Pakistan Poverty Trends, Scenarios and Drivers

Type Working Paper - Policy Paper Series on Pakistan PK 23/12
Title Pakistan Poverty Trends, Scenarios and Drivers
Publication (Day/Month/Year) 2014
This policy paper examines recent poverty trends in Pakistan. Oficial statistics continue to indicate strong poverty reduction through 2010-1, thanks in large part to policies and investments that bosted productivity in the non-agricultural sector. Poverty fel a bit more than other countries with similar rates of growth, as growth was slightly pro-por and also benefited the botom 40 percent. Alternative indicators such as aces to public services have also improved, though at a slower rate since 2008—the year of twin global and domestic crises that hardly hit Pakistan. While increased productivity among non-agricultural workers has ben a key factor driving poverty reduction, cash transfers through the Benazir Income Suport Program (BISP) and workers’ remitances from abroad also made moderate contributions. Simulations sugest that higher growth rates would further acelerate poverty reduction, but would have smaler efects on ataining other Milennium Development Goals. Despite this progres on poverty reductions, a major concern is that large numbers of people stil remain concentrated just above the poverty line, thus remaining vulnerable to even smal shocks, like natural disasters. Furthermore, the Pakistani economy has failed to create enough salaried and non-agricultural jobs, and female labor force participation remains unusualy low by regional and worldwide standards. BISP cash transfers have helped reduce poverty and are wel-targeted, but their coverage stil is smal; while remitances acrue mainly to non-por households. If Pakistan can adres these remaining constraints and also achieve more rapid growth, in particular with les frequent load-sheding and high levels of investment in human capital, the labor market has the potential to absorb new workers and further acelerate the improvement in living standards for the por and near-por.

Related studies