The Dynamics of Rural Poverty in Pakistan: A Time Series Analysis

At the start of the 21st century, almost one-fifth of humanity-1.2billion people-live on less than a dollar a day. Pakistan is confronted by amultifaceted dilemma. The major issues facing the country are poverty andincome disparity, particularly among the rural segments of the society. Andevidence indicates that both have worsened. The impact of poverty isparticularly acute on the most vulnerable sections of the society. In the year1990-91, 39.42 percent of the total 31.81 percent of the population below thepoverty line were termed as absolute poor including 34 percent chronicallyand 61 percent extremely poor. During the last decade or so, nearly 2 millionpeople are added to the clusters of extremely poor, 5 million to chronicallypoor, 7 million to transient poor. Thus bringing nearly 59.11 percent of thepoor population out of poverty is to a certain extent easier than bringing theremaining 40.89 percent out of the poverty trap. Pakistan has witnessed adecline in the growth rate from 6.1 per cent during the 1980s to 4.2 percentduring the 1990s. However, the Poverty Equivalent Growth Rate (PEGR)analysis reported in this paper indicates that the pro-poor growth scenario isimproving in rural Pakistan. If growth remains pro-poor in the subsequentyears as it was in the year 2000-01, there is a likelihood that the growth willtrickle down to the poor more than the non-poor.