ADB has rededicated itself to reducing poverty in Asia and the Pacific. To ensure that all aspects of ADB operations are driven by poverty considerations, ADB's Board approved the Poverty Reduction Strategy.
In Pakistan, poverty declined until the 1990s. Since then, slow economic growth, low human capital - especially for women -- and poor governance have contributed to rising poverty. Today, about 32 percent of the population live below the poverty line.
Preliminary findings of ADB's Poverty Analysis in Pakistan show extreme pockets of poverty in rural Sindh and southern Punjab, whereas the whole province of Balochistan is poor by all indicators of poverty and development.
PRM held extensive stakeholder consultations at each of the four provincial capitals, culminating with the holding of a High Level Forum in Islamabad in April 2001.
The process will conclude with the signing of a Partnership Agreement with the Government in June 2002.
South Asia, one of the poorest subregions in the world, now has more than half a billion poor people. Poverty in South Asia is due primarily to
- low income
- low human development
- prevailing inequality
- social exclusion
- gender bias
Highlights of ADB's Poverty Reduction Strategy
In ADB's view, poverty is a deprivation of essential assets and opportunities to which every human is entitled. Everyone should have access to basic education and primary health services. Poor households have the right to sustain themselves by their labor and be reasonably rewarded, as well as have protection from external shocks.
Beyond income and basic services, individual and societies are also poor, and tend to remain so, if they are not empowered to participate in making decisions that shape their lives. Poverty is better measured in terms of
- basic education
- health care
- nutrition
- water and sanitation
- income employment and wages
- empowerment
The primary responsibility for finding solutions to poverty lies with countries themselves, but success will depend on the united efforts of Government and civil society, and on strong and sustained support from the international community.
ADB's poverty reduction strategy is anchored on
Pro-poor, sustainable economic growth
The lesson is clear: growth can reduce poverty by generating employment and incomes, and labor intensive growth can reduce it even faster. Thus, policies that encourage labor intensive growth are powerful pro-poor measures. These policies include
- the removal of market-distorting interventions, such as overvalued exchange rates
- import and/or export restrictions
- credit subsidies, and reliance on state-owned enterprises
Other policies that fall in this category are
- development of a conducive environment for the private sector
- programs aimed at increasing employment and income generating opportunities for women and other groups that may be outside the formal labor force, e.g. microfinance
Social Development
Economic growth can effectively reduce poverty only when accompanied by a comprehensive program for social development. Social development must be targeted. Human capital is the primary asset of the poor, and its development is of fundamental importance in the war against poverty.
Therefore, every country needs to have a comprehensive, national poverty reduction strategy. Pakistan is in the advanced stages of developing this. It will provide for
- adequate budgetary allocations for human capital
- targeting of basic services for the poor
- removal of gender discrimination
- effective population policy
- social protection
Good Governance
The quality of governance is critical to poverty reduction. Good governance facilitates participatory, pro-poor policies as well as sound macroeconomic management. It
- ensures the transparent use of public funds
- encourages growth of the private sector
- promotes effective delivery of public services
- helps to establish the rule of law
As the Asian crisis has shown, good governance is also essential to avoid or reduce the severity of economic crises in an era of increasing liberalization and globalization.
Learn more about ADB and Governance.
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