Posted by : Ahsan Khan Thursday, 22 December 2011

In Islam, poverty is a great curse and unfortunate. Our beloved Prophet Hazrat Muhammad (PBUH) also prayed to Allah to save him (PBUH) from Poverty. Poverty is the state in which one lacks a usual or socially acceptable amount of money or material possessions. Poverty is said to exist when people lack the means to satisfy their basic needs.
“Poverty is a multi-dimensional trend which is characterized by lack of income and non-fulfillment of basic needs as well as lack of access to social infrastructure.”
These are the major types of poverty: 
1)      General Poverty
General poverty refers to the existence of poverty in almost all the sectors of economy. As in case of Pakistan, 21.0 % population is much poor.
2)      Absolute Poverty
It is meant to represent a specific minimum level of income needed to satisfy the basic physical needs of food, clothing and shelter in order to ensure survival.
3)      Cyclical Poverty
Cyclical poverty refers to poverty that may be widespread throughout a population, but its occurrence itself is of limited duration.
4)      Collective Poverty
Collective poverty involves a relatively permanent insufficiency of means to make safe basic needs of life.
5)      Concentrated Collective Poverty
Cities or regions neglected by industry and in areas where agriculture or industry is inefficient and cannot compete profitably, there are found victims of concentrated collective poverty.
6)      Case Poverty
Case poverty refers to the inability of an individual or family to secure basic needs even in social surroundings of general prosperity. This inability is generally related to the lack of some basic quality that would permit the individual to maintain himself.
7)      Poverty line
A level of personal or family income below which one is classified as poor according to governmental standards - called also poverty level. In Pakistan poverty line is a US Dollar per day.
Poverty refers to the state of being poor, including deficiency of capital and lack of the means of providing material needs and comforts. In developing countries poverty is common in all the regions.
Situation in Pakistan:
21.0 % population is much poor and spending their lives below poverty line in Pakistan. Poverty line refers to one dollar per day. Last year population below poverty line was 23.9 %.
Causes of poverty may be divided into following three categories:


1. Vicious Circle of Poverty
Vicious circle of poverty is the largest reason of poverty. Developing countries including Pakistan are trapped into VCP. A poor country is poor forever due to the VCP.
2. Unemployment
Unemployment is the major cause of poverty. Unemployment means no source of income and result is poverty. Rate of unemployment is 5.5 %, 16 % is underemployed and 20 % is disguised unemployed in Pakistan.
3. Lack of Foreign Investment
Due to backwardness, political instabilities and improper availability of infrastructure the attraction for foreign investment is not suitable. Foreign investment is $ 1.8 billion in Pakistan. Lack of foreign investment means less employment opportunities and poverty.
4. Low National Income
Poverty in Pakistan is also the result of low level of national income. Low level of national income means low level of saving and low level of investment. All these factors contribute toward poverty.
5. Use of Backward Technology
Techniques of productions used by developing countries are backward. Due to out-dated methods of production, productivity level is low. Low level of productivity means narrowness of market and reduction in exports and increase in imports.
6. Increase in Utility Charges
Utility charges like water, gas, electricity, telephone bills etc. are increasing day by day in Pakistan. More utility charges lead to reduction in the saving of population and its result is poverty.
7. Low per Capita Income
Per capita income of Pakistan is as low as $ 1095. Low per capita income means low level of saving and low level of investment. Its result is poverty.
8. Backward Agricultural Sector
In agriculture sector people have adopted just subsistence farming styles. They are not farming according to the commercial patterns. Sometimes due to natural calamities and use of backward techniques of production, there is reduction in production and it decreases the income of poor farmers.
9. Absence of Credit Facilities
Poor population needs credit facilities to take an active part in economic activities to remove poverty. But in Pakistan, availability of credit is not desirable. Poor people have no access to credit it is only for rich landlords. Conditions for credit issuing are so tights and credit is not given in time.
10. Improper Income Distribution
Imbalanced distribution of resources is an additional cause of poverty in Pakistan. This situation leads to increase the gap between rich and poor. Due to undesirable distribution of income and wealth, poor population is unable to take part in economic activities to remove poverty.
11. Low level of Productivity
Due to use of backward technologies and inefficiencies of labour & entrepreneur productivity level in Pakistan is very low as compare to developed countries. Value of annual productivity of Pakistani labour is much lower than the labour of rich nations.
12. Low level of Saving
Low level of saving is mainly due to low income. It leads to less investment and less return. Due to less return people remains poor forever. Domestic Savings are 9.9 % of GDP in Pakistan.
13. Inflation
High rate of inflation is an extra reason for poverty. Due to inflation much amount of money is not enough to purchase much amount of goods and services. Inflation decreases the savings and investments of poor people and they remain poor. Rate of inflation is 13.3 %.
14. Imposition of Taxes
Government has to impose taxes to raise its revenue. Imposition of taxes reduces the disposable income of people. Lack of disposable income means low savings and low investment and poverty.
15. Non-Productive Expenditures
Government has to make a lot of unproductive expenditures on social heads and to make strong defence. These high expenditures are also a reason of poverty.
16. Low Rate of Capital Formation
Rate of capital formation in Pakistan is very low. Low rate of capital formation means low opportunities of employment, low level of productivity and deficit in balance of payment that leads to poverty. Rate of capital formation is just 5 % and it should be more than 20 %.


                          17.            Population Pressure

Rapidly raising population is also a cause of poverty. Existing population is already not provided basic necessities of life. So increase in population will lead to increase in poverty. Total population is 169.94 million at the growth rate of 2.05 %.
                          18.            Dishonesty & Corruption
Poverty is also due to dishonesty and corruption in management. Officers receive a huge amount of illegal money for the legal and illegal job. These unnecessary payments reduce the savings of poor and result is poverty.
                          19.            Illiteracy
Lack of education and training is also a cause of poverty. It reduces the abilities to work. Sometimes a worker due to illiteracy remains unemployed or underemployed. Similarly, lack of skill in entrepreneur also reduces his profit and its result is poverty. Literacy rate is 57 % in Pakistan.
                          20.            Backward Infrastructure
Non-availability or availability of backward infrastructure is also an additional reason of poverty. Low level of education, backward state of technology, poor health, inefficiency of labour and poor system of transportation & communication are caused in poverty. These entire things create no attraction for investment.
                          21.            Low Living Standard
Pressure of foreign counties in our economic activities, backward standard of productivities and improper basic facilities to population reduce the living standard of population. Low living standard is a symbol of poverty.


                          22.            Law and Order
Law and order conditions are at their poor stages. A huge portion of saving of population is wasted in costly and lengthy legal process Chief Justices Iftikhar Muhammad Chohdery has to wait for justices for a long period in Pakistan.
                          23.            Poor Governance
Instable government and instability in the policies of government is another cause of poverty. Every government remains fail to establish such policy that leads to reduce the poverty.
                          24.            Landlordism
Ignorant but big landlords control our whole economy. They have no sense of social welfares. In government they take those actions that are in their personal interests.
                          25.            Nepotism
Nepotism means the murder of talent and abilities. It refers to the employment opportunities according to relation not according to the worth. If population is poor but is talented it remains poor due to nepotism.


Different economists to remove the serious problem of poverty suggest following measures:
1-      Poverty can be removed by broking the vicious circle of poverty.
2-      Control on inflation is compulsory to eliminate the poverty.
3-      Government should provide more facilities to investors to increase the investment to reduce the unemployment.
4-      Use of modern techniques of production and subsidies in utility charges is necessary.
5-      Development of agriculture and industrial sector will reduce the poverty in Pakistan.
6-      Government should make easy, more and in time availability of various types of credits.
7-      We should save more to reduce the poverty.
8-      Govt. should reduce the rate of tax and increase the rate of capital formation.
9-      Govt. should allocate more funds for education to increase the literacy rate.
10-  Proper maintenance of law and order in necessary to remove the poverty.
11-  Check on nepotism is necessary to reduce the poverty.
Poverty is not bad but to remain poor and to accept poverty is really bad. In Pakistan, poverty is increasing day by day. Effective steps of government are required to reduce it. Government should provide credit facilities and use labour intensives techniques of production to reduce the poverty. 

{ 8 comments... read them below or Comment }

  1. People have the capability to acquire an income protection plan while others don't. Poverty caused by unemployment must be really hard for the less fortunate without proper government reform.

    1. if masses want help from govt, then they should await the long journey due to current bad governance.

  2. very nice and informative document.. you have explained each and everything in very detail which really helped me to prepare my presentation

  3. what a comprehensive and easy way of expressing the problem and solutions.

  4. Greate, but I am disagreed about you wrote poverty is curse, it is not curse, and please dont involve islam if you haven't knowledge a out that.

  5. Greate, but I am disagreed about you wrote poverty is curse, it is not curse, and please dont involve islam if you haven't knowledge a out that.

    1. So what's you thinking poverty is a blessing? And Islam focus to eradicate poverty..
      Poverty may lead to kuffar..

    2. Dr. Tariq Ramadan! I don't know poverty is blessing or not but I know, in history of mankind Holy Prophet (P.B.U.H) is the only person who lived his whole life under poverty & simplicity and He is the most successful person in whole mankind...



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