econmomic final report!!!

8/8/2019 Econmomic Final Report!!!

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PROJECT REPORT

POVERTY

SUBMITTED TO:Mr. Shoaib Malik

SUBMITTED BY:

Aqsa Khalid

Moonam Arshad

Sadaf Noor

Sheikh Waqas

TABLE OF CONTENTS

Introduction.. 4Background ... 4

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Causes of poverty. 4 Health and education

5 Political instability

5Economic

concerns............6WEALTH DISTRIBUTION IN PAKISTAN

Storage of basic needs 6

Effects of Poverty 6 Health

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Education 6

Violence7

Measures to reduce poverty 7 Aid

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Good institution.. 8

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INTRODUCTION

Poverty is the condition in which a person or community isdeprived of or lacks the essentials for a minimum standard ofwell-being and life.Around the world, in rich or poor nations, poverty has alwaysbeen present. Today most nations are facing Inequalitythegap between the rich and the poor.Poverty in Pakistan is a growing concern. Although the middle-class has grown in

Pakistan to 35 million, nearly one-quarter of the population is classified as Poor

BACKGROUNDEconomically, Pakistan was a very poor and predominantly agricultural country at

the time of its independence in 1947 from British South Asia. During its first four

decades, Pakistan's economic growth rate was better than the global average.

Historically, Pakistan's overall economic output (GDP) has grown every year

since a 1951 recession. Despite this record of sustained growth, Pakistan's

economy had, until a few years ago, been characterized as unstable and highly

vulnerable to external and internal shocks.

CAUSES OF POVERTY IN PAKISTAN

Causes of poverty mainly concern reasons behind the low wealthand productivity of the poor or, conversely, the shortage andinflation of the goods they consume.

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The unwillingness of Pakistani government to give full-fledged property rights of land to their tenants is cited as thechief obstacle to development. This lack of economicfreedom inhibits entrepreneurship among the poor.

New enterprises and foreign investment can be driven awayby the results of inefficient institutions, notablyCORRUPTION, weak rule of law and excessive bureaucraticburdens.

Costly barriers favor big firms at the expense of smallenterprises, where most jobs are created.

Lack of opportunities can further be caused by the failure ofgovernment to provide essential infrastructure..Opportunities in richer countries drive talent away, leadingto brain drains

HEALTH AND EDUCATION

Pakistanis suffer a lot due to Poor health and education as itseverely affects productivity. Inadequate nutrition inchildhood undermines the ability of individuals to developtheir full capabilities. Lack of essential minerals such as

iodine and iron can impair brain development. Billion people(one-third of the total global population) are affected byiodine deficiency.

Similarly substance abuse, including for example alcoholismand drug abuse can consign people to vicious povertycycles. Infectious diseases such as Malaria and tuberculosiscan perpetuate poverty by diverting health and economic

resources from investment and productivity; howeverilliterates are the ones who suffer the most.

POLITICAL INSTABILITY IN THE COUNTRY

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War, political instability and crime, including violent gangsand drug cartels, also discourage investment.

Terrorism, suicide bomb blasts all destabilize the economicsystem.

Law and order situation in the country, fight over rule amongthe political leaders, rich becoming richer and poorbecoming poorer

Foreign investors are reluctant to invest in Pakistan, keepingin mind its political situation and downfall in the economy.

ECONOMIC CONCERNS

WEALTH DISTRIBUTION IN PAKISTANWealth Distribution in Pakistan is highly uneven, with 10% of the population

earning 27.6% of income.]According to the United Nations Human Development

Report, Pakistan's human development indicators, especially those for women,fall significantly below those of countries with comparable levels of per-capita

income. Pakistan also has a higher infant mortality rate (88 per 1000) than the

South Asian average (83 per 1000)

Factors affecting povertyDemand & Supply conditions Demand and Supply conditions of goods and services are

definitely affected due to shortage of goods and resources.

The situation is very evident presently in our country, asthere is shortage of sugar and other resources. As demandof sugar is greater and supply high. When there is shortage,prices of goods rise further, making consumption moreexpensive for the ones already who cant afford. . Rises inthe costs ofliving make poor people poorer. Poorpeople spend a greater portion of their budgets on

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food than richer people.As a result poor households andthose near the poverty threshold can be particularlyvulnerable to increases in food prices.

INFLATION Similarly due to price instability, prices of goods and services

rise that causes INFLATION in the economy and which iscurrently the situation in our country. Prices of petrol, cngand other commodities are raising everyday unconditionally.Due to increased price levels the poor can hardly afford whatthey previously could afford.

BUSINESS CYCLES Shocks in the business cycle affect poverty rates, increasing

in recessions and declining in booms.(ADD A DIAGRAM)

HIGH INETEREST RATESThese generally reduce the purchasing power of theconsumers resulting in the decrease in consumption of goodsand services. Pakistanis already facing poverty and in such ascenario high interest rates to them will further make adesirable standard of living un achievable .

UNEMPLOYMENTHigh levels of unemployment are a key factor affecting poverty.As people dont find jobs, it is harder to run their families, thusthey are deprived of the basic necessities and luxuries of life.

Younger generation who are willing but unable to find jobs getfrustrated which results in negativity and they indulge in crimeactivities

CULTURAL FACTORS

Cultural factors, such as discrimination of various kinds, cannegatively affect productivity such as age discrimination,

stereotyping,

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gender discrimination

racial discrimination,

caste discrimination.

SOCIAL CONCERNSGENDER RIGHTS AND OVER POPULATION IN PAKISTAN

Women in Pakistan suffer from poverty of opportunities throughout their lives.

Female literacy in Pakistan is 43.6% compared to Male literacy at 68.2%, as of

2008. In legislative bodies, women constituted less than 3% of the legislature

elected on general seats. Overpopulation and lack of access to birth control

methods. Population slows or even become negative as poverty is reduced due to

the demographic transition.

Environmental Issues

Environmental problems in Pakistan, such as erosion, use of agro-chemicals,

deforestation etc. contributes to rising poverty in Pakistan. Increasing

pollution contributes to increasing risk of toxicity, and poor industrial

standards in the country contribute to rising pollution.

Feudalism

Pakistan is home to a large feudal landholding system where landholding families

hold thousands of acres and does little work on the agriculture them. They

enlist the services of their serfs to perform the labor of the land. The

landlords' position of power allows them to exploit the only resource the poor

can possibly provide their own labor.

Poverty and the rise of Islamic fundamentalism

The rise of poverty in the country has been correlated with the rise of Islamic

Fundamentalism in many parts of the country.Madrassa education is offered on

the pretext that they provide better education than the other schools. They study in

a religious environment that has been radicalized by the world-sponsored

exposure of the "Holy Jihad" in Afghanistan.

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EFFECTS OF POVERTY

HEALTH

One third of deaths - some 18 million people a year due topoverty-related causes, most of them women and

children, have died as a result of poverty since 1990.Those living in poverty suffer disproportionately from hunger or

even starvation and disease further suffer lowerexpectancy. Every year nearly 11 million children living inpoverty die before their fifth birthday.

EDUCATION

Research has found that there is a high risk of educationalunderachievement for children who are from low-incomehousing circumstances. This often is a process that beginsin primary school for some less fortunate children. Forchildren with low resources, the risk factors are similar toexcuses such higher levels of teenage pregnancy, and theeconomic dependency upon their low income parent orparents.

VIOLENCE

Areas strongly affected by poverty tend to be more violent. Inone survey, 67% of children from disadvantaged innercities said they had witnessed a serious assault, and 33%reported witnessing a homicide. MANY have been found tobe victims of violence, compared to 32% in Washington,DC (mean income for a household: $40,127).

DEPRESSION

Poverty affects peoples lives on all levels; bumping into the issue of lack of

money is incredibly stressful and grinds people down. People with disabilities are

more likely to be poor and more likely to suffer from depression. Lastly, we live

in a culture where success is measured by how much we earn. People with low

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income are automatically assumed to be unsuccessful. This impacts their self

esteem.

INCREASE IN CRIME RATE

Due to depression and frustration individuals indulge themselves in crime

activities, thefts e.t.c or even get dependant in drugs and alcohol thinking it would

reduce their frustration. Using drugs destroys a nation socially as well as morally.

MEASURES TO REDUCE POVERTY

Extending property rights protection to the poor is one of themost important poverty reduction strategies PAKISTANInation could take

Investments in human capital, in the form of health, are needed for economic growth.

Human capital, in the form of education, is an even moreimportant determinant of economic growth than physicalcapital.

It was the technology of the steam engine that originallybegan the dramatic decreases in poverty levels. Cell phone

technology brings the market to poor or rural sections. Withnecessary information; remote farmers can produce specificcrops to sell to the buyers that bring the best price. Suchtechnology can also make financial services more accessibleto the poor.

AID

Aid in its simplest form is a basic income grant, a form ofsocial security periodically providing citizens with money

Aid from non-governmental organizations (NGOs) may bemore effective than governmental aid; this may be becauseit is better at reaching the poor and better controlled at thegrassroots level.

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One of the proposed ways to help poor countries has beendebt relief.

Immunization campaigns for children, such as against polio,diphtheria and measles have save millions of lives

GOOD INSTITUTE

Pakistan is in dire need of efficient institutions that are notcorrupt and obey the rule of law make and enforce goodlaws that provide security to property and businesses as well

as individuals.

Funds from aid and natural resources are often diverted intoprivate hands and then sent to banks overseas as a result ofgraft. If Western banks rejected stolen money, says a reportby Global Witness, ordinary people would benefit.

Supporting higher growth and greater stability of income and employment in ruralareas by focusing on

Getting the policy and institutional framework right; Increasing agriculture productivity and diversification by moving to

market-based agricultural prices, and expanding the role of the privatesector in storage and agriculture support services;

Increasing non-farm employment opportunities by developingagribusiness for exports.

Promoting rural-urban linkages by improving communications, particularlyrural roads;

Expanding rural economic infrastructure, especially for irrigation,

drainage, and water resource conservation and management; Promoting financial intermediation, and enhancing access to credit in the

rural areas Investing in infrastructure in areas where incidence of poverty is high,.

Liberalization in the international textile trade has already yielded

benefits for Pakistan's exports, and the country also expects to profit

from freer trade in agriculture.

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