Effects of Poverty on the Economy of Pakistan2

8/12/2019 Effects of Poverty on the Economy of Pakistan2

1/23

EFFECTS OF POVERTY ON THE ECONOMY OF PAKISTAN


2/23

i


Prepared for

Mrs. Kausar Jafri

Associate Professor of English

Institute of Administrative Sciences

University of Punjab

Prepared by

Amber Naeem 80

Areesha Munir 85

Saddat Ullah 57

February 14, 2014


3/23

ii

February 14, 2014

Mrs. Kausar Jafri

Associate Professor of English

Institute of Administrative Sciences

University of Punjab

Dear Mrs. Jafri:

Here is the report on the effects of poverty on the economy of Pakistan youasked us to conduct last week dated February 9, 2014.

As you will see, our observation pointed to some svere effects of povertyon our economy. We have also mentioned the causes of poverty. We areconfident that this report will aid in seeking the appropriate way of doingany research by your time.

We Amber, Areesha and Saddat appreciate having this assignment. If wecan help you interpreting this report or in implementing ourrecommendations, please call on us.

Sincerely yours,

Amber Naeem

MHRM, Roll # 80 (S)


4/23


5/23

TABLE OF FIGURES

Part page

Figure 1: Socio-economic status of Pakistanis . . . . . . . . . . . . . . . . . . . 8

Figue 2: Poverty Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Figure 3:Growth and Poverty Studies, published by PIDE durin 1957 -

- 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Figure 4: The most corrupt sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Figure 5: Price Trend of Essential Commodities (Rs) per Kg . . . . . . . . 13


6/23

v

EXECUTIVE SUMMARY

Conclusion drawn from study suggest that the following aspects should be

added in this report.

Basically Poverty is a global phenomenon. It exists where people are

deprived of the means to satisfy their basic needs mandatory to their

survival. Mostly the phenomenon occurs in developing countries of the

world, which not only affects them socially but also psychologically. The

study focuses on the causes and consequences of poverty in Pakistan and

attempts to offer recommendations for its alleviation. Despite, a long list of

causes, the research emphasizes on the causes like;

Vicious Circle of Poverty

Government Policies

Government Extra Expenditures

Corroption

Inflation

Smuggling

Population

Unemployment


7/23

vi

Poverty is a svere phenomena because it has a very bad effect on the

economy, like

Poverty Cause Suicide in Society

Health Problem

Lack Of Education

Child Labour

Crime And Violence

Sub Standard Life

Poverty Breeds Poverty

The report tries to examine this phenomenon in the context of Pakistan and

also suggesting some measures.


8/23

1


INTRODUCTION:

In Islam, poverty is a great curse and unfortunate. Our beloved Prophet Hazrat

Muhammad (PBUH) also prayed to Allah to save Him (PBUH) from Poverty. Poverty is

one of the most brutal and threatening curse on any nation which restrains it from

prospering. So it is very much important for any state to get rid of this problem as soon

as possible before it gets more severe and dangerous. Pakistan is also one of those

unfortunate countries which are going through this problem. Poverty is on its peak when

it comes to the Asian Countries and most importantly when it comes to the

subcontinent. India being so advanced, modernized and developed is still having

barriers of poverty and is one of those countries where the poverty is on its peak.

Pakistan is also feeling the heat from this curse and poverty in Pakistan is also very

much high.

WHO ARE POOR?

A person who is hungry, insecure and powerless is poor. People who cannot go to the

doctor when they are sick, cannot send their children to school, or do not feel secure in

their homes and at work are poor.


9/23

2

Poor people often lack access to clean water as well as political influence and the

possibility to influence their lives. A poor person has neither power nor food for the day.

Over the billion people in the world are said to live in extreme poverty. Men, women and

children who try to survive on less than a dollar a day are usually included in the

category of extremely poor.

MEANING OF POVERTY:

Poverty may have different meanings depending upon country of origin.

ACCORDING TO WORLD BANK:

Poverty is pronounced deprivation in well-being, and comprises many dimensions. It

includes low incomes and the inability to acquire the basic goods and services

necessary for survival with dignity. Poverty also encompasses low levels of health and

education, poor access to clean water and sanitation, inadequate physical security, lack

of voice, and insufficient capacity and opportunity to better oneslife.

ACCORDING TO ASIAN DEVELOPMENT BANK:

Poverty is a deprivation of essential assets and opportunities to which every human

is entitled. Everyone should have access to basic education and primary health

services.


10/23

3

ACCORDING TO UNITED NATIONS ORGANIZATION:

Fundamentally, poverty is denial of choices and opportunities, a violation of human

dignity. It means lack of basic capacity to participate effectively in society.

(UN Statement, June 1998signed by the heads of all UN agencies)

GENERAL DEFINITION:

Poverty refers to the condition of not having the means to afford basic human needs

such as clean water, nutrition, health care, education, clothing and shelter.

DIFFERENCE BETWEEN POOR & POOREST:

POOREST:

The poorestrefers to people living on less than $1 per day or in the bottom half of

those living below their nations poverty line.

POOR:

The term poor meanthose living in poverty above $1 per day or the upper of those

living below their nations poverty line.


11/23

4

POVERTY LINE:

A level of personal or family income below which one is classified as poor according

to governmental standards - called also poverty level:

1. Above poverty line those are not affected by poverty and are able to fulfil their

basic needs.

2. Below poverty line those are affected by poverty and are unable to fulfil their

basic needs.

In Pakistan poverty line is 2500 PKR.

TYPES OF POVERTY

ABSOLUTE POVERTY:

When people live without proper housing, clothing and medical care is known as

absolute poverty.

RELATIVE POVERTY:

Kandell (1998) described relative poverty as a condition that exists when people are

able to afford basic necessities as food, clothing and shelter but cannot maintain the

average standard of living for members of their society. In other words we can say

Income inequality.


12/23

6

CYCLICAL POVERTY:

Cyclical poverty refers to poverty that may be widespread throughout a population,

but its occurrence itself is of limited duration.

CONCENTRATED COLLECTIVE POVERTY:

Cities or region neglected by industry and in areas where agriculture or industry is

inefficient and cannot compete profitably, they are found victims of concentrated

collective poverty.

CASE POVERTY:

Case poverty refers to the inability of an individual or family to secure basic needs even

in social surroundings of general prosperity. This inability is generally related to the lack

of some basic quality that would permit the individual to maintain himself.

POVERTY AROUND THE GLOBE - FACT SHEET:

Poverty is the state for the majority of the worlds people and nations. One may find high

level of inequality and find most of humanity living on just few dollars, irrespective of the

one live in the wealthiest nations or the poorest one. Some of the poverty related facts

flashed on the website of ((Global Issues Organization ))

1.4 billion people in developing countries live on $1.25 or less.**


13/23

7

The GDP of 41 heavily indebted poor countries is less than the wealth of worlds

7 richest people combined.

The poorest 40 % of the worlds population accounts for 5% of global income.

The richest 20% accounts for three-quarters of world income.

Around 27-28 percent of all children in developing countries are estimated to be

underweight or stunted.

1 billion children live in poverty (1 in 2 children in the world).

640 million live without adequate shelter.

1.7 billion people lack access to clean water, 270 million have no access to

health services. ***

22000 children die each day due to conditions of poverty.****

SITUATION IN PAKISTAN:

Pakistan is one of the developing countries facing the extreme level of poverty. 24% of

population of Pakistan is much poor and spending their lives below poverty line.

According to the latest estimates of the World Bank, almost 40 percent of 107

developing countries are highly exposed to the poverty. Pakistan is ranked among the

43 countries most exposed to poverty risks. Poverty is widespread in Pakistan and is

predominantly a rural phenomenon. Nearly two thirds of our population lives in rural

areas. Most of them depend on agriculture for their livelihoods. Many of them lack basic

needs such as safe drinking water, primary health care, education and other social

services.


14/23

8

Figure 1

Figure 2


15/23

9

Figure 3

Growth and Poverty Studies, published by PIDE durin 1957 - 2010

Topics 1960 1970 1971 - 1980 1981 2010 1960 - 2010

1. Growth 6 5 71 82

2. Development 7 5 38 50

3. Development

Strategies

0 2 5 07

4. Planning 20 6 20 46

5. Foreign Trade 6 7 18 31

6. Income

Distributin

6 10 23 39

7. Poverty 0 11 99 110

8. Other Social

Issues

1 2 11 14

All 46 48 285 379

Poverty Studies/All

Issues

(0%) (23%) (34.7%) (29%)

Source: PIDE research staff


16/23

10

CAUSES OF POVERTY:

Poverty in Pakistan is too constant and too complex, and cannot be restricted to few

facts. There are many interrelated factors that contribute to poverty in developing nation

like Pakistan., some of them are as follws:

1. VICIOUS CIRCLE OF POVERTY:

Vicious circle of poverty is the largest reason of poverty. Developing countries

like Pakistan are trapped into VCP. Less developed countries remain poor due to

certain obstacles. These obstacles react upon one another in such a way that

they form a vicious circle, which keeps a country at low level of development.

2. GOVERNMENT POLICIES:

Government is not well aware of present conditions of country. The policies of

government are base on the suggestions of officials which do not have

awareness about the problems of a common man. After implementation, the

policies do not get effective result. After the failure of one policy, government

does not consider its failure and announces another policy without studying the

after maths of last one.

3. GOVERNMENT EXTRA EXPENDITURES:

Here are some facts and figures about the high expenses of Government

Officials:

5 crore per year is spent on the security of President and Prime Minister.


17/23

11

Monthly expenses of one minister is 30 lac

Monthly expenses of 96 ministers is 28800000 (28 crore 80 lacks)

Expenses of 96 ministers per year is 3 arab, 45 crore, 60 lacs

National assembly + senate = 440 members

Provincial assembly = 636 members

Total = 1076 members

Every member have luxury and expensive vehicles, none of them is car less and

each member have more than one car

So 1076 x 4 = 4304 cars at least!

If each car consumes fuel of 500 daily then :

4303 x 500 = 2152000 per day

2152000 x 30 = 64560000 per month

64560000 x 12 = 77 Crore, 47 Lacs, 20 Thousands rupees per year

This is only the estimate of fuel, now you can think yourself about their eating

expenses, their salaries, their visits etc.

4. CORROPTION:

Another cause of poverty is corruption. There are two types of corruption. There

is no morality and every one is trying to earn more and more by using fair and

unfair means. Officials waste their time has low efficiency.Only one relationship


18/23

12

that is exists in society is money. Law and order conditions are out of control and

institutions are failed to provide justice to a common man. In this whole scenerio

some corroupt people has been occupying the resources and common man is

living in miserable conditions, which brings more poverty in the state.

Figure 4


19/23

13

5. INFLATION:

Inflation is rise in the general level of prices of goods and services. Poverty in

Pakistan is increasing due to the current layer of inflation. Inflation decreases the

purchasing power of society, people are unable to fulfil their needs and results in

strenghthen the poverty rate.

Figure 5

Price Trend of Essential Commodities (Rs) per KgItems Weights Units Jan-08 19

thMay

2011

% change

Wheat 0.62 Kg 18.98 24.24 27.71

Wheat Flour 11.91 Kg 19.41 28.35 46.06

Beef 3.99 Kg 122.33 226.55 85.20

Mutton 2.81 Kg 233.79 440.06 88.23

Chicken

(farm)

2.39 Kg 74.74 125.12 67.41

Milk Fresh 15.73 Ltr 29.63 55.27 86.53

Cooking Oil 1.90 2.5 ltr 300.84 495.00 64.54

Rice 1.52 Kg 34.43 54.17 57.33

Sugar 4.46 Kg 25.97 65.59 152.56

Mash Pulse 0.49 Kg 70.50 156.71 122.28

Source: Federal Bureau of Statistics


20/23

14

6. SMUGGLING:

Pakistan is recently facing the shortage of sugar and wheat due to smuggling

these items to neighboring countries. Pakistan is the 7 thlargest wheat producing

country. Total wheat consumption of Pakistan is 20 million tones, while

production of wheat last year was 23 million tones. Similarly Pakistan is 4 th

largest sugarcane producing country but facing the swear shortage of sugar.

7. POPULATION:

The estimated population of Pakistan is 184.35 million, making it the worlds 6th

most populous country. Such a large population will undermine efforts being

undertaken to reduce poverty and to improve living standerd of people.

8. UNEMPLOYEMENT:

Unemployment means when people are without jobs and they are not actively

prarticipating in overall economy. Unemployment rate in 2009 was 7.4%, which

was doubled in 2010 and the current rate is 6%. When people are unemployed

they consume the resources but are unabe to contribute in overall economy,

which results in poverty.

EFFECTS OF POVERTY:

1. POVERTY CAUSE SUICIDES IN SOCIETY:

24% of Pakistans population lives below poverty lineand any rise in inflation

effects this group the most. Many people commit suicides because of their bad


21/23

15

economic position. But it is the same group that has been ignoring the fact that

small families can help them cope there problems more effectively.

2. HEALTH PROBLEM:

Poverty also affects health. Some prominent diseases which are more likely to

affect people below the poverty line include AIDS, malaria, tuberculosis, measles,

pneumonia etc, which are attributed to lack of basic healthcare facilities. The

diseases which can result in poverty include a range of mental illnesses which

tend to hinder the ability of a person to work.

3. LACK OF EDUCATION:

Lack of education is an important cause of poverty. Children living in absolute

poverty cannot afford basic education, those in relative poverty are forced to drop

out half way into their elementary or middle schooling because of inability to pay

fees and family responsibilities.

4. CHILD LABOR:

Rate of child labor is increasing day by day due to poverty. Parents send their

children to work instead of school because they cannot afford this.

5. CRIME AND VIOLENCE:

Crime and violence is increasing in society due to poverty. People choose

unethical ways to improve their lives. Poverty is also asociated with violence in

family, including child and elder abuse.


22/23

16

6. SUB-STANDARD LIFE:

The standard of people living below poverty line is very low. All or most of the

money earned go to basic survival. There is little or no money left to improve

standard of living.

7. POVERTY BREEDS POVERTY:

Living in poverty almost always means that the harsh reality of today will repeat

itself tomorrow.if one cannot afford to buy ones own land or home or livestock,

there are fewer opportunities to build assets that will last over time.

REMEDIES FOR THE PROBLEM:

Poverty will never end unless there are real solutions to end it; solutions based on

economic justice and political changes:

Government should improve their policies. Government should make their

policies in favor of Pakistan and Pakistani people.

The full equality between men and women in public as well as private

areas of life, a worldwide minimum wage of $20 per day and the end of

child labor under the age of 16 with the creation of a subsidy for

scholarship.

The guarantee of shelter, healthcare, education, food and drinking water

as basic human rights that must be provided free to all.

Corroption should put to an end and Judiciary should take some action

against corrupt people.


23/23

17

Population rate should be controlled.

Government should make policies to provide employment to the labor

force.

Smuggling should be stopped by enforcing law and order.

Law and order must be improved to bring Foreign Direct Investment (FDI).

Government should first think about the healthcare, education, energy

crisis instead of defense and armory.

We should rely on ourselves instead of IMF.

CONCLUSION:

The review of the above literature shows that poverty is still in Pakistan. Which is really

a worrying situation for Pakistan for future progress. We still need to overcome it as

soon as possible.

Effects of Poverty on the Economy of Pakistan2

Documents

Transcript of Effects of Poverty on the Economy of Pakistan2