The report features a comparison of several calorie- and income-based poverty measures to a new and broader Poverty of Opportunity Index, a comprehensive analysis of trends in income poverty and human development, the macro-economic factors that have determined these trends over the last two and a half decades, and the effect of government policy on poverty reduction since Independence .

A Profile of Poverty in Pakistan

Widespread poverty remains Pakistan ‘s most persistent and urgent problem. Whether we define poverty using the narrow definition of lack of adequate food or income or the broader definition of lack of access to opportunities, the number of people in poverty in Pakistan falls between the range of a quarter to a half of the total population. Income poverty in Pakistan has increased from 30% in 2000 to 45% in 2004.

But for poor people, poverty means poverty of opportunity, not just poverty of income. Income poverty is only one of many deprivations. Other human deprivations include lack of education, ill health, social exclusion, discrimination on the basis of ethnicity, gender or religion and political repression. Poverty is a multi-dimensional phenomenon, not a single-dimensional issue.

Poverty of opportunity is the cause; poverty of income is the result. For policy makers, it is important to focus on strategies that address poverty of opportunity because only then the poor can be integrated into the mainstream of development. The poor must be empowered, income transfer or charity is not the lasting solution to poverty.

Pakistan ‘s growing poverty lies with the successive governments’ failure to translate economic growth into poverty reduction and sustainable development prospects for the poor. We can draw several lessons from Pakistan ‘s failure to reduce poverty even when it experienced reasonable economic growth.

First, equitable patterns of growth are essential for sustained reduction of poverty. This requires a two-pronged approach consisting of broad-based economic growth across income groups and improved access to education, healthcare, family planning, sanitation, clean drinking water and micro-credit. These two elements are mutually reinforcing and should be implemented simultaneously.

Second, different strategies are required to address poverty in rural and in urban areas. Rural poverty requires more immediate attention as there are more poor people in rural areas than in urban areas. This means that the prevailing urban bias in public spending for social services has to be corrected and resources have to be redirected toward rural development and agricultural support programmes. It also means correcting gender bias in providing social service and micro-credit. But most important of all, it is essential to have meaningful land reforms and agricultural income tax. The poor must have a share in the growth of the economy.

Third, strategies should be disaggregated down to local level so that they can respond to the felt needs of a community or a village. Poverty alleviation strategies based on national data are irrelevant to the needs and concerns of poor people at the local level.

Finally, the real answer to poverty reduction lies in changing the very model of development from traditional economic growth to human development where human capabilities are built up and human opportunities enlarged, and where people become the agents and beneficiaries of economic growth. Such human development models rely on certain core strategies for poverty elimination, in particular, basic education and basic health for all, credit to the poor, women’s empowerment, land reforms, equitable growth and good governance. This is the main lesson from the experience of several countries that have substantially reduced poverty over the last two decades, including Malaysia , China , Republic of Korea and Colombia .