Assignment

Subject: Pakistan Economy

Topic:

Poverty and Income distribution

Teacher:

Humaira Liaquat

Student:

Babar Saleem

Roll No:

41

Class:

BBA 5th semester

Poverty and income distribution in Pakistan

What is Poverty? Poverty is the deprivation of food, shelter, money and clothing that occurs when people cannot satisfy their basic needs. Poverty can be understood simply as a lack of money, or more broadly in term of barriers to everyday life. Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having a job, is fear for the future, living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of representation and freedom. Poverty is a call to action - for the poor and the wealthy alike - a call to change the world so that many more may have enough to eat, adequate shelter, access to education and health, protection from violence, and a voice in what happens in their communities. Poverty is the state of being without, often associated with need, hardship and lack of resources across a wide range of circumstances. Why is this? Is it enough to blame poor people for their own predicament? Have they been lazy, made poor decisions, and been solely responsible for their plight? What about their government? Have they pursued policies that actually harm successful development? Such causes of poverty and inequality are no doubt real. But often less discussed are deeper and more global causes of poverty. Behind the increasing interconnectedness promised by globalization, are global decisions, policies, and practices. These are typically influenced, driven, or formulated by the rich and powerful. These can be leaders of rich countries or other global actors such as multinational corporations institutions and influential people.

In the face of such enormous external influence, the governments of poor nations and their people are often powerless. As a result, in the global context, a few get wealthy while the majority struggle. Absolute poverty refers to a set standard which is the same in all countries and which does not change over time. An income-related example would be living on less than $X per day. Relative poverty refers to a standard which is defined in terms of the society in which an individual lives and which therefore differs between countries and over time. An income-related example would be living on less than X% of average UK income. Absolute poverty and relative poverty are both valid concepts. The concept of absolute poverty is that there are minimum standards below which no one anywhere in the world should ever fall. The concept of relative poverty is that, in a rich country such as the UK, there are higher minimum standards below which no one should fall, and that these standards should rise if and as the country becomes richer.
Measuring poverty at the country level

A common method used to measure poverty is based on incomes or consumption levels. A person is considered poor if his or her consumption or income level falls below some minimum level necessary to meet basic needs. This minimum level is usually called the "poverty line". What is necessary to satisfy basic needs varies across time and societies. Therefore, poverty lines vary in time and place, and each country uses lines which are appropriate to its level of development, societal norms and values. Information on consumption and income is obtained through sample surveys, with which households are asked to answer detailed questions on their spending habits and sources of income. Such surveys are conducted more or less regularly in most countries. These sample survey data collection methods are increasingly being complemented by participatory methods, where people are asked what their basic needs are and what poverty means for them. Interestingly, new research shows a high degree of concordance between poverty lines based on objective and subjective assessments of needs.

Poverty in Pakistan: 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 A World Bank report titled Sparing lives, better reproductive health for poor women in South Asia has revealed that Pakistans 37.4 percent children under the age of five are malnourished. The South Asia region still has nearly 400 million poor people out of a population of 1.42 billion. Poverty is not just endemic; it is increasingly becoming concentrated with the passage of time. A high poverty ratio has decreased Pakistans spending on social sector further. According to Pakistans Planning Commission, poverty rate has jumped from 23.9 to 37.5 percent in the last three years. The commission has estimated that in 2005 there were 35.5 million people living below the poverty line but in 2008 their number increased to over 64 million. Consequently, unemployment has also increased. Moreover, 40 percent of the urban population lives in slum areas. Reduction in social sector spending is increasing poverty and has reduced the standard of living in the country. High inflation, price hike and shortage of commodities have also added to the problem. It is the hallmark of our macroeconomy.

Steps to reduce poverty: A massive effort for job creation and employment generation in order to reduce the high levels of poverty must be launched. Infrastructure development would be an effective tool to curb the rising ratio of poverty. Housing is another sector which needs to be promoted and encouraged through a well planned incentives package. Transportation sector should also be reactivated. Better law and order situation would be helpful in the restoration of business activities and to reduce rising poverty. Policies regarding poverty reduction Marshalled by different government could not calculate the desire results.Crudely speaking,this is the gravest problem being faced by pakistani nation,if not handled with diligent care and implicit faith,will swell and devour the entire mechanism of the state.For a welfare state to get stronger,policies as regards development of poor strata should be the top of the checklist.i behold a time when we shall be steadily hauling our downtrodden economy towards heights,provided that we chalk out such policies that not only project the welfare of effected spots but also transpose their outlook .I propose following measures for extermination of this menace; 1.Promote industriallization 2.replacement of the orthodox agricultural implements with new scientific equipments in order to increase the yield. 3.establishment of justice and equality 4.equal distribution of resources 6.merit should be the upshot strategy in all walks of life 7.elimination of discriminatory policies 6.controlling of inflation and other economic indicators and regulators. 8.developing investment friendly environment 9.Giving more feasibilities and concessions to the foreign investors 10.dumping extremism and feudalism 11.establishing more and more technical institute in order to get people well skilled. 12.prevalence of education

13.provision of job opportunities 14.division of agricultural lands among tenants. 15.imposition of progressive tax system in order to elicit revenue without missing a single head 16.maintaining law and order situation in order to protect economic activities 17.Net of public oriented Development projects should be extended so that the respective people could find jobs. 18.smuggling and other illegal economic activities should be dealt with iron hand. 19.industrial zones should be established in the areas according to the local economic preferences. 20.A grand strategy should be formulated in order to achieve a radical overhaul in economic system in general by keeping in view the long term requirements of the country.