Aug 242009


In Pakistan, currently more than 20% people are living below the poverty line. People in the rural areas are poorer than in the urban areas. Pakistan and foreign economists have different criteria to describe poverty. According to some foreign economists, if a person’s daily income is less than one dollar a day, then he is considered as living below the poverty line.

Some foreign economists suggest 2 dollars, instead of one dollar a day for poverty line. The biggest reason for poverty in Pakistan is the backwardness of the agriculture sector. Nearly 66% of the population, living in the rural areas, is lowly paid.

Data from the agriculture census of Pakistan, conducted in 1990, shows that cultivated land in unequally distributed in Pakistan. Poor farmers have no availability of adequate and cheap fertilisers, pesticides, quality seeds, water, latest technology and consultancy services. They have no capital to improve their lands, that’s why their income level is low and poverty especially prevails in the rural areas.

The second reason for poverty is the unfair distribution of income among people. The poor are becoming poorer and the rich becoming richer. In Ayub’s era there were 22 families, who had control of the majority of the national income. In the present, the situation is the same with a slight difference.

Such unequal distribution of income is creating restlessness among the less income class. They have less money to fulfill their basic needs like food, health, education and housing etc, that’s why the poverty level is growing day by day. In fact, the non-adoption of Islamic economic system and the capitalistic system are responsible for such an unfair division of wealth.

The third reason for poverty is the rapidly growing population of the country. Population-wise Pakistan is the 6th largest country in the world and its population growth rate is 1.8%, which is the highest in the region. Pakistan’s GDP growth rate is less than 3%.

So, there is a shortage of goods and services like food, clothing, housing facilities, education and health etc all these things are inadequate to meet the necessities of a growing population. One earning hand has to feed a large number of family members. Due to the high level of demand and less production, there is general poverty.

The fourth reason for poverty is inflation, which is a king of regressive tax on the fixed income class. Due to inflation, the salaried and fixed income group is more affected than the business class. The employees’ salaries are not increased by the government in proportion to inflation, but their expenditures are increasing, day by day, due to dearness.

Less income and the low level of saving are responsible for poverty. Increase in the prices of oil at the international level is also enhancing poverty. Fifthly, our industrial sector is very backward the share of this sector in national income is less than 20%, which is very low as compared to the developed economies.

Due to industrial backwardness, our exports are less, rather we have to import electrical and industrial items at high rates. A huge portion of foreign exchange reserves in consumed for industrial imports. The low level of living and poverty is related to the backwardness of this sector directly of indirectly.

The sixth reason for poverty is the low level of education and the defective education system. In Pakistan, the literacy rate is only 56%, which is very low in the world. Due to the few technical, engineering and research institutions, the productivity of labour is very low and our human resources are outdated, both qualitatively and quantitatively.

Women are not given the chance to participate in national, economic, social and educational activities. Due to the scarce access to education, the majority of people have a low level of income, directly of indirectly, resulting in poverty.

Seventhly, poor governance is responsible for creating poverty. Good governance is an essential and important pre-condition for growth and development. But in Pakistan, such a scenario is different. People have less access to justice and national decision making. There is corruption, political instability, a disturbed law and order situation, red tapism, terrorism, bomb blasts and delay in the system etc.

Such things are hurting the public’s confidence, and they take less interest in the different economic activities. Due to low production, there is general poverty. The eight reason for poverty is the weak taxation system. If the taxation system is not in favour of the general public and the investment sector, then output and economic activities would be sluggish.

Indirect taxes like general sales tax, customs duty, excise duty etc, affect the investment climate and poor consumers greatly. Ultimately there will be poverty. Black marketing, hoarding, smuggling, profiteering, nepotism, corruption of a specific community is exploiting the poor people of Pakistan, making them more poor.

Courtesy: Business Recorder

 Posted by at 9:02 pm

  5 Responses to “Reasons for poverty in Pakistan”

  1. dear shazad ahmad
    Good attempt on the topic but figures are more higher than you wrote i.e. around 50% now.

    • good attempt but their is a lack of information about comparison of human development index with other countries in that region like India and Bngladesh

  2. Hey,

    i found this information extremely helpful.

    I’m writing an essay on how the Pakistani children are subjected to an unstable life for my world issues class but i was just wondering if you could tell me as to where you got this information from because i need a valid source to reference because apparently any blogs wouldn’t be appropriate. 🙁

    or if anyone knows any excellent websites where i can find information on:-
    * corruption of Pakistani Government
    *Unequal economic/financial distribution (rich are getting rich and the poor are getting poorer and remaining poor)
    * Poverty in Pakistan
    *Child labour in Pakistan
    * Lack of education in Pakistan
    *Lack of health and nutrition in Pakistan
    *Cultural norms in Pakistan


  3. i got helpful information , <3 well done

  4. v.v.v important information …………..\
    good good

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