Poverty of action

IF the nicely-written poverty reduction strategy papers and well-organised seminars could eradicate poverty, Pakistan might have been a country of rich people by now, not a land of the hungry, ill and illiterate. The gap between words and implementation needs to be quickly bridged if our government is serious about reducing poverty. Is it? As Pakistan faces a serious balance-of-payments crisis and is knocking on the doors of its so-called friends and international lenders for money to avoid default on its foreign currency debts, the task of reducing poverty appears even more daunting. A panel of economists who have helped the government draw up its economic stabilisation programme for seeking assistance from the IMF to overcome cash-flow problems anticipates that the implementation of the macroeconomic stabilisation policies (over the next two years) could push another eight to 10 million households below the poverty line and throw another million people into joblessness this fiscal year. But the government claims in the draft poverty reduction strategy paper-II — released at a workshop in Islamabad the other day — that it would alleviate poverty over a three-year period beginning in 2009 by regaining macroeconomic stability and pushing annual growth to seven to eight per cent through economic liberalisation, deregulation and privatisation. This year the growth is projected to fall well below the target of 5.5 per cent. Now who has got it wrong — the government or the panel of economists?A more or less similar strategy or PRSP-I was formulated by the previous government. Like the new document, the previous one too promised to seek sustainable growth in the productive and labour-intensive sectors to create new jobs and ensure income distribution among a wider segment of population for reducing the incidence of poverty. It failed. We saw millions pushed back into abject poverty without adequate nutrition, clean water, clothing, shelter and healthcare once the external shocks of spiking global oil and food prices shook the very foundation of the economy in the last couple of years after five years of average GDP growth of seven per cent.We need more than just growth to pull people out of poverty — strong political commitment, and not just economic growth or deregulation and liberalisation. The government’s commitment to poverty alleviation will shortly be tested when it makes cuts in its expenditure as part of its pledge to the IMF. If it fails to prioritise its expenditure on the social sector — education, healthcare, clean water, etc — to foster inclusive growth on its unproductive spending on defence and luxury cars and so on, its commitment to mitigate poverty will stand exposed. The difficult part will start once we have the aid in hand.