Empirical Analysis of The Determinants of Rural Poverty in Sindh Province of Pakistan

Abstract

Sanghar district has a population of 1.353 million according to 1998 census. Agriculture employees 70% of the rural people out of which 57% are self employed. Farming is mostly at subsistence level except for the bigger land holding. Large number of landless people work on these farms and are mostly paid in cash. Besides subsistence earning high dependency ratio is another reason of poverty. The major source of drinking water supply were hand pumps and pipe water in the district, only 17% of the rural population had access to separate latrines, while 16% have access to shared latrines. Badin district with a population of 1.2 million is one of the richest district in terms of natural resource base but it is the poorest in terms of human development. Extreme natural disasters had adversely affected the district over the last ten years. This has resulted in a general disruption of livelihoods, increased their vulnerability and in some cases led to out migration. Inequality in the distribution of water and lack of basic social services and infrastructure has further resulted in harsh living conditions and extreme poverty. This study was conducted to estimate poverty and inequality in the distribution of income, analyse the determinants and identify the correlates of poverty in Sindh. The study also evaluated various government, NGOs and private sector initiatives towards poverty alleviation. A total sample of 320 households was selected from two district. Multistage sampling was used to select households. The primary data collected from household survey was analysed. For measuring Poverty headcount Index,Poverty gap and Sen Index were used, while for measuring inequality Lorenz curve and gini coefficient were used. For analyzing the determinants and identifying the correlates logistic regression and multiple linear regression models were estimated. The major conclusion drawn from the study revealed that headcount ratio was 52% in Sanghar district, and in Badin it was 56%; while Sanghar district has a poverty gap of 373, and in Badin it is 356. On the same proportion the two districts have a sen index of 0.31 respectively. Logistic regression was applied to primary data. The results revealed that logistic regression satisfy the 85% while multiple linear regression accounted for 47% variation. Land ownership is significant because those who own land will be out of poverty. As the number of earners increases the proportion of household poverty decreases. All variables show significant values except household size which shows a positive sign. In the Lorenz curve and gini coefficient if the gap between the perfect distribution line and Lorenz curve is high it implies that there is inequality in the distribution of income. If Lorenz curve goes down this shows that most of the people in the study areas have low income. It was concluded that land, household size, number of earners and qualification of household head has a significant effect on poverty. xiiiBased upon the research findings it is recommended that irrigation water may be provided in the study areas so that the poor could utilize their land for crop production. Delivery of essential services and basic necessities of life would reduce the burden of poverty in both Sanghar and Badin. There is a need for a very strong monitoring and evaluation of NGOs / VDOs so as to make sure that their services reach the poorest of the poor in the study areas. The monitoring and evaluation should be carried out by independent research institutions. Government should introduce new housing schemes so as to support those in ultra poverty. Local entrepreneurs and businessmen may launch a massive effort for job creation. Network of institutional credit may be widened to rural areas. One of the measures to alleviate extreme poverty in the study area would be to establish vocational skill training centre through public private partnership to train youth and women for self reliance. Rural leadership and community organizations developed programmes may be launched by major NGOs and public sector organizations. Poor communities may be encouraged to participate in planning and development. There is a need to encourage active participation of rural women in income generating jobs through a very strong social mobilization. These suggestions would facilitate and sustained reduction in poverty and ultimately play a positive role in achieving the United Nations Millennium Development Goals of fighting poverty and hunger by the year 2015.