Recommendations on Poverty Alleviation
The general consensus that emerged during the seminar is that poverty situation prevailing the world over poses a challenge to humanity and that poverty anywhere is a threat not only to the development efforts but also to the prosperity at large. There is sufficient evidence to believe that poverty is not a problem specific or exclusive to the under developed Third World, even the most developed economies face serious poverty problems. It is common knowledge that affluence exists side by side with conditions of utter poverty even in the rich countries of the world.
There has never been dearth of plans and programmes designed to address the issue of poverty alleviation, yet it is sad to note that little has been done in practical terms. Above all, the poor perception and short-sightedness, non-implementation of policies whatsoever, mass corruption and despotic and non-committed regimes are responsible for the plight of the poor. Unless fundamental structural changes are made both at the policy and management levels, which imply inter alia taking into consideration the ideological and social imperatives, judicious distribution of assets and property rights and overhauling the whole planning and implementation machinery, situation may not change for betterment.
Looking at the problem of poverty from pure technical view point, the following actions seem more important:
Food and population are two major-indicators as well as determinants of the poverty situation. We need to be careful in establishing the cause and effect relationship of these factors. Rather than following the single track policies of reducing fertility rate and other similar measures through an artificial interventionist approach, which is not in-keeping with our traditional and cultural heritage and is accompanied with scores of undesirable social evils, we must follow the positive strategy of improving productivity to increase food supply and provide education to masses in general and to women in particular lo induce responsible familyhood. Economic development that leads to gainful employment of all able-bodied persons and improved incomes through distributive justice is a better means to help stabilise the population. It is rightly said that development is the best ‘contraceptive’.
The relationship of population growth and income distribution needs be tackled through a mass employment strategy which would help raise the living standard of the poor, improve nutrition and health of the family and rid the children from unwanted labour. Higher emphasis however, should be on creation of employment opportunities in the large-scale manufacturing with linkages to labour-intensive vendor industries and micro-enterprises. This must be tackled with a coordinated agricultural development and industrialization policies alongwith a comprehensive human settlement strategy suggesting a proper geographical distribution of population and appropriate economic activity. The employment programme should be closely linked with the national strategy of human resource development and functional education.
Rural credit has never been sufficient to meet the total demand of the sector. Other than adequate provision of cost-free loans, it is also important to see that credit earmarked for the poor sections of society must reach the intended beneficiaries. Deriving essential lessons from experiments like Grameen Bank of Bangladesh, the element of social organization, awareness creation and motivation should also be built in the credit extension programmes.
In the present day economic development models, taxation and tax-expenditures policies are used as an important vehicle for resource transfer from the rich to the poor. In Pakistan, however, the incidence of taxation and benefit of public expenditures have not been helpful in alleviating poverty. A large and relatively rich segment of population escapes from of direct taxes. Agricultural income is exempted from such taxation. Concessions, exemptions and tax holidays provide loopholes to industrialists for tax evasion. As a result, the tax burden has increased for the lower income groups. The incremental tax burden goes on falling as the income rises and for the highest income group the tax incidence has declined over the period. Moreover, inflationary phenomena is the most regressive form of tax which has adversely affected the purchasing power of the poorest among the poor in society. The whole tax system demands basic restructuring wherein share of direct taxes should be increased and tax base should be expanded.
Although government is the key actor in the whole development process, as its policies and actions deeply affect the whole gamut of political and socioeconomic life, a major role in this regard has to be assigned to the private sector which adopts a more flexible approach easily adjusting to the demands of the target groups, and where bureaucratic rigidity is not present to forbid innovation and a more humane approach.
Pakistan has experimented with a number of donor-aided anti-poverty programmes starting with the Village-Aid Programme of the 1950s, Basic Democracies and Rural Works Programme of the 1960s, IRDP and PWP of the 1970s, Junejo’s Five-Points Programme, Taamir-e-Watan and the currently operative Peoples’ Programme and SAP. Unfortunately, none of these could ameliorate the plight of the poor. All indications are that poverty incidence has increased particularly in the 1990s. The real cause seems to be poor political commitment of the government and the resultant mismanagement at all levels.
Poverty and related problems deserve to be taken not merely as economic issues but also as moral, ethical and cultural imperatives. The Islamic institutions of zakat, waqf, inheritance, state provisionism and numerous other modes developed and tried over centuries in the Muslim society can play a vital role in poverty alleviation. There is an urgent need for streamlining all such Islamic modes which are best suited to our cultural and ideological environment. This will also help in decentralising the development process on which little success has been achieved so far though it is universally considered as the true form of good governance.
Any attempt at introducing Islamic modes and instruments would fail to make proper impact unless the Islamic scheme is followed in its totality. This means inter alia, serious action at eliminating all forms of exploitation, particularly riba from the economy, which is considered as the single largest factor perpetuating poverty.
There is also a need to address the basic problems of poor relationships in the society. Restructuring the governmental and administrative institutions, and decision about the respective roles of various tiers of the state i.e. community-based voluntary social organisations, family and the individual. This will not only help in poverty alleviation but ensure establishment of truly just and welfare society.
Source: Poverty Alleviation in Pakistan: Present Scenario and Future Strategy, Mohibul Haq Sahibzada. Republished with permission.