POVERTY REDUCTION IN Pakistan: Learning from the experience of China

1. In Name Of ALLAH Who is the Most Compassionate, the Most
Merciful
LONG LIVE PAKISTAN AND CHINA FRIENDSHIP

2. POVERTY REDUCTION IN PAKISTAN: LEARNING
FROM THE EXPERIENCE OF CHINA

3. GROUP
PARTICIPANTS
Ahmad Shabbir
(LB20183120012)
Hafiza Zara Latif
(LS20183120016)

4. CONTENTS
General Facts and poverty Profiles of P. R. China and Pakistan
Poverty Reduction Strategies In Pakistan
Poverty Reduction Strategies In P. R. China
Learning Options for Pakistan from P. R. China
Options and Challenges

5. GENERAL FACTS
AND POVERTY
PROFILES OF
CHINA AND
PAKISTAN
China has been successful in poverty reduction from the masses owning to the introduction of
centered policies.
One-third (250 million) of the total rural population of China was living, in 1978, below the poverty
line.
According to the World Bank, more than 500 million people were lifted out of extreme poverty as
China's poverty rate fell from 88 % in 1981 to 6.5 % in 2012, as measured by the percentage of
living on the equivalent of US$1.90 or less per day in 2011 purchasing price parity terms.
As of 2018 the number of people in poverty living below the national poverty line is around 30
about 2% of the population with hopes of totally eradicating poverty by 2020.

6. CONTI…….

7. POVERTY PROFILE
OF PAKISTAN
• Pakistan is a developing country
situated in the south Asian
Region and mostly depend on
the Agriculture sector to sustain
economic growth.
• In 2013-14, a total of 29.5
percent Pakistanis were living
under poverty line

8. CONTI….
• which has been decreased to 24.3 percent during 2015-16,” (Pakistan Economic
Survey (PES) 2017-18).
• Poverty in both rural and urban areas has also been on the declining trend with
poverty headcount of 12.5% in urban and 30.7% in rural areas in 2015-16.
• The decline in poverty is more pronounced in urban areas than rural areas.
((Pakistan Economic Survey (PES) 2017-18).
• Now, 24.3 % of the total population is living under the poverty line.

9. CONTI………….
• According to the World Bank,
poverty in Pakistan fell from
64.3% in 2002 to 29.5% in
2014. Pakistan has made
substantial progress in reducing
poverty giving it the second
lowest headcount poverty rate
in South Asia.

10. POVERTY
INCIDENCE
Year National Urban Rural
2005-06 50.4 36.6 57.4
2007-08 44.1 32.7 49.7
2009-11 36.8 26.2 42.1
2011-12 36.3 22.8 43.1
2013-14 29.5 18.2 35.6
201-2016* 24.3 12.5 30.7

11. MAJOR CAUSES
OF POVERTY IN
PAKISTAN
ECONOMIC
CAUSES
Vicious circle of poverty
Unemployment
Lack of Foreign Investment. ...
Low National Income. ...
Use of Backward Technology. ...
Increase in Utility Charges. ...
Low per Capita Income. ...
Backward Agricultural Sector.

12. CONTI……..
Absence of credit facilities
Improper income distribution
Low level of productivity
Low level of savings
Inflation
Imposition of Taxes
Non-Productive expenditures
Low-level of capital formation

13. SOCIAL CAUSES
OF POVERTY
Population pressure
Dishonesty and corruption
Illiteracy
Backward infrastructure
Low living standard

14. POLITICAL
CAUSES OF
POVERTY
Law and Order
Poor governance
Feudalism
Nepotism
Foreign loans on high interest rates

15. PEOPLE IN
POVERTY

16. POVERTY
REDUCTION
STRATEGIES IN
PAKISTAN
In the late 1970s, poverty in Pakistan (as high as in China)
Two fundamental questions are:
(i) what approach has Pakistan used to alleviate poverty, ??
(ii) why have the approaches or policies not worked for poverty alleviation??
The poverty reduction strategies in the rural areas for the last three decades
(1980-2010) can be broadly grouped into the following categories.

17. CONTI…….
Land reforms, (1959, 1972, 1977)
Three Phases of Land Reforms 1959, 1972 and 1977.
In order to correct the land distribution and improve the living standards of
the rural poor.
Results
In all the three reforms, a landownership top limit was fixed
The resumed area was only 6 percent, 2.5 percent and 8 percent of the total
cultivated area 1959, 1972 and 1977 respectively.

18. WHY LAND REFORMS FAILED?
• Not all beneficiaries were the landless
• Landless agricultural workers were not included [Khan (1998)].
• Lack of follow-up system, including lack of distribution of farm credit and inputs.
• Thus, all the three major attempts of redistributing land in Pakistan, have failed to
correct land distribution [World Bank (2007)].

20. AGRICULTURAL
GROWTH AND
POPULATION
Initiatives/Strategies
Several policy changes in agriculture, adjustments in the prices of
outputs and inputs.
Introduction of new cotton varieties contributed to this growth.
Public sector institutions, also, expanded credit for mechanical
technology and investment in large-scale private farming and
processing, during this period [Khan (1998)]

21. THE GROWTH IN BOTH GDP AND AGRICULTURE HAS
NOT ALWAYS BEEN HIGHER THAN THE ANNUAL
POPULATION GROWTH

22. RURAL
DEVELOPMENTS
PROGRAMS
History of the Rural Development Programs for Poverty Reduction
V-AID (Village and Agricultural Industrial Development Programs)
1953-1962
Basic Democracy System 1959-1970
Peoples Works Program 1972-1977
Integrated Rural Development 1972-1980

23. CONTI…..
Operational Poverty
Programs in Pakistan
• National rural support Program
• Punjab rural support Program
• Sindh rural support Program
• KPK rural support Program
• Baluchistan rural support Program

24. CONTI….
Bacha Khan Poverty Alleviation Programme (BKPAP)
Aga Khan Rural Support Programme (AKRSP) (Gilgit-Baltistan)
Akhtar Hameed Rural Support Program
These rural support programs are working to alleviate poverty from the
masses of Pakistan covering almost all the geographical regions.

25. PROGRAMS FOR
THE POOR
Benazir Income Support Program
Pakistan Poverty Alleviation Fund
Non-Government Organizations
International Non-Government Organizations
Charity Based Foundations
Micro-finance Banks

26. CHINA'S
EXPERIENCE IN
POVERTY
REDUCTION

27. CHINA’S
PROGRESS IN
ACHIEVING
MDGS

28. POVERTY
REDUCTION
STRATEGIES IN P.
R. CHINA
1. Increased funding for poverty reduction
2. Reform-driven economic growth
3. Stimulation of economic growth with reforms (Land
System Reforms, Economic System Reforms, and
Political System Reforms)
4. Infrastructure-Construction
5. Promotion of industrialization and urbanization
6. Anti-corruption Campaign
7. Upgradation of rural electricity network
8. Upgradation of dangerous rural housing

29. CONTI………
9. The innovation to poverty alleviation: E Commerce
9.1. Jingdong Group
9.2. Alibaba E-commerce
9.3. Taobao
10. Strict Accountability process
11. Regular Monitoring and Evaluation of the
Projects
12. Dedication and Devotion

30. CONTI………
13. Construction of infrastructure for transportation
and telecommunication
14. Elimination of Corruption
15. Social Security System
16. Co-operation of the rural folk in the Projects

31. INFRASTRUCTURE
CONSTRUCTION

32. UPGRADING OF
RURAL
ELECTRICITY
NETWORK

33. UPGRADING OF
DANGEROUS
RURAL HOUSES

34. GROUP PARTICIPANTS
Nasir Jillani: LS20183120018 Ali Ahmed LS20183120015

35. SHOULD CHINA
BE AN
ECONOMIC ROLE
MODEL FOR
PAKISTAN??
• First, poverty levels (around 33 percent) were the
same in China and Pakistan, in the late 1970s.
• China’s industrial and service sectors growth, was
actually based on the fundamental agricultural
reforms, introduced 30 years ago [Heilig, et al.
(2011)].

36. CONTI…. China’s best practice and successful experience in
poverty reduction should be a “Role Model” for
Pakistan. According to the Ministry of Planning,
Development and Reform report, 39% of Pakistanis
living in multidimensional poverty and 20% slightly
above the poverty line. With a truly astonishing
reputation, China is irrefutably a world-leader in
poverty reduction and there is a lot the rest of the
world can learn from its experience, including
Pakistan.

37. LESSONS LEARNED FROM THE CHINESE
EXPERIENCE
Pro-poor growth
pattern and strategy
Pay more attention to
the social development
of the poor
Targeting poverty
intervention, when
possible
Participation of all
actors in poverty
reduction
Pilot first, scale up
Management matters
in poverty reduction
Right direction is more
important

38. CCT ARE PREFERABLE THAN UCT
• Instead of unconditional cash transfers, like Benazir Income Support Program
(BISP), the government should launch conditional cash transfer (CCT) programs.
Such programs were introduced by China and followed by India successfully. They
will help control food scarcity among the poor. It has been witnessed that UCTs
are not rationally used by individuals even if they are in dire need of basic
commodities. It is suggested to go for CCTs to make household able to meet the
basic livelihood.

39. TARGETED EMPLOYMENT PROGRAMS
• To overcome the issue of unemployment in rural areas, China’s social security
program can be replicated making adjustments in Pakistan’s perspective. The Chinese
government hired unemployed people for different jobs so that they might earn their
livelihood. The programs like food-for-work were introduced for this purpose. China
gave jobs to unemployed people. Jobs like gate-keepers, security personnel and
laborer in construction projects were offered to the unemployed. India also imitated
this model by offering jobs to the poor unemployed and used their services in the
construction of roads, etc.
• Poverty and unemployment is high in rural areas of Pakistan, so following in the
footsteps of China, the problem of unemployment can be tackled. For this purpose,
targeted programs must be introduced exclusively for the benefit of the poor.

40. HEALTH REFORMS ARE INEVITABLE
• Health issue is severe in urban and rural areas of Pakistan. The Government of
Khyber Pakhtunkhwa (KPK) has implemented health reforms benefiting 1.8 million
people. Like China, Pakistan should adopt dynamic health policies as low-cost
insurance to low income people but free insurance to those who can’t afford.
Rationing must be done in targeting the poor for those who cannot afford
expensive health facilities.

41. IMPLEMENTATION OF INSTITUTIONAL REFORMS
• Institutional framework of implementing social security program works as the
bedrock for success. Like of China’s institutional framework exerting two-sided
performance pressure, Pakistan should also go for such institutional structure.
Although in 7th National Finance Commission (NFC) award 10.3% portion was
allocated on the basis of poverty, it is not enough. In next NFC award,
amendment must be made to replace the poverty head-count in divisible pool
with poverty reduction. It is because the funds allocation on the basis of poverty
doesn’t give any incentive to take steps to purge poverty.

42. STRENGTHENING LOCAL GOVERNMENT
INSTITUTIONS
• Local government institutions are weak in Pakistan as every government wanted to
keep all the decision-making power with itself. Non-deregulated local government
institutions hinder in decontrolling power to town level. As new government in
Pakistan has intentions to work for strong local government, so it’ll eventually help in
pursuing developmental projects and will involve people at grass roots level. Local
governments are accountable to masses , as representatives are elected by the
general public and from upper hierarchy in the government.
• Amalgamation of bottom-up and top-down approach will help in improving the
services delivery and targeting the poor.

43. GO FOR MULTI-TARGETING PROJECTS
• The new government intends to implement projects like five million affordable
houses and plantation of 10 billion trees nationwide. The inclusion of people, those
are unemployed and live below the poverty line, will help in providing affordable
living to everyone. In this regard, Chinese and Indian model of food-for-work and
employment-for-living are pre-eminent to learn lessons. Micro-financing has also
positive impact in alleviating poverty from Pakistan, so more groups must be
targeted to get more effective results (Noreen 2011).
• Hence multi-dimensional programs are needed to curb multi-dimensional poverty
in Pakistan.

44. LIMITATIONS IN LEARNING EFFECTIVELY
Until 1970s, most of the economic
resources in China were under state
control, and through reforms they were
equitably distributed in the rural areas.
It empowered the poor.
While the power and political structure,
in Pakistan, is entirely different than
that of China, comprising of civil and
military bureaucracy, political and
religious forces, landed rural élites, and
strong caste, and biraderi (clan) system.

45. LIMITATIONS/POTENTIAL
CHALLENGES
• The Chinese government has targeted the
poverty-stricken regions, whereas it is difficult to
distribute economic resources, say land, in poor
regions of Pakistan, where a few families control
the land.
• It is important to note here, policies and programs
have also been launched in Pakistan by previous
governments, but they have not brought any real
change in poverty, mainly due to poor governance
and weak institutions, policy gaps, poor
implementation and corruption, low public
spending and nepotism, population pressure and
internal conflicts.

46. CONTI….
• The provincial autonomy and the unequal distribution of resources among them make
it difficult to achieve the goal of poverty reduction in Pakistan.
• The 11% of youth has not yet been provided jobs in Pakistan by the government
because of the poor situation of industrial sector.
• The educational system of Pakistan is defective because it is only producing degree
holders and not the skilled labor force that is why the industrial sector is moving out
of the country.
• The political structure of Pakistan is consisted in multi-party system and due to the
change in governments the ongoing poverty reduction projects suffers a lot because
every new government stops funding the old projects on the cost of new ones.

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