The day of 17th of October is observed as the International day of Poverty, where Pakistan still faces many challenges to eradicate it and boost the economy. Poverty reduction is one of the core objectives in the economic development of countries across the world.
Presently, Pakistan is facing multifaceted challenges due to the recent flood conditions, political instability, and expenses of the government and listed under the FATF watch list. Our country has some of the biggest challenges, prevention from poverty, fear of being called out as a defaulter, and the ongoing economic crises. The effects of the COVID pandemic and the ongoing war in Ukraine which is the cause of global inflation made it unlikely for the world to eradicate extreme poverty by the decade’s end.
However, it seems nearly impossible as the aftermaths of the Pandemic and war in Ukraine have even pushed the country towards extreme poverty. The cost of basic needs and essentials went all-time high in history. The recent outbreak of monsoon rains followed by extreme flooding has left the country in a devastating condition. Millions of people lost their jobs, homes, livestock, and harvests, especially those who were dependent on the daily wage income below the line of poverty.
The lack of resources, food essentials, and clean water for drinking has pushed people towards illness and life-threatening diseases. The estimated counts are as nearly 2 million houses destroyed and up to 9 million people in Pakistan pushed towards extreme poverty according to a status report shared by the World Bank.
If the measures are not taken into action immediately, the consequences will worsen the situation in Pakistan. Without proper decisive relief and recovery efforts, the current national poverty rate may increase from 2.5 to 4 percentage points, An estimated 6 to 9 million to be pushed into poverty. Macroeconomic risks also remain high as Pakistan is facing challenges related to high public debt, a large current account deficit, and lower export demand.
The people of Pakistan resist the measures of the IMF and the policies that the IMF demands to be established face a large amount of backlash from the people of Pakistan as it results in increased prices of goods, increase in tariffs, etc. IMF has predicted that the current year’s unemployment rate will increase from 6.2 to 6.4 and the inflation rate will escalate by 19.9%. IMF policies have always stroked more poverty, inflation, and unemployment in the country but the crucial economic situation of Pakistan, left no choice to the government but to approach IMF.
If we aim to lower the current deficit we would have to take some major and tough decisions, the government should reduce the extra expenditures along with other policies that need to be formed. The government needs to adopt a progressive taxation system instead of slashing huge budgets with no formal plans.
Poverty reduction cannot only be achieved through increased employment or direct measures of money to poor households but via the provision of basic necessities such as education, health, food, and regenerative financial services.
The increase in the educational attainment of the poorer in the economy can bring a huge varying effect on the earnings in a year. In the long run, households can increase their overall throughput of earnings along with the standard of living by breaking the vicious cycle of poverty.
- Poverty And Pakistan - 07/11/2022
