Poverty in Pakistan: Vulnerabilities, Social Gaps and Rural Dynamics World Bank, 2002

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Poverty in Pakistan Vulnerabilities, Social Gaps
and Rural DynamicsWorld Bank, 2002

• Presentation at Lahore
• December 28, 2002

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Objectives of the Poverty Assessment

• Look beyond measurement of poverty, to focus on
  non-income dimensions of poverty including
  qualitative and institutional aspects - and the
  rural economy
• Initiate collaboratively an ongoing research
  program to inform and elevate dialogue and debate
  on policies related to poverty reduction
• Key Elements
• Rationalize poverty trends over the decade of the
  1990s, using multiple rounds of household survey
• Undertake a new survey to explore in-depth issues
  of poverty, rural and human development
• Combine quantitative information with insights
  from qualitative survey
• Focus on the institutional and political economy
  factors that impede effective delivery of public
  services

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Broad Messages

• Poverty has stagnated in the nineties (up to
  1998-99), also revealing a high incidence of
  vulnerability
• Rural poverty is of special concern, having shown
  little reduction over the period
• Even during periods of relatively high poverty
  reduction, human development has not registered
  commensurate progress
• Institutional constraints pose major obstacles to
  distribution of benefits of growth across sectors
• Recent reforms present unique and innovative
  opportunities to support better distribution of
  public benefits

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Poverty Trends the Static Picture

• Static measures do not tell the full story Large
  movements in and out of poverty indicate high
  incidence of vulnerability

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Trends in Mean Consumption Inequality

• Inequality (Gini Coefficient) in Per Equivalent
  Adult Consumption

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Poverty is Multidimensional

• Moreover, other deprivations often adversely
  affect the future potential to climb out of
  poverty
• Vulnerability to shocks Inadequate access to
  insurance opportunities
• Landlessness Over 50 of the rural population in
  Pakistan is landless, over 40 of them are poor
• Lack of education 42 of the population living
  in households with illiterate heads is poor,
  compared to 2 of those in other households.
• Poor access to health care and basic
  infrastructure The poor are less likely to
  access health facilities. 24 of the poor rely on
  unsafe sources for drinking water, compared to
  19 of the non-poor
• Exclusion Social groupings such as caste,
  kinship groups and biradris determine access to
  services and economic opportunities

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Why Social Gap

• Social indicators (with a few exceptions) have
  stagnated during the 1990s
• Factors that contribute are
• Inadequate social spending
• Inefficiency in spending allocated amounts
• Poor quality in delivery of services linked to
  incentives

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Primary Gross Enrollment Rates (GERs) in the
Nineties
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• Rising rich-poor gap primary GERs have fallen
  from 1991 to 1998-99 for the lowest 5 deciles

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What Factors Determine School Enrollments?

• Households economic status is important
• So is parents education having a mother who has
  attended school makes it 23 more likely that a
  child will also do so
• Proximity to school is a factor for girls
  schooling in rural areas
• Proximity to physical school facilities however
  is only part of the story quality matters

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Results from the PRHS sample of 206 rural public
schools offering primary education

• Inadequate basic facilities 1/3 of the schools
  had an adequate building about 50 had access to
  drinking water, toilets or furniture 16 of
  co-ed schools had a separate toilet for girls
• Teacher absenteeism At the time of the visit, no
  classes were being held in 34 schools. In the
  remaining schools, 20 of teachers were absent
• Low student attendance At the time of the
  visit, about 64 and 61 of enrolled boys and
  girls respectively were present in the classroom
• Better quality of schools is associated with
  higher enrollments in rural communities

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Expansion in Private Schooling

• Recent years have seen a rapid expansion in
  private schooling
• From 1991 to 98-99, share of private sector in
  primary enrollment increased from 14 to 23, in
  secondary schooling from 8 to 17. The expansion
  occurred across all consumption groups

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Are Private Schools Affordable?

• Private school fees are fairly low
• lowest in Punjab
• account for 1.7 (rural) and 2.1 of hh
  expenditure in Punjab
• Distribution skewed to the right

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Indicators of Quality

• Compare favorably on observable indicators with
  public schools
• Preliminary work on testing (ADK 2002) suggests
  that learning may be on par with public schools

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The Promise of Public/Private Partnership ?

• Private Schooling a fast-growing sector
• Tend to have reasonable fees
• better quality inputs
• Better gender balance
• higher ratio of female students in private
  compared to public schools (43 vs. 37)
• IF private schools are desirable, what can be
  done to encourage the setting up of such
  institutions?

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Health Outcomes

• The decade registers improvements in some
  indicators of health and fertility
• Infant mortality has fallen
• Immunization coverage has improved
• Knowledge and use of family planning methods have
  increased
• Significant challenges remain
• High incidence of nutritional deficiencies among
  children
• Access to health care, and maternal care remains
  low in rural areas

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Nutritional Status of Rural Children

• Anthropometry

• Based on data from PRHS (2002)
• Declines over time till 20-24 months
• Subsequent catch-up to a small extent
• By the age of 5, a child has about 60 percent
  probability of being stunted, and 45 percent
  probability of being underweight

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Insights from Analysis of Nutritional Outcomes

• Nutritional status of children almost unchanged
  over last 15 years in sample areas
• Strongly correlated with income and mothers
  education
• Impact of income almost entirely driven by
  community level average income
• Indications that quality of community facilities
  may explain this phenomenon

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Rural Challenges

• Virtually no change in rural poverty or
  consumption inequality over the decade of the
  1990s (HIES), although value-added in agriculture
  grew at average 4.2 percent
• What happened to the growth?
• The apparent disconnect between agricultural
  growth and poverty may have a number of causes
• Droughts and floods over the decade suggest
  year-to year fluctuation in measured consumption
  (as in agricultural growth)
• Stagnation in the non-farm sector
• Direct and indirect effects of land and asset
  inequality on productivity and poverty our main
  focus

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What Factors Limit Productivity in Agriculture?

• Imperfect or non-existent markets for land and
  other assets like tube-wells and tractors
• Inequality in asset ownership, particularly land,
  appears to have significant and large
  productivity effects
• Inefficiencies in irrigation lead to productivity
  losses
• Both canal and tubewell water have strong effects
  on crop yields and farm profits the supply of
  canal irrigation is a significant constraint on
  productivity

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Inefficiencies in the Irrigation System

• Irrigation infrastructure is increasingly
  dilapidated
• Investments in physical infrastructure
  (rehabilitation of canals, lining of water
  channels, land leveling) and maintenance
  undertaken only sporadically
• Why? Poor incentives for irrigation departments
  and farmers to maintain/improve the system or
  reduce wastage
• Institutional factors influence access to water
• Payments to irrigation officials for delivery of
  sanctioned water supplies are routine and endemic
• Misappropriation of canal water by upstream
  farmers is substantial and integrally involves
  irrigation officials

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Policy Imperatives

• The broad thrust of the policy framework in
  I-PRSP reinforced
• Increasing and sustaining growth remains critical
  for poverty reduction
• Concomitant reforms necessary to maximize the
  poverty-reducing potential of growth
• Reduce inequality in asset ownership Land reform
  ?
• Improving the coverage and targeting of social
  protection schemes to help cope with shocks
• Building institutions for better delivery of
  services - from human development to irrigation,
  infrastructure, credit and insurance services
• Empowering communities in the design and delivery
  of services

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• Rural Poverty an Urgent Priority
• Land and asset inequality in rural areas has
  important productivity consequencesbeyond a
  distributional concern
• Decreasing poverty and increasing agricultural
  productivity are not competing policy objectives
• Land and tenancy (security of tenure) reform
• Innovative use of credit to enable land leasing,
  and the leasing of other productive assets
• Restructuring of canal irrigation
• Income diversification through more vibrant
  non-farm rural development

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Social Protection

• In the long-run, vulnerability will be reduced
  through growth and increased opportunities for
  diversification
• In the absence of credit and insurance markets,
  public programs like zakat and Khushal Pakistan
  can serve as insurance mechanisms for vulnerable
  groups
• Appropriate targeting and coverage is key
• Design and targeting will both benefit from
  regular monitoring of programs on the ground
• Community-based experiments in credit and
  insurance can work where formal mechanisms fail
• Scaling these efforts up will require concomitant
  reform of formal institutions

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Momentum for Change Reforming Institutions

• The ongoing devolution reform provides a natural
  starting point
• Devolution may lead to increased participation of
  communities in decision-making and greater
  accountability of government officials
• Devolution not a panacea by itself
• Continuing role of higher level governments in
  defining roles and responsibilities, designing
  fiscal incentives and promoting equity
• The challenge of capacity-building at the local
  level
• Re-thinking the role of the government forging
  partnerships with the private sector and
  community organizations