Pakistan Institute of Development Economics



Growth in Pakistan: Inclusive or Not?

Cross country evidences reveal that Asian countries have experienced rapid growth over the last two decades. The increase in growth is accompanied with reduction in poverty from 1990 to 2001 as the number of individuals living below the poverty line has decreased over the time period [ADB (2006)]. Growth is considered to be a necessary condition for reduction in poverty but growth does not necessarily imply that it will lead to improvement in living standards of every one. Growth does benefit and improve standards of living but it may lead to increase in inequality if it leads to increase in benefits for few section of the society only. This has been witnessed in China as economic growth benefited all segments of the society, it lead to improvement in living standards for all, but the improvement benefited the rich more as compared to the poor. The same situation persists in India as well. In contrast, countries like Brazil, Mexico, and Thailand have different scenario where there is increase in economic growth and this increase is also accompanied with improvement in equity [Anand, et al. (2013)]. Pakistan historically has seen episodes of high growth but those unfortunately were not coupled with such macroeconomic conditions as are required to achieve lower poverty levels. Therefore, Pakistan has always been facing the challenge of achieving rather more inclusive growth that could benefit all classes of society. The provision of basic services such as education, health, sanitation, and housing for all the segments of population, and social security schemes to ensure social protection are critical for long run reductions in poverty

Zunia Saif Tirmazee,

Maryiam Haroon.