MY previous article on the rise of Pakistan’s middle class (which appeared in this newspaper on March 23), elicited a surprising response. It was the most ‘face-booked’ and ‘tweeted’ of all my op-eds since last year, and I received numerous comments via text message and e-mail as well.

Overwhelmingly, the response was euphoric and celebratory in nature, with many friends, especially from Karachi, suggesting that I had finally “seen the light”, and hoping that this would mark the start of more “positive” thinking and writing from me! Indeed, the purpose of the article was to balance the narrative, and tell a story which also needed to be told: that the only way to explain the consumption and affluence visible in some parts of Pakistan was by the rise of a sizeable middle class. However, the attempt to balance the narrative may have an unintended consequence. It could reinforce the complacency that has been exhibited — and articulated — by senior government figures and policymakers, regarding the ‘true’ state of the economy and the socioeconomic circumstances of most Pakistanis.

This complacency is set to increase further if reports regarding the results of the latest official poverty assessment, as yet unreleased, are true — that Pakistan is likely to record another sharp fall in the poverty headcount ratio, from the controversial figure of 17.2 per cent that was estimated in 2008.

In the wake of some recent disturbing developments and findings, it is important to re-balance the narrative. While it is important to recognise the emergence of a large middle class in Pakistan, it is imperative not to forget that an unacceptably large number of our countrymen are falling through the cracks.

The first of these ‘counter narratives’ pertains to rising food insecurity and overall vulnerability in the country. While estimates of the size of the middle class are open to methodological questioning, on the other side of the equation, the estimates of the food-insecure and vulnerable population are perhaps relatively more ‘firm’. An UN inter-agency assessment mission, for example, had placed the food-insecure population in Pakistan at 77 million people — in 2008, at the start of the global food crisis. It is almost certainly likely to be the case that this cohort has grown in number since, given that food inflation has totalled 75 per cent between 2008 and 2011.

The second of these comes from the findings of the official National Nutrition Survey, 2011 (NNS, for short). While the results of the survey have not been officially released, a reader associated with this exercise has shared some of the grim findings. The two most important ones include:

— An across-the-board increase in malnutrition in children, with 67 per cent of this cohort falling in this category, across the whole of Pakistan (mothers have fared poorly as well);

— An across-the board increase in ‘stunting rates’ in children in Pakistan, with Sindh faring particularly poorly on this score.

According to this researcher, given that there are no discernible patterns in the findings and the results are fairly evenly distributed across different regions and sub-groups (male/female, rural/urban, by province), the most plausible explanation for the results is that “the underlying cause is poverty, which according to this survey would be very pervasive and extant”.

The third disturbing development relates to the re-emergence of polio in the country, with Pakistan amongst three countries in the world where this deadly debilitating disease has made a comeback. While this is perhaps more related to conflict than directly to poverty, it does underscore an increase in vulnerability for large sub-groups in Pakistan, not a decrease.

Finally, and perhaps the most depressing: the recent suicide by not one, but two school-going teenagers, in quick succession and in separate events, but with ostensibly one common factor — the root of their desperation was largely economic in nature, going by media accounts.

These four developments should be enough to focus our minds on how successive policymakers and policies are failing Pakistan, even as a sizeable middle class takes root. The conundrum of the emergence of Pakistan’s middle class even as the economy has weakened in terms of a long-run, secular trend is perhaps explained quite significantly by the atrophying of the state and its institutions — the ability to collect taxes, duties and other dues (such as utility bills), and in more broad terms, by enforcing obligations — and not by the success of any deliberate economic policy per se.

In addition to the foregoing, given the context of the speech from which my article on the middle class was adapted, the downside of the consumption boom was not touched upon. The sharp and sustained pressure on the balance of payments is partly explained by a steep rise in imports of ‘non-essential’ products to sustain the lifestyle wants of the affluent in Pakistan.


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Comments (4)

Khalid Ikram
April 6, 2012 10:05 pm
Good, balanced article. A couple of comments. Let's look at the provincial performance. Based on the PIHS for FY's 99 and 2002, and PSLM for FY's 2005, 2006, and 2008, World Bank staff calculates that poverty at the national level increase significantly in FY 2002. This increase was driven by poverty increases in Sindh and Balochistan, while the pace of poverty reduction was stable in the Punjab and KP Poverty has declined since then at the national level, but poverty in sales and Balochistan has continued fluctuating. First, the volatility in Sindh and Balochistan correlates with the growth rate of agricultural GDP, particularly the GDP of main crops; poverty rates in the Punjab and KP did not show any clear linkage with the rise and fall of the growth rates of major crops. Second, the Punjab and KP are the main beneficiaries of the surge in remittances from about $1 billion in FY 97 to $8 billion in FY 2009. For example, in FY 2008, the sum of foreign and domestic remittances on average amounted to more than 20% of household expenditure per-adult-equivalent in KP and about 12% in the Punjab, compared with 2.5% in Balochistan and less than 1% in Sindh. I wonder how much of the surge in middle-class consumption expenditure is really what we see in the Punjab, Karachi, and to some extent in Peshawar. All this is not negligible by any means, but it does mean that Balochistan and rural Sindh might be particularly bad off. There also are likely to be bad pockets in the Punjab, and especially southern Punjab, from which much immigration has not taken place and therefore is unlikely to be a major beneficiary of remittances.
Hari
April 6, 2012 8:55 pm
Wow...I see hope. I have read quite some articles over the years from Pakistani economists in the newspapers and always thought they missed the point or the issue in the very first place. Most of the economists I am referring to seemed to disregard the facts/realities and tried to pander to the thoughts and blessings of powers who mattered. This article and the previous ones has clearly elucidated the reality and since these cant be denied am sure well thought of necessary steps to correct the course will be put forth and implemented. I am pleasantly surprised these thoughts/article is written by a former government adviser. Hope to see some realistic and practical solutions suggested and executed.
Dr Meekal Ahmed
April 6, 2012 2:00 pm
Very good, as usual Sakib. You could have also mentioned rising income inequalities -- assuming that the data is available.
Morfi
April 6, 2012 12:22 pm
Having been a keen reader of your articles here, I was actually surprised at the content of your previous piece, which did not seem to capture reality and seemed pointless in the end…. This sequel has put things into much better perspective, and thank-you for that. In trying to look for positives, one should not forget the realities and how sustainable or ‘real’ those positives are. The govt does need, direly so, active policies for economic development, which have been conspicuous by their absence.