Tackling poverty through cash transfers not a viable option

While traditional models of cash transfers can provide immediate relief, they do not tackle the root causes of poverty in Pakistan. To achieve sustainable poverty reduction, investments in employment generation, education and economic growth are usually needed.

According to Pakistan Economic Survey 2022-23, the UCT (unconditional cash transfers) under the Kafalat Programme disbursed a total of Rs128.90 billion during the July-March period of FY23. 

Talking to WealthPK, Qaiser Bengali, a member of the Board of Directors of Benazir Income Support Programme (BISP), said that job creation can provide individuals with a consistent source of income, enabling them to support themselves and their families over the long term. “Cash transfers, on the other hand, offer temporary relief but may not lead to sustained economic independence.” 

According to the ‘Pakistan Development Update’ by the World Bank, poverty rate in the country is expected to touch 37.2% (as per the World Bank standard of $2.15 per day) in the ongoing fiscal year. 

Bengali added that the primary focus in reducing poverty should be on skills development programmes. “Employment opportunities often come with training and skill development, enabling individuals to improve their qualifications and income potential over time. This can lead to upward mobility and a sustained escape from poverty.”

According to the last Pakistan Economic Survey, between July and December FY23, approximately 8.67 million beneficiaries under cash transfer programmes received disbursements worth Rs16.35 billion.

Bengali said that a favourable business environment in the country would encourage entrepreneurship and business expansion. “This will lead to increased job opportunities. Job creation is a direct and effective way to lift people out of poverty by providing them with a source of income.”

He urged the government to allocate resources to schemes that can boost business in the country. “Business growth often demands infrastructure upgrades, such as roads, energy and technology. These infrastructure improvements can lead to better living conditions and job opportunities in both the rural and urban areas.” 

Furthermore, he said promoting education will equip individuals with knowledge, skills and qualifications that will enhance their employability. “This will increase their chances of securing better-paying and more stable jobs, reducing their susceptibility to poverty,” he stressed. 

Achieving sustainable poverty reduction often necessitates investments in education, creation of employment opportunities, and sustained economic development.

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