What is Poverty?
Poverty is not an economic abstraction, it is a human
condition. It is despair, grief, and pain. It is the despair of a father who joins
the swelling ranks of unemployed. It is the grief of a boy who cannot enter a school because he lacks a few rupees to buy textbooks. Poverty is the grief
of parents watching their child die of a routine childhood disease because they
cannot afford any medical care. Poverty is a clear picture of illiterate,
hungry, malnourished poverty-stricken, and survival-oriented people of a
country. In fact, the inadequacy of income to meet basic needs, low quality of
life, denial of. opportunities and
CAUSES OF POVERTY:
These are the causes of poverty especially in Pakistan.
1. Under Development
Due to underdevelopment a large portion of the population has to go without even the most essential needs of daily life.
2. Inequality
There is the extreme inequality of income and wealth in Pakistan. Actually, underdevelopment and inequality are the twin causes of poverty. It is inadmissible to ignore or underplay either factor.
3. Low Per Capita Income
Poverty is also reflected by the low per capita income. It is an important measure of economic development and also represents the living standard of the people of a country. The per capita income of Pakistan is $1512.
4. Inadequate Growth Rate
One reason for the failure of Planning to make a major dent on poverty has been the inadequate growth rate. The growth rate of the GDP is 4.2% while the growth rate of the agriculture sector is during 2014-15.
5. Higher Growth Rate of Population
The growth rate of population in Pakistan is very high i.e. 1.92%. such a high growth rate of population accompanied by the low growth of the economy brings down the Per capita income and per capita consumption expenditure and thus increase poverty.
6. Unemployment
Poverty js also on the Increase With the rise in the number of the unemployed. Then the number of unemployed persons has been increasing with every year, The unemployed people in Pakistan are 3.58 million while the unemployment rate is (3% during 2014-15.
7. Low Consumption Expenditure
Poverty is also reflected in the low consumption expenditure of the majority of the people in Pakistan, A number of studies have been made towards this end.
8. Regional Disparities
There ace extreme regional disparities accounting for the poverty of the people of certain regions against the prosperity of the others e.g. the various regions of Baluchistan and Khyber Pakhtunkhwa are backward as compared to different regions of Punjab.
9. Low Availability of Essentials
Another cause of poverty is the low standard of living which is primarily reflected in the low availability of essential commodities. There is a wide disparity in the consumption levels of the top rich and bottom poor. Therefore, these national averages do not reflect the true living standards of the poor people of the country.
Continuously rising prices are another cause of poverty. When prices rise, the purchasing power of the money falls and they lead to the impoverishment of the lower middle and poorer sections of the society. The inflation rate is 4.8% in Pakistan. Thus inflationary pressures have further increased the number of poor people in the country.
11. Low Technology
Low level technology is also responsible for the poverty of the country. Not only the manufacturing process and agricultural techniques are far below the standards of developed countries, but even marketing skills, capacity to organize production units and financial markets are at a low level.
12. Capital Deficiency
Another cause of poverty has been the deficiency of capital in the country. In real terms, capital is much below the level required for the rapid growth of the economy.
13. Backwardness of the Agriculture Sector
The agricultural sector is the backbone of the economy. The
largest sector of the economy is leading towards backwardness. Its growth rate
is only 29% during 2014-15. There exist disparities in the distribution of
land. Because of limited income, small farmers fail to have modern
14. Defense Expenditure
Due to the strategic position of Pakistan, the defense rising
every year. Therefore, the Government is bound to spend lesser amounts on other
sectors of the economy and poverty is rising.
15. Increase In Utility Charges
The
charges of utilities like electricity, water: gas, telephone (.3tG, aro
increasing in Pakistan. The increasing trend of utility charges is al%o
decreasing the standard of living,
16. Political Instability
Political instability is commonly cited as an obstacle to the economic development of the country. The rapid changes in Govornmont3 aro
proved to cause of low investment in the country, Then, tho low rato of
investment leads to poverty.
17. Fall in Overseas Employment
The
employment opportunities in the Middle East and European countries have declined
due to various factors such as the gulf war, the incident of September 11 j
2002 etc. This situation of the country helps to increase unemployment. As a
result unemployment and poverty go side by side in LDCs.
18. Social
Factors
In Pakistan, people are caught in the vicious circle of Poverty due to tho prevalent socio-cultural obstacles. These are as under:
i. Observe social, cultural, and religious ceremonies and spend extravagantly
ii. The high level of indebtedness is both the cause and effect of poverty.
iii. Illiteracy and ignorance.
iv Fatalism.
v. Sectarian and religious ideas.
vi Caste-ism
vii Joint family system
19. Administrative Factors
There are marked deficiencies in public administration of the country which helps to increase poverty. These are as under:
ii. No good governance.
iii. Red-tapism
iv. Centralization of powers
v. Corruption and nepotism
vi. No accountability
20. International Factors
Due to some international factors, the developed countries have kept the less developed countries in a state of poverty, These are as under,
i. Adverse balance of payments.
ii. Debt burden
iii. Debt servicing
(v) Wars
(vi) Economic sanctions
(vii) Trade barriers
21. Global Economic Crisis
The impact of the global financial crisis on
counties
is reflected in a sharp reduction in their projective GDP growth rates that are
the lowest since the 1990s. A worst-case scenario envisages as many as more than 50 million people are becoming unemployed.
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