RELATIVE POVERTY DYNAMICS IN PAKISTAN

In any study of poverty and inequality, the diagnosis of relative poverty is imperative for drawing reasonable policy responses. Relative Poverty measures the extent and magnitude of poverty by comparing the population at arbitrary poverty lines. This study is aimed at estimating the incidence, depth and severity of poverty in relative perspective across regions and over time. While employing HIES data sets, relative deprivations have been estimated at 50 percent, 66.66 percent, and 75 percent of the mean consumption expenditure of respective survey years during 1998-99–2004-05. Taking a moderate view of the poverty line at threshold level of 66.66 percent, 41.38 percent population was found relatively poor at country level during 1998-99 with corresponding P1 and P2 at 10.25 and 3.60, respectively. Though the relative poverty has declined (4.31 percent) at country level during studied period; however, it is still very high (37.78 percent). Inter-provincial dynamics exhibited improvement in relative poverty at all its levels in NWFP; whereas, mixed trends were observed in other provinces. Rural relative poverty improved in Sind and Baluchistan while it worsened in Punjab. In case of urban areas, relative poverty worsened in Sind and Baluchistan. When we compare the trends of relative poverty with absolute poverty for the same period, trends were largely found opposite for both the interregnum periods. Moreover, overall dynamics revealed decline in absolute poverty manifolds than relative poverty for the whole period. The relative poverty dynamics for the whole period (1998-99 to 2004-05), what we call “Difference of Difference” depicted a decrease of 4.31 percent in population of the relative poor in the country. Provincial statistics of relative poverty estimates reflect that Punjab was the worst of all provinces for having 45.61 percent of its population living below the threshold level of 66.66 percent of average consumption expenditures, followed by Sind (44.41 percent), NWFP (36.40 percent) and Baluchistan (27.04 percent), respectively. Similar ranking is also observed in case of relative poverty gap and its severity for these provinces. The findings suggest that instead of uniform policy strategy across the board, policy packages must be defined for absolute poor and relative poor separately. A two pronged policy scenario is suggested for each province which not only contains the absolute poverty but addresses the poor as well who are relatively deprived in terms of income, education, health and empowerment.