Demographic and Economic Aspects of Poverty: A Case Study of Multan District, Pakistan

Pakistan Economic and Social Review, June 30, 2020 | Go to article overview

Demographic and Economic Aspects of Poverty: A Case Study of Multan District, Pakistan


Byline: MUHAMMAD RAMZAN SHEIKH, MUHAMMAD HANIF AKHTAR, MUHAMMAD MUZAMMIL ASGHAR AND ASAD ABBAS

Keywords: Poverty, Households, Punjab, Pakistan

I. INTRODUCTION

The problem of poverty is as old as economic development. Poverty influences the economic condition of society adversely. Poverty limits the abilities and worsens the health of people as they do not contribute in the workforce effectively. Low levels of income lead to bad health, malnutrition and low education levels which lessen economic efficiency and performance (Dasgupta and Ray, 1987). In other words, the countries have to face many economic and political issues when its larger proportion of the population is poor, and the government is compelled to spend more to eradicate poverty. The poor have less physical and monetary assets, fewer investment opportunities, limited access to credit facilities, therefore they are unable to finance their children's education. They have more children as a source of old age financial security and resultantly these factors cause per capita growth to fall (Todaro and Smith, 2014).

Demographic variables are important to analyze the household poverty and these may also influence the economic growth of a country. The countries having high fertility rates and low child mortality rate lead to high youth dependency rate which in turn lowers the per-capita resources for investment in human capital, infrastructure, and economic growth. In these circumstances, it is difficult for the households to tackle the issues arising from poverty. Economic growth and household poverty are also influenced by adult mortality rates. Due to severe and fatal diseases, terrorism and armed conflicts, working age population of the countries declines which consequently upsurge the incidence of poverty not only at household level but also as whole at national lavel by boosting age dependency burdens and reducing the potential for economic growth (Buvinic et al. 2009).

According to the annual report of United Nations Development Program on poverty (2017), 650 million people were suffering from extreme poverty and about 16% of them lived in developing countries, while another 800 million people were at risk of falling back into poverty because of ethnicity, gender, and lack of opportunities where they live. Pakistan is also facing the problem of poverty as the estimates show that a fraction of population is living under a minimum standard line. Over the last decade, the incidence of poverty was observed a decline at national level because incidence of poverty had decreased from 50.4% in 2005-06 to 24.3% percent in 2015-16. The incidence of poverty was about 12.5% and 30.7% in urban and rural areas respectively in 2015-16. The decline in poverty was more evident in urban areas than those of rural areas.

The reasons for this decline were poverty alleviation program like "Benazir Income Support Program" (BISP), reasonable political stability, peace, reduction in terrorism, persistent rise in growth rate of 1.7% in 2008-09 to 5.5% in 2015-16 and inflows of remittances 1.

Poverty trends to vary with location to location. In developing countries, most of the population live in rural areas and connected with the agriculture sector to sustain themselves. The agriculture sector in rural areas plays a significant role in the economic development of rural areas. The conventional agrarian sector in the rural economy has been characterized in most developing economies, by dominant small land possession class, sharecroppers, and tenants that are suffering from poverty (Chaudhry et al. 2009). Pakistan's 63.6% population is living rural areas and incidence of poverty in these areas is estimated at 30.7% in 2015-16 2.

Multan district is located in the Southern Punjab of Pakistan. Multan district accounts for 2.28% of the country population. Most of the population of Multan district is residing in rural areas (56.62%) where people are facing the severe problem of poverty due to a lack of educational and health infrastructure, lack of employment opportunities etc. …

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