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Opinion, Social Issues

The Inequality that exists throughout in form of Poverty

November 28, 2020 by Eman Ahsan

A community-based condition that is distinguished by a certain minimum point of the standard of living expected for the place where one lives or the lack of resources mandatory for basic survival is called poverty. While on the contrary, inequality is the unfair opportunity provided to different social classes and different positions and statuses within a group or society.

 

Inequality and poverty, through their relationship with economic growth, influence each other explicitly and implicitly. The alliance between poverty and inequality is not at all straightforward. Poverty and inequality are systematically distinct concepts. They vary independently from each other, and to treat one as an indicator of the other can deceiving to such an extent. Both poverty and inequality have been closely linked with correlative concern in social-economic change. But poverty and inequality may vary and do not alter at the same pace, they possibly even alter in opposite directions. One should first properly identify which conception of poverty and which aspect of inequality one is stating so that it could not be difficult to make any important declaration about their relationship.

 

Reducing the rate of inequality and poverty, and stimulating equity, are important are major key macro-economic objectives. The income gap between the wealthy and underprivileged has been extending dramatically which has highlighted the fact that we need to understand the causes of inequality and poverty, and according to that observation we need to establish suitable strategies to overcome poverty and narrow the income gap.

 

There are sufficient ways in which poverty and inequality can be reduced. They may include a tax and benefitting system in which the government intervenes and introduce a progressive tax that supposedly involves taking more tax from people with more income, meaning that the tax increases in correspondence with the income. Other than this, the government can introduce policies to reduce unemployment which is also a major factor that affects the distribution of income which is in direct relation with poverty and inequality. Also, economic growth has a great impact on the poverty level because sustainable economic growth increases GDP per capita that affects the standard of living. But it isn’t necessary that it brings down the rate of poverty as there is a concern that economic growth widens relative poverty as it mostly benefits the wealthy.

 

The least unequal societies in Europe have been influenced remotely since they tend to have the lowest levels of poverty. This is fundamental because these Governments prefer to give importance to ensuring that there is an appropriate minimum income level and guaranteeing proper access to services and relevant minimum wage levels. Normally, they are very productive in redistributing wealth through tax and other arrangements. This suggests that political decisions determine which society to construct and how to diminish and handle poverty.

 

There has been appreciable progress globally in reducing poverty and in recent years there has been rapid growth in Asia, mainly Southeast Asia. Some countries in sub-Saharan Africa are moving towards progression, however, the sum of poor people surviving in this area is still growing. It was projected by The World Bank that by 2015 over 90% of the total poor population will populate in South Asia or sub-Saharan Africa. Most of the poor people in Africa are chronically poor, meaning that they experiencing deprivation for most or all of their lives and normally pass this onto their children.

 

As for Pakistan, there are hardly any studies that have attempted to do research and to estimate the long-run relationships between growth, poverty, and income distribution. Ali

and Tahir in 1999 covered the time period 1963/64 till 1993/94 and Saboor in 2004

covered the rural area of Pakistan for the period 1990/91 to 2001/02. Both use

ordinary least squares (OLS) and by using the pooled data from the Household Income and Expenditure Surveys (HIES) they evaluate the connection between the three variables. The estimation of OLS using pooled data seems problematic, however, since it fails to account for the variations in poverty, inequality, and growth across various regions of Pakistan.

 

According to the current worldwide survey, out of 188 countries in 2014 Pakistan is ranked at 147 which is extremely below par the terms of human development. Also, Pakistan is at a lower rank than its neighboring countries, for instance, India which is ranked at 130, Bangladesh at 142, Sri Lanka ranking at 73, and Iran at 69. Pakistan attained 0.538 points on the human development index (HDI) in 2014, which showed an improvement of 0.002 points from the previous year, but did not change the overall ranking. 

 

Year Poverty
1987–1988 13.0
1990–1991 17.26
1992–1993 22.40
1992–1993 25.50
1998–1999 35.2
2001–2002 34.5
2004–2005 23.9
2005–2006 22.3
2007–2008 17.2
2010–2011 12.4

 

References

Brigitte Rohwerder. “Defining Poverty, Extreme Poverty, and Inequality.” GSDRC. October 06, 2016. Accessed November 08, 2020. https://gsdrc.org/topic-guides/poverty-and-inequality/measuring-and-analysing-poverty-and-inequality/defining-poverty-extreme-poverty-and-inequality/#:~:text=Inequality is concerned with the line (McKay, 2002).

Scheffler, Samuel. “Is Economic Inequality Really a Problem?” The New York Times. July 01, 2020. Accessed November 08, 2020. https://www.nytimes.com/2020/07/01/opinion/economic-inequality-moral-philosophy.html.

“Income Inequality and Poverty.” OECD. Accessed November 08, 2020. https://www.oecd.org/social/inequality-and-poverty.htm.

Naschold, Felix. Why Inequality Matters for Poverty. Inequality briefing. London: Odi.org.

“Inequality | Poverty Eradication.” United Nations. Accessed November 08, 2020. https://www.un.org/development/desa/socialperspectiveondevelopment/issues/inequality.html.

Blackwell, Angela Glowel. “Income Inequality.” The New York Times. August 02, 2014. Accessed November 08, 2020. https://www.nytimes.com/2014/08/02/opinion/income-inequality.html.

Beteille, Andre. “Poverty and Inequality.” JSTOR. October 18-23, 2003. Accessed November 8, 2020. https://www.jstor.org/stable/4414161?seq=1.

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