Pakistani society pushed 13 million more people below the poverty line in the year 2024 The World Bank in its report about Pakistan in the first month of this year noted a 25.3 percent poverty rate in 2024, up by 7 percentage points from 2023 pushing an additional 13 million people into poverty. The year 2024 was the second consecutive year in which the head counts continued to rise. In the middle of 2023, the World Bank projected that poverty was expected to increase to 39.4 percent from 34.2 percent in 2022-a five percentage-point increase. “The significant increase in poverty shows how multiple shocks a challenging macroeconomic environment leading to a contraction in real GDP, record-high food and energy prices, and the catastrophic impact of the 2022 floods in the absence of effective Coping mechanisms, have led to declining economic activity and real incomes” reads World Bank Report for the year 2023.This picture of poverty in Pakistani society over the last two years is only the tip of the iceberg. The figures quoted in the government reports and reports of International donor organisations like UNDP, World Bank, and Asian Development Bank are too dismal.
Since the early 1990s Pakistani state and society performed extremely poorly in meeting the challenge of how to tackle poverty, and social and economic inequalities in their midst. Dwindling growth rate, shrinking labor market, distortions of the market, old unjust feudalistic social and economic structures in our rural areas, and policies of successive governments to disproportionately favor the rich through subsidies tax rebates, and holidays all lead to increasing poverty and social and economic inequalities. In Pakistani society, most people draw their income from their employment as a labor, and the majority of these laborers are associated with agriculture in rural areas. The majority of Pakistani poor are in rural areas and the most cited reason for their poverty is the unavailability of cultivable land for agricultural labor.
Power is so distributed in Pakistani rural areas that the hapless agriculture laborer does not get payment for his or her labor proportionate to the work they do for the landlord—who is powerful, and who controls access to land and access to justice. This feature of our rural economy is well documented, “In landlord-dominated areas, where landlords control the local state apparatus as well as the credit market the poor tenants are locked into a nexus of power and debt bondage with the landlord. Consequently, the tenants are obliged to work part-time on the landlord’s farm as laborers either at less than market wage or no wage at all” reads a research paper titled, “INSTITUTIONAL IMPERATIVES OF POVERTY REDUCTION” authored by an eminent economist, Dr Akmal Hussein. This and other such distortions in the market are the reason for rural poverty.
Pakistani governments and states never talk about social and economic inequalities and express a sense of complacency with their poverty reduction social programs like cash transfers and other facilities offered to the poor of the country. The resources allocated to these social programs are always too meager and insufficient to deal with the class inequalities, which are most of the time creation, of one or the other ruling political party or a military government. The subsidies to industrialists, tax breaks to traders and businesspeople payment of negligible income tax on exports, or exemptions offered to military-led businesses from taxes are some examples of how the rich are offered the opportunity to amass more wealth than they already have.
The arrival of neo-liberal philosophy in our society, our political class went with the flow and wholeheartedly embraced the idea of a trickle-down economy, wherein the fruits of economic progress eventually reach the poor segments of society after the rich
UNDP’s Pakistan National Human Development Report 2020 lists the amount of subsidies, tax breaks, and other privileges offered to businesspeople, traders, exporters, military business concerns, and industrialists by the PMLN government in 2017-2018. According to its calculations, Overall, in 2017–2018, exporters in Pakistan enjoyed privileges totaling PKR 248 billion; large-scale traders in Pakistan enjoyed privileges totaling PKR 348 billion, , Pakistan’s military establishment enjoyed privileges totaling PKR 257 billion. These privileges create inequalities and offer opportunities for the rich to become richer with the help of state backing and resources. The Pakistani state turns a deaf ear towards anyone talking about social and economic inequalities as they live in their religious stupor and complacency that they and their rich friends are dropping crumbs, for the downtrodden, on their way to fabulous riches.
There never has been any regime in Pakistan’s history, except Elder Bhutto’s, which could be described as pro-poor, and which made any attempt to reduce inequalities in Pakistani society. In the wake of the arrival of neo-liberal philosophy in our society, our political class went with the flow and wholeheartedly embraced the idea of a trickle-down economy, wherein the fruits of economic progress eventually reach the poor segments of society after the rich, who are primary beneficiaries of the neoliberal revolution, have amassed wealth to the maximum extent. A cursory look at are economic policies of successive governments in the post-Musharraf period and their rhetoric will make it clear that they have been firm believers in a trickle-down economy. But this formula has never worked in Pakistan.
There have been two governments in Pakistan’s political history that had a high growth rate of above 6 percent and none of these governments—the Ayub Khan government in 1960 and the General Musharraf government between 1999 and 2008—succeeded in using this high growth rate in reducing poverty during their time in government. The 1990s, the era of musical chairs between Nawaz Sharif and Benazir Bhutto is famous for its slow growth rate and exponential rise in poverty in Pakistani society. The post-Musharraf period is another era of a slow growth rate and exponential rise in the rate of poverty.
Dr Akmal Hussein suggests the following definition of pro-poor growth, “Pro-poor growth can be defined as a process which directs a disproportionate share of the increase in national income in favor of the poor. Going beyond this, we would suggest that restructuring the growth process in favor of the poor involves empowering them to participate in the economic, social, and political decisions that affect the material conditions of their life”. Pakistan’s two leading political parties in their rhetoric are strongly pro-poor and they and their leaders put up an extremely compassionate image of themselves on the media. A careful analysis of their rhetoric will strongly suggest that they are either clueless about the plight of the Pakistani poor or their understanding of poverty lacks a scientific basis. They think or at least their rhetoric makes us believe that they are God-fearing creatures using religious idioms to convince their constituencies of the poor that they would take them to a land of utopia. However, their rhetoric is simply nonsense if we take a charitable view and outright fraud if we examine it from a hard analytical perspective.
Poverty will never end with charity even if you have a pious religious wish to end it with your philanthropy even if the philanthropic ideal is coming from an extremely religiously pious person or from the state itself. It is not God’s design according to which some people are destined to be poor. It is your economic and social structure that is keeping a substantial proportion of Pakistani people below the poverty line. Social Power is unequally distributed in our society and state policies disproportionately favor the rich to amass wealth and keep the downtrodden away from the means of production and from the right to own property, which are the factors that are keeping a substantial number of people in our society below the poverty line.
Our society is producing zero literature indigenously—not because the issue of poverty does not pose any serious social, political, and security problems for our society, but because our state and our political class are too much under the influence of neo-liberal thoughts and philosophies
The loudmouths of the General Musharraf government and succeeding political governments made a lot of fuss with their rhetoric about the achievements of their governments in reducing poverty in our society. Dr. Akmal Hussein debunks the rhetoric of these loudmouths with these words, “An analysis of the sources of growth during the period 2000-01 to 2004-05 shows that the composition of growth during the period was pro-rich rather than pro-poor. It was fueled mainly by the services sector, (particularly banking and communications) which contributed 60 percent of GDP growth during the period, and the manufacturing sector primarily manufacturing automobiles, luxury consumer electronics, cement, and textiles, which contributed 30.4 percent of GDP growth during this period. GDP growth during the period was overwhelmingly pro-rich since none of the sectors that mainly constituted the growth either produced 23 goods for the poor or directly employed them. In fact, the labor force survey data of the government shows that unemployment rates rose sharply from 6.1 percent in 1999 to 8.3 percent in 2004. (See Table 6). Therefore, the nature and composition of GDP growth during this period could not be expected to have reduced poverty”. The political governments following the Musharraf regime dropped some crumbs for the poor, but their efforts made no dent in the horrendous scales of poverty and inequalities in our society.
Since the arrival of neo-liberal thoughts, which politicians like Nawaz Sharif quite unwittingly reflect in their rhetoric, in our society our political discourse has been devoid of any mention of poverty or inequalities. All we have is a pious political wish to eradicate poverty from our society. I was shocked to note that the 2024 election manifestos of PMLN and PTI only make a passing remark about poverty and inequality. No substantial argument, plan, or philosophy has been projected in these manifestos. If the issue of poverty and inequalities is alive at all in our country it is because of the foreign donor organisations including UNDP, World Bank, Asian Development Bank, or people like Dr Akmal Hussien. Our society is producing zero literature indigenously—not because the issue of poverty does not pose any serious social, political, and security problems for our society, but because our state and our political class are too much under the influence of neo-liberal thoughts and philosophies.
When our government and state fail to initiate policies for the reduction of poverty and inequalities in our society, we, kill the creative potential of millions of people, men, women, and youth. We are using force to keep these millions of poor people from contributing to the economic progress and growth of our society just to please a few of our filthy rich financiers. It seems Karl Marx expressed the thought that the state serves the interests of dominant social and economic classes after analysing the situation of any society in 19th-century Europe that resembled Pakistan.Pakistani states and dominant classes of society nakedly use state machinery to serve their economic interests.
Ironically, we are still stuck in this basic question about poverty and inequalities in our society. By now we should have moved ahead and should be pondering the question of how the introduction of this vast multitude of downtrodden people in our economy will affect our environment, which already shows signs of breakdown—just look at the smog crisis in our industrial city, Lahore. The introduction of millions in our economy will increase the level of our carbon emissions, something which will contribute to climate change. Otherwise more equal societies show more potential for economic growth and fewer social problems. Remember we have just come out of a civil war-like situation with the Taliban knocking at the doors of our cities. Some people see the Taliban as a harbinger of protracted class warfare.