Income inequality and poverty in Pakistan.

In the article today, I will write about how I read Pakistan's more than 75-year history covering economic, social and political developments. I will deploy some theoretical advances to speculate the directions in which the country seems to be headed in the near term. The focus will be on the widening income gap between the very rich and the very poor. Data collected and published by the UN show income distribution in Pakistan to be more uneven in terms of the way it is distributed among the country's citizens. The UN uses two measures for estimating income inequality: the ratio of incomes of the lowest and the richest segments of the population and estimates of what is called the Gini coefficient.

By all measures, Pakistan performs poorly compared to other South Asian nations. For it, the ratio of the average income of the poorest 10% of the population to the richest 10% is 6.5. In other words, the average income for the richest is more than 16 times the average for the poorest. The ratio is 7.5% for Bangladesh, 8.6% for India and 11.1% for Sri Lanka. The ratio of the average incomes of the poorest 20% of the population to the richest 20% is 4.8% for Pakistan and Bangladesh, 5.5% for India and 6.8% for Sri Lanka. Gini coefficient - a measure frequently used to indicate the extent of inequality - is the worst for Pakistan: 29.6 as against 32.4 for Bangladesh, 35.7 for India and 38 for the world as a whole.

Why has Pakistan fallen so far behind the rest of South Asia? The question has a long answer but the one that is the most obvious is the absence of public policy aimed at improving income distribution. This is the case in particular in more recent times. In the earlier periods of Pakistan's almost 76-year long history, those responsible for making public policy twice made it their business to improve the lot off the poorer segments of the population. First, Field Marsha Ayub Khan who governed the country for 11 years, for 1958 to 1969, and then Zulfikar Ali Bhutto who was in power for almost six years, from 1971 to 1977, the state got engaged with some diligence in improving the lives of the poor. Ayub Khan's focus was on the rural poor while Bhutto took steps to help the poor in urban areas.

Called the high yielding varieties, or HYVs, new wheat plants were imported from Mexico while the Philippines was the source of high yielding rice during the Ayub period. The military president got directly involved in bringing the HYV technology to...