Growth and Poverty in Pakistan: Implications for Governance

According to the Economic Surveys, Pakistan’s real GDP has grown at an average annual rate of 6.8 percent in the 1960s, 4.8 percent in the 1970s, 6.5 percent in the 1980s and 4.7 percent in the 1990s. However, that did not seem to have mitigated poverty as parallel to this growth the number of poor also kept swelling. Although different estimates put number of poor in Pakistan around 50 million, the actual could be more [Ahmad (2001)]. The average growth rates in the first halfcentury of Pakistan have been around 2 percent [Hasan (1997)]. It is pertinent to state that this discussion paper is not an attempt to challenge the figures either of the growth rates or the numbers of the poor in Pakistan. This is rather an attempt to understand the correlation of governance with growth on one hand and poverty on the other. It offers conceptual analysis of the concepts and their respective interpretation, explanation, application and ensuing misunderstandings. This paper has also attempted to challenge certain (usual) assumptions and perceptions regarding the role and relationship of growth and governance in reducing poverty in Pakistan. One has pointed out that most of the studies on the subject focus on symptoms and not the causes of poverty. This leads to on one hand growth of poverty, as poverty does not seem to halt despite certain evidence of relatively high growth particularly in 1960s. On the other hand we witness poverty of growth as whatever growth we have had it has hitherto failed either translating into corresponding mitigation of poverty or equitable collective prosperity. This is because there have not been efforts at governance level to ensure equity of impact of growth through adequate distribution mechanisms, sufficient social and human investments leading to education and skill development of women and men, who in turn could benefit from opportunities arising by way of process of economic growth.