PAKISTAN’S poverty level has surged due to the absence of inclusive growth, lack of fundamental rights and persistent inequalities. Pakistan’s population in 2021-22 was 224.78 million, with 82.83 million residing in urban areas and 141.96 million in rural areas. Projections suggested that the poverty rate will reach 37.2% by 2023. Economic growth in the last decade could not bridge deep spatial disparities. Rural poverty rates are double than those in urban areas where roughly 50% population lives below the poverty line. The recent flood disaster has further worsened financial vulnerabilities.
UNICEF reports that Pakistan has the second-highest number of out-of-school children globally, with an estimated 22.8 million children aged 5-16 not attending school, accounting for 44% of the total population in this age group. A recent World Bank survey also shows that only 66% of non-poor and 34% of poor children in the lower-middle-income bracket have access to primary education. Students pursuing secondary or higher education predominantly come from the top 30% of the middle-class.
Renowned universities and schools, including Beacon House, Roots, Froebel’s International, IBA, LUMS and NUST etc have a minimum fee of 200,000-400,000 per semester which is equivalent to the biannual total income of a middle-class family. Access to higher education has become a nightmare for bottom income level. Consequently, the participation rate for secondary level education is 23% for the bottom 40% and 77% for the top 60%income level population. At the higher education level, the participation rate for the bottom 40% drops to 9% which is primarily limited to public sector universities located in peripheral areas with a lower reputation.
Low-income graduates face difficulty securing jobs at prestigious companies, which can abolish their career aspirations even after obtaining a higher degree. The school and university network can influence this outcome significantly. Graduates from affluent backgrounds possess a greater probability of finding suitable job due to their extensive networks. Lower-class individuals typically have contacts only with co-workers, whereas counterpart has connections with both co-workers and higher-ups, resulting in fewer job prospects for the lower class.
International and local scholarships are structured to benefit the privileged segment, with high fee for standardized tests such as the GRE (costing over 70,000 PKR) and IELTS (costing almost 50,000 PKR), making them unaffordable for the poor. English proficiency has become a requirement for these scholarships and scholarship agencies conduct awareness sessions in elite schools and universities, providing graduates from these institutions with a greater chance of success.
On the flip side, lower class graduates are employed in informal sector which accounts for 71.7 percent employment with numerous vulnerabilities, including inadequate labour rights, child and bonded labour, insufficient social protection, lack of sustainable employment and gender-based discrimination. They earn even below the minimum wage of 25,000 PKR and lack job security and social benefits such as health insurance and education for their children and many workers are subjected to modern slavery. The lower 40% income group lacks the resources to obtain education from prestigious schools and universities and public sector educational institutions do not have the capacity to make them competitive with graduates from elite schools. As a result, the underprivileged are excluded from the corridors of power and competition.
Similarly, Pakistan’s healthcare spending is less than 1.2% of its GDP, resulting in a low ranking of 122 out of 190 countries in the World Health Organization’s performance report. Quality and accessibility of healthcare in Pakistan also rank low at 154th place. The country has a national health infrastructure with numerous hospitals and healthcare centres, but about half of the population lacks access to primary healthcare and 42% of the population is uninsured. The demand for healthcare has led to the growth of private facilities, but they are expensive and not accessible to the poorest 30% of the population.
People in remote areas lack access to public sector healthcare and the available facilities often have poor conditions, which contributes to the spread of deadly diseases. According to WHO, HIV rates are rapidly increasing, with nine out of 251 people screened testing positive in remote areas of Sindh. Low-income individuals lack access to healthcare and cannot afford private sector medical facilities, while the top 30% of society can afford healthcare through personal means and employer-provided health insurance. As a result, the less fortunate remain disadvantaged due to financial constraints and a lack of access to mainstream resources.
Access to justice in Pakistan is limited due to high costs for legal services and court expenses, resulting in a majority of citizens being unable to file cases or grievances. This leads to unequal opportunities for legal representation and hinders the fundamental right to a fair trial. The government has established the Access to Justice Development Fund, allocating only 13.5% of the total fund to legal empowerment and legal aid. Despite this, Pakistan ranks poorly in order and security, civil justice, regulatory enforcement, fundamental rights and corruption among other countries.
The United Nations report on Pakistan’s economy highlights that the country’s elite groups, including the corporate sector and the feudal land-owning class i.e. the richest one per cent, have received economic privileges amounting to an estimated $17.4bn, or roughly six per cent of the country’s economy. The corporate sector has benefited the most, with an estimated $4.7bn in privileges. These elite groups have strong representation in the Pakistani Parliament, with most major political parties’ candidates coming from either the feudal landowning class or the business-owning elite.
On the flips side, the tax system remains regressive, with 60 per cent of total taxes coming from indirect taxes and direct taxes rely heavily on withholding taxes, which can become 70 percent indirect when passed onto consumers. Though paying extensive indirect taxes as poor are in majority but they are unable to access education, legal aid, health care and other fundamental rights which in results in a vicious cycle of poverty and lack of privilege that has persisted since the country’s independence.
—The writer is an Assistant Professor (PhD Financial Economics) at the National University of Modern Languages, Islamabad.
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