Quality Of Life, Livelihood And Poverty In Pakistan
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Pakistan has been in existence for nearly 64 years and has been evolving ever since. Since the partition, many people lost their livelihoods and had to reconstruct their mode of living from scratch. The refugees faced severe accommodation problems in the beginning resulting in confusion and chaos in early periods of the migration. This instance greatly affected the newly established economy of Pakistan as new businesses initiated and the 1st government had to support these new establishments as well as old settlers in order to accomplish stability and control in the region. This inflow of aid from the managers of the newly established region lacked efficient allocation and as we can assume that no one is fair and greed runs deep within this tough exterior of the skin. There came an income gap between the rich and the poor. Hence the known problem of the developing nations emerged from within, poverty.
The quality of life is not the same in Pakistan. It encompasses many varying sects of society which involve different ideologies and perspectives hence different measures of quality. Being agriculture based country; naturally income is not high in the sector; therefore little livelihood and more mouths to feed causes imbalance in the order of things. Lack of resources creates a flutter of panic amongst the people and causes disturbance in the society. This is the quality of life in Pakistan where the rich keep getting richer and the poor keep getting poorer. However Pakistan is trying hard to minimize this gap by undergoing massive policy changes and development expenditures to create more jobs and to be able to educate people to the level of helping to eradicate poverty from this nation. Poverty is like a quicksand, once you set foot in it all your efforts pull you towards it. Development and equal resource allocation is the key to alleviating poverty however it may seem extraordinarily hard but it is not impossible.
Historic evolution of different types of poverty
Poverty is a state of severe deprivation of basic necessary needs, which includes food, safe drinking water, sanitation facilities, health, shelter, education and information. It is dependent not only on income but also on access to services. It also comprises of lack of income and resources to ensure sustainable livelihoods. Poverty is a multidimensional phenomenon and is not a single line of ants. Rather it is the effect that occurs when you obstruct a single line of ants and they have multidirectional effects. However some may assume the concept of poverty to be one-dimensional. There are advantages and disadvantages to both aspects. One-dimensional approach based on income poverty is relatively simple to use. It encompasses most though not all of the issues around poverty. Multidimensional measures produce a much broader perspective on the complex nature of poverty and a possibly richer array of clues on how poverty can be tackled.
Poverty is the hand where there is no food, poverty is the mind where there's no thought, it is the hand with no money, it is the land with no order, and poverty is the nature when there's no life. Whenever we think of poverty only the monetary definition comes to mind. Poverty is not only the lack of funds that cast us down to that level when we may be called impoverished, it is not only when one lacks basic necessities but poverty can be of various types.
Some poverty types are economic poverty, bodily poverty, mental poverty, food poverty, cultural poverty and political poverty. Economic poverty deals with the fact when one lacks resources or monetary terms that keep them from attaining the basic necessities of life such as food, cloth and shelter. The economic poverty only deals with the linkage of monetary terms and basic necessities. Continuing bodily poverty is when one lacks the physical health status and also is deprived of access to healthy living conditions. Mental poverty deals with the lacks of thought that arises due to poor or no educational standards hence the quality of education. Food poverty is when malnutrition occurs in a society due to lack of food variety and/or demand. Cultural poverty is the lack of togetherness that results in a society and which further separates the relations that hold us together in a community. It is basically the lack of mutual understanding in events and cultural gatherings. Political poverty is when there is lack of knowledge of how the system works. The basic lacking variable is the knowledge of how to cast a vote and effectively elect a leader.
Absolute poverty is the line that is drawn between the sufficient and the lacking. This line marks the minimum socially adequate level of income that may distinguish between the poor and the non-poor. The absolute poverty line is generally constant across regions and periods of time and it a general comparison that may decide whether a person is poor or not based on the level of income or consumptions levels in comparison to the set poverty standards. The poverty lines used in Pakistan do not generally meet these basic requirements. The standard of living implied by the poverty lines varies across regions and over time. An unusual situation may arise when rich regions show higher poverty than poor ones. It leads to giving greater benefits to the non-poor than the poor. This can lead to misallocation of government scarce resources.
Relative poverty is an easy to calculate measure to deduce the level of poverty in any country. Using this method, income per capita of the entire population is ranked. And a certain bottom portion or range could be chosen by the government as the range for people who are poor or insufficient. This can be fine for country-wide measurements, but it has some major drawbacks in global use. For example, a 10% relative poverty measurement was applied in a global setting, it would appear that both an industrialized country, such as the U.S., and a sub-Saharan African country had the same 10% poverty rate, even though the conditions of the poor in sub-Saharan Africa are much worse than conditions in the U.S. For this reason, absolute poverty measures are more often used to define poverty on a global scale. A relative poverty line is not useful to monitor poverty over time or space. The relative poverty approach does not provide a stable target against which to measure the effects of government programs because they change each year in response to increase or decrease in real consumption levels instead of remaining fixed in real term.
Cost of living, income generation and economic poverty in Pakistan
Ever since the inception of Pakistan, its economy is developing. People are attaining more opportunities to earn their livelihood. The people of Pakistan are maturing as a nation. However still being a developing country Pakistan faces its drawbacks such as unstable, unreliable governments, lacking encouraging social structure, incentive based employment procedures, exploitation of the poor etc. A country with enough resources to sustain itself, Pakistan is still involved in high debt and imports of fuel. Fuel is the essence of development, inflation depends on fuel prices. The cost of living in Pakistan is quite cheap in comparison to other countries however the state of the Pakistani nation feels otherwise. This is only because the Pakistan undergoes high fuel prices and energy bills which catalyze the mechanism of price adjustments in the open market and there results a high inflationary pressure on all commodities that use fuel and other energy resources. However with high expense ratio of incomes, it becomes difficult for an average employee to generate income efficiently and to save accordingly as expectations play a larger role only when there is room to expect. On an ever changing Pakistani business environment where big changes occur in a matter of months or so, in form of political fluctuations, terrorist activities, energy inflations, season based energy shortages and/or natural disasters. All these variables have a high weighted impact on the income generation and cost of living, making income generation complicated and cost of living higher. Hence Pakistan faces extreme cases of economic poverty. All these aforementioned variables pave a path to seep into more debt and every increase in debt makes us go away from being self-sufficient and although we do not lack funds, we are unable to put them to good productive usage due to the political infrastructure of Pakistan.
Economic poverty, economic deprivation and social gaps
As introduced earlier in the chapter, economic poverty relates to the monetary aspect in attaining the basic necessities of life such as food, clothing and shelter. Economic poverty is one of the key aspects that influence the productivity and the development phase of a developing nation. Pakistan still in its developing phase since 1987 has seen downward trends in economic poverty but the political imbalance of thought and governance has caused this downward trend to disappear due to different policy changes over the years. However economic poverty has been recognized as the key factor holding us back from rising in the world and different NGO's too and private companies are striving to rid us of this poverty curse. This current economic deprivation that is visible in matters of the Pakistani governance is not due because we lack resources, it is because we fail to recognize the motivational factor that emerges when we see our leaders working for the nation because that factor is nonexistent. Nearly 29% in Punjab, 50% in Sindh, 62% in Khyber Pakhtunkhawa and 92% in Baluchistan are classified as economically deprived districts in Pakistan.
In comparison to other countries with similar income, Pakistan had a 23% lower outreach for sanitation facilities; gender gap has not seen any significant decreasing trend. Moreover in the education sector school enrollment rate is lower in Pakistan and the adult illiteracy rate is higher. This variance of social indicators for Pakistan is the most significant feature of the social gap between the rich and poor as the poor cannot manage to pertain to private substitutes for public services hence they are disproportionately affected.
Socio-cultural origins of poverty, social deprivation and exploitation
Emergence or the origins of poverty in Pakistan are quite evident in the 64 year history since independence. Migration of refugees into Pakistan have caused many people to forget their jobs and leave their businesses in India and come to begin a new life and livelihood in Pakistan. However pure the intentions of the refugees, there came a testing phase for them; when they migrated into the new Muslim state they had no shelter, no preplanned livelihood source. They had to start from scratch, the previous residents of the region had settled businesses and lives however while there were people who helped the refugees settle and get jobs, there still were those who were reluctant to hire certain castes or accept diverse cultural groups. Although government intervention too played an important role in the aid of the refugees, still a large population suffered greatly and was left destitute. Economic derivation was a major factor in the early stages of development and the high population too did not help the situation. Therefore the social gap initiated there and then between the rich and the poor. As the poor did not have funds to educate their new generation to get better jobs and the rich kept getting richer as majority of the reforms and policies laid out by the government were to establish a productive mechanism in the economy. Meanwhile this social gap created social deprivation among the population as the community could not interact among themselves on equal basis which created further barriers. Social exploitation such as child labor came to color as young children who lacked proper education and skills were hired on a very low wage to do jobs that required no specific set of skill but included repetitive tasks, such as lifting heavy bags of cement from one location to another. The children needed to support their families and the income they generated helped them sustain their families. However this mechanism of exploitation was a clear violation of human rights with regard to social norms and rights of children.
Microfinance institutions, network and performance in Pakistan
The Pakistan Microfinance Network (PMN) initiated in the late 1990s after the Micro Credit Summit in February 1997. The PMN deals with the entire microfinance industry striving towards providing quality productive facilities while simultaneously increasing outreach of its efforts. However the PMN is still in its early stages in comparison to the progress made by other countries in the field of microfinance. According to the research done by this network, it estimates the need for microfinance services to nearly 27 million people and only 7% are projected to be lying in the outreach radius of the Pakistan Microfinance Network. The objectives of PMN include promoting an enabling environment that benefits the work of all stake holders, building the capacity of stakeholders, especially that of retail microfinance institutions, and acting as an information gateway by disseminating industry relevant information, improving transparency, promoting benchmarking and serving as an information hub.
Government initiatives and establishment of the microfinance institutions
The government and the State Bank of Pakistan have taken vast interest in the microfinance sector and have been taking various steps since 2000 to support the growth of the microfinance sector in Pakistan. Furthermore the SBP looks forward to initiating a microfinance unit within the SBP. The SBP also initiated the Expanding Microfinance Outreach (EMO) in 2007 which planned to accomplish the financial outreach to 3 million borrowers by 2010. The EMO strategy also recommended allowing international players into the industry to create a competitive market for financial services so that more innovative financial solutions could be brought to existence for the betterment of the society. In light of these recommendations BRAC and ASA came into play in the domestic market for microfinance services.
Credit information, access to credit and the microfinance lending
Credit information is the key aspect in utilizing financial services from any financial institute. For Pakistan the credit information is held by the Credit Information Bureau of State Bank of Pakistan which was established in December, 1992. The CIB helps in promoting financial discipline by collecting and collating credit data of borrowers and further providing assistance in credit risk management and making prudential lending decisions. People who are the expected user of the micro lending facilities are usually accustomed to informal modes of loans or access to funds such as investing in livestock, keeping a pool of funds at a specific location then be provided funds on a rotating turn basis. However these measures of funds management could backfire and result in massive unrecoverable losses. Formal financial services however are seemingly complicated to the impoverished as they require certain regulatory features such as credit history, collaterals or a guarantor. However in case of microfinance services all such limitations to access are minimized hence making it easy for the poor population to benefit from the microfinance services.
Microfinance lending can be categorized into microfinance banks, rural support programs, nongovernmental organizations and commercial financial institutions. Microfinance services comprising of health care, cost of burials, food security, irrigation aid, schooling and education, insurance against assets, etc may utilized by the impoverished. Moreover microfinance lending is subject to the requirements of the client and not subject to any preplanned loan product. The client may vary the loan boundaries and customize it as per his/her requirement. This shows the help and efforts that the PMN is willing to undertake to rid us of this social, generation and poverty gap that has been existent among us.
Potential biases regarding the rural urban networks
Rural areas lack the infrastructure to provide for higher livelihood requirements for the impoverished however this luxury is available in the urban sector. Over the years a particular region develops and strives and the local community of investors and opportunists gather in that particular area to try hard to develop and on that note when they accomplish a better standard of living the wages rise hence that region gets termed as the urban hub of information and better employment. However regions which do not get due attention in this development process face development gap and the resident population looks forward to migrating to urban hubs to find better employment choices. Hence due to these factors certain biases exist between the rural urban networks that influence the decision making of investors towards the urban centre, better educational facilities, health programs and political influence.
Women have always been considered weak in this world as for centuries man has been involved in gaining power, controlling populations, and conquering states hence also involved in attaining education as to strive in the world of employment whereas women always lagged behind as keeper of the houses. However all over the world this perception of gender biases has been changing where now women are competing shoulder to shoulder with men for the same opportunities and proving successful. Although former gender biases are still visible in the rural sector of Pakistan where women still are given lower status in comparison to men when earning livelihood or attaining education. Hence women are left lagging behind the development race and where there could be four earning hands, there are only two. These factors influence the development process greatly.
Effectiveness of the microfinance lending
Microfinance is although in its early stages in Pakistan but still its outreach has increased significantly since the SBP interventions starting in the year 2000 and has been making reforms as to enhance its scope of micro lenders in Pakistan. However due to the high population and the rural sector still being the majority of the Pakistan's population, PMN is still working hard to expand its outreach and introducing programs to better meet with the financial problems of the destitute. Microfinance lending however faces many threats in form of natural disasters, inflationary pressures, accountability issues and political reforms. Although the first step to poverty reduction was taken in the 1990s Pakistan has been overwhelmed by the political uncertainties that arise due to accountability issues. The effectiveness of the microfinance sector has been considerably good if you discount the corruption that takes place therein. From the bird's eye view PMN has been able to help and come to aid of majority of their clients who were indeed in plight of the poverty gap. The rural sector has improved with the emergence of microfinance as new hope can be seen in approaches to poverty alleviation in Pakistan.
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