Tuesday, February 27, 2007
Poverty likely to persist in Pakistan: ADB official
ISLAMABAD: Pakistan has made a significant achievement in poverty reduction, but the outcome has not been consistent and sustainable over a long period of time.
There is a close correlation between economic growth and reduction in absolute poverty; and due to this reason, poverty may persist in Pakistan unless strong economic growth is sustained. The absolute poverty would stay relatively high by 2015.
Senior Public Resource Management Specialist of the Asian Development Bank (ADB) Dr Emma Fan told a Workshop on ââ¬ÅStructural Issues in Poverty Reductionââ¬Â Organized by the ADB and PRSP Secretariat Ministry of Finance here on Monday.
The GDP per capita of $596 in Pakistan is relatively low against lower middle-income countries having GDP per capita of $1612, and the world at $5656.
The growth in GDP per capita in Pakistan was moderate 2.3%% per annum during 1980 to 2005 and Pakistan has not achieved high and sustained growth. Economic growth in Pakistan during 1980 to 2005 was moderate, which stood at 5% compared with 9.5% in Peoples Republic of China.
She said that economic growth is, on average, pro-poor. The policies that promote growth, such as increasing openness, labor force participation and financial liberalization are conducive for poverty reduction. The complex dynamics of change in inequality make it difficult to target it as a policy objective. Policies to promote growth and reduce poverty are more likely to achieve desired results.
Talat Anwar in his paper on ââ¬ËRole of growth and inequality in explaining poverty in Pakistanââ¬â¢ recommended that economic growth as a strategy is important for poverty reduction for Pakistan, the contribution of redistribution in favor of poor should not be ignored, if the government intends to enhance the effects of growth on poverty reduction.
Ghulam Muhammad Arif, World Bank consultant in his paper on ââ¬ËDemographic transition, education and youth unemployment in Pakistanââ¬â¢ disclosed that working age population particularly youth is rising and child dependency is on decline as well. This bonus phase is likely to continue for the next two to three decades when old age dependency will start rising. He said that the benefits of the bonus phase for a country are associated with development of human capital and placement of youth in productive employment. He recommended a strong youth employment policy in Pakistan.
Muslehudin in his presentation on ââ¬ËAn analysis of Pakistanââ¬â¢s growth experienceââ¬â¢ outlined that short term growth out look does not seem encouraging as many risks loom large that may weaken the economic growth momentum; and these include persistently high inflation, burgeoning current account deficit, recent decline in exports amid growing concerns about exports competitiveness, and heightened political uncertainty ahead of forthcoming elections.
Furthermore, there is risk of a slowdown in both private consumption and investment in rising interest rates environment that may force households and business to cut back on their spending and investment plans.
In a longer term perspective, growth looks vulnerable owing to a number of macroeconomic and structural weaknesses in the economy; the most important being low savings and investment, weak human capital base, lack of industrial and export diversification, low agriculture productivity, in adequate physical infrastructure and weak institutions and governance.
While addressing the structural weaknesses for long-term sustainability of growth is a challenging task, there are grounds for optimism too.
http://www.dailytimes.com.pk/default.asp?page=2007\02\27\story_27-2-2007_pg5_12
Poverty likely to persist in Pakistan: ADB official
ISLAMABAD: Pakistan has made a significant achievement in poverty reduction, but the outcome has not been consistent and sustainable over a long period of time.
There is a close correlation between economic growth and reduction in absolute poverty; and due to this reason, poverty may persist in Pakistan unless strong economic growth is sustained. The absolute poverty would stay relatively high by 2015.
Senior Public Resource Management Specialist of the Asian Development Bank (ADB) Dr Emma Fan told a Workshop on ââ¬ÅStructural Issues in Poverty Reductionââ¬Â Organized by the ADB and PRSP Secretariat Ministry of Finance here on Monday.
The GDP per capita of $596 in Pakistan is relatively low against lower middle-income countries having GDP per capita of $1612, and the world at $5656.
The growth in GDP per capita in Pakistan was moderate 2.3%% per annum during 1980 to 2005 and Pakistan has not achieved high and sustained growth. Economic growth in Pakistan during 1980 to 2005 was moderate, which stood at 5% compared with 9.5% in Peoples Republic of China.
She said that economic growth is, on average, pro-poor. The policies that promote growth, such as increasing openness, labor force participation and financial liberalization are conducive for poverty reduction. The complex dynamics of change in inequality make it difficult to target it as a policy objective. Policies to promote growth and reduce poverty are more likely to achieve desired results.
Talat Anwar in his paper on ââ¬ËRole of growth and inequality in explaining poverty in Pakistanââ¬â¢ recommended that economic growth as a strategy is important for poverty reduction for Pakistan, the contribution of redistribution in favor of poor should not be ignored, if the government intends to enhance the effects of growth on poverty reduction.
Ghulam Muhammad Arif, World Bank consultant in his paper on ââ¬ËDemographic transition, education and youth unemployment in Pakistanââ¬â¢ disclosed that working age population particularly youth is rising and child dependency is on decline as well. This bonus phase is likely to continue for the next two to three decades when old age dependency will start rising. He said that the benefits of the bonus phase for a country are associated with development of human capital and placement of youth in productive employment. He recommended a strong youth employment policy in Pakistan.
Muslehudin in his presentation on ââ¬ËAn analysis of Pakistanââ¬â¢s growth experienceââ¬â¢ outlined that short term growth out look does not seem encouraging as many risks loom large that may weaken the economic growth momentum; and these include persistently high inflation, burgeoning current account deficit, recent decline in exports amid growing concerns about exports competitiveness, and heightened political uncertainty ahead of forthcoming elections.
Furthermore, there is risk of a slowdown in both private consumption and investment in rising interest rates environment that may force households and business to cut back on their spending and investment plans.
In a longer term perspective, growth looks vulnerable owing to a number of macroeconomic and structural weaknesses in the economy; the most important being low savings and investment, weak human capital base, lack of industrial and export diversification, low agriculture productivity, in adequate physical infrastructure and weak institutions and governance.
While addressing the structural weaknesses for long-term sustainability of growth is a challenging task, there are grounds for optimism too.
http://www.dailytimes.com.pk/default.asp?page=2007\02\27\story_27-2-2007_pg5_12
