WEB DESK: According to the Federal Minister for Planning, Development and Reforms, Ahsan Iqbal, while addressing a seminar on “Poverty Estimation” which he co-chaired with Federal Finance Minister Ishaq Dar, the number of poor in Pakistan has increased after a new methodology for measuring poverty was adopted using 2013-14 survey data.
He added that the 2001 poverty line formula that had placed 20 million Pakistanis below the poverty line was outdated and misleading and the current figure for poverty places 60 million people below the poverty line.
Who was responsible for the change in the poverty formula? While lauding Iqbal’s decision to accept the new formula and present data that was neither misleading nor outdated even though the numbers are naturally politically damaging for the party in power, yet it is relevant to note that the change was undertaken subsequent to an agreement between the ministry of planning, development and reforms, the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP) – an agreement signed almost two years ago in 2014.
What is the new formula and what is its history? According to the UNDP website, Multidimensional Poverty Index (MPI) was developed and published for the very first time in its 2010 report and defines it as identifying “deprivations across the same three dimensions as the Human Development Index and shows the number of people who are multi-dimensionally poor and the number of deprivations with which poor households typically contend with. It can be deconstructed by region, ethnicity and other groupings as well as by dimension, making it an apt tool for policymakers”.
OPHI notes that “poverty is often defined by one-dimensional measures, such as income. But no one indicator alone can capture the multiple aspects that constitute poverty. Multidimensional poverty is made up of several factors that constitute poor people’s experience of deprivation – such as poor health, lack of education, inadequate living standard, lack of income (as one of several factors considered), disempowerment, poor quality of work and threat from violence”.
Ahsan Iqbal clarified that while food energy intake was the model in use in 2001 yet it was not a representative one and revealed that the methodology for computing the MPI in Pakistan was through choosing “10 to 40 percent of distribution as reference group, 2350 calories as minimum welfare measure and cost of basic needs as method with the objective of capturing non-food expenditures.” However, it was also revealed that the percentage of poor fell by around 25 percent – Dar as is his usual practice focused on the decline in the percentage of poor – from 34.6 percent in 2001-02 to 9.3 percent in 2013-14 – and stated that “whatever the methodology the poverty level in the country has declined,” though in all fairness he did add that poverty is a challenge and the government would take measures to try to cut it.
One would have greatly appreciated if Ishaq Dar had dwelt at length on some specific measures that the government is in the process of formulating for the budget 2016-17 – measures designed specifically to reduce the new disturbing poverty line data that has tripled the number of Pakistanis under the poverty line. One can only hope that such an exercise is ongoing in the Ministry of Finance as the budget making exercise is already underway.
Source: Business Recorder