Poor and the rich in Pakistan are living ‘poles apart’: UNDP report

The report highlighted that Pakistan’s tax system does not reduce inequality in the country due to the low direct taxation, which is under 20 percent. The report stated that in Pakistan the burden of taxes rises gradually with income, making the country’s tax system only mildly progressive.

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The UN Development Programme’s (UNDP) recent National Human Development Report (NHDR) for Pakistan focuses on the exorbitant inequality in the country.

The report titled, “The three Ps of inequality: Power, People, and Policy” are the main concepts upon which the report is built.

According to the report, the difference in the standard of living between the rich and the poor of the country is so stark, as if they are living ‘poles apart’.

The value of privileges enjoyed by the most powerful elite of the country amounts to Rs.2660 billion or $17.4 billion in 2017-18. Overall, the richest 20 percent of Pakistanis hold 49.6 percent of the national income, compared with the poorest 20 percent, who hold just 7 percent.

“…diverting just 24 percent of these privileges to the poor could double the benefits available to them. To alleviate inequality, redistribution along these lines is a crucial first step,” stated the report. It would cover the expenditure of the government on the social protection programs the poor of the country need.

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According to the report authored by Dr. Hafiz A. Pasha, the richest 1 person of Pakistan hold 9 percent of national income in 2018-19, and the poorest 1 person in contrast holds only 0.15 percent of the national income of the country.

The solution to such a stark difference according to the report is, “To reduce income inequality, the real per capita income of the poorest 40 percent of Pakistanis must grow at a rate that exceeds the income growth rate of the total population.”

The middle class of Pakistan according to the report has shrunk over a decade from 42 percent in 2008-09, to 36 percent in 2018-19, which is owed to inflation, unemployment among willing and able workforce, and decreasing purchasing power parity.

The most inequality exists in all Pakistan’s provinces, Sindh, Punjab, KPK, and Balochistan, in that order. However, KPK according to the report has shown substantial human development, while Balochistan is the province that lags behind all the provinces in its HDIs.

Read More: Hafiz Pasha: PTI is pushing Pakistan into abject poverty

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