Rich-poor gap widened during 2000-05: report 
ZAHEER ABBASI
ISLAMABAD (March 10 2007): The government has admitted that the gap between the rich and the poor has gone up during 2000-01 to 2004-05, both in the rural and urban areas. The Ministry of Finance in its annual progress report 2005-06 titled 'A Poverty Reduction Strategy Paper', has admitted that inequality reflects distortions in access to markets.
In the availability and quality of health, education, infrastructure services, and in rural-urban distortions - all of which dampen growth and poverty reduction. The reduction in poverty between the 2000-01 to 2004-05 period could have been much more, had the distribution of consumption expenditures remained the same, the report said.
It said that another measure of inequality was the ratio of highest to the lowest consumption quintile, which measures the gap between the rich and the poor. This ratio increased overall marginally from 3.76 in 2000-01 to 4.15 in 2004-05. However, in urban areas, the gap between the rich and the poor widened relatively more from 10.40 in 2000-01 to 12.02 in 2004-05, compared to the rural areas, where the gap between the rich and the poor remained more or less unchanged from 2.22 in 2000-01 to 2.19 in 2004-05 Regarding the earlier period, between 1998-99 and 2000-01, when poverty increased, the empirical evidence showed a decline in inequality, the report said.
It said that Gini coefficient, commonly used to determine the inequality levels in a country, was applied to the household consumption data of PSLM 2004-05 and it was compared with the 2000-01 PIHS/HIES. The data showed that consumption inequality increased in Pakistan between 2000-01 and 2004-05.
It says that although consumption inequality increased in urban and rural areas during this period, the inequality in urban areas was higher than in rural areas, probably due to diversification of urban workforce in terms of skill and education, leading to differentials in household earnings and consumptions.
Another measure of inequality was the ratio of highest to the lowest consumption quintile, which measures the gap between the rich and the poor. This ratio increased overall marginally from 3.76 in 2000-01 to 4.15 in 2004-05.
However, in urban areas the gap between the rich and the poor widened relatively more, from 10.40 in 2000-01 to 12.02 in 2004-05, compared to the rural areas, where the gap between the rich and the poor remained more or less unchanged, from 2.22 in 2000-01 to 2.19 in 2004-05.
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ZAHEER ABBASI
ISLAMABAD (March 10 2007): The government has admitted that the gap between the rich and the poor has gone up during 2000-01 to 2004-05, both in the rural and urban areas. The Ministry of Finance in its annual progress report 2005-06 titled 'A Poverty Reduction Strategy Paper', has admitted that inequality reflects distortions in access to markets.
In the availability and quality of health, education, infrastructure services, and in rural-urban distortions - all of which dampen growth and poverty reduction. The reduction in poverty between the 2000-01 to 2004-05 period could have been much more, had the distribution of consumption expenditures remained the same, the report said.
It said that another measure of inequality was the ratio of highest to the lowest consumption quintile, which measures the gap between the rich and the poor. This ratio increased overall marginally from 3.76 in 2000-01 to 4.15 in 2004-05. However, in urban areas, the gap between the rich and the poor widened relatively more from 10.40 in 2000-01 to 12.02 in 2004-05, compared to the rural areas, where the gap between the rich and the poor remained more or less unchanged from 2.22 in 2000-01 to 2.19 in 2004-05 Regarding the earlier period, between 1998-99 and 2000-01, when poverty increased, the empirical evidence showed a decline in inequality, the report said.
It said that Gini coefficient, commonly used to determine the inequality levels in a country, was applied to the household consumption data of PSLM 2004-05 and it was compared with the 2000-01 PIHS/HIES. The data showed that consumption inequality increased in Pakistan between 2000-01 and 2004-05.
It says that although consumption inequality increased in urban and rural areas during this period, the inequality in urban areas was higher than in rural areas, probably due to diversification of urban workforce in terms of skill and education, leading to differentials in household earnings and consumptions.
Another measure of inequality was the ratio of highest to the lowest consumption quintile, which measures the gap between the rich and the poor. This ratio increased overall marginally from 3.76 in 2000-01 to 4.15 in 2004-05.
However, in urban areas the gap between the rich and the poor widened relatively more, from 10.40 in 2000-01 to 12.02 in 2004-05, compared to the rural areas, where the gap between the rich and the poor remained more or less unchanged, from 2.22 in 2000-01 to 2.19 in 2004-05.
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