Poverty alleviation in Pakistan

Poverty alleviation refers to the efforts, strategies, and policies aimed at reducing or eliminating poverty. It involves improving the living standards, access to basic needs, and economic opportunities for people living in poverty. Poverty alleviation often involves addressing inequalities within society, such as unequal access to resources or opportunities. This is globally recognized by the rising nations of the world as a goal for development and their recognition as a nation to reckon with in global politics and economic strides.

Are any strategies, policies, and efforts on eliminating poverty on the priority list of things to do of Pakistan? The answer lies in a reality check on the ground. While the nation celebrates the stability in the key fiscal performance indicators of the country, the news for the poor of the country is disturbing. IMF has revised Pakistan’s growth downward by 2.6 percent.

In the same breath, the World Bank estimates that 1.9 million more people will fall below the poverty line this year. This figure will add on to more than 42 percent of the population currently living below the poverty line — a level unsuitable for maintaining the socioeconomic fabric of a country.

The World Economic Outlook underlines that Pakistan’s projected economic growth is insufficient to bring down poverty, despite some positivity in stabilizing the economy and the easing of inflation. Economists believe that the economy must grow by 6-8 percent a year to cut poverty and create jobs for 2-3 million new workers. Economists’ assessment of a growth of 6-8 percent to beat poverty appears realistic as Pakistan’s peers in the region, who are maintaining a growth of over 6 percent, are winning in poverty reduction battles.

South Asia region, which hosts 25 percent of the world population with 2 billion people, accounts for nearly 30 percent of the global poor. At the same time, South Asia has emerged on the world map as one of the fastest growing economies of the world with a remarkable GDP growth of over 6 percent with inflation and unemployment capped at 7.2 percent & 7 percent, respectively. Majority of the countries in the region are recording a growth of over 6 percent and are winning against poverty and each year more people are moved out of poverty.

In 2024, India’s poverty rate fell below 5 percent, with rural poverty at 4.86 percent and urban poverty at 4.09 percent, according to a State Bank of India (SBI) report. This signifies a significant decrease from previous years, with rural poverty dropping from 7.2 percent in FY23 and 25.7 percent in FY12, and urban poverty declining from 4.6 percent in FY23 and 13.7 percent in FY12.

According to the World Bank, more than 33 million Bangladeshi people have been lifted out of poverty since 2000. Since the early-2000s, rapid economic growth has fuelled a remarkable increase in per-capita income. Bangladesh’s per capita has increased almost threefold between 2010 and 2020, from under dollar 700 to dollar 2,068, (the highest GDP per capita in South Asia) moving Bangladesh into the ranks of middle-income economies.

Vietnam has made remarkable progress in reducing poverty, with the poverty rate decreasing steadily in recent years. In 2023, Vietnam’s poverty rate was reported at 3.4 percent of the population, according to Statista.

What is common in these countries in winning over poverty are their years of sustained economic growth of over 6 percent backed by economic reforms, political stability, rule of law and enabling business environment.

The question arises, where does Pakistan stand among its peers in poverty reduction? The answer is far and much too far behind. There are apparent reasons for it. The foremost is that poverty reduction is not an item of urgency in the economic landscape and priorities of the state, in spite of the fact that world agencies who know what hunger means are raising the red flag and setting off alarm bells.

The spectre of food insecurity in Pakistan has taken on an alarming dimension. The World Bank’s recent warning that nearly 10 million Pakistanis could face acute food insecurity this fiscal year should be a wake-up call for policymakers and the public alike. Added to the sluggish economic growth of 2.7 percent is the consistent climate impact on agriculture on major crops like rice and maize, which have suffered due to erratic weather patterns and water scarcity, undermining rural livelihoods and shrinking national food supplies.

Pakistan faces average annual losses of over USD 2 billion due to climate disasters, which exacerbate the already high poverty levels, according to the Asian Development Bank (ADB). According to an independent analysis, ‘Pakistan’s inability to efficiently utilise allocated development funds is severely hampering the country’s economic progress and climate resilience efforts. With more than USD 2 billion underspent annually, the country’s absorption capacity has become a critical bottleneck. Instead of reforming archaic processes, they have begun to blame the malaise on the absence of bankable projects. Multiple documents have addressed the issue of under-spending and project implementation delays in Pakistan. Numbers from the Economic Affairs Division show that rolled-over foreign assistance funds doubled from around USD 1.2 billion in 2017-2018 to USD 2.1 billion by 2022-2023.

That 42 percent of the population currently is living below the poverty line and severely threatening the socioeconomic fabric of a country is something that needs urgent attention of the state. Needless to say, the nation is all about its people and 42 percent of its people constitute a sizeable number which does matters.

Copyright Business Recorder, 2025