Poverty dilemma

Mansoor Ahmad
Friday, May 26, 2023

LAHORE: Not everyone who is poor in Pakistan these days was born into poverty. Large numbers of poor people have gradually fallen into poverty in recent years of economic stress as their incomes remained less than the increase in cost of living.

First the lower middle class then people living a shade better survived the income-expenditure gap by parting with their assets they accumulated over years.

After these assets were exhausted they started cutting some regular expenses like going out for dinner or spending summer vacations at some hill station. When the pressure increased due to constant double digit inflation they were forced to compromise on the education of their children shifting them to low fee institutions. Those living in rented houses shifted to smaller ones. They reduced use of air conditioners and some were forced to stop the use altogether.

People reduced the use of their bikes or cars for commuting between office and home or for emergencies. Many shifted from bigger cars to smaller and fuel efficient vehicles. Lastly, they started compromising on health issues as well, skipping the regular blood pressure or diabetes doses to save expenses. Finally they were left with no option and many now live in poverty.

The efforts of well to do families of yester years were mainly offset by the ever increasing prices. The food prices increased to historic levels, the fee of lower end schools have also doubled, the house rent of even smaller house is now almost the same as they used to pay for bigger residences, the prices of low end cars are now higher than the price at which 1300cc cars were available four years back, and the motorcycle prices have doubled.

Petrol rates have doubled as the electricity rates. Those middle class families that owned their house before the economic recession are better off as they at least save the house rent. If and when the economy improves they may wriggle out of poverty sooner than those living in rented houses.

Social workers express deep concern over the helplessness of the state towards the ever increasing plight of people. But no amount of charity or social work could reduce poverty as it would keep rising till a real turnaround in the economy.

Even in a growing economy some people fall into poverty within the specified time frame due to incompetence, accidents, external shocks or bad luck; but at the same time many families escape poverty because of the growing economy.

The number of families escaping poverty in growing economies is much higher than people falling into poverty trap. In Pakistan’s case where the economy is not performing, a large number of families are facing poverty for the first time in their life.

Economic and governance conditions in Pakistan indicate that poverty would haunt its citizens unless it grows as a developmental state. According to a research done by Overseas Development Institute London, in a developmental state, progressive taxes are collected, labour is regulated, and the chronically poor protected.

There is a sense of nationhood. Investment attracts and promotes national development goals. It has a powerful, competent, autonomous and stable bureaucracy and its political loyalty is not tested.

A developmental state is relatively independent of special interests although it is well linked with non-state actors who contribute to policy formation. Economic development is consistently prioritised by government policy, which promotes productive entrepreneurship.Tolerance, meritocracy, social mobility and high levels of education are valued and promoted.