Income Inequality: Elite Capture in Pakistan
By Riaz Haq
CA
A recent United Nations report on inequality reveals that the richest 1% in Pakistan take 9% of the national income. A quick comparison with other South Asian nations shows that 9% income share for the top 1% in Pakistan is lower than 15.8% in Bangladesh and 21.4% in India.
These inequalities result mainly from a phenomenon known as "elite capture" that allows a privileged few to take away a disproportionately large slice of public resources, such as public funds and land, for their benefit.
Elite capture, a global phenomenon, is a form of corruption. It describes how public resources are exploited by a few privileged individuals and groups to the detriment of the larger population.
A recently published report by the United Nations Development Program (UNDP) has found that the elite capture in Pakistan adds up to an estimated $17.4 billion - roughly 6% of the country's economy.
Pakistan's most privileged groups include the corporate sector, feudal landlords, politicians and the military. UN Development Program's NHDR for Pakistan, released last week, focused on issues of inequality in the country of 220 million people.
Income Inequality: The richest 1% of Pakistanis take 9% of the national income, according to the UNDP report titled "The three Ps of inequality: Power, People, and Policy". It was released on April 6, 2021. Comparison of income inequality in South Asia reveals that the richest 1% in Bangladesh and India claim 15.8% and 21.4% of national income respectively.
In addition to income inequality, the UNDP report describes the inequality of opportunity in terms of access to services, work with dignity and accessibility.
It is based on exhaustive statistical analysis at national and provincial levels, and includes new inequality indices for child development, youth, labor and gender. Qualitative research, through focus groups with marginalized communities, has also been undertaken, and the NHDR 2020 Inequality Perception Survey conducted. The NHDR 2020 has been guided by a diverse panel of Advisory Council members, including policy makers, development practitioners, academics, and UN representatives.
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