A few words of hope and despair
Millions of children spread over South Asia are still living in abject poverty with no hope for light at the end of the tunnel
Prof Sarwar Md Saifullah Khaled
Pakistans economy is pickicking up pace but, some say, not fast enough for its millions of poverty-stricken people. Shah Nawaz one of thousands in the Pakistans financial hub who are being fed by charities, realises this truth as he walks dusty streets of Karachi. However, confidence in Pakistan is growing, with the International Monetary Fund (IMF) claiming in October 2016 that the country has emerged from crisis and stabilised its economy after completing a bailout programme. Its credit rating has improved. There are encouraging signs of foreign investment, such as massive Chinese infrastructure project officials routinely call a gamechanger. But all these glittering promises have yet to feed millions like Shah Nawaz in Pakistan. The 14-year-old boy stands waiting with more than 100 others outside the Saylani Welfare building in Karachi to receive free meals twice a day to feed his family members.
Shah Nawaz dropped out of school four years back. While Pakistans Gross Domestic Product (GDP) still hovered around a weak 3.0 percent. Shah Nawazs family struggled to survive on his fathers meagre part-time wage income of Rs. 250 (rupees) (US $2.30) a day. He wails I have immense passion for my studies and want to become a prosperous man, but I cant. His despair resonates throughout Pakistan nay throughout the third world countries. A new central bank report of Pakistan says 60.6 percent of the population does not have access to cooking fuel. Nearly 50 percent of all children are deprived of a basic education. And 33.3 percent of Pakistanis have no access to a primary medical facility. One of the charitys officials, Aamir Saylani, said that The number of people coming to our centres is growing, and they are not beggars but poor people who are not able to make ends meet.
After winning a third term in 2013 Pakistani Prime Minister Nawaz Sharif vowed to boost the long-depressed economy like other leaders across the third world countries. Chronic energy crisis, as power outages shut down factories and bring businesses to a virtual standstill daily was among the key challenges Nawaz Sharif faced at the time. He approved more than a dozen coal, hydro and gas and combined cycle power generation plants. Most of them due to begin generating electricity by mid-2017. His advisers, meanwhile, negotiated a three-year extended fund facility with the IMF to raise US $6.4 billion. That, coupled with remittances from Pakistanis overseas, has taken Pakistan foreign exchange reserves to an estimated US $22 billion, from US $3 billion in 2008.
The Pakistan economy grew at 4.7 percent in the fiscal year 2015-2016, while inflation was at a low of 3.8 percent and interest rates down at 5.75 percent. Encouraged by such figures Islamabad set an ambitious yearly growth target of 5.7 percent for 2016-2017, undeterred by domestic debt of US $182 billion. The World Bank (WB) predicted 5.4 percent growth by 2018. But unbiased and independent economists doubt the growth is sustainable. Abid Suleri, who heads the Sustainable Development Policy Institute (SDPI) in Islamabad, said that You were on artificial support, and it will be a real litmus test for the government once the IMF facility is over. A senior economist at the Social Policy and Development Centre (SPDC) in Karachi, Mohammad Sabir, said that it would take sustained growth of around 6.0 percent for five successive years to make a real dent in poverty in Pakistan.
Hopes are pinned on a US $46 billion China-Pakistan Economic Corridor (CPEC) initiated by Beijing that aims to link the Asian superpowers Xinjiang region with the Arabian Sea through Pakistan. The plan encompasses a series of infrastructure, power and transport upgrades that Islamabad hopes will kickstart its economy. But experts opine that the deal is opaque, and much more transparency is needed before they can assess any impact for Pakistan economy including, for example, whether the US $46 billion is an investment or a loan. Sabir warned that if it is a loan, it would severely hamper the future foreign payment capability of the country.
The Pakistan central bank says that the countrys foreign debt remains around US $73 billion, just over 25 percent of the countrys GDP. Pakistan country director for the Asian Development Bank (ADB) Werner Liepach, told that it was much too early to tell what effect CPEC would have on Pakistan economy. However, he said, given the challenging global context contrary to what many believe, Pakistan is actually doing quite well. According to him the benefits of growth in Pakistan are actually more widespread as compared to many other developing countries that may show higher levels of growth, but with greater inequality. He, nevertheless, added that there is room to improve to eradicate poverty.
Meanwhile, millions of Pakistanis like school-dropout boy Shah Nawaz still struggle and suffer while the building housing the charity providing food for his family was flattened in an operation targeting illegal settlements on government land. The picture is same throughout South Asia and Shah Nawaz is not unique to Pakistan. Shah Nawaz represents tens of millions of children spread over the Indian subcontinent and Saylani Welfare building depicts the face of aspiration of most of the elites of these countries in the guise of providing charity or help to the poor. Such philanthropists as Saylani Welfare grab and deprive the people of their rights and properties first and then make a little charity service to the deprived to make a show and hide their misdeeds that cause poverty of tens of millions of Shah Nawaz across the third world countries.
The writer is a retired Professor of Economics
