Poverty rate jumps to 37.5 percent from 23.9 percent in three years

[Naveed Yaseen]

SARAH HASAN
ISLAMABAD (February 14 2009): Pakistan's poverty rate jumped from 23.9 percent to 37.5 percent in the course of three years after severe economic shocks hit Pakistan, Planning Commission officials told Prime Minister Yousuf Raza Gilani in a briefing on Friday. It said that Pakistan needs aggressive development plan focusing on food security, poverty and supply side challenges.

Officials said that over 64 million people, out of 160 million population, has plunged into the poverty pool. Sharp increase in unemployment has led to vulnerability of poor households. The presentation made by Planning Commission said, "Slow economic growth, sudden external shocks resulted in high inflation and shortages impacting on cost of doing business, and plunged 64 million population bellow the poverty line from 35.5 million people in 2005".

According to the presentation, 40 percent of the urban population lives in Kachi-Abadies/slum areas. Slashing social sector spending is increasing poverty and has reduced the standard of living in the country. Pakistan's position in human development index is 136 out of 177 countries--even below Maldives and Bhutan in South Asian region.

During first six months of current fiscal year the government spent only 19 percent from total allocation of Rs 371 billion of federal public social development program, lowest until 2005. This federal level PSDP has already been slashed by Rs 100 billion in addition to envisaged operational shortfall at Rs 77 billion.

In the first half of last fiscal year the government had released Rs 132.6 billion, which is 39.6 percent of total allocation of Rs 371 billion. Break-up of PSDP releases shows Rs 166 billion (45 percent) for infrastructure development, the social sector has been given highest priority with an allocation of Rs 188 billion and or 51 percent of the fund. Other departments (Agriculture, Industry, Minerals) have been allocated Rs 17 billion.

After six months social sector suffered a major cut as out of Rs 100 billion cut in development spending Rs 79.5 billion was 'through forward' from social sector projects, while 'through forward' for education sector is Rs 20 billion and for health Rs 39.7 billion for next year.

To meet IMF 4.2 percent fiscal deficit condition, major cut came on development budget. In addition to this, Planning Commission has already asked ministries to prioritise their project in A, B & C categories. The Planning Commission document said that achieving IMF conditions ultimately would lead to ignoring social sector spending. This would land Pakistan in a situation where it would be missing most of the UN Millennium Development Goals (MDGs).

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