Harsh, though denied realities

Last week, a report released by the Organisation for Economic Co-operation & Development (OECD) disclosed that, globally, the rich-poor gap is now as wide as it was in the 1820s. The report is based on study of income trends in 25 countries over the past two centuries that were then extrapolated to estimate the global trend in this context.
The report examined the 200-year trends in health, education, income, and personal and environmental security, to assess their impact on well-being and concluded that, while public well-being improved steadily beginning the 20th century, with life expectancy and literacy levels shooting up, since 2000 slide in these indicators has been rapid.
The study reveals that inequalities contracted sharply in the mid-20th century due to an 'egalitarian revolution' (muted reference to the rise of Communism in Eastern Europe) but escalated since 1980, and by 2000, rose to its 1820s level, courtesy "globalisation" of trade and market de-regulation that promoted not "free" but "free for all" capitalism.
OECD labels escalation in income inequality as one of the most worrying developments of the past 200 years, but doesn't admit that this distortion escalated because, beginning 1980, the West also began 'democratising' the whole world, using invasions to topple its own stooges like Saddam Husein and others, which later turned this planet into a war zone.
Civil wars, that preceded these invasions, were the route to building popular dissent against the stooges, and were fuelled by West-supported terrorism that now impacts much of the planet. In strife-ridden developing countries - many now stigmatised by terrorism - this mess prevents expansion of economic activity in line with the rise of population in these countries.
Because now the globally-accepted minimum daily wage is $1.25, third world countries are defining poverty in ways that hide rising poverty. The logic used is that, given the differences in the level of prosperity in the first, second and third worlds, there can't be a uniform standard (minimum per capita daily wage) to classify those living below the poverty line.
The logic makes sense but governments in developing countries (with huge populations) use this excuse to hide their prolonged failure in attaining a balanced distribution of the national wealth. It therefore isn't surprising that while poverty kept rising, the number of billionaires too kept rising and, this trend was interpreted as a sign of progress.
In November 2011, a petition was filed in India's Supreme Court to challenge the redefinition of the poverty line by India's National Economic Planning Commission (NEPC). According to NEPC's revised definition, those earning a daily income of IRs 25 ($0.45) in villages, and IRs 35 ($0.60) in the cities, were classified in 'above the poverty line' category.
Some estimates indicate that 52% of India's population lives below the globally-accepted poverty line, but official estimates say that only 37% live below the poverty line. Indian government is not alone in using such self-deceiving tricks; Pakistan has a worse record. Statistics released by Federal Bureau of Statistics (FBS) are seen with much more scepticism.
Especially doubtful are its inflation indices - Consumer, Wholesale, Sensitive and Core - and estimate of the population below the poverty line. By denying the ground realties (on purpose), governments overlook focusing on remedying them to their own ultimate disadvantage. Pakistan's in-power democratic regime is now getting a taste of it every day.
In 2006, ADB had expressed its reservations over the reliability of Pakistan's Poverty Assessment Update because data was generated primarily through household surveys. ADB's concerns included not updating the sampling frame, frequent changes in the field survey methodology, the quality of questionnaires used, and the survey report's delayed availability.
Credibility of such data is established through a post-enumeration survey, which is not practiced in Pakistan, which points at sidelining of reliable internal mechanisms for validating the surveys. No wonder the Musharraf regime insisted that just about 17.2% were living below the poverty line - a claim rejected by international bodies who thought the figure was 32%.
The Planning Commission seemed unaware of the Household Income & Expense Survey (HIES) which, at that time, had made startling revelations eg among the low-paid, almost half of the monthly household income was spent on food because of high food inflation, and the poorest spent 69.2% of their food expenses on just the basic essentials.
Only towards the end of his regime did Musharraf realise the importance of imparting vocational training to millions of Pakistani youth (firming half of the total population) to prevent their becoming criminals, but ended up doing precious little. This was his major failure besides neglect of energy and power sectors, and reckless deregulation of financial services.
Given the rapid rise in inflation and slide in economic activity, courtesy inflation and electricity shortfall, during the last six years, over 40% of the population is now below the poverty line. Had that not been so, the PPP regime wouldn't have come up with BISP to offer the poor a bit of relief. But the rise in crimes and terrorism belies the success of such initiatives.
This strategy for containing poverty was based on convoluted thinking - giving alms instead of helping the poor to stand on their own feet and become value-contributing, self-sufficient citizens - a policy reflecting ignorance of the prime obligations of the state, which has been the distinguishing and continuing failure of successive regimes.
What the state also doesn't notice are the malpractices in wholesale and retail markets that inflate prices artificially. This blindness permits the rich to go on enriching themselves at the cost of an ever-expanding majority of the poor. In 1994, The Economist reported that Pakistanis could be holding between $100 billion to $140 billion in accounts abroad; now that figure has crossed $200 billion.
This distortion needs undoing by revising tax rates to fairly tax the rich and revamping tax collection strategy to repair and expand the socio-physical infrastructure to, on the one hand create jobs and help living on earned income (not handouts) and on the other impart skills that equip people for participating in economic activities and earning honourably.
Assisting specialised banks for small enterprises was imperative for helping the skilled earn a living. But former Prime Minister Shaukat Aziz took pride in the fact that these banks weren't given any state support, not even subsidised credit. No wonder, Microfinance banks couldn't do as much and as rapidly, as a poverty-stricken Pakistan required.
Not surprisingly, crime is now Pakistan's biggest problem. The convoluted belief that law enforcers-too few compared to Pakistan's rising population and hugely handicapped in terms of gadgetry and funding support-must control the poverty-driven crime and terrorism, is suicidal self-deception.