Concealed for 15 months
Tuesday, August 10, 2010
Dr Ashfaque H Khan
Mehtab Haider, a well-respected economic journalist of The News, published a story headlined "Poverty reduced to half in Musharraf's regime: WB Report." (Aug 7.) Quoting from the World Bank's July 30 report, "Country Partnership Strategy," the writer, Mehtab Haider, reported that the percentage of Pakistanis living the below poverty line had fallen from 34.5 per cent in 2001-02 to 17.2 per cent in 2007-08.
This news item has vindicated my position, thanks to the World Bank. I had been urging the government over the last 15 months through my columns to release the poverty numbers for 2007-08. The government, in particular the Planning Commission, failed to release the numbers, obviously for political reasons.
The Planning Commission's Centre for Poverty Reduction and Social Policy Development (CPRSPD) had estimated the extent of poverty in Pakistan by using the Pakistan Social and Living Standards Measurement (PSLM) Survey for 2007-08. The CPRSPD found that the number of people living below the poverty line declined from 22.3 per cent in 2005-06 to 17.2 per cent in 2007-08. During that period, rural and urban poverty also registered declines from 27 to 20.6 per cent and 13.1 to 10.1 per cent, respectively.
These results were presented to the Planning Commission in March 2009. However, the "experts" there were unwilling to accept the results, for obvious reasons. Some of these experts, who retired almost a decade ago but continue to work on contracts, wanted to protect their jobs. They advised the government not to accept the results unless these were validated by World Bank experts. So the government approached the World Bank to send in its own experts to validate the CPRSPD estimates.
The findings of the experts sent by the World Bank, Nobu Yoshida and Tomayuki Sho, who presented their results to the Planning Commission on May 29, 2009, were exactly the same as those of the CPRSPD. They not only recommended that the government release these numbers, they argued that "not releasing the numbers is not an option." Therefore, the World Bank released them, after waiting for 15 months; the government has still not done so.
Why is the government so reluctant in releasing the poverty figures? There are two reasons for this. First, as Mehtab Haider has said "poverty reduced to half in Musharraf's regime…" The government wanted to suppress the figures because it never wanted to tell the people that they inherited only 17.2 per cent people living below the poverty line. Furthermore, it was politically suicidal to admit that poverty reduced to one-half in just six years during "Musharraf's regime".
Secondly, the government had formed a "Panel of Economists" headed by Dr Hafiz A Pasha in April 2008. The panel found that 35-40 per cent of the population was living below poverty line in 2007-08–up from 22.3 per cent in 2005-06. It is important to note that when the panel was working on poverty estimates, the PSLM Survey data for 2007-08 were not available. The panel estimated the numbers under a methodology that was never revealed. It is now exceedingly clear that the panel's estimates were based on flawed methodology.
Some professional economists like to put themselves into potentially advantageous position whenever a change of government takes place in Pakistan. Some retired "experts" would do anything to please the new political leadership to protect their jobs. Some would try to secure lucrative jobs or consultancy positions. Jobs and consultancies would be available only if they painted a horrible picture of the state of the economy inherited by the new leadership. A combination of all these motives was enough to persuade the political leadership to prevent the release of the poverty figures.
I have been pointing out these facts through four of my columns, urging the government to release the numbers for the sake of transparency. And the World Bank has now released the numbers. Isn't it an embarrassment for the government? The World Bank wrote everything which the present government never wanted to hear.
For example, the report (page 8) said: "Pakistan saw an impressive decline in poverty during 2001-02--2007-08; the share of the population living in poverty halved, down from 34.5 per cent in 2001-02 to 17.2 per cent in 2007-08. Both urban and rural areas saw significant reductions.
"This progress was made possible by growth in real per adult consumption expenditures and declining inequality during 2005-06--2007-08. Key human development indicators of educational attainment, health outcomes, and unemployment rates corroborate these trends through 2007-08."
Even a cursory look at these figures would reveal that not only poverty declined sharply in Pakistan from 2001-02 to 2007-08 but inequality was reduced as well. Meanwhile, social indicators improved and the unemployment rate dropped. Are such outcomes not the cherished goals of every government? If something good happened from 2001-02 to 2007-08, there is nothing wrong in acknowledging the facts.
Should the government still not release the poverty numbers even after the World Bank has done so? Where are those so-called "experts" in the Planning Commission now? Where are the members or the head of the Panel of Economists? Wouldn't they advise the Planning Commission to release the numbers now? Or would they continue to live in a state of denial? Suppressing the figures, thereby misguiding the people of Pakistan, is highly deplorable.
The writer is director general and dean at NUST Business School, Islamabad. Email:
ahkhan@nbs.edu.pk