Misplaced priorities

While economic managers of the country insist that the global economic meltdown caused economic turmoil in Pakistan, it needs to be understood that the economic turbulence rather than being an international phenomenon was more a localised one. Fiscal mismanagement resultantly led the government to increase borrowings from the State Bank of Pakistan, in order to fund its extravagant expenditures. A major proportion of these borrowings were utilised to fund non-development expenditures. The loss making public sector organisations are bearing the brunt of poor policy making, and instead of addressing these concerns, the government is continually injecting money in these organisations to sustain them.
A consequence of such blatant policy failures is that economic growth of the country has come to a complete halt. In the last three years, Pakistan has experienced average economic growth of approximately 2.5 per cent whereas population is increasing at a rate of two per cent. This means that real GDP growth rate is almost negligible. Government’s inability to attract foreign investment in the country has meant that the increase in labour force of approximately three per cent a year will not be absorbed in the labour market.
According to recent survey by the World Bank, approximately 40 per cent of 107 developing countries are highly exposed to poverty. Pakistan now has the distinction of being ranked among the 43 countries most exposed to poverty. Almost two thirds of our population live in rural areas and depend on agriculture for their livelihood. A major proportion of these people lacks access to basic amenities such as safe drinking water, primary health care, education, shelter and other social services.
According to reports, 37.4 per cent of children under the age of five are malnourished in Pakistan. Interestingly however the government for the last three years has shown its reluctance to release poverty figures. Estimates by the Asian Development Bank reveal that every 10 per cent increase in food prices leads to 2.2 per cent of Pakistan’s population shifting below the poverty line. Ministry of finance figures show that food prices have increased by 94 per cent since the last poverty survey in 2006 and if these figures are anything to go by, then it can be deduced that poverty rate in the last three years has gone up to approximately 43 per cent from 22.3 per cent in 2006.
Adhocism in policy making, lack of vision and lack of will are factors that have contributed to a rise in socio-economic disparities of Pakistan. Government sympathisers would be quick to take this as an opportunity to bash previous government for fudging economic growth figures, pointing to policy failure of the trickle down effect. However, improving living standards does not promise an equitable distribution of income in all cases. Economic growth leads to income inequalities but at the same time attracts foreign investment, increases employment opportunities and boosts the confidence of stakeholders and investors.
Programmes such as the Benazir income support programme or the sasti roti programme are effectively ensuring that a major chunk of our people inherit the national tradition of begging for subsistence, that they rely on entities and individuals to alleviate their problems, that they are given a fish without knowing how to fish. There is a reason that economic aid for poverty alleviation has in most cases never been effective to cut down on poverty since the poverty stricken are not being imparted with the necessary skills to make a living for themselves.
Increasing socio-economic disparities are a direct result of the apathy of those sitting in the higher echelons of power to etch out policies that ensure that unskilled workers are provided with adequate training to become a part of the workforce. If the government fails to make pragmatic policies in this regard, then 75 per cent of the population living very close to the poverty line will be pushed below it, while sustained levels of economic growth has the ability to bring millions of people out of this poverty trap.

The writer is Sub Editor, Profit