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Macroeconomic Policies and their Impact on Poverty Alleviation in Pakistan

  • Rashid Amjad

    (International Labour Office, Geneva, Switzerland.)

  • A.R. Kemal

    (The Planning Commission, Government of Pakistan, Islamabad.)

The paper provides a consistent time-series of poverty estimates for the period 1963- 64 to 1992-93 for both the rural as well as the urban areas, examines the influence of macroeconomic policies on the poverty levels, analyses the impact of Structural Adjustment Programmes on the levels of poverty, and suggests a strategy for poverty alleviation in Pakistan. The paper explores in particular the influence on poverty of such factors as economic growth, agricultural growth, terms of trade for the agriculture sector, industrial production, rate of inflation, employment, wages, remittances, and the tax structure. While the paper cautions that on account of the limited number of observations the results of the study should be interpreted cautiously, the study does suggest that the growth above a threshold level of about 5 percent, increase in employment, and remittances are the most important variables explaining the change in poverty over time. The paper also comes to the conclusion that the policies pursued under the Structural Adjustment Programme have tended to increase the poverty levels mainly because of decline in growth rates, withdrawal of subsidies on agricultural inputs and consumption, decline in employment, increase in indirect taxes, and decline in public expenditure on social services. The paper also outlines a strategy for poverty eradication and argues that besides the safety nets, the employment programmes, as well as promotion of informal sector enterprises, are essential.

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Article provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.

Volume (Year): 36 (1997)
Issue (Month): 1 ()
Pages: 39-68

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Handle: RePEc:pid:journl:v:36:y:1997:i:1:p:39-68
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  1. Moazam Mahmood, 1991. "Growth and Distribution of Agrarian Assets in the Punjab," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 30(4), pages 1007-1027.
  2. S.M. Naseem, 1973. "Mass Poverty in Pakistan. Some Preliminary Findings," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 12(4), pages 317-360.
  3. M. Shaukat Ali, 1995. "Poverty Assessment: Pakistan's Case," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 34(1), pages 43-54.
  4. MUHAMMAD HUSSAIN MALlK, 1988. "Some New Evidence on the Incidence of Poverty in Pakistant," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 27(4), pages 509-515.
  5. Muhammad Hussain Malik & Najam Us Saqib, 1989. "Tax Incidence by Income Classes in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 28(1), pages 13-26.
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