Op-ed: A new paradigm for overcoming poverty
Dr. Akmal hussain
Overcoming poverty means shifting the location of the poor in the local power structures from being victims to active subjects in achieving equitable access over markets and over institutions
A paradigm, according to Kuhn the great philosopher of modern science, is a framework of thought within which questions are posed and answers pursued. When the problem addressed by an existing paradigm cannot be overcome by the analysis and forms of action associated with that paradigm, then it becomes obsolete and is transcended by a new paradigm. In my research for the UNDP, National Human Development Report over the last three years, I have proposed that the prevailing paradigm of poverty may have become obsolete and it is time to replace it with a new one. The essential flaw in the prevalent poverty paradigm is that the issue of power is systematically excluded from both the understanding of poverty as well as policies for overcoming it.
The poor in Pakistan cannot simply be seen (as much of the literature does) as free individuals suffering from merely adverse ‘resource endowments’, and making choices in more or less ‘free markets’. It is such a paradigm, which induces the government to think that all it needs to do to reduce poverty is to allocate more resources to the poor or to the local governments who are supposed to ‘represent’ them.
Similarly some of the large NGOs operating in many different districts pursue poverty alleviation by trying to provide micro credit to the poor. Increased resources by the government or micro credit by NGOs may be a necessary but is not a sufficient condition for overcoming poverty.
By contrast one can propose an alternative paradigm within which one can understand poverty occurring when the individual household in a fragmented community is locked into a nexus of power that systematically perpetuates poverty. Within such a paradigm it is possible to understand a fact that eludes the conventional paradigm: The poor face markets, state institutions and local structures of power that discriminate against the poor and deprive them of a large proportion of their actual and potential incomes.
This is documented for the first time on the basis of new survey data in the just published National Human Development Report. The data set is new simply because the underlying questions have not been asked before. Some of the questions one has raised are: How do distorted markets for inputs and outputs of goods and services result in the loss of the actual or potential income of the poor? If this is indeed the case then what is the magnitude of the income loss? How do local structures of power with respect to landlords, local administrative officials, and institutions for the provision of health, credit and dispute resolution deprive the poor of their income, assets and the fruits of their labour?
Most studies on poverty in Pakistan have examined the problem simply in terms of measuring the number of people below certain poverty lines. However if poverty is to be overcome what is required is to understand the processes of poverty creation and to identify the points of intervention in the poverty process through which the poor can be enabled to overcome poverty on a sustainable basis. That is what one has attempted to do in the Report.
The new survey evidence shows that the poor lose as much as one-third of their income due to unequal access over input and output markets and extortions by the local administration. For example, as much as 51 per cent of the extremely poor tenants, borrow money from the landlord. The leverage of power available to the landlord on the basis of tenants’ dependence for both operation of the land and loans from the landlord, enables the latter to appropriate the only resource which the poor have, namely their own labour.
The evidence shows for example that of those tenants who borrow from the landlord as many as 57.4 per cent work on the landlord’s owner cultivated portion of the land without any wages at all, and 14 per cent work for a daily wage of only Rs 28 which is substantially below the market wage rate for unskilled labour. Similarly the extremely poor sections of the rural population when they are locked into a dispute related with land, water or theft, are forced to spend as much as Rs 18,333 in trying to resolve the dispute through local structures of power and yet only 38.5 per cent of the disputes get resolved. Since the expenditure on dispute resolution by the extremely poor is more than their annual income, involvement in disputes means borrowing money and getting into a debt trap.
The evidence shows that health is a major trigger that pushes people into poverty and the poor into deeper poverty. As many as 65 per cent of the poor were ill at the time of the interview and lost as much as three months of the year to illness. Given the inadequacy of the government’s health facilities as many as 85 per cent of the poor go to private allopathic medical practitioners for treatment.
The expenditures on such treatment are so high that poor households are obliged to borrow mostly from informal sources to finance the medical expenses of their families. Consequently they gradually lose whatever few assets they have (such as farm animals) and being unable to earn a livelihood for long periods due to illness, they are then forced to borrow money even for food expenses. Access over good quality health services is a question not just of money but also of power and influence to get hold of a proper doctor or a hospital bed.
Thus the analysis and evidence within this new poverty paradigm suggest that the key to overcoming poverty is to empower the poor to get better access over markets, governance, and the institutions that provide public services such as health care, education and justice. Empowerment in this specific sense means establishing autonomous community based organisations of the poor at the local level. These organisations would be quite distinct from the ‘village organisations’ set up by large cross-district NGOs.
My work on both institution building for the poor and action research over the last two decades, shows that overcoming poverty means empowering the poor to acquire greater control over their use of productive resources including their own labour, and keeping their incomes and savings in their own hands. It means enabling the poor to get organised and have institutionalised access over public resources and participation in the design and implementation of poverty alleviation projects.
Overcoming poverty means shifting the location of the poor in the local power structures from being victims to active subjects in achieving equitable access over markets, and over institutions providing credit, health and education services. This will require facilitating the emergence of autonomous organisations of the poor and enabling them to achieve an institutionalised linkage with various tiers of local government. Attempts at poverty reduction without empowering the poor in this specific sense, will merely perpetuate poverty.
Dr Hussain is a leading economist and author and co-author of many books