Weekly Reflections: Policy algorithms of poverty alleviation
By Dr Abdul Saboor
In the public policy dossier, poverty alleviation has always been a daunting challenge for almost all the developing countries in the world. The situation in Pakistan has been more critical and serious for the public policies in general and poverty alleviation policies in particular could not optimally deliver for the poor masses and the dream of trickle down remained unfulfilled. Dr. Mahboob-ul-Haq once admits in his famous 22-families speech in Karachi that if Pakistan takes care of the poor, it may automatically take care of GDP rather than just taking care of GDP and waiting for the fruit to trickle down. One of the brilliant growth rates of Pakistan’s history could not alleviate poverty in 60s and 70s. Rather, via the dictates of imported philosophies we invited income inequality which further triggered poverty. From these dark pages of poverty history, the policy lesson is very simple – we will have to design a Pakistani Model of Poverty Alleviation by involving a patriotic team of indigenous scholars and technocrats.
One should appreciate the bold initiative announced by the government but setting up a separate Ministry for Poverty Reduction may not be the final solution. This is just the start of ‘one thousand miles journey’ the success of which depends on an in-depth understanding of the correlates of various dimensions of poverty in rural and urban areas of Pakistan. Neither the ‘old wine in new bottle’ nor ‘new wine in old bottle’ would be marketable in the world of multidimensional poverty. A complete overhauling along with some surgical operations is required in the institution framework and regulatory arrangements so as to get desired results of poverty alleviation on sustainable grounds.
Poverty alleviation policies are neither always good nor always totally bad. Same is the case with the intentions behind the construction of each policy. Part of problem with such policies lies in its formulation while the rest is linked to the implementation of poverty alleviation programs and allied projects. It has been noted in Punjab for the last three decades that the economic benefits of all water related development projects were accrued to the rich farmers. There is further need to visualize the leakages in similar kinds of other poverty alleviation projects and programs in terms of corruption, inappropriation of funds and resource inefficiency. It is also true that some of the poverty alleviation policies only provide temporary solution of the menace without addressing the allied issues on long term basis. This kind of ‘punctured arrangement’ probably goes to the benefit of international funding bodies and domestic lobbies to eradicate poverty slowly so that the opportunity of new programs and projects could be maintained for future ‘adventures’
If we are really serious to tackle this serious issue, then there must be a good team of intellectuals who have branded and indigenous knowledge of the state of poverty at grass root level. Foreign development models with a huge team of foreigners would give the same results as it has been generating in the past. Moreover, the complexity of bureaucratic control and inefficient execution of public policies on their parts would have to be realized for seeking optimal solutions. The political moves of turning the benefits towards one’s own vested interests will have to be carefully avoided. The nation cannot afford to bear the brunt of politicizing the social safety nets, credit schemes, subsidies, etc.
Public policies of composite, holistic and integrated nature are truly required for addressing the issues of poverty in its quite broad sense. Policy isolation in the domain of poverty alleviation has neither worked in the past nor can it deliver in the years to come. So, the core idea is of a ‘basket of policies’ to be formulated in such a way that all the micro, macro, mega, meso and meta policies are taking into consideration the welfare aspects of the masses. The proposed Ministry of Poverty Reduction should be vigilant and in collaboration will all other ministries both at federal and provincial levels. As for instance, the fiscal and monetary policies must carry some of imperatives of poverty alleviation. Price policies and taxation policies must be in tandem with improvement in the welfare level of the poor. So should be the constructions of all development and economic policies.
Similarly, the entire series of commercial, development, economic, political and social programs along with allied projects should be designed in the pro-poor framework. The credit schemes should specifically be targeting to the poor and vulnerable groups in the remote areas of the country. The flow of health and education incentives should be directed towards the poor. Special care of the poor is also required in employment generation activities by promoting vocational and technical skills. They will have to be included in development related and productive activities. Moreover, gender specific poverty alleviation initiatives (free opportunities for health and higher education as for example) are more sustainable as the ripple effect is positively transmitted across generations.
Besides following holistic approach, poverty alleviation framework should focus on the short term and long term strategies keeping the vulnerable and chronic poor in view. Poverty alleviation targeting of various poor pockets needs to be defined for each of these time periods. Spatial diversity of public policy is equally important as one formula of poverty reduction would not be fitted for all. There should be a typical program of poverty alleviation in rural areas keeping the genuine requirements of farming and non-farming sectors in view. The incentive package to be announced for the villages of Rajanpur should certainly be different than that of rural Sindh and hilly terrains of AJK, Gilgit and KPK. Similarly, a separate policy package is required for those who are entangled in the vicious circle of poverty and those who are just at the brink of poverty.
Almost all the best practices of the world regarding poverty alleviation offer some straight forward policy messages. It was the systematic promotion of local government system that helped Europe coming out of the poverty trap. It was the commitment of top leaders in Brazil that they succeeded in eradicating poverty. It was a holistic mix of economic-political-social domains in China that curbed poverty in the shortest possible time. It was the wisdom of President Park that removed poverty in South Korea through rural to urban transformation of the economy.
Similarly, Mahathir’s indigenous inclusive approach set the stage for poverty reduction in the country. Bangladesh got rid of poverty to a great extent through the micro-credit schemes of Dr. Younis under the auspices of Graemen Bank. Even the poverty alleviation programs of Agha Khan Foundation and Orangi Pilot Project are some note-worthy examples of classical fabric. In all these precedents, one common denominator is the true intention, devotion and dedication on the part of top leaders and executors in the very benevolence framework rather than bureaucratic arrangements.
As a wise start, many rich Pakistani families can take the responsibility of either health or education of a single person or a family at least for five years. In partnership with the government, a few highly rich families can also set up a business for some group of poor men and women. Corporate social responsibility can thus be activated in new ways and means. Some of the elite class is economically so powerful that it is just a peanut for them to establish a school, college o hospital for the poor. Obviously the dream of Medina City State can only be materialized if the poverty imperatives are taken at priority agenda. In this regard, Akhuwat kind of replicas can be introduced at district level particularly in rural areas.
All the development thinkers and policy makers would agree to the point that there is marvelous potential of reducing poverty in the country. For reaping that potential, fool proof and corruption free systematic approached would have to be launched. We will have to avoid cosmetic arrangements just for winning political scores. Short term benefits would have to be foregone for achieving a bigger target of poverty alleviation by 2030 as per Sustainable Development Goals. For that purpose, we will have to make our public men efficient through trust building and reasonable facilitation so that they could play the ideal role of a benevolent public servant.
In this context, one can conclude that the algorithms of public policy for poverty alleviation are quite complex if visualized through foreign lens but quite easy and simple if it is indigenized by taking real stakeholders on board. The worst of all kinds – poverty of wisdom needs to be removed before taking some initiatives for eradicating food, income, education and health poverty. The knowledge constructed on the pillars of such development approaches and economic theories which worked nowhere in the world until some local wisdom is added in the poverty alleviation approaches. ‘Think globally and act locally’ is the key to open the rusted lock of wisdom.
Dr Abdul Saboor is Professor of Economics and Dean, Faculty of Social Sciences, PMAS Arid Agriculture University, Rawalpindi