost of food, health, shelter, education and other fundamental needs for one year. Meanwhile, Bangladesh – a young country, has seen an increase of up to $1602 in its per capita income. It is very close to Pakistan.

Oxfam’s another report ‘Commitment to Reducing Inequality (CRI)’ ranks Pakistan at number 139 out of 152 countries. In spending on education, health and social protection, it is ranked on 146; progressive taxation is ranked at number 98 and in labour rights is ranked at number 118.

According to development experts of Pakistan, between 1998-99 and 2013-14 consumption-based poverty fell from 57.9pc to 29.5pc. Multidimensional poverty that comprises education, health and living standards has dropped from 55.2pc to 38.8pc between 2004-5 and 2014-15.

In addition, during 2013-14, the Gini coefficient was 0.41 and in the years 1987-88, it was 0.35. Besides, the richest 20pc in Pakistan spend seven times more than the poorest 20pc.

Currently, our country is on the trajectory of high economic deficit. This has caused 35pc people to live below the poverty line, around 22.4 million children are out of school, and 45pc are stunted.

Moreover, women’s unpaid care work is not measured in any data. They are not paid equal wages. Around 63pc youth spend their life impractically.

Income and wealth inequality is from top to bottom. Only 22 persons in the country have billions of wealth and reserves. The rest spend their life in hunger and poverty.

Education and health infrastructures are on the verge of collapse. Institutions are rotten. Moral and ethical values are decaying.

In addition, extreme inequalities cause rampant corruption in the society, obstruct economic growth, irregular wealth and income distribution, moral and ethical iniquities, and adversely affect labor and human rights.

This portrays an intimidating picture of the country’s overall economic scenario.

Civil society organizations (CSOs), public sector organizations and INGOs in Pakistan are working more on issues like poverty, gender disparity, water, food rights etc. Thus far the root cause of all these issues ‘inequality’ is untouched and un-debated.

Undoubtedly inequality is a highly political debate, as is entrenched in government policies and institutions. However it needs to be triggered with people, civil society, policy makers and parliamentarians to initiate discourse in the country.

Inequality needs to be controlled now. CRI index shows that some African countries through spending on education, health and social protection have controlled inequality.

The government needs to increase spending on education, health, and social protection, and to provide equal labor wages – both men and women. The government should revamp and reform taxation system – to bring progressive and just tax systems.

 

Government’s Erratic Allocation in PSDP

The denial of basic human rights and economic deprivation has exacerbated structured poverty and inequality in rural and semi-urban areas of Pakistan. The self-reliant economic development models for men and women still a distant dream despite an increase in country’s gross domestic product (GDP) over 5.28pc.

Like every year, this year also government proudly presented Rs. 4.8 trillion federal budget in contradiction of the ground realities. As the experts comment that the budget is nothing more than the manipulation of statistics and numbers, additionally the maneuvering of people’s aspirations and circumstances.

It is pretty impressive to know that in 2017-18 budget the government has reserved Rs. 2113 billion for public sector development program (PSDP), which is 5.9pc of GDP. Thus, merely for federal PSDP, it is Rs. 1001 billion. Not only this, under the outside federal public sector development program, the Benazir Income Support Programme (BISP) has been allocated Rs. 121 billion.

The major portion of the total expenditure of PSDP budget Rs. 1001 billion have been allocated for federal public sector development program in 2017-18. This is an increase of 25.1pc from last year allocation of Rs 800 billion, of which Rs 715 billion were actually spent. It means that in 2016-17 government spent 85 billion less than the actual estimates.

Of the total federal PSDP in the current year, the government has allocated Rs. 40 and 45 billion for Special Federal Development Program (SFDP) and Relief and Rehabilitation of IDPs accordingly. This is 8pc of total federal PSDP outlay. On the other hand, during 2016-17 government allocated Rs. 28 billion for SFDP and Rs 100 billion to Relief and Rehabilitation of IDPs. It’s total coalesced to Rs. 128 billion but unfortunately remained unspent. This is the worthy point to note that government could not utilize 128 billion.

Furthermore, the corporations – WAPDA and NHA is also the part of federal PSDP. These components have been allocated Rs 380 billion as part of the Federal PSDP for the year 2017-18. This is 38pc of the total federal PSDP provision of Rs 1001 billion. During 2016-17, both these corporations spend Rs 344 billion, which was 48pc of total federal PSDP expenditure of Rs 715 billion. It means that a large portion of the outlay of federal PSDP only goes to these two corporations.

Apart from these corporations, federal PSDP has also some portion of about Rs. 30 billion for Prime Minister’s Global SDGs Achievement Programme in this year. This is 3pc of the total federal PSDP allocation of 2017-18. Last year Rs. 20 billion were allocated but the spending increased up to Rs. 42 billion, double than the actual amount of the total federal outlay of PSDP Rs. 715 billion. In this count major portion of the amount goes for the expenditures of MNAs and MPAs. The situation is messed up in some heads of expenditure, there is zilch expenditure, others have crossed double than actual amount and some heads are lower spent.

In addition to, the Federal Ministries/Divisions have been allocated Rs. 378 billion. This is 38pc of total federal PSDP budget of 2017-18. During 2016-17, Rs. 282 billion was allocated out of total federal PSDP outlay Rs. 715 billion, but spending was increased up to Rs. 298.52 billion. This was 42pc of total federal PSDP. The expenses were over spent in this head than actual estimates.

Above all, the development expenditure outside PSDP has been estimated at Rs 152.2 billion in 2017-18. Last year (2016-17), it was estimated at Rs 156.6 billion, but the actual spend was Rs. 127 billion. It shows that out of total estimated expenditure only 81pc was utilized.

Outside federal public sector development program, the Benazir Income Support Programme (BISP) has been allocated Rs. 121 billion in 2017-18.  However, during 2016-17 the BISP was allocated Rs. 115, but the spending remained to 111 billion less than the actual allocation.

It is upright that government has initiated new projects in federal PSDP 2017-18 budget such as Clean Drinking Water for All, an amount of Rs 12.5 billion has been allocated in this head, about Rs. 5 billion has been earmarked for Special Provision for Competition of CPEC Projects and also an amount of Rs 12.5 billion has been allocated to Energy for All.

To conclude, the federal PSDP expenditure is one the very crucial to reduce poverty and bring about development. Therefore, the government ought to ensure appropriate utilization of the apportioned budget for inclusive sustainable growth.

Food security predicament in Pakistan

Pakistan is a low income developing Pakistan. Agriculture is one of the leading sectors in the country. About 68 per cent population in Pakistan earn their livelihood through farming and agriculture.

In general, looking at the global food security predicament in South Asian countries, and particularly Pakistan is on the hit list for food deficiency in coming years, the example we have in the recent past for Thar denizens, where hundreds of children died in the laps of their mothers due to widespread malnutrition. The magnitudes of food shortage would be even very much distressing for the marginalized secluded communities of Pakistan in near future.

During the World Food Summit held in 1996, the food security was defined as ‘food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs, and their food preferences are met for an active and healthy life.’ Food is a rudimentary fundamental human right as well as need originated from the International Covenant on Economic, Social and Cultural Rights (ICESCR), identifying the ‘right to an adequate standard of living, including adequate food’, in addition to the ‘fundamental right to be free from hunger’.

Pakistan has total area of 79.6 million hectares, where 21.2 million hectares are cultivated. And the cropped area in the country constitutes 23.8 million hectares. Nearly 80 per cent of the cultivated land is watered. Pakistan is among top ten producers of sugar cane, mango, wheat, cotton, dates, and oranges and own 13th position in rice crop in the world.

As said by the Federal Bureau of Statistic 2010–2011, 40 per cent labor force of the country is working in agriculture sector where there is 36.2 per cent male and 75.4 per cent female. The sector contributes 20.9 per cent to the country’s GDP. Moreover, Pakistan has rich livestock sector, which employs almost 35 million people and contributes 11 per cent to the GDP of the country.

Having such rich and splendid agriculture landscape, our people are living hand to mouth. Hundreds of children are dying because of undernourishment. And we are struggling with substantial food insecurity challenges.

According to a report, the underprivileged people spend more on food as compared to non-food items. The report further elucidates that within the poorest group the average household’s expenditure share on food in Pakistan has gone up from 55.6 per cent in 2005-6 to 61.6 per cent in 2009. In three years 5 per cent graph of food expense had gone up.

According to a survey estimates 65 per cent population out of estimated 188 million 113 million people of Pakistan live in the rural areas. These are those people, who are directly affiliated with farming and agriculture. But now the state for farming in Pakistan is so poor that millions acre land is being degraded due to water logging and salinity. Where once one-acre land used to produce 60 to 70 man produce, but that has reduced to 40 men per acre? That thing in Pakistan is leading toward food shortage.

According to Global Food Security Index (2013), in South Asian countries Pakistan is second last for food insecure countries. According to World Food Programme (2009), in excess of 48 per cent of the population is food insecure.In line with the findings of the National Nutritional Survey (2011), up to 58 per cent, Pakistanis are food insecure. In two years, there seems 10 per cent increase in food insecurity. Additionally, according to it the situation was better in 2003 but has increasingly worsened with the year 2011 being the worst.

The reasons of food insecurity in Pakistan can be many such as, the rich are grabbing and controlling the resources, and compelling the relegated communities to live in poverty and hunger. Exceeding population over yield production. Larger urbanization and rise of cities. We are consuming more than conserving. Uneven water distribution, rural and urban divide, failed economic policies, negligence of new technology in the agriculture sector, lack of good governance, and corruption.

Moreover, there are many other reasons like natural and man-made disasters as floods, earthquakes, droughts, and conflicts, in the last two decades have played havoc with the existing agriculture system in the country. Recent flood (2015) in Pakistan have heavily hit the paddy crop in Punjab and Sindh, and thousand acres banana in Katcha areas of Sindh is spoiled. The same situation was created during floods of 2010 and 2011.

The World Development Report 2008 recommends that the growth originating in agriculture is four times more effective in reducing poverty than the growth coming from non-agriculture sectors. The government needs to revise its food securities policies and strategies focusing on rural agricultural land reform, a requirement for economic and social development within the country. The introduction of modern technologies in the agriculture sector needs to be implied.

Thus, to enhance the agriculture produce and overcoming food insecurity challenges in the country. The community level agriculture institutions need to be revolutionized, and rural farmers’ capacity enhancement help increases yields in future. Moreover, the integrated cropping methodologies and food preservation technologies must be developed. There should be more flexible trade policies with neighboring countries.

 

Climate-resilient Economic Development

With regard to climate change, among South Asian countries, Pakistan is hugely affected country. It is among the seventh countries vulnerable susceptible to climate change. The vulnerability of Pakistan is due to its geographic, demographic and varied climatic conditions.

Of that the nation has experienced severe consequences in the shape of economic instability, infrastructure immensely damaged, human capital loss, fishing, rare species of birds, flora, and fauna declined, and agricultural deficiency due to climate change since past few decades.

Not only has this but withal increment in temperature causes heatstroke death for past two years. Besides, there is increasing sea intrusion, expeditious melting of glaciers, elevating sea-levels, unprecedented rains, cyclones, droughts, and floods these adverse corollaries further threaten to hold back advantages in economic and social development.

As Pakistan already has suffered the most weather and climate cognate disasters, virtually every sector of development has adversely been affected due to transmuting climate pattern in the region.

Due to climate change, Pakistan has lost its actual gross domestic product from two decades.  Billions of rupees cash crop have been destroyed. Numbers of in-kind items have been spoiled.

Adapting to these hard circumstances, in recent past, Pakistan has taken good initiatives to combat with rising destructive climatic situation. Sustainable Land Management Program is initiated with the fortification of UNDP with the total cost of 105.400 million to combat desertification.

Pakistan has a climate change policy that “ensures that climate change is mainstreamed in the economically and socially vulnerable sectors of the economy and to steer Pakistan towards climate resilient development.”

In addition, recently the government has passed “Pakistan Climate Change Act 2017”. Also, the government has launched Green Pakistan Program (to increase the forest coverage) with the total cost of Rs. 3.7 billion till 2021, and a number of other climate battling projects.

Apart from these, at global level, Pakistan has signed the Paris Climate Change Agreement.

Due to Donald Trump’s recent gainsays the USA to be no more the part of The Paris Agreement on climate change – is a great menace to changing global climate. Though, the US is the second country in the world that emits an astronomically vast quantity of greenhouse gases. Its withdrawal from the agreement will engender a huge breach and quandaries for other countries and be a great challenge for fighting climate change.

Pakistan has lots of options to adapt climate resilient economic development.

The most vulnerable to climate change are the people living in rural and semi-urban areas.

For that at the community level the focus need to be given on inclusive agricultural development – incipient climate resilient crops/seeds should be planted, new ways, means, and practices of cultivation need to be introduced among farmers, and their immediate linkages with new markets ought to be developed. It will also help in reducing poverty and improve the resilience of agriculture sector in the country.

In addition, the non-agricultural activities, such as consumption something through credit, insurance, and social safety nets need also be adopted. The government should expand tourism and services sector.

High rates of urbanization and economic growth will ameliorate climate resilience. The country’s climate change and economic policies should align for inclusive and sustainable economic development.

In climate affected rural areas, the government may setup inclusive economic generation zones that may help in the time of crises and disasters. Mostly affected are women and children, during the time of disasters, therefore for women there need to be initiated small business enterprises to generate some amount of money to run the households.

Moreover, economic diversification is one of the very potent implements for climate risk mitigation or adaptation in Pakistan.

It is a very earnest matter; therefore concerned departments and institutes ought to mainstream climate change adaptation in planning, budgeting and spending national and sub-national levels.

To sum up, measuring the growing economic menace of climate change to the country, and the required economic and fiscal responses, are challenging tasks that disclose obstacles regarding the absence of data and capacity.

However, Pakistan needs to develop knowledge and awareness base of the economic consequences of climate change is a significant stage to mainstreaming climate change into economic development.