Abstract
Pakistan is a poverty ridden country where ample population lives below a money metric poverty threshold. There are varying trends of poverty across regions and over time. This paper invites the attention of policy makers and researchers on the importance of segregating poverty measures at administrative divisional levels while addressing both rural and urban poverty in the country. It is aimed at diagnosing the incidence of poverty dynamics both in rural and urban areas of Pakistan at national, provincial and divisional levels while addressing some specific questions minutely. There is a little research work of this nature found in poverty literature of Pakistan. Our findings revealed that poverty increased from 25.73 percent to 30.57 percent between 1998-99 and 2001-2002 which reads a proportionate increase of 18.81 percent during the interregnum period. This increasing trend in incidence of poverty was found to be more in rural areas (20.07 percent) as compared to the urban areas (14.60 percent) followed by pronounce decline of 40.66 percent in overall poverty till 2004-05. Moreover, rural and urban areas witnessed almost the same decreasing trend in the incidence of poverty though rural poverty is more than the urban poverty in absolute terms. In this way, overall poverty dynamics for the whole period (1998-2005) what we call “difference of difference” depicted a decrease of 21.85 percent in the population of poor persons in the country. It is quite interesting to note that Punjab province was the worst of all provinces in terms of incidence of poverty in 1998-99. There was about 30.44 percent of the population living below the poverty line. NWFP, Sindh and Baluchistan were in following the row of incidence of poverty at the proportion of 28.05, 21.49 and 16.07 percent, respectively. But the inter-provincial poverty dynamics changed much during the seven years period thereby reshuffling the ranking position of provinces significantly. Rural Punjab was almost double poor than the urban Punjab. Moreover, it was further realized that rural poverty had been decreasing at a great momentum in Rawalpindi, Gujranwala, Sargodha and Faisalabad. This demonstrated that the poverty alleviation strategies initiated by the government had worked well in rural economy. The “difference of difference” revealed that there was highest decrease in poverty in Larkana followed by Karachi. But Hyderabad and Mirpur Khas (rural in particular) depicted increasing trends of poverty. This might be attributed to the unequal transfer of resources by the provincial government during this period for being fewer representatives of these areas. The overall dynamics revealed that Peshawar, Mardan and Kohat witnessed increasing trend of poverty while there was decreasing trends of poverty in all other administrative divisions. The broad based estimation of poverty suggested that the problem of poverty should not be tackled at national level rather some area specific policy matrix should be designed and resources be mobilized accordingly. It suggested that a small internal or external shock at monetary and fiscal level can abruptly change the status of poverty in the country. In this way, a two pronged policy initiative is required. First, opportunity box should be expanded for those who are already poor by providing employment, water management, land reforms, health, sanitation and education facilities. Secondly, effort must be made to keep the vulnerable poor staying below the poverty line by sustaining their livelihood pattern under shock scenarios.

Ikram Ali, Abdul Saboor, Sarfraz Ahmad, Farooq Tanwir, Mustafa, Ashfaq Ahmad Maan. (2008) Poverty dynamics in rural Pakistan: Divisional level diagnosis, , Volume-45, Issue-4.
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