Part – I

In 1992, the UN declared October 17 as the International Day to Eradicate Poverty. Since then, on this day governments around the world pledge to reduce poverty and eradicate extreme poverty. However, all the pledges, promises and slogans to end abject poverty have failed to improve the situation for nearly 1.70 billion people around the world who still live in poverty.

The real question is whether we can eradicate – or rather reduce – poverty without changing economic policies and redistribution of wealth. Capitalist ruling elites around the world have failed to address this acute problem, and poverty is a by-product of the existing social and economic system.

The system we have for producing and distributing wealth is capitalist in nature. It is organised in ways that allow a small elite to control most of the capital – factories, machinery, tools, land – used to produce wealth. This encourages the accumulation of wealth and income by the elite and regularly makes heroes of those who are most successful at it. It also leaves a relatively small portion of income and wealth to be divided among the rest of the population. With a majority of the people competing over what’s left to them by the elite, it is inevitable that a substantial number of people are going to wind up on the short end – living in poverty or with the fear of it much of the time.

In part, then, poverty exists because the economic system is organised in ways that encourage the accumulation of wealth at one end and create conditions of scarcity that make poverty inevitable at the other. But the capitalist system generates poverty in other ways as well. In the drive for profit, for example, capitalism places a high value on competition and efficiency. This motivates companies and their managers to control costs by keeping wages as low as possible and replacing people with machines or replacing full-time workers with part-time workers. That makes it a rational choice to move jobs to regions or countries where labour is cheaper and workers are less likely to complain about poor working conditions, or where laws protecting the natural environment from industrial pollution or workers from injuries on the job are weak or unenforced. Capitalism also encourages owners to shut down factories and invest money elsewhere in enterprises that offer a higher rate of return.

These kinds of decisions are a normal consequence of how capitalism operates as a system. But the decisions also have terrible effects on tens of millions of people and their families and communities. Even a full-time job is no guarantee of a decent living, which is why so many families depend on the earnings of two or more adults just to make ends meet. All of this is made possible by the simple fact that in a capitalist system most people neither own nor control any means of producing a living without working for someone else.

Clearly, patterns of widespread poverty are inevitable in an economic system that sets the terms for how wealth is produced and distributed. If we’re interested in doing something about poverty itself – if we want a society largely free of impoverished citizens – then we’ll have to do something about both the system people participate in and how they participate in it. But public debate about poverty and policies to deal with it focus almost entirely on the latter with almost nothing to say about the former.        What generally passes for ‘liberal’ and ‘conservative’ approaches to poverty are, in fact, two variations on the same narrow theme of individualism.

It may mean that capitalism is in some ways incompatible with a just society in which the excessive well-being of some does not require the misery of so many others. It won’t be easy to face up to such possibilities, but if we don’t we will guarantee poverty its future and all the conflict and suffering that go with it.

Poverty kills people silently. Poor people die because they can’t get food, shelter, healthcare. They can’t spend money on safety and education. Low incomes force them to live in poverty.

It is not polite to talk about all this. We talk about the poverty rate or the poverty level or the poverty gap, but not about children catching fire and adults wasting away. We talk about economic development and markets and education, not the people who die each year coughing blood as tuberculosis takes over their body. They don’t die from tuberculosis. They die because they have no awareness about it. They even die when the government provides them medicines. They die because they live in unhygienic conditions and can’t afford decent food to survive. It is easier to believe that poverty causes people to wear old clothes, live in small houses, or forego owning a television than it is to admit that people on the bottom of the socioeconomic ladder often die early as a result of that poverty.

Poverty doesn’t just hurt your body, it also hurts your soul. Poverty kills dreams and murders hope. It squashes every last ounce of ambition; it impacts the old, but targets the young. It steals more than full bellies and healthy bodies; it suffocates the future and squanders potential.

Part – II

In the first part of this article, I made general points on how economic systems and policies are directly related to the level of poverty in society. In this part, I will explore the reasons for the increase in rural poverty over the last three decades. This increase is directly linked with neoliberal and free-market economic policies.

The policy of deindustrialisation and the outsourcing of manufacturing from the US and major European economies to China and other countries have laid the basis for a rise of rural poverty. But in countries like Pakistan, this process is somewhat different. The continued existence of feudalism, big landlordism and the tribal system in Pakistan is one of the main reasons that gave rise to poverty in rural areas. Wealth is concentrated in a few hands.

Rural poverty accounts for nearly 63 percent of poverty worldwide. It has reached 90 percent in countries like Bangladesh and stands between 65 percent and 90 percent in Sub-Saharan Africa. (Several Latin American countries, where poverty is concentrated in urban areas, serve as exceptions to this pattern.) In almost all countries, the conditions – in terms of personal consumption and access to education, healthcare, potable water and sanitation, housing, transport and communications – faced by the rural poor are far worse than those faced by the urban poor. Distorted government policies, such as penalising the agricultural sector and neglecting rural (social and physical) infrastructure, have been major contributors to both rural and urban poverty.

Poverty in Pakistan has historically been much higher in rural areas than in urban areas. The existence of pervasive poverty – whereby a significant proportion of the population remains poor over an extended period of time – is strongly linked with the structure of society. Cultivated land is unequally distributed in Pakistan. Around 47 percent of farms are smaller than two hectares and account for only 12 percent of the total cultivated area. Access to land, which is the basic factor of production, is crucial to reduce poverty in rural areas.

Pervasive inequality in land ownership intensifies the degree of vulnerability of the poorest sections of rural society because the effects of unequal land distribution are not limited to a control over assets. The structure of rural society in areas where land ownership is highly unequal tends to be strongly hierarchical, with large landowners or tribal chiefs exercising considerable control over the decisions – personal and otherwise – of people living in the area who are under their influence as well as over their access to social infrastructures and facilities.

Just abolish the large landholdings, feudalism and the tribal system, introduce land reforms and distribute land among the landless peasants, haris, agriculture workers and ordinary tribal people to see the impact. Z A Bhutto introduced limited reforms in the 1970s. But those reforms still brought out millions of people from poverty. The economic policies adopted by first PPP government reduced poverty. Poverty started to increase in the 1990s when successive governments implemented neoliberal economic policies and gradually abolished subsidies on agriculture and food.

Four out of 10 Pakistanis are living in acute poverty and the population of Balochistan fares the worst in this respect among all provinces, according to Pakistan’s first-ever official report on multidimensional poverty that was released in 2016. The report states 38.8 percent of Pakistan’s population lives in poverty. A majority of the rural population (54.6 percent) lives in acute poverty while 9.4 percent of the population in urban areas are poor. This emphasises the need to make rural-centric economic policies.

Multidimensional poverty is the highest in Balochistan and the lowest in Punjab. In monetary terms, the poverty line stands at Rs3,030 per adult equivalent per month. If various regions in the country are accounted for, Fata has the highest poverty rate, where three out of every four people (73.7 percent) are poor. Fata is followed by Balochistan (71.2 percent) and Khyber Pakhtunkhwa (where half of the population, around 49.2 percent, suffers from acute poverty and deprivation).

In Sindh, 43.1 percent of the population is extremely poor owing to the lack of education, health facilities and poor living standards. In Gilgit-Baltistan, 43.2 percent of the population is poor while in Punjab three out of 10 (31.4 percent) are suffering from acute poverty. In AJK, four out of 10 people (25 percent) are poor. Four of the five poorest districts are in Balochistan where the poverty level is alarmingly high. The poorest district is Killa Abdullah (where 97 percent of the population is poor) followed by Harnai (94.2 percent), Barkhan (93.6 percent), Sherani (90.6 percent) and Kohistan in K-P (95.8 percent).

In Sindh, Tharparkar has been declared the poorest district, with 87 percent of the population living under the poverty line. This was followed by Umerkot (84.7 percent), Tando Muhammad Khan (78.4 percent) and Badin and Kashmore where almost 75 percent of the population is poor.

In Punjab, Muzaffargarh (64.8 percent) and Rajanpur (64.4 percent) are the poorest districts. This is followed by DG Khan (63.7 percent) and Bahawalpur (53 percent). All these districts are part of southern Punjab, which has been neglected by successive governments over the years.

The more alarming indicator is the intensity of poverty, as each poor person lacks access to half of the indicators selected for measuring poverty. The MPI findings show that 60.6 percent of Pakistan’s population does not have access to cooking fuel, 48.5 percent of the people do not complete their schooling, almost four out of every 10 people (39 percent) do not have any assets and over 38 percent of the population lives in a one-room shelter. Around one-third of the population does not have access to health facilities.

Look at these figures and decide for yourself which direction we are heading in on the basis of the current economic policies. Is there any element of surprise in this report for those who argue for radically changing the social and economic structure and policies? This report clearly shows how the most backward and underdeveloped rural areas have been neglected by successive governments. Pakistan’s ruling class has failed to solve the agrarian question and transform the lives of the rural population. The rural population still needs jobs, economic opportunities and the bare essentials of life.

Article first appeared in thenews.com.pk on 20 & 27-October-2017

http://thenews.com.pk/print/238376-Poverty-and-economic-policies-Part-I

http://thenews.com.pk/print/240036-Poverty-and-economic-policies-Part-II