Economic Survey, Economy, Human Development, Pakistan, Poverty
Leave a Comment

On releasing poverty numbers


Dr. Ashfaque H Khan

Statistics speak all languages, affect all policies, and touch all aspects of people’s lives. It is difficult to overemphasise how critical statistics are for policymakers in guiding their work, assessing the impact of their policies and changing direction when needed. If the authorities have access to better statistics, their efforts to fight poverty and promote better life for the people would be more effective. The case in hand is poverty statistics, which have not been released by the government for over one year.

The Center for Poverty Reduction and Social Policy Development (CPRSPD) of the Planning Commission has estimated the extent of poverty in Pakistan by using the Pakistan Social and Living Standards Measurement Survey, commonly known as the PSLM Survey, for the year 2007-08. The CPRSPD found a sharp decline in nation-wide poverty in 2007-08 over 2005-06. It found that the number of people living below the poverty line declined from 22.3 per cent in 2005-06 to 17.2 per cent in 2007-08. Rural and urban poverty also registered declines from 27 to 20.6 per cent and 13.1 to 10.1 per cent, respectively during the period. These results were also validated by the World Bank experts, Mr Nobu Yoshida and Tomayuki Sho, especially flown from the World Bank headquarters at the request of the government of Pakistan. These two experts conducted their validation exercise and presented their results to the Planning Commission on May 29, 2009.The World Bank experts recommended that the government should release these numbers because these are credible.

Despite the World Bank’s recommendation, the government has not yet released the poverty numbers. Why is it so reluctant in releasing the poverty numbers? To answer this question, I will have to remind the readers that immediately after taking charge of the state of affairs the present government had formed a Panel of Economists headed by Dr Hafiz Pasha in April 2008. The panel found that 35-40 per cent of the population was living below the poverty line in 2007-08 – up from 22.3 per cent in 2005-06.

It is important to note that when the panel was working on poverty estimates, the PSLM Survey data for 2007-08 was not available. They estimated the numbers using some methodology which was never revealed by them. It is now exceedingly clear that the estimates were based on flawed methodology. I had objected to the use of such methodology because I was then associated with the ministry of finance. The visiting World Bank team at that time was also of the same opinion.

The political leadership, unaware of the technical details, took the estimates of the panel seriously and everybody, including the president, the prime minister, and the cabinet ministers started mentioning the numbers within and outside the country. Even the same numbers as estimated by the panel appeared in the document of the Friends of Democratic Pakistan (FODP) meeting held in Tokyo last year.

The political leadership had no reason to distrust the professional skills of the economists in the panel. However, their only fault was that they could not realise that some members of the panel were positioning themselves to get lucrative assignments and some retired “experts” were trying to secure their jobs in the government.

How could the government release the poverty numbers of the CPRSPD? How could it comply with the recommendations of the World Bank to release the numbers? The CPRSPD found a sharp decline in poverty, which was validated by the World Bank. The panel under the leadership of Dr Hafiz Pasha on the other hand found a sharp increase in poverty. This is a real embarrassment for the government. How could it tell the world in general and people of Pakistan in particular that poverty numbers which they were propagating were wrong and based on flawed methodology? I have all the sympathy with the political leadership.

The question generally being raised by some stubborn “experts” that the poverty numbers estimated by the CPRSPD and validated by the World Bank do not represent the current ground reality. How could this be the representative of the current ground reality when the survey itself was conducted from July 2007 to June 2008? The current ground reality will be reflected when the PSLM survey for 2010-11, if at all, will be conducted.

Not releasing the numbers has wide-ranging consequences. First, the benchmark for the poverty numbers is five years old (2005-06). Second, the next PSLM survey which was to be conducted in 2009-10 has been delayed. Third, the government is trying to conduct a fresh survey which is not in line with the PSLM methodology. This is tantamount to moving the goalpost and destroying the poverty numbers.

My appeal to the newly-appointed advisor to the prime minister on finance, Dr Abdul Hafeez Shaikh is to release the 2007-08 poverty estimates. I also suggest that we should not conduct any poverty survey which will be a substitute for the PSLM survey. Similarly, do not change the goalpost even if we do not like the numbers, lest we will never be able to know as to what is happening on the poverty front.

Poverty may have increased in Pakistan after 2007-08. The global economic crisis in 2008 has brought miseries for the people of Asia-Pacific region. More than 26 million people could lose jobs by the end of 2010; and millions who took decades to work their way out of poverty have slipped back in it. Pakistan is part of the region and is no exception. Rise in poverty is a global phenomenon and we should not be apologetic on this count. The panel has not only embarrassed the government but has also brought a bad name for the country. It is in the interest of Dr Shaikh and in the interest of the country that such “experts” are kept outside the Q-block.

The writer is director general and dean at NUST Business School, Islamabad. Email: ah khan@nbs.edu.pk

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s