Rising Poverty in Pakistan (GROUP # 8)

NUST Business School

ASSIGNMENT # 3

Topic: Rising Poverty in Pakistan (Group 8)

Course: Introduction to Macroeconomics

Submitted to:
Maleeha Rizwan
Submitted by:
Ahmad Waqas Dar
Agha Ali Mehdi
Muiz Ahmed
Arslan Khan
Hani Ali

BS AF 2K17-B
Date: 10th December, 2018

Table of Contents

1.1 Brief Introduction ………………………………………………………………………3

1.2 Effects on Economy…………………………………………………………………….3-4

1.3 Pressing Issue...................................................................................................................6-8

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1.4 Solution/Statistics.............................................................................................................7-9

1.5 Bibliography…………………………………………………………………………….10

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RISING POVERTY IN PAKISTAN

Poverty in literal sense is a circumstance where an individual is unable to satisfy their basic

needs as they lack the necessary means to achieve them. Poverty is a phenomenon, particularly

of a threatening nature; especially to developing countries like Pakistan. Pakistan has been

plagued by this phenomenon ever since it’s hard-earned independence and unfortunately little

has been done to treat it. According to statistical evidence, 17.2% of the total population in

Pakistan lives below the poverty line.(1)

Poverty is a phenomenon that is a direct consequence of mainly unfair and unequal resource

allocation in various sectors of administrating a country such as taxes, education, income etc and

some uncontainable natural factors such as increasing population, agricultural instability and etc.

Effects of rising poverty in Pakistan

Poverty has a lot of adverse effects on the economy of Pakistan which are explained below :

Education

Poverty directly affects the education of lower class and underprivileged which is a great loss for

the country. Most of the young generation is not skilled and starts working at a lower age thus a

major chunk of youth is not properly utilized in the job sector.This decreases the overall

efficiency of the country.

Crimes

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Poverty is also a big contributor of crimes as most poor people doesn’t have enough resources

and adequate facilities to live.As a result poor people tend to do crimes in order to live and have

enough money to attain basic facilities.This hinders the foreign direct investments (FDIs)

because the country is in turmoil and is not considered safe for investments.

Poor Health

People living in poverty are exposed to different disease and ailments because of lack of

cleanliness/sanitation and non availability of clean water.Moreover they can also not attain good

health care which makes them unfit to work and earn money.The government has to spend a lot

of revenues on health care department to operate more hospitals which also decreses the

infrastructure budget which could be otherwise utilized on different sectors.

Weak Governance

Rising poverty means that the government collection of taxes get low because most of the

individuals are not employed and make no money.Governemnts with poor tax foundations

cannot fulfill their proposed targets because of lack of funds.Most government officials are

underpaid which decreses the efficiency and is the backbone of corruption. Thus a vicious circle

is created because poverty.

Lack of Infrastructure

Poverty hinders the development of infrastructure as the country is deficit of funds. Pakistan has

to spend a large amount of taxes and capital on healthcare facilities and defense budgets etc.Also

the weak tax base makes it difficult for the country to fulfill its needs.

POVERTY IS THE GREATEST ISSUE

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Poverty is the main issue in Pakistan, due to the fact that it is interlinked not only with

governance but also productivity of a nation itself. The matter should be held with extreme

measures, and the reason why it should be under consideration are as follows:

 Poverty is a vulnerability to the nation, not only as economic indicator but also as a

social indicator. And is the same for Pakistan.

o As an economic indicator, it represents how steep the financial state of the

people is and if they are unable to find ways to accommodate themselves with the

fluctuations of income, it result in creating a havoc for the nation.

o As a social indicator, it shows that people lack in their financial power rarely

brings them toward any irrational decisions but it actually is due to social image.

What will others think? A question embarked in everyone mind that if we did this

how will other react. In fear of what other will think about having such less

finances, people tend to do rash decisions.

 There are needs of a human being or perhaps the needs of the society as a whole, the

requirements of a society to prosper and grow. The lack of these needs results in

problems like poverty.

o Lack of education ;

This is one of the most contributing factor when we talk about poverty and

its causes. Illiteracy results in lower levels of skilled labor, inefficient

work forces resulting in companies outsources or using machinery which

gives rise to unemployment.

o Lack of Infrastructure ;

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Infrastructure is a very important factor that contributes to the growth of a

society and an economy in its absence the economy finds it hard to grow,

resulting in lower levels of opportunity and higher levels of

unemployment.

o Instability both political and economic;

It has been many years this country has been suffering from terrorism and

instability. Due to this instability the economy has lost its balance and companies and

firms are either outsourcing or have completely shifted to other more stable, safer and

cheaper countries. This has caused a gap in employment resulting in unemployment

and that has caused the poverty levels to grow drastically.

SOLUTIONS

Poverty is an issue that has created havocs around Pakistan for many years. Due to this issue

many have suffered and created many problems and brought down its significance in many eyes.

But each problem has a solution and so does this one, which are explain as given below:

 Imran Khan’s House Shelter Movement

o This movement, if correctly coordinated can save people from poverty. One of the

many reason of poverty is that finances are not completely used, but with shelter

provided one only has to be worried about the fact finances for the family. So, if

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this movement is coordinated correctly it can create results for the betterment of

the nation.

 Education

o Education is an important tool in reducing poverty. If education is correctly

provided and promoted than it can bring poverty down as more bright minds will

emerge and rational decisions can be made.

 Traditional Agricultural Equipment

o The replacement of the traditional agricultural equipment by the new scientific

equipment which will result in more productivity. And more productivity will

result in decrease of poverty.

 Equality

o Not only in Pakistan but also in the whole world rich and the poor are never

treated equally. No matter what leaders say but in the end their in no equality,

which results in poverty. To face this processor cycle a system of equality or at

least distribution of resources are too be equalized. In only doing this poor and

rich discrimination can come one step to an end which as a result can reduce

poverty.

 Job Opportunities

o In Pakistan, more job opportunities are to be made. The rate of unemployment is

very high and due to this fact poverty rises. To decrease rate of unemployment,

resulting decrease in poverty more job opportunity or provision of employment is

required.

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By these points alone we can say that no matter what the problem is, each and everything has

solution. And if the government follow even a half of these points, it can result in decrease in

poverty.(1229 words)

Statistical Data

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Bibliography

1)https://pide.org.pk/pdf/publications/Monograph/Poverty%20Reduction%20in%20Pakistan.pdf

2)http://www.cssforum.com.pk/general/discussion/36905-how-can-we-reduce-poverty-rate-

pakistan.html

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