NHDR Core Message # 9

PAKISTAN NATIONAL HUMAN DEVELOPMENT REPORT 2003

POVERTY, GROWTH AND GOVERNANCE

 

KEY NHDR OBSERVATIONS
 

1. The financial crisis is a manifestation of the interplay between the problems of governance, the decay of institutions, and the adverse structure and slow growth, of GDP. The essential feature of the problem in the context of economic revival, is that the government has severe fiscal constraints to undertaking major initiatives for stimulating the economy or directly attacking poverty.

2. The debt-servicing burden of total public debt as a percentage of government revenue increased from 19.6 percent in 1980 to 60.3 percent in 2000.

3. Overtime the tax burden on the poor has increased and on the rich has declined.

4. The pattern of growth in the crop sector during the 1990s is characterized by a slow down in the annual growth rate of major crops, a declining growth rate of factor productivity and an increased instability of output growth.

5. While the availability of the irrigation water has been reduced, the requirement of water at the farm level has increased due to increased deposits of salts on the top soil and the consequent need for leaching.

6. High drop out rates occur often because the household is facing adversity and gets pushed into such acute poverty that it is forced to send the children to work for a pittance rather than continue with education. There is a serious problem with the quality of education imparted to students not only with respect to the curricula but also the quality of instruction.

7. The adverse health and socio-economic status of poor women is accentuated as marginal households with given incomes bear the burden of a large number of children. In Pakistan high fertility rates, high population growth rates, ill health and poverty are linked in a vicious cycle.

8. GDP Growth has declined during the 1990s, there has also been a decline in employment elasticities, labour productivity and real wages in both agriculture and industry.

9. The poor are not isolated heads to be merely counted. The poor exist as living communists who are looked into a structure of power which keeps them dependant on the landlord, the money lender and the local state officials.

10. Women from poor household today are subject to not only the stress from economic deprivation but also: ‘loneliness…, violence and fear of violence, depression and resignation…’

11. During the process of rapid economic growth of the 1960s, while an exclusive and highly monopolistic class was amassing wealth, the majority of Pakistan’s population was suffering an absolute decline in its living standards.

12. While the landlord’s incomes increased, those of the poor peasantry declined relatively, as they faced a reduction in their operated farm area and in many cases growing landlessness.

13. Apart from the increased expenditures on defence and administration, the budget was additionally burdened by the losses of the public sector industries.

14. When the cushion of foreign loans and debt relief was withdrawn at the end of the Afghan War, the underlying structural constraints to GDP growth began to manifest themselves.

15. The key factor that determines whether a poor household shifts out of poverty or moves deeper into poverty is the share of household income contributed by the second earner.

16. While the financial burden and input cost on the poor tenants has increased, their lack of control over timing of water application, combined with adulterated inputs, keeps the yield per acre of poor peasant at a lower level, thereby reducing their net income.

17. In the relatively few cases where the extremely poor do engage in disputes, the cost of mediation (Rs.18, 333) places a crippling burden on them since it is more than their annual household income.