Pakistan

AFTER THE END OF British colonial rule on August 14, 1947, the Islamic Republic of Pakistan came into existence. The Indian subcontinent was divided into India and Pakistan. The new country started the nation-build-ing process amid problems like government deficits, a dependence on foreign aid, growing population, increasing defense expenditures, and military coups. In 1950, agriculture made up 53 percent of the Gross Domestic Product (GDP). Pakistan faced wars with India, ethnic strife, and a rising civil war in East Pakistan.

The 140 million people of Pakistan are among the poorest of the world, with two-thirds residing in rural areas. The population that falls below the poverty line is 44 percent. With a population growth of three percent, poor governance, low levels of literacy, and low spending on social sectors, the economic development of the nation is hampered. It is one of the few countries in the world where economic growth has slowed down, poverty incidence is increasing, and there is a declining trend in spending on development.

Pakistan presents the challenging situation of a poor nation with only 45 percent of the population having access to health services. The infant mortality rate is high, and 38 percent of children are malnourished. The decline in GDP growth rate is the immediate cause of increasing poverty in Pakistan. In the last decade of the 20th century, about 12 million people joined the population living below the poverty line.

However, Pakistan has shown signs of economic recovery in the early 21st century through foreign aid, entry into global markets, and various programs from international bodies and nongovernmental organizations (NGOs). The government is undertaking reforms, and its spending on development increased to four percent of its GDP in 2003, from two percent in the 1990s. Tax reforms have increased the government's revenue and effort has been made toward reforming various institutions. State-owned enterprises have been privatized. Agricultural trade has been liberalized, and incentive is given to cultivators. There has been an increase in industrial production, and the dependence on agriculture is diminishing. The foreign-exchange reserve is stable because of growth in exports and remittances by nonresident Pakistanis from other countries. Inflation has been contained and it has remained below five percent. Compared to an earlier number of 44 percent, presently 32 percent of the population live below the poverty line.

[Page 806]In June 2002, the Asian Development Bank (ADB) entered into partnership with the government in its poverty reduction strategy. Access to basic education and primary health services was stressed. The ADB provided about $3.7 billion for poverty eradication programs and helped in a major way to create the Khushhall Bank, benefiting about 200,000 households in remote areas. Assistance was given for rural modernization projects and development of the city of Karachi.

The United Nations Development Program (UNDP) in Pakistan is trying to achieve poverty eradication through its programs of sustainable livelihood, better governance, and female empowerment. The World Bank's Global Development Marketplace program created a novel program entitled Mazoori Majboori Nahin (“Labor Is Not Helplessness”), supporting projects to prevent disability, improve medical rehabilitation services, and promote public awareness programs. Financial support of $25,000 was given to each institution and individual to implement various projects. Through its Country Assistance Strategy, the World Bank is supporting the government's poverty reduction strategy. The World Bank will also double its assistance in 2008 to $1.5 billion. The Aga Khan Development Network is very active in northern areas of Pakistan through its projects relating to health, education, and rural development.

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