Safeguards for the poor

When public policy and actions do not put the issue of inequity and poverty at the centre of the development strategy, a majority of people are deprived of the basic entitlements of food, education and health.
The scale and depth of this ‘loss of entitlement’ affecting the poor do not depend on availability of food in the market. It is a misperception to assume that reasonably good crop production and high commodity prices this year will bring any substantial change in the overall food deficit and chronic malnutrition experienced by 38 per cent of households classified as ‘poor’, and 56 per cent of the population classified as ‘vulnerable’.
The structural framework in which our economy operates ensures that maximum benefits of return from agriculture are appropriated by one per cent of landholders, owning more than 50 acres, rather than distributing it among those 67 per cent of total households who do not possess land at all. This majority of landless poor are net buyers of food and support large families with low income.
They mostly earn their livelihood as crop sharers, daily wage labourers and temporary workers employed in the informal sector. A natural disaster, man-made emergency or little surge in food prices that exceeds their paying capacity induces them to cut back on one or two meals.
In 2007-08, the food price inflation hit this majority so severely that Pakistan was included in the list of 36 countries facing the risk of ‘food riots’. In order to avert the situation, the government spent around Rs55 billion on wheat imports and distribution of subsidised flour to poor people through the Utility Stores Corporation outlets. In the same year, the total outlays for the Baitul Mal scheme and the Punjab Provincial Food Support Programme were about $100 million and 350 million, respectively.
In the following years, the combined effects of economic recession and flood devastation exacerbated both, the scale and depth of the deprivation. The incidence of poverty went up to 38 per cent as a significant number of households living at the threshold could not cope with the situation and fell below the poverty line.
In critical times, women and children of such households tend to be the worst victim. Owing to their precarious position in intra-family entitlement pattern, they get less share of food than what they need and, are exposed to the vicious cycle of malnutrition and infectious diseases leading ultimately to high mortality and morbidity. Even before the floods struck in late July 2010, a survey conducted by Unicef of the worst-affected region showed that ‘almost a quarter of children under the age of five, suffered from acute malnutrition.’
These children belong to families that are in persistent state of endemic under-nutrition. Growth as such is not a dependable strategy for enhancing their elementary wellbeing and capability. If it is to serve as a solid basis for improving living conditions, Jean Dreze, the renowned economist says, ‘it must take a participatory form and substantial part of resources made available by economic growth has to be devoted to the expansion of public provisioning’.
The current phase of fiscal consolidation envisaged under the IMF guidelines narrows down the scope and size of public provisions by slashing development expenditures. Beside, extraordinarily high cost of security continues to drain resources away from the development sector.
As a result, capability of poor to secure minimum sustenance has been severely eroded. It is imperative to create and institutionalise economic and social safeguards to reduce economic deprivation.
Pakistan has implemented a number of programmes aimed at providing safeguards and targeted subsidies to the poor. Some of those with substantial scale include the Food Support Programme commonly called Bait-ul-Mal scheme covering 1.8 million households at Rs3,000 per household per year; the Punjab Provincial Food Support Programme covering 1.8 million households with cash transfers of Rs1,000 per household per month; and the Zakat and Ushr schemes.

These programmes, says the World Bank report entitled ‘Food Price Increases in South Asia: National Responses and Regional Dimensions’ released in mid March, 2011, ‘are fragmented and duplicative and their aggregate coverage is relatively low (about 13 per cent of the total population). More importantly, they are poorly targeted and have relatively little impact on poverty and vulnerability.’
By its design the Benazir Income Support Programme has a lot of similarities with cash transfer programmes successfully implemented in Brazil, Mexico and Indonesia. Although it has developed reasonably sound operational structure, the programme needs to improve institutional capacity by fostering horizontal and vertical linkages, increasing range and depth of financial services, and integrating beneficiaries with employment hubs such as labour markets and microfinance institutions.
The effects of cash support can only be sustained and capitalised when they are substantiated by a range of substantive and procedural reforms, particularly in the agriculture sector. It is time to realise that increase in the number of small farmers gives rise to a process of expanding and reinforcing the economic activity in the agriculture sector.
The growth in economic activity provides working space to the poor to participate in the processes and benefits of economic growth. Selective and sporadic steps such as imposing price control, tightening export barriers and buying extra stock may temporarily increase availability of food in the market, but cannot secure sustenance of the poor.
It is only by integrating millions of people into the economic and social mainstream that hunger, poverty and income disparities can gradually be reduced, without giving up economic development.
The writer is a development professional. nsamoo@gmail.com
Dawn News