Inequality in Pakistan

Inequality in Pakistan
The nexus between growth and inequality has long been debated by scholars.
Even though the link between growth and inequality remains controversial even
today, there is growing evidence of multi-dimensional inequality in developing
countries, including Pakistan. It appears that fruits of economic growth have
benefited only a few people in the society, while the vast majority have remained
deprived. Numerous manifestations of inequality can be pointed out, including
inequalities of income, assets, public services (health, education), Gender
inequality, rural versus urban and between regions. These inequalities lead to
huge economic and social costs in terms of low productivity, increased level of
tension and high crime rate in the society.
Income Inequality:
Overview:
Inequality in income and assets is one of the major cause of social unrest, high
crime rates and violent conflicts. Skewed income distribution is likely to cause
large differences on the basis of ethnicity and regions. These aspects cause
political instability.
Widening income inequality is the defining challenge of our time. In advanced
economies, the gap between the rich and poor is at its highest level in decades.
Inequality trends have been more mixed in emerging markets and developing
countries. In Pakistan, it is generally assumed that income inequality is
increasing. In Pakistan we can see large disparity between provinces on the basis
of income distribution.
According to IMF study income inequality measured by Gini index negatively
affects growth and its sustainability (Ostry, Berg, and Tsangarides 2014; Berg
and Ostry 2011).
Another IMF study Inequality: causes and consequences examine how
income share of individual at various points of distribution matter for growth
through the sample of advance and emerging economies. Findings of the study
were a higher GINI coefficient is associated with lower output growth. More
importantly they also find negative relationship between income share of top
20% and output growth.
Various studies have been conducted in Pakistan On income inequality these
studies however are not comparable due difference in choice of indicator and
methodology.
Anwar (2005). Gini coefficient increased from 0.338 in 197071 to0.358 in 1986
87, and to 0.419 in 199899, furthermore; Anwar (2005) calculate GINI
coefficient of grouped household income data and find that income inequalities
were decreasing in 60s, showing an increasing trend in 70s, stagnant position in
80s, and rapid rise in inequality n 90s. Kemal (2005) also concluded that income
inequalities rapidly increase in 90s and data shows that they are increasing in
current decade too. Reason of rising inequality in era of nineties was after effects
of structural adjustment programme.
Rural Urban Disparities:

In the following graph Gini coefficient by region shows that levels of urban
inequality are much higher than in rural income groups. The reduction in national
inequality after 199697 was due to a sharp decline in inequality in rural areas
and a marginal decline in urban areas. The gap between urban and rural Gini
coefficients has remained roughly constant since 2000.
A higher Gini coefficient may be attributed to the fact that urban workers have
much more diversified skills than rural workers; in urban areas income-earning
activities range from trade, industry and professional groups to petty traders and
other own-account workers. By contrast, most rural households possess uniform
skill-sets and the bulk of land-owners are small which leads to incomes being
relatively more evenly distributed.
The increase in inequality in urban areas, especially after 199697, may be
attributed to the implementation Structural Adjustment Programme (SAP) from
1996 to 2004.
Provincial Disparity:
looking at provincial inequality trends, the Gini index is highest in Sindh province,
followed by Punjab, while Khyber Pakhtunkhwa (KP) and Baluchistan provinces
have the lowest levels of inequality. Also, while the Gini index increased in all
four provinces up until the mid-1990s, it registered a declining trend throughout
afterwards. Gini index of Baluchistan and KP provinces were respectively 29
percent and 16 percent lower than the national figure, indicating that income
distribution has most improved in Baluchistan.
Inequality of Opportunities
Health Services:
Major causes of health inequities arise from the conditions in which people are
born, grow, live, work, and age. These conditions are referred to as Social
Determinants of Health (SDH). The most important of these are distribution of
income, discrimination on the basis of gender, class, ethnicity, disability, and
political and governance structures that reinforce rather than reduce inequalities
in economic power.
Gender Disparity in Health Services:
The gender inequality has deep roots in Pakistani society. Culturally, women are
at a disadvantage from birth and are subject to discrimination during their entire
life in Pakistan, while men receive economic and social utility. The United Nations
Millennium Development Goals report 2011 has prioritized the goal for promoting
gender equality and women empowerment but targets are far from its reach in
Pakistan and despite efforts there is a wide gap between males and females in
terms of employment opportunities, paid work, access to health services and
health outcomes in Pakistan.

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Inequality in Pakistan

Rural Urban Disparities:

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