Causes of Poverty in Pakistan
Causes of Poverty in Pakistan
Causes of Poverty in Pakistan
Pakistan is a poor country. Its economy is facing fluctuations now a day. At the
time of independence Pakistan has very low resources and capital, so the
were all not well aware of modern global system and the progress processes and
the needs of country. Due to bad policies today Pakistan is facing a lot of
It is difficult to point out all causes of poverty in Pakistan but the major causes of
Government Policies:
policies do not get effective result. After the failure of one policy, government
does not consider its failure and announces another policy without studying the
aftermaths of last one. Heavy taxes and unemployment crushes the people and
they are forced to live below poverty line. The suitable medical facilities are not
provided to people and they are forced to get treatment for private clinics which
Another cause of poverty is corruption. There are two types of corruption. There
is not morality and every one is trying to earn more and more by using fair and
unfair means. Officials waste their time has low efficiency. Only one relationship
that is exists in society is money. One has to pay a heavy cost to get his right.
Law and order conditions are out of control and institutions are failed to provide
justice to a common man. Justice can be bought by money only. But government
is unable to control such type of things. In this whole scenario some corrupt
people has been occupying the resources and common man is living in
miserable conditions.
One has land which is fulfilling the needs of his family but he has to divide the
land into his children when they got young. After division the land is not sufficient
to support a family. Now the families of his children are suffering and spending
Materialism:
In our society social bonding are gradually becomes thinner and thinner. A race
of material object has been started even no one tried to understand the problems
of others. Every one is gradually changing from human to a bioman which only
know about his needs and have no concept about the limitations of others.
People are not ready to help each other. At last every one has lose his trust on
others which effect our social and economic system and it is another cause of
poverty.
Lack of Education:
The literacy rate of Pakistan is very low. Most of people do not have any concept
about the modern earning sources. Most people are unable to adopt technology
for their business needs, that’s why business do not meet international standards
and results as decrease in revenue which lead the society to poor financial
conditions.
importing good every year, even raw material has to import for industry. If we
decrease import and establish own supply chains from our country natural
There are lot of problems regarding law and order. Terrorist attacks create
uncertainty in stock markets and people earning from stock are getting loss due
Foreign investor comes to local markets. They invest millions of dollars in stock
markets and stock market gets rise in index. Then the investor withdraws his
money with profit and market suddenly collapses. The after math always be
Privatization:
Government is unable to manage the departments and country has low reserve
assets. So the meet the requirements some companies run by government are
companies are becoming costly. For example if government sold a gas plant then
Moral Culture:
The main reason for poverty is the social dishonesty and irresponsible behavior
of people. Every one is trying to get rich by using unfair means. A shop keeper is
ready to get whole money from the pocket of customer. People doing jobs are
not performing their duties well. In society the man considered brave or
respectful who do not pay taxes or continuously violate the laws. This
The objective of this undertaking is to determine the incidence of poverty and to identify
alleviation of poverty through the 'Infaq' an attempt has been made in this study to
ascertain the prospects of bridging the poverty gap through the official 'zakat' and 'ushr'
household, has also been investigated in the present study. The nutrition based poverty
lines both in terms of expenditures and income were estimated using Household Income
and Expenditure Survey J 987-88 micro data. For the purpose of determining poverty
lines in terms of' expenditures the relationship between daily calorie intake per adult
equivalent and monthly total consumption expenditure per adult equivalent were
estimated. The expenditure based poverty lines were converted into income based
poverty lines by regressing the total expenditure per adult equivalent per month on
income per adult equivalent per month. Headcount (P0), poverty gap (P1) and Foster,
Greer and Thorbecke (FGT) poverty measure (P2), which are widely used in the recent
research done on poverty, were utilized for estimating the incidence of poverty in the
(population). To ascertain the role of 'infaq', in alleviation of poverty the amount of 'infaq'
income received by the households was deducted from their total income and the P0, P1
and P2 indices were re-estimated. Thus the difference between both the results (with and
without 'infaq') showed the impact of 'infaq' on poverty alleviation. The Logit model was
used in this study for evaluation of the role of different characteristics that determine
poverty status of household. The incidence of poverty was estimated both at the
population and the household levels. Our findings are that the incidence of poverty is
sensitive to the poverty line selected. The incidence of poverty in terms of persons is
higher than that of households. This could be due to the fact that incidence of poverty is
relatively higher among the larger households, which are likely to represent, a larger
proportion or the population. Another finding of the study is that the incidence of poverty
in terms of income poverty lines is higher than that estimated in terms of expenditure
based poverty lines. Our estimates suggest that poor households are disproportionately
located in the rural areas of Pakistan. More than 85 percent of the total poor households
are residing in the rural areas of Pakistan. Punjab contributes 72.71 percent of poor
households, followed by Sindh (12.75 percent) to all the poor households of the country.
The share of NWFP in the poor households is 12.08 percent, while Baluchistan has the
lowest share (2.45 percent). Malik's index to ascertain the locational concentration of the
poor households was also estimated. These estimates suggest that the rural areas of
Pakistan have the relatively higher proportion of the poor households than their share in
the total population. The decomposition of the poor households according to the
socioeconomic characteristics of the heads of the households was also carried out in the
study. Our findings in this regard are: The majority of the male headed poor households
fall in the age group of 40 -49, while the majority of female headed poor households fall
in the age group of 30-39. Classification of the poor according to the marital status shows
that about 95 percent of the male heads of the poor households are married and 70
percent of the female heads of the poor households are married. It implies that household
headed by the married persons are more exposed to poverty risk. The proportion of poor
households having highly educated heads is extremely low. Majority of the educated
heads of the poor households falls in the primary or below matric category of education.
Our results indicate that more than 90 percent of the male heads of the poor households
fall in the working class category, while about 80 percent of the female heads of the poor
households fall in the non-working class category. The occupational classification of the
heads of the poor households shows that the majority of the male heads of the poor
production and related workers, transport equipment operators and labourers' categories.
The proportion of female heads of the poor households belonging to the category of
'professional, clerical and related workers' is the highest (81.0 percent in over all
suggests that most of the male heads of the poor households are engaged in the
agriculture, forestry, hunting and fishing, followed by construction. While most of the
female heads of the poor households fall in the category of activities not adequately
defined. The breakdown of employment status of the heads shows that most of the male
or female heads of the poor households are classified as self-employed, and they are
followed by the category of employees. The earning status of the households reveals that
the proportion of the households with single earner is the highest in case of male headed
households, while in case of female headed poor households; the majority falls in the
large sized households. The highest proportion of the male headed poor households is
found in case of households having 7 to 8 members and in case of female headed
households, those having 5 to 6 members. The Results of the Logit model show that the
households living in Punjab have the highest probability of being poor as compared to the
other provinces; that as the educational level of the head of the household increases the
probability of that household being pour decreases. that as 'lnfaq' increases the probability
of a household being poor declines. that the probability of a household being poor
declines, when the number of earners in that household increases, that the probability of a
household being poor increases with the increases in the size of the household. The
effects of 'Infaq, on poverty alleviation, in Pakistan, suggest that 'Infaq, could help in
reducing poverty level in Pakistan in terms of head count (P0) by 2.16 percent overall,
3.78 percent in urban areas and 2.06 percent in rural areas. The most important impact of
'infaq' is on the reduction in poverty gap (P1) and severity of poverty index (P2). The
poverty gap was reduced by 4.l6 percent in overall Pakistan under the impact of 'infaq'.
Pakistan. We also estimated the funds required to bring the poverty gap to zero and
explored the possibilities of filling this gap by the official zakat collections. Our findings
are that the present zakat collections can fill the poverty gap completely of the extremely
poor and partially that of the very poor. But in the present form it is not capable of
eradicating total poverty. If zakat is collected to its full potential, it could not only result
in complete eradication of poverty from the country but also can generate surplus funds.