Economic Growth: best poverty alleviation strategy

(First published in Dawn, on 4th May, 2013)

THIS is in response to the letter “Jump in Pakistan’s poverty level” by Dr Ali Akbar Dhakan (April 29 or the post on May 7, 2013 on this blog). The writer has brought alarming statistics about poverty to light, suggesting foreign-financed growth as the solution. I would like to add a few things to his recommendations.

First, if investment is to be attracted from outside, encouraging industrial conglomeration would pay more than discouraging it in a rural bias.

Second, the returns from having a relatively balanced budget are greater than incurring a high deficit year on year. Therefore, it would be best to use the already available share more responsibly rather than increasing allocation to the development sector per se.

Third, priority must be given to tackling security and energy crisis in place of redistributive policies that yielded little in the past, as he has well shown. In essence, facing trade-off, economic growth should take precedence over quick fixes.

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