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NOVEMBER 2007

^ISSUES:

• The wretched of the earth

• Ill-planned cities are ticking time bombs

• World Population Becomes More Urban Than Rural

• The poverty controversy: what are the real facts?

• In search of clean water

• Development and GDP rates

There’s an entertaining book about the spread of nondescript products and services by George Ritzer, called The Globalization of Nothing (2004). Ritzer, of McDonaldization of Society fame, argues that a main conflict in the contemporary world is taking place between the globalisation of nothing and the glocalisation of something, and we know what he means. Globalisation is the only game in town, and if you want to retain a bit of local substance, ownership, character or whatever in what it is that you are doing, consuming or producing, opt for the glocal rather than isolation, which is just about impossible anyway.

Hm. Sensible words, but something seemed to be missing. Literally. There are, simply, a lot of people missing from this and similar (but usually less readable) accounts of the consequences of globalisation. A short while after perusing Ritzer’s really nice book, I came across a book which takes on globalisation from the opposite direction, speaking about a global trend which does create some homogeneity across the continents (nothing?), but which has few direct points of contact with the multinationals, the UN, the cultural tourist, the mall and all the other stock characters of the globalisation literature. That book was Mike Davis’ The Planet of Slums (2006). During this or next year, for the first time in human history there will be more urban than rural people in the world. The urban population of the earth is now larger than the entire global population was when I was born. (Blimey!) And most of the urban growth takes place in the countries that have the least to offer their new inhabitants. Some cities in the rich countries grow somewhat, but in a slow and fairly controlled way. The growth in poor cities, on the contrary, lacks historical precedent. Between 1800 and 1910, the population of London grew by a factor of seven. This sounds dramatic, but in a much shorter period – from 1950 to 2000 – the population in cities like Dhaka, Kinshasa and Lagos has increased forty times! Good thing, one might be forgiven for thinking (or perhaps not), that they lack efficient methods for extracting parking fines.

Some more examples: Buenos Aires and Rio de Janeiro were large cities already fifty years ago, with 4.6 and three million inhabitants, respectively. Today, both have around 12 million inhabitants. Cairo has grown, in the same period, from 2.4 to 15 million, Delhi from 1.4 to more than 18 million, Seoul from one to 22 million. African cities like Nouakchott and Mogadishu, which were just oases or trading centres a few decades ago, are now home to millions. The Congolese city Mbuji-Mayi, which I hadn’t heard about before reading Davis, has grown from next to nothing to two million in the last decade. Urban slums emerge, especially in China and parts of Africa, in areas where there were initially no urban settlement at all – gigantic slums without a city proper. As you are reading this, huge swathes of land are growing into enormous, continuous, permanently makeshift settlements of cardboard and aluminium sheets, with millions upon millions of inhabitants but scarcely any plumbing, electricity or police protection. Davis mentions the five hundred kilometre stretch from Rio to São Paolo (pop. 37m.), the central Mexican highlands around Mexico City (estimated to contain half of Mexico’s population, 50m., by 2050), parts of China and the coastal strip from Benin City via Lagos to Accra, which is predicted, in a few years’ time, to contain the largest concentration of poverty in the world.

People move to town for a variety of reasons. Traditionally, a main cause, or cluster of causes, has been a combination of relative overpopulation in rural areas and possibilities for work. The ”bright lights” hypthesis also had its supporters – people swapped boredom, or so they thought, for excitement. Such explanations may still hold true in parts of China and India, but not in Africa or Latin America, where urban economies have been in decline for decades, at the same time as the urban population has grown steadily. An explanation would have to take into account factors such as war, depleted resources as a result of population growth or ruthless modernisation (the construction of motorways and resorts for the rich etc.), along with a dream of prosperity and work which becomes increasingly unrealistic as the years go by. The authorities in poor countries do little to address the slum problem, but the private sector is in. However horrible living conditions may be in the slums of Kolkata (Calcutta) and Lima, the inhabitants usually have to pay rent to a slumlord. Even if they share a latrine with 93 persons and a standpipe with 85, and live in higher density than people have at any earlier time, they have to pay. Even a dilapidated shed under a highway bridge has a price. Often, slumdwellers have to pay for protection too, since the police only enter the slum to collect bribes.

The main headache for government and comfortably-off people concerns how to control and contain the slum population, in order to prevent them from spreading, with their rags and stink, into prosperous quarters and commercial centres. In many colonial cities, high-ranking military officers, apparatchiks, politicians and businessmen have joined expatriates from rich countries in taking over the lush residential areas left by the colonials. Increasingly, such suburbs of affluence and freshness are becoming gated communities where nobody is allowed to enter without permission. In parts of Cape Town, electrical fences have now replaced human guards. New forms of apartheid-like exclusion develop as a result of rich people’s need to be left at peace with their wealth. They have effectively divorced themselves from greater society in their cosmopolitan, transnational homes.

Sometimes, governments try to alleviate the slum problem by bulldozing the slums, but of course the slums re-emerge, often the very next day, there is nowhere else to go. A more progressive policy, attemplted in Cairo, Delhi, Bombay and Mexico City, consists in building permanent residential areas for poor people on the outskirts of the city, but as Davis points out, it slumdwellers never actually move into these flats; others always seem to get in first.

Like Engels writing about the English working class in the 1850s (or Orwell doing the same thing eighty years on), Davis never succumbs to the temptation of romanticising life in a slum. No intimation is given of the quiet charm of slum life, where solidarity grows amidst shared poverty. On the contrary, living in a slum is – and Davis says so – fundamentally unpleasant. Slums are crowded, filthy and smelly places. They are always located in the least attractive areas; next to a polluted river, a noisy road, a rubbish dump; in a mosquito-infested swamp or a windy dustbowl. How do slumdwellers survive at all, given that only a minuscule minority have formal work? The answer is the informal sector (a useful term coined by Keith Hart in the early 1970s), that is unregistered economic activity. Some make a living by selling each other services, from haircuts and sex to transport and protection; some run little workshops producing tourist trinkets; some grow cannabis or distil alcohol; and some make a living from the rubbish of the rich, be it old furniture or edible things. Many, not least children, are informally employed by large enterprises. They survive, but just barely.

The distance between life in the slums and the rich suburbs grow. The rich have their health centres and shopping malls, their fast food restaurants and private schools (in Ritzer’s terms, they have an abundance of nothing, but try to say that to a slumdweller!), and in the weekends, they can whisk out to their country houses or resorts on new highways which are built on land that might have been used for other purposes. They are the beneficiaries of a globalisation and a standardisation of lifestyles which liberates them from their own countries. (And, speaking from a global perspective, they are us.) In substantial parts of the world, it is now evident that nation-building and development ”for the whole people” was something one tried to achieve in the 20th century. One now realises that the project was impossible.

The future for at least a billion persons, maybe many more, lies in one of these slums. In Kenya, an incredible eighty-five per cent of the population growth takes place in the seething slums of Nairobi and Mombasa. So it is, to quote an old favourite. Don’t believe for a second that global capitalism will eventually pull up the downtrodden and help them to achieve what in NGO newspeak is called ”a dignified life”. The slums are growing faster than the GNP of any country. Their inhabitants are human driftwood, superfluous matter, human debris.

(By Thomas Hylland Eriksen http://folk.uio.no/geirthe/Davis.html)

The city is undergoing a ‘huge social revolution’, which, if not taken care of, would lead to rising conflicts and divisions mainly because the planners’ schemes were devoid of social and environment considerations, said Arif Hasan, an eminent city planner. He was speaking at a seminar titled “Mental health in a changing world, the impact of culture and diversity” organised by the Pakistan Association of Mental Health (PAMH) at the Expo Centre.

He warned that, if the nature of social change was not understood or failure of public education was not addressed, there would be chances of rising conflicts and social explosions.

Talking on “social impact of urbanisation”, he said that the migration towards cities was the result of what he called ‘cash economy,’ leading to mobility. This cash economy has also caused selfishness. He said that, owing to failure on the part of the state to address issues of poverty, unemployment and marginalisation, this migration was compounding the problem of housing, employment and transport in cities.

He said that around eight million people live in slum areas in the city, who are in a ‘constant state of fear’ of evictions while 98 per cent of the population lives below the poverty line. He said that, since 1992, around 51,000 houses have been bulldozed in the metropolis, leading to displacement of four million people.

Hasan said that the initiation of the Lyari Expressway project caused evacuation on a large scale which resulted in the loss of education of 36,000 children. Referring to interviews of around 100 young couples recently, he said 80 per cent of them wanted to leave the country because of injustices, inability to own houses, lower standards of education for children, lack of entertainment facilities, family disputes and terrible environmental problems. He said that joint the family system was shrinking as several members of a family now earn money which led to jealousy, besides this, the attitude of working women has also adversely affected the joint family system.

Hasan added that only those cities have overcome their problems where strong political and governance institutions existed.

Dr Manzoor Ahmed, while talking on the “impact of culture and diversity on human behaviour”, said that there is a lack of acceptance for democracy, justice and human rights in our society because ‘we are living in constant fear of loosing our identity’. According to him, another reason behind this phenomenon was our particular social, moral, economic and religious structure, which commanded us to obey orders.

Dr Pirzada Qasim Siddiqui, Vice-Chancellor, University of Karachi, said that health and education has never been a priority of our policy makers. He said that human rights violations and denial of justice have further aggravated the problems, leading to mental disorder.

Dr Haroon Ahmed, head of PAMH, said that a lack of predictability and the rule of law was causing anxiety and conflicts in the society.

(By Imtiaz Ali, The News, 26/11/2007)

There’s no big countdown billboard or sign in Times Square to denote it, but Wednesday, May 23, 2007, represents a major demographic shift, according to scientists from North Carolina State University and the University of Georgia: For the first time in human history, the earth’s population will be more urban than rural.

Working with United Nations estimates that predict the world will be 51.3 percent urban by 2010, the researchers projected the May 23, 2007, transition day based on the average daily rural and urban population increases from 2005 to 2010. On that day, a predicted global urban population of 3,303,992,253 will exceed that of 3,303,866,404 rural people. 

Though the date is highly symbolic, the researchers – Dr. Ron Wimberley, Distinguished Professor of Sociology at NC State; Dr. Libby Morris, director of the Institute of Higher Education at the University of Georgia; and Dr. Gregory Fulkerson, a sociologist at NC State – advise avoiding the urge to interpret this demographic transition to mean that the urban population has greater importance than the rural.

Urban and rural populations, they say, rely heavily on each other.

Cities refine and process rural goods for urban and rural consumers. But if either cities or rural areas had to sustain themselves without the other, Wimberley says, few would bet on the cities. 

“As long as cities exist, they will need rural resources – including the rural people and communities that help provide urban necessities,” he said. “Clean air, water, food, fiber, forest products and minerals all have their sources in rural areas. Cities cannot stand alone; rural natural resources can. Cities must depend on rural resources.”

In the United States, the tipping point from a majority rural to a majority urban population came early in the late 1910s, the researchers say. Today, 21 percent of our country is rural although some states – Maine, Mississippi, Vermont, and West Virginia – are still majority rural. In North Carolina, a rural majority held until the late 1980s.

Although rural natural and social resources are necessary for urban people and places, the researchers say rural people do not fare well relative to their urban counterparts. Maps of U.S. quality-of-life conditions show that poverty and low education attainment are concentrated in rural areas – especially the rural South – where the nation’s food, water and forest resources exist.

Over much of the globe, rural poverty is much worse than in the United States. Findings by the International Fund for Agricultural Development show that 1.2 billion of the world’s people live on less than what a dollar a day can buy. Globally, three-fourths of these poor people live in rural areas. 

The researchers add that, in addition to having a highly disproportionate share of the world’s poverty, rural areas also get the urban garbage. In exchange for useable natural resources produced by rural people for urban dwellers, rural places receive the waste products – polluted air, contaminated water, and solid and hazardous wastes – discharged by those in cities.

Wimberley says that May 23, 2007, marks a “mayday” call for all concerned citizens of the world. “So far, cities are getting whatever resource needs that can be had from rural areas,” he said. “But given global rural impoverishment, the rural-urban question for the future is not just what rural people and places can do for the world’s new urban majority. Rather, what can the urban majority do for poor rural people and the resources upon which cities depend for existence? The sustainable future of the new urban world may well depend upon the answer.”

(Source: http://news.ncsu.edu/releases/2007/may/104.html)

Some controversies in this country never seem to die down and are always with us. A case in point is the controversy over the issue of what constitutes the real level of poverty in Pakistan. The debate over this issue has been going on for years.

The government says that the number of people living below the poverty line has dropped significantly in recent years from 34 per cent of the population in 1999 to 24 per cent today. Independent analysts, however, claim that the poverty level has not gone down and that the number of people living below the poverty line is still around 34 per cent.

Based on Pakistan’s current population of an estimated 160 million, the government figure of 24 per cent translates into more than 38 million people living below the poverty line. That’s a huge number and one that poses a major challenge for our economic policy makers.

As in the case many other developing countries, the government uses an income yardstick of a dollar-a-day per person to define poverty. But this is a very misleading figure in Pakistan’s case.

For one thing, there has been a sharp decline in the rupee’s value against the dollar over the last 15 years. Back in the early 1990s a dollar was worth around 30 rupees. Today, it is worth 60 rupees. So when one says that a person’s income is a dollar a day today, it translates into an income of 60 rupees a day.

Based on the census figure of an average of 6.7 people per household in Pakistan, this income of 60 rupees a day person translates into a household income of Rs 402 per day (60 multiplied by 6.7), or Rs 12,060 per month.

More than 60 per cent of Pakistan’s population still lives in the rural areas, where many people grow their own vegetables, grains and fruit and keep livestock to meet their food needs. Also, most of them don’t live in rented dwellings. Given this fact, a household income of Rs 12,060 per month hardly constitutes a family living in abject poverty.

Moreover, a household income of Rs 12,060 per month has a much higher buying power in Pakistan than the dollar equivalent of this figure has in developed countries.

In terms of the cost of foodstuff and other basic needs, the purchasing power parity of a dollar in Pakistan is an estimated three times higher than it is in developed countries. So a household income Rs 12,060 per month in Pakistan translates into a buying power equal to what the dollar equivalent of Rs 36,180 would buy in developed countries.

Of course, some things -– such as electricity and fuel oil -- cost more in Pakistan than they do in many developed countries. Even so, a purchasing power parity household income of Rs 36,180 per month suggests that the picture of poverty in Pakistan is not as bleak as it is made out to be.

The other side of this coin has to do with the fact that that Pakistan is becoming an increasingly urbanised country, with large numbers of the rural population migrating to cities. While people living in cities have better access to things like healthcare and education, they pay much higher prices for food than the inhabitants of rural areas. Moreover, unlike rural inhabitants, most urban inhabitants live in rented accommodation and have to spend a big chunk of their income on rent. They also have to spend a big chunk of their income on transport costs, commuting back and forth from their homes to their work places. The cumulative result of all these factors has been a sharp rise in urban poverty.

In Karachi, for example, over 40 per cent of the population lives in slum communities, euphemistically known as the Katchi Abadis. Karachi now has more than 350 slum communities. The inhabitants of many of these slum communities live in appalling conditions -- with no sanitation, no piped water and no electricity. The same goes for numerous other towns and cities across the country.

The government needs to link its poverty reduction targets to a time frame and put policies in place to achieve those targets, bearing in mind that Pakistan is a big country with a current estimated population of 160 million.

If poverty reduction in a country of Pakistan’s size is to be meaningful, the exercise has to adopt strategies commensurate with the scale of the problem. Otherwise, the poverty-reduction will run the risk of becoming mere tokenism, with only a few showpiece projects to show for the effort.

At the UN Millennium Summit of September 2000, the 190 member states of the world body, including Pakistan, issued the Millennium Declaration, committing themselves to a series of targets, most of which are to be achieved by 2015. Known as the Millennium Development Goals (MDGs), they represent a framework for achieving human development and broadening its benefits.

The prime responsibility for achieving the MDGs lies with individual countries. Countries in the Asia-Pacific region should, however, also be able to count on regional and international partnerships, and they would also benefit from changes in the global system and the global economy –- provided, however, that such changes are aimed not at making rich countries richer at the cost of developing countries but at creating a more equitable global trading system, with greater access for the products of developing countries in the markets of rich countries.

But the collapse of the trade talks at the WTO ministerial conference in Cancun, Mexico, in September 2003, over the twin issues of market access and agricultural subsidies given by the United States and the EU countries to their own farmers, does not augur well for the prospects of creating a more equitable global trading system. To put the subsidies issue into perspective, it should be remembered that while the United States and EU give $ 300 billion a year to their farmers as subsidies, they collectively give only $ 50 billion a year in aid to developing countries.

This huge disparity underscores the fact that the developing countries cannot count on the rich countries to lift them out of the poverty trap. So the success of individual countries in the Asia-Pacific region in meeting their MGD targets will ultimately depend on national commitment and on the quality and thoughtfulness of national decisions.

The Asia-Pacific region includes some highly developed states, and a number that are approaching middle-income status. It also includes 13 least developed countries, 12 landlocked developing countries and 17 small island developing states.

For all these countries, including Pakistan, the MDGs are not merely a set of targets, the achievements of which can be tallied on a scorecard. Rather they represent a commitment to a broader and more inclusive process of human development.

This approach implies that holders of rights should also participate fully in deciding how those rights are to be fulfilled, such as through full participation and greater empowerment. And as the Millennium Declaration emphasises, one of the most important requirements for achieving this is “good governance.”

The Asia-Pacific region has many diverse forms of democratic governments. In some cases these have involved highly centralised administrations that have offered a limited space for popular participation. Nevertheless, in recent years, there have been significant changes, including the initiation of a process of decentralisation.

Pakistan, too, has been making efforts to decentralise its administration, with such initiatives as the elected local bodies regime and greater autonomy for local bodies in decision-making. Local bodies now control their own funds and are free to decide how to spend the money. But many local bodies in the country’s poorer regions continue to be strapped for cash and have to depend heavily on the federal and provincial governments for the money needed for development projects and poverty reduction schemes. The problem is compounded by the fact that while the local bodies are theoretically autonomous, they have very limited taxation powers. Most tax revenues still go into the coffers of the federal and provincial governments, forcing the local bodies to go knocking on those governments’ doors for money. The time-consuming red tape involved in this process has a direct bearing on the lack of progress in poverty reduction at the grass roots level. Bureaucratic battles over turf have added to the problem, with local bodies’ officials and their provincial counterparts squabbling over just which agency -– local or provincial – has the authority to do what and when and how. Islamabad, too, has a habit of jumping into the fray, making the problem of jurisdiction more acute. All this needs to change, and fast, if the issues of good governance and poverty reduction are to be seriously addressed.

(By Kaleem Omar, The News, 17/09/2007)

One cannot but be compelled to endorse the appeal made by a group of NGOs and civil society organisations (published in the national press on Friday) pleading the government to enforce all laws and regulations that seek to control environmental pollution and manage the quality of water in the country. The group of seven, through the advertisement titled 'Pakistan's waters at risk', have appealed to the president, prime minister and the chief justice of Pakistan to intervene and ensure the following: (a) water and environmental standards set by the government itself and enshrined in various acts of parliament (particularly the Pakistan Environment Protect Act of 1997) be enforced; (b) those agencies and bodies that are presently polluting water resources by releasing effluent and other waste material into the environment without cleansing it first be directed to treat the discharge and (c) that a commission, with representation from civil society, be set up to monitor the quality of water in the country and to assist in the implementation of a regulatory framework for the said purpose.

All three proposals are sound and need to be seriously considered by the government. The reason for this is obvious: waterborne diseases are the leading cause of death for young children in the country with an estimated quarter of a million dying every year on this account. The damage is in fact far greater, not just from the purely economic point of view in terms of the associated health costs but also from a social and psychological standpoint since the families of the victims suffer from immense trauma. If the country's population, or at least the bulk of it, had access to clean drinking water, the majority of these deaths could be prevented. Apart from the issue of waterborne diseases, water contamination in recent years has assumed dangerous proportions with unchecked pollution being diverted directly into sources of drinking water. Examples of this are the dozens of deaths caused in Hyderabad and other parts of Sindh in recent years and in parts of Punjab -- both had to do with municipal and industrial bodies dumping untreated effluent into bodies of water that were used for human consumption or when sewage lines got mixed with lines carrying piped drinking water. No wonder then that according to the government's own figures, every third Pakistani drinks unsafe drinking water.

The picture becomes more disturbing if one looks at it more closely. For instance, the government's own data reveals that 99 per cent of industrial effluent and 92 per cent of urban wastewater is discharged untreated into rivers and the sea (the extent of damage to marine life and the ecosystems of these bodies of water can probably not even be imagined). Drinking water in most urban cities such as Karachi, Lahore, Hyderabad, Peshawar, Multan and even Abbotabad and Islamabad has been found to be laced with biological and chemical pollutants (according to a survey conducted by the NGO Network and the National Institute of Health, three-quarters of all water in the federal capital is not suitable for drinking). Equally alarmingly, 36 per cent of the population of Sindh and Punjab is exposed to arsenic levels in water that are five times more than the safe limit as prescribed by the World Health Organisation. The picture is quite dismal and reflects, regrettably, the government's misplaced priorities since some other areas receive more attention and funding (the most obvious being defence). As the figures above suggest, it would actually not be a cliché to say that improving the quality of water in Pakistan is a life and death issue -- it is precisely just that. What is needed is a government that displays the political will and commitment to address this issue seriously, gives it the priority that it deserves and does not dismiss it as a fashionable issue advocated by the NGO sector for its own ends such as funding and so on (one suspects that is what the government partly tends to think of the matter).

(The News, 29/11/2007) 

The economy of Pakistan has grown on average at seven per cent during last four financial years. But does this impressive growth rate mean that the country is well and truly on a solid footing with regard to socio-economic development? The answer is not so straightforward. To begin with, economic development is more than growth in GDP or aggregate output. Development means economic growth accompanied by relevant social and institutional changes which makes that growth sustainable. These changes include reduction in absolute poverty, a better quality of life, high literacy, improved labour productivity and other inputs, sophisticated techniques of production, development of physical and commercial infrastructure, higher savings, job creation and a stable political system. This definition indicates that development has not only economic but also cultural, political and social dimensions. Expansion of real GDP or aggregate output is a necessary but not sufficient condition for development. Keeping this definition in view, let's see where Pakistan stands on the road to development.

During the 1960s, the economy grew at a healthy rate of 6.8 per cent, in the 1970s it slowed down to 4.8 per cent, increased to 6.5 per cent in the 1980s and fell to 4.6 per cent in the next decade. Between 2000-01 and 2003-04, Pakistan's GDP grew on average by 4.1 per cent. In the last three years, the rate has been impressive at an approximate average of seven per cent. However, the point to note about the periods of high growth is that they have not been accompanied by changes – as one would expect -- in savings, investment, human resource development (HRD), technology, the quality of life and so on.

Take savings and investment, the capital condition for development. Throughout Pakistan's economic history, savings-GDP and investment-GDP-ratio has been below 20 per cent (it is only during the last fiscal year that investment-GDP-ratio exceeded 20 per cent to reach 21.4 per cent). Besides, there have not been corresponding changes in savings/investment and GDP growth. Between 1980s and 1990s, for instance, average GDP growth fell by 1.9 percentage points but savings-GDP ratio during this period went up on average by 6.3 percentage points. Between 2002-03 and 2003-04 GDP growth went up by 2.7 percentage points but savings-GDP ratio went down by 2.1 percentage points. Between 2003-04 and 2004-05 GDP growth went up by 1.1 percentage points but savings-GDP ratio and investment-GDP ratio dropped by 3.6 and 0.5 percentage points respectively. Conversely, between 2004-05 and 2005-06 GDP growth went down by 2 percentage points but savings-GDP ratio and investment-GDP ratio went up by 1.3 percentage points and 3.2 percentage points respectively. Moreover despite the recent increase, the investment-GDP ratio is well below the desired level and less than that in many neighbouring economies. For instance, in India, the investment-GDP ratio exceeds 30 pc, while in case of Bangladesh and Sri Lanka it is 25 pc and 24 pc respectively.

The most important factor underlying investment is savings. In case of developing countries, investment falls below the desired level, mainly because of low savings. Saving depends on various factors the most important of which is income. All said and done, saving is a luxury, which increases as income goes up. The poor do not save; rather they dis-save by borrowing. The same goes for poor countries, which are caught in the debt trap because of low level of national income. Though a necessary condition for investment, savings in themselves are not enough to induce investment. As a matter of principle, businesses undertake investment when expected revenues are greater than estimated costs. Costs depend on interest rates, price of inputs and corporate taxes. Revenue expectations are based on an estimate of the level of demand for the output. In case there is deficiency of potential demand for their goods or services, businesses shy away from investment. As in case of savings, the key determinant of demand is income. In case of developing countries, since per capita income tends to be low, demand is deficient, which restricts investment.

In case of Pakistan also, the major reason for low level of savings and the resultant low level of investment is the low level of per capita income. Though per capita income in Pakistan has, according to official statistics, increased to $925, the increase is largely nominal rather than real thanks to a high inflation rate. Two other major causes of high consumption and thus low savings are consumer financing and proliferation of credit cards. Now take human resource development, another important condition for economic development. According to the UNDP's HDI ranking for 2006, Pakistan ranks 134 out of 177 countries. And this is not surprising. Life expectancy in Pakistan is 64 years, which is even less than the world average of 67 years. The infant mortality rate is 77 (per 1,000 births), higher than the world average of 55. The mortality rate for children who fail to reach the age of five is 101 per 1,000 -- again higher than the world average of 81. Judged by the international standard of poverty, which is earning less than a dollar day, at least one-third of the population is poor. Poverty means low incomes, low savings or even dis-savings, high birth rates, and low literacy level, which hamper development efforts. The literacy level is a shocking 54 per cent. A major cause of low literacy level is meagre expenditure on education, which is two per cent of GDP. Besides, there is a strong link between education and income level as only 25 per cent of the poorest individuals are literate. The total public expenditure on health is only 0.5 per cent of GDP. This may perhaps explain why despite the recent high growth rate, Pakistan's HDI ranking has only slightly improved, from 142 in 2004 to 135 in 2005. This is because as in the past, the current growth rate is based on a trickle-down approach. This development approach sets development goals essentially in terms of accelerating GDP growth with little regard for alleviating large-scale poverty or reducing income inequality. The assumption, mistaken as it is, is that left to themselves market forces can affect unrestricted or at least large-scale transfers among income groups.

The case of Pakistan, as well as that of other countries including India which adopted this approach, demonstrates that equity or distribution of income is an important part of the development problem, which market forces themselves cannot solve. Rather there is the need to benefit the poor directly by investing in their health and education to increase their productivity. Pakistan also lags far behind in the field of technology with scientists and engineers making up a mere 0.2 per cent of the labour force.

Finally, we come to the political factors constraining development. The fact that at present all developed countries are democracies does not mean that there is a causal link between democracy and development. Potentially developed countries like China, and Singapore have essentially authoritarian political systems. In case of Pakistan, interestingly, economies have grown faster under authoritarian governments. However, this also does not mean that political authoritarianism is necessary for national development of Pakistan but in fact what is required is a stable political system and strong institutions. Only time will tell whether we get either or both of these.

(By Hassain H Zaidi, The News, 30/11/2007)