Explore the main causes of poverty in Pakistan, from political instability to lack of education and gender inequality. Learn how these factors contribute to the country’s economic challenges and what can be done to address them.

Poverty Causes in Pakistan

Majority of the population of Pakistan is suffering from absolute poverty majoirty of the people are unable to have sufficient resources to satisfy their basic needs. They are living below a specific minimum level of real income; an international poverty line. According to World Development Report 2000 – 01, 37.3% population of Pakistan was living below the poverty line in 1997. Of this, 36.9% was living in rural areas and 28.0% in urban areas.

The principal causes of poverty in Pakistan are as follows:

• Underemployment Nature of the Economy: The first principal cause of poverty is the underdevelopment of the economy. Due to this large portion of the population has to go without even the most essential needs of daily life. Since the national income is low therefore aggregate consumption, is also very small relatively to the huge size of the population.
• Extreme inequality of income and wealth : The second principal cause of poverty Is the extreme inequality of income and wealth. In fact, underdevelopment nature of the economy and inequality are twin causes of poverty. Both factors are effecting each other in multiple ways.
• Highest growth rate of population: The growth rate of population is the highest one in the world. It has been very high far long as against the real growth rate of the economy. This has failed to bring about the required improvement in living standard. Up to 1980s the growth rate of population has been around 3% per annum. It only began to decline since the beginning of 1990s, but It Is still very high-2.5% per annum. Such a high growth rate of population accompanied by the low growth rate of the economy has been leading to bring down the per capita income and per capita consumption expenditure, and thus causing poverty.
• Low per capita Income: Poverty is also reflected in Pakistan by the low per capita income. In 2001. it was $ 470. During the four decades of planning (1955 to 1998) the per capita average growth of income had been nearly 2% per annum.
• Inadequate growth rate: One of the main reasons that led to failure of planning to make a visible dent on poverty had been the inadequate growth rate. During the last five decades, the growth rate of national income has been around about 5% per annum on the average. Against a very high growth of population, such a low growth rate of the economy has tended to perpetuate poverty.
• Unemployment: A high rate of unemployment also causing a perpetual poverty in Pakistan. The economy being an agricultural by its nature is nor fully accommodating annual high growth of labour-force. Agriculture sector hardly can provide employment for seven months in a year. Industrial sector in. not such developed to absorb fully the increased labour-force Hence, unemployment, underemployment and disguised employment are hardly effecting per capita income and causing to increase the intensity of poverty.
• Inflation : Continuous rising prices are another main cause of poverty in Pakistan. Rising prices causing to fall the purchasing power of money which lead Impoverishment of the lower middle and poorer sections of the society. Hence inflationary pressures have been further increasing the number of poor People in the’country.
• Capital Deficiency: Capital deficiency has been another main cause of poverty in Pakistan. This reflects from the low per capita availability of capital and the low rate of capital information,(at market prices), increased from 10% in 1959 – 60 to 16% in 2000- 01. In real term, however, it is much below the level required for the rapid growth of the economy.
• Inadequate use of technology : Inadequate use of technology Is also responsible for the poverty In Pakistan. Not only manufacturing processes and agricultural production techniques are far below the standards of developed countries, but even marketing skills, the ability to organize production units, and financial markets are at a low level. Consequently, per capita productivity remains at low level which, in turn, keeping the economy in a state of poverty.
• Inadequate availability of essentials : Another reason of poverty in Pakistan is the low standard of living which is quite reflected in the low availability of essential commodities Despite more than four decades of development efforts, the per capita availability of essential consumer goods can be increased marginally.