Poverty and its causes
Muhammad Ahmad Adil
8th February 2012
Topic: Poverty In Pakistan
Management sciences Department
Abdul Wali Khan University Mardan
February 8, 2010
Teacher, Economy of Pakistan
Abdul Wali Khan University
I am herewith present my Assignment authorized by you as a requirement for this course. In this assignment, I have tried to provide updated information about Poverty In Pakistan. I hope I have covered all that was required for the assignment. If there be any clarification demanded, I would appreciate a call from you.
Muhammad Ahmad Adil
Poverty in Pakistan
Theory of Poverty:
Poverty cannot be described it can only be felt. One knows more about poverty when he is hungry and cannot purchase food, he and his children want new clothes but they can’t purchase it because of low income, he’s sick and doesn’t have money to have medicine, he wants to send his children to school but can’t bear educational expenditures. The world Development Reports define poverty as “pronounced deprivation in well being’. Poverty can be measured by following three methods, i.e. Head Count Ratio, Basic Needs Approach, and Poverty of Opportunity. According to Head Count Ratio, the persons who fall below the poverty line as determined in the country are regarded as poor. In Pakistan, for instance, the persons who earn income which cannot meet the daily intake of about 2350 calories per person are considered to fall below the poverty line. Basic Need’s Approach suggests the measurement of ‘poverty’ with reference to income distribution. According to this approach if the persons of a fixed income group cannot purchase basic needs, i.e. food, clothing, housing, education and basic health facilities, they are considered to fall below the poverty line. The third approach which is ‘poverty of opportunity’, if due to fall in income, health or education the human sufferings increase the people are considered to have fallen below the poverty line.
Poverty in Practice:
Globally considerable progress has nevertheless been made in different parts of the world in reducing poverty. The proportion of people living in extreme poverty on global level fell from 28 percent in 1990 to 21 percent in 2001 (on the basis of $1 a day). In absolute numbers the reduction during the period was 130 million with most of it coming from China. In Sub-Saharan Africa, the absolute number of poor actually increased by 100 million during the period. The Central and Eastern Europe and the CIS also witnessed a dramatic increase in poverty. While incidence of poverty declined in South Asia; Latin America and the Middle East witnessed no change. Proposal to tackle the problem:
The recent trends in global and regional poverty clearly suggest one thing and that is, that rapid economic growth over a prolonged period is essential for poverty reduction. At the macro level, economic growth implies greater availability of public resources to improve the quantity and quality of education, health and other services. At the micro level, economic growth creates employment opportunities, increases the income of the people and therefore reduces poverty. Many developing countries have succeeded in boosting growth for a short period. But only those that have achieved higher economic growth over a long period have seen a lasting reduction in poverty East Asia and China are classic examples of lasting reduction in poverty. One thing is also clear from the evidence of East Asia and China that...
References: 1. Economics of Pakistan, M.Saeed Nasir
2. Reports of World Bank
3. Economic Survey 2005—06
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