economy of pakistan

1. Issue in Pakistan Economy
Group Name: F
Group Members: 1. Sharaf Ud din.
2. Sameer Khan.
3. Suleiman Khan.
Teacher Name: Sir Hilal Mubarak.
Presentation Topic: Poverty and Income Distribution Measurement
issue, trend in poverty and income distribution, is poverty the problem,
does growth eliminate or create poverty, poverty alleviation strategies
and their failure?

2. Table of Contents
 Poverty
 Types of poverty
 Measurement of poverty
 Poverty in Pakistan
 Income Distribution
 Measurement of income distribution
 Income distribution in Pakistan
 Trend in poverty in Pakistan
 Trend in income distribution
 Is the poverty the problem
 Growth
 Effect of growth on Poverty
 Poverty Alleviation Strategies
 Failure
 Solution

3. Poverty
Poverty is an economic state where people are
experiencing scarcity or the lack of certain
commodities that are required for the lives of
human beings like money and material things.
The word poverty comes from French word
poverte; which means poor.
Poverty is a state or condition in which a person or
community lack to the financial resources . Means(
income).
• Poverty line:
Poverty line is the level of income to
meet the minimum living conditions.
The official poverty line in Pakistan
is calorie based, and consumption based.

4. Types of Poverty
1. Absolute poverty:
Also known as extreme poverty or abject poverty, it
involves the scarcity of basic food, clean water, health, shelter, education and
information. Those who belong to absolute poverty tend to struggle to live and
experience a lot of child deaths from preventable diseases like malaria, cholera
and water-contamination related diseases. Absolute Poverty is usually
uncommon in developed countries
2. Relative Poverty:
It is defined from the social perspective that is living
standard compared to the economic standards of population living in
surroundings. Hence it is a measure of income inequality. For example, a
family can be considered poor if it cannot afford vacations, or cannot buy
presents for children at Christmas, or cannot send its young to the university.
Usually, relative poverty is measured as the percentage of the population with
income less than some fixed proportion of median income.
3. Situational Poverty:
It is a temporary type of poverty based on occurrence of an
adverse event like environmental disaster, job loss and severe health problem.
the poverty comes because of unfortunate event.

5. Measurement of Poverty
 Following are some measurement of poverty.
 1. Headcount Index:
This is the share of the population whose income or consumption is
below the poverty line. That is the , the share of the population that can not afford to by a
basic basket of good.
Suppose the proportion of the population whose line Z means poverty
line.
Suppose we have a population size n in which q people are poor than the
headcount is define as;
H= q/n
to be able to do so we make a critical assumption that all household
members enjoy the same level of well being, this assumption may not hold ion many
situation.

6. Poverty Gap:
It is define as; shortfall of the total population from the
poverty line express as a percentage of the poverty line.
This measure reflects the depth of the
poverty as well as its incidence.
The indicators is often describe as
measuring per capital amount of resources needed to
eliminate poverty or reduces the poor shortfall from the
poverty line to zero, through perfectly target cash transfers.
PG= 1/n summation [( z-yi ) z].
In the equation poverty gap is z-yi
in the difference between the poverty line z and the income
or consumption for those who are poor.

7. Poverty in Pakistan
• The World Bank (WB) has estimated
that poverty in Pakistan has increased
from 4.4 per cent to 5.4 per cent in
2020, as over two million people have
fallen below the poverty line.
• Using the lower-middle-
income poverty rate, the WB estimated
that the poverty ratio in Pakistan stood
at 39.3 per cent in 2020-21 and is
projected to remain at 39.2 per cent in
2021-22 and might come down to 37.9
per cent by 2022-23, reported The
News International

9. Income Distribution
 Income distribution is the smoothness or equality which
income is dealt out among member of a society.
or
 Income distribution is covers how a country total GDP
is distributed amongst its population.

10. Measurement of Income Distribution
 we can measure income by two ways.
1. Lorenz Curve.

12. 2. Gini Coefficient

13. Income distribution in Pakistan
 According to our estimates, the top 1% income share is 30.2%,
the top 0.1% share is 13.4% and the top 0.01% share is 5.1%.
 Instead, Pakistan's top income distribution is
similar to that of the Middle East and Brazil. The middle 40%
share is 30.0% and the bottom 50% share is at a mere 11.6%.
 Income distribution is extremely important for development.
 Since it influence the cohesion of the society determines the
extent of poverty of any given average per capita income and the
poverty reducing effect of growth and even effect people health.

15. Trend in poverty in Pakistan
 The World Bank (WB) has estimated
that poverty in Pakistan has increased from
4.4 per cent to 5.4 per cent in 2020, as over
two million people have fallen below
the poverty line.
 Using the lower-middle-
income poverty rate, the WB estimated that
the poverty ratio in Pakistan stood at 39.3
per cent in 2020-21 and is projected to
remain at 39.2 per cent in 2021-22 and
might come down to 37.9 per cent by 2022-
23, reported The News International

16. Trend in poverty in Pakistan
 In Pakistan, 24.3% of the population lives below the national poverty line in 2015. In
Pakistan, the proportion of employed population below $1.90 purchasing power parity a
day in 2019 is 1.3%. For every 1,000 babies born in Pakistan in 2019, 67 die before
their 5th birthday.
 The percentage of people under poverty in Pakistan in 2018 is 31.3%. According to the
Business Recorder, the percentage of people under poverty in Pakistan is predicted to
jump to 40%. By numerical standards, the poverty population will increase from 69
million to 87 million by the end of 2020.

17. Trend in Income distribution in Pakistan
 , the top 1% income share is 30.2%, the top 0.1% share is 13.4% and the top
0.01% share is 5.1%.
 Instead, Pakistan's top income distribution is similar to that
of the Middle East and Brazil. The middle 40% share is 30.0% and the
bottom 50% share is at a mere 11.6%.
 Income distribution is extremely important for development.
 Since it influence the cohesion of the society determines the extent of
poverty of any given average per capita income and the poverty reducing
effect of growth and even effect people health.
 Wealth distribution in Pakistan is slightly varied, with the top 10% of the
population earning 27.6% and the bottom 10% earning only 4.1% of the
income. Pakistan generally has a low gini co-efficient and therefore a decent
distribution of income (relatively lower inequality).

19. Is the poverty the problem
 Poverty is a socio-economic issue. Socio-economic issues are factors that have negative
influence on an individuals' economic activity including: lack of education, cultural and
religious discrimination, overpopulation, unemployment and corruption. ... One in ten
children is poor.
 Grinding poverty and lack of development fuel child labor, illiteracy, religious
extremism and endless conflicts on massive scales
 Poverty can dampen growth when market imperfections (market failures, incomplete or
uncompetitive markets) combine with investment indivisibilities, fixed costs, and
strategic complementarities.

20. Economic Growth

21. Effect of growth on Poverty
 Economic growth reduces poverty because growth has little impact on income
inequality. In the data set income inequality rises on average less than 1.0
percent a year. Since income distributions are relatively stable over time,
economic growth tends to raise incomes for all members of society, including
the poor.

22. Poverty Alleviation Strategies
 Increasing the supply of basic needs. Food and other goods
 Increasing personal income provide Subsidies.
 provide Health care and education. Desirable actions such as enrolling children in
school or receiving vaccinations can be encouraged.
 Removing constraints on Govt. services Basic services should be provided without
corruption.
 Controlling overpopulation Overpopulation and lack of access to birth control leads to
population increase to exceed food production and other resources.
 Empowering women with better education and more control of their lives makes them
more successful in bringing down rapid population growth through education.
 Income grants A guaranteed minimum income ensures that every citizen will be able to
purchase a desired level of basic needs.
 . Economic freedoms Easy terms and conditions for the people to open a business.
 Favorable circumstances.
 Governments should provide essential infrastructure.

23. WHY PAKISTAN COULD NOT SUCCEED
IN POVERTY REDUCTION
 Policy gaps or poor implementation.
 Weak institutions,
 poor governance
 deteriorating law and order situation
 Neglect of the social sector Power structures in rural areas
 Lack of effective targeting
 High population growth
 Conflicts in countries.

24. THANK YOU