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1. An Introduction to Poverty
Presented By:
Muzammil Abbas 2014-ag-89
Usman Tariq 2014-ag-89
Asad Ur Rehman 2014-ag-176
Presented To:
Madam Rehana Qureshi
Institute of Business Management Sciences,
University of Agriculture Faisalabad

2. Outline of Presentation
Introduction
Types of Poverty
Measurement of Poverty
Important Poverty Measures
Factors affecting Poverty
Causes of Poverty
Effects of Poverty
Remedial Measures

3. What is it?
Poverty is the lack of basic human needs, such as
clean water , nutrition, health care, education,
clothing and shelter, because of the inability to afford
them.
It can also be referred as absolute destitution.
Relative poverty is the condition of having fewer
resources or less income than others within a society
or country, or compared to worldwide averages.
In Pakistan, poverty is a growing concern, as it is a
developing country.

4. Types of Poverty
It is multidimensional phenomena.
Absolute Poverty
•It is the extreme kind of poverty involving the chronic lack of basic food,
clean water, health and housing.
•People in absolute poverty tend to struggle to live and experience a lot of
child deaths from preventable diseases.
Relative Poverty
•This kind is usually in relation to other members and families in the society.
•For example, a family can be considered poor if it cannot afford vacations,
or cannot buy presents for children at Christmas, or cannot send its young to
the university.
Situational Poverty (Transitory)
•In this type, there is usually no escape from it, as people are trapped in its
causes and have no access to tools that will help them get out of it.
•People or families can be poor because of some adversities like
earthquakes, floods or a serious illness.

5. Measurement of Poverty (%age of Poor)
Two basic ingredients in measuring poverty:
(1)Poverty Line: definition of threshold income or
consumption level
(2)Data on size distribution of income or consumption
(collected by a sample survey representative of the
population)

6. Poverty Line
•The CONCEPT of a poverty line depicting a global minimum
standard for a socially acceptable minimum standard of
living for the whole world. This concept came into existence
after 1945.
•This GLOBAL conceptualization of POVERTY as an object of
measurement EVERYWHERE is a feature of WORLD ORDER
in the later 20th century.
•It is $ 1.25 /day/person in Pakistan

7. Important Poverty Measures Methods
• Head Count Ratio (HCR): proportion of total population that
falls below poverty threshold income or expenditure. Based
on either national PL or dollar-a-day PL.
• Poverty Gap Index (PGI): unlike HCR, it gives us a sense of
how poor the poor are. It is equivalent to income gap below
PL per head of total population, and expressed as a
percentage of the poverty line.
• Squared Poverty Gap index (SPG): Adds the dimension of
inequality among the poor to the poverty gap index. For a
given value of the PGI, population with greater dispersion of
income among poor indicates a higher value for the SPG.
• Monotonicity Axiom
• Transfer Axiom

8. Factors affecting Poverty
•(1)Growth in average income (2)Distribution
•Poverty reduction take place when average income
rises and inequality falls.
Other factors include,
•Per capita agricultural income
•Employment and real wage rate
•Inflation rate and relative food prices
•Government expenditure
 Per capita development expenditure
 Social sector expenditure

9. Causes of Poverty
Lack of education
 The literacy rate of Pakistan is very low. Most of people do not have any concept
about the modern earning sources.
 Most people are unable to adopt technology for their business needs, that’s why
business do not meet international standards and results as decrease in revenue
which lead the society to poor financial conditions.
Materialism
 In our society social bonding are gradually becomes thinner and thinner. A race of
material object has been started even no one tried to understand the problems of
others.
 Every one is gradually changing from human to a bioman which only know about his
needs and have no concept about the limitations of others. People are not ready to
help each other. At last every one has lose his trust on others which effect our social
and economic system and it is another cause of poverty.
Large Scale Import
 The import of Pakistan is greater than export. Big revenue is consumed in importing
good every year, even raw material has to import for industry.
 If we decrease import and establish own supply chains from our country natural
resources the people will have better opportunities to earn.

10. Division of Agricultural Land
 Pakistan is an agricultural country. Most of people are farmers by
profession. One has land which is fulfilling the needs of his family but
he has to divide the land into his children when they got young.
 After division the land is not sufficient to support a family. Now the
families of his children are suffering and spending their lives below
poverty line.
Moral Culture
 The main reason for poverty is the social dishonesty and irresponsible
behavior of people. Every one is trying to get rich by using unfair
means. A shop keeper is ready to get whole money from the pocket of
customer. People doing jobs are not performing their duties well.
Criterion of Poor
 The criterion of poor is that if a person is not earning US $367.00 per
is year considered poor but this was repeated later on the criterion is
changed and now it’s US $ 1.25 per day per person.

11. Effects of Poverty
 Diseases are more widely spread because poor people cannot
afford hygienic foods and pure drinking water which is much
expensive.
 Many infants born into poverty have a low birth weight,
which is associated with many preventable mental and
physical disabilities.
 Poor families experience much more stress than middle-class
families. Besides financial uncertainty, these families are
more likely to be exposed to series of negative events and
“bad luck,” including illness, depression, eviction.
 Homelessness, or extreme poverty, carries with it a
particularly strong set of risks for families, especially children.
Homeless children are less likely to receive proper nutrition
and immunization. They experience more health problems.
 Homeless women experience higher rates of low-birth-weight
babies, miscarriages, and infant mortality, probably due to
not having access to adequate prenatal care for their babies.
 Homeless families experience even greater life stress than
other families, including increased, family relationships, and
friendships.

12. Solutions to Poverty
Poverty will never end unless there are real solutions to end it;
solutions based on economic justice and political changes.
The full equality between men and women in public as well as
private areas of life.
The guarantee of shelter, healthcare, education, food and drinking
water as basic human rights that must be provided free to all.
A total redistribution of idle lands to landless farmers and the
imposition of a 50% cap on arable land devoted to products for
export per country, with the creation of a worldwide subsidy for
organic agriculture.
An end to private monopoly ownership over natural resources,
with a minimum of 51% local communal ownership in
corporations, which control such resources as well as the
termination of intellectual property rights on pharmaceutical
drugs.

13.  The cancellation of third world debt with no reciprocal
obligations attached and the payment of compensation to Third
World countries for historical as well as ecological debt.
An obligation of total transparency for any corporation with
more than 100 employees and a 1% tax on all benefits
distributed to shareholders of corporations to create
unemployment funds.
The termination of tax havens around the world as well as free
flow of capital in developing countries.
An equal voting for developing countries in international
organizations such as IMF, World Bank, WTO, and the
termination of veto right for the permanent members of the UN
Security Counsel.
A commitment by industrialized countries to decrease carbon
emission by 50% over a ten-year period as well as reducing by
25% each developed country%u2019s consumption of natural
resources.

14. Poverty Head Counts & Millennium
Development Goal Targets
Using consistent consumption based poverty
estimation methodology, shows that poverty
declined from 34.4 percent in 2000-01 to 22.3
percent in 2005-06, and subsequently, overall
poverty situation in 2010-11 appears to have
improved.
Poverty headcount, based on consistent
consumption based estimates, comes to around
12.4 percent in 2010-11, with 7.1 percent in urban
areas and 15.1 percent in rural areas.

15. Poverty Indices in Pakistan
(% of population living below national poverty line)

16. THANKS