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Friday, December 12, 2014, 09:47

South Asia struggles to tackle poverty


Contrasting numbers

The Indian economy is worth $2 trillion and has been clocking an average annual GDP growth of 5.8 percent over the past two decades, estimates the International Monetary Fund.

“The contrasting numbers clearly indicate that we haven’t done enough on the ground,” Iqbal Singh Dhaliwal, scientific director of Abdul Latif Jameel Poverty Action Lab at Massachusetts Institute of Technology (MIT), says.

Kumar from CSDS says “growth has not reached the bottom of the pyramid, mainly those living in remote corners of the country”.

The widely reported increasing farmers’ suicide rate in India is also linked to poverty. According to the latest census, nationwide the farmers’ suicide rate was 16.3 per 100,000 farmers in 2011. It is higher than the corresponding rate of 15.8 per 100,000 in 2001.

The country’s agriculture sector, which accounts for 18 percent of GDP, employs about 50 percent of the country’s workforce.

“Poverty is much more acute in rural areas. Even now, 70 percent of India’s population lives in villages. Addressing the issue of poverty amongst the rural poor would mean tackling the issue of poverty substantially,” points out Kumar.

In Pakistan, about 1,600 people committed suicide in 2011 due to abject poverty, according to the Human Rights Commission of Pakistan. About 21 percent of the population of more than 180 million people lives below the poverty line, based on the World Bank’s definition of extreme poverty of US$1.25 income per day.

However, if the poverty line is raised to US$2 per day in tandem with international standards for middle-income countries, then more than 60 percent of the population in Pakistan falls below the poverty line.

“Rural poverty is acute,” Muhammad Ali Kemal, research economist at Islamabad-based Pakistan Institute of Development Economics, says. “The nature of poverty is also different in the urban and rural areas.”

Wealth distribution in Pakistan is highly uneven, with the top 10 percent of the population earning 27.6 percent and the bottom 10 percent earning only 4.1 percent of the income.

Ali adds that redistribution of resources and providing equal opportunities make it easier to achieve balanced growth.

Bangladesh has been posting an average growth rate of 6 percent per annum over the last decade. However, the country managed to trim poverty rates only from about 60 percent in the early 1990s to 31.5 percent in 2010, and to around 26 percent in 2014. At present, about 40 million people in the country live below the poverty line.

“Growth is not an achievement,” says Mustafizur Rahman, executive director at the Dhaka-based think tank Centre for Policy Dialogue. “Reducing hard-core poverty remains a major challenge; reducing income inequality is proving to be a difficult task.”

Sri Lanka, too, has registered growth, from an average of 5.5 percent during 2000-2009 to 7.5 percent in the post-war period. And it is expected to continue its strong growth, at 8.2 percent in 2015 rising from 7.8 percent this year, says Global Economic Prospects 2014.

The poverty head count ratio in the island nation dipped from 28.8 percent in 1995 to 6.7 percent in 2013, according to a report this year by the Department of Census and Statistics-Sri Lanka. Of the total identified poor, the large majority — around 84 percent — live in rural areas.

“Poverty has been steadily reduced in urban areas by providing economic opportunities, but poverty in the rural area is huge,” says Geetha Mayadunne, senior research professional at the Centre for Poverty Analysis in Sri Lanka.

“Expansion of income-earning opportunities and raising productivity at all levels are likely to be the best ways to eradicate poverty,” she says.

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