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Poverty in Jacobabad
For people within Jacobabad, a city in the Sindh province of Pakistan, May 2022 marks the peak of the latest heat wave. By May 16, 2022, the temperature in the city reached 51 degrees Celsius (123.8 Fahrenheit). The city’s water canals, which are essential for irrigating farms in order to grow crops for food, have dried as a result of the heat waves. Dr. Ammad Ullah from the Jacobabad MS civil hospital told the Guardian that an “estimated that 50 to 60 people are getting heat stroke every day.” This could push more citizens into poverty in a city where “most of the million people” living there are already in poverty. According to the 2018-19 Household Integrated Economic Survey (HIES), almost 22% of Pakistan’s population lives in poverty. Despite the dire situation in Jacobabad, efforts are underway to combat the extreme heat wave and poverty in Jacobabad. The Pakistani government is taking steps to address the environmental crisis in Jacobabad and the country at large to prevent an increase in poverty.

How Heat Waves Increase Poverty in Jacobabad

The very high temperatures experienced by the people of Jacobabad in May 2022 pushed them further into poverty. For example, citizens in Jacobabad acknowledge that work and school are proven pathways out of poverty. However, the heat waves have made working and schooling difficult with children fainting during class and workers on the edge of vomiting during work. In this way, the extreme heat wave and poverty in Jacobabad impact the livelihoods of locals and the futures of children.

The Pakistani Government’s Efforts

The Pakistani government is attempting to mitigate the extreme heat wave and poverty in Jacobabad by pursuing environmental solutions. On May 17, 2022, Sherry Rehman, Pakistan’s climate change minister, said that the government has formed a national task force to lead “disaster management efforts” to keep the temperatures low. During this time, the government responded by promptly setting up 1,000 heat wave centers in the Sindh and Punjab provinces. Aside from saving lives, the heat wave centers will allow citizens to return to school and their jobs, which, in turn, will reduce poverty in Jacobabad.

On May 30, 2022, Rehman met with the country director of the World Bank, Najy Benhassine, to discuss the current World Bank projects in Pakistan. The World Bank’s climate initiatives are particularly important in Pakistan, considering the impacts of the heat wave in Pakistan’s city of Jacobabad. On the topic of large projects in Pakistan in general, Rehman encourages a “move toward a more sound water strategy in Pakistan” and “an effort to move from pilot projects [that] look good on paper toward the scaling up of outcomes.” Rehman also highlights a need for public awareness campaigns in Pakistan so that more people understand the severity of extreme weather conditions.

Looking Ahead

The situation in Jacobabad is severe due to the heat wave’s impacts on poverty and food security along with its consequences on health, education and jobs. However, the attention Jacobabad receives from international media and humanitarian organizations illustrates a strong will to assist Jacobabad’s people. The Pakistani government also responded quickly by setting up heat waves centers and implementing disaster management efforts. This shows the determination on the part of Pakistani leaders to address the situation in Jacobabad and bring down the poverty rate despite the immense challenges the nation faces.

– Abdullah Dowaihy
Photo: Pixabay

Digital Payment System in Pakistan
Pakistan has a primarily cash-based economy that thriving illegal markets and low government revenue plagues. A new digital payment system in Pakistan could change this. The State Bank of Pakistan (SBP) and the Pakistani government worked in collaboration with the Bill and Melinda Gates Foundation to launch this brand new digital cash transfer system. Additional support came from the United Nations, the World Bank and the United Kingdom.

This new digital payment system called Raast or “direct way” can instantly transfer money between two entities. Although the idea is not new and there are several other financial transaction systems on the market, Raast is the first one that received sponsorship from the Pakistani government, linking financial institutions and government entities. The government’s main goals are to make money transfers more transparent and thereby reduce corruption, increase government revenue and create a more inclusive economy.

Increased Transparency, Tax Revenue and a Less Corrupt Economy

A payment system such as Raast records every transaction in real-time and establishes a log of payments. This allows users to keep track of their transfers, and since the information is visible to all involved parties, users can report complaints or mistakes much more easily. When the Pakistani government and its citizens use Raast, it makes it possible for citizens to receive their pensions, salaries or other payments from the government much more quickly. The increased efficiency and transparency also supports small businesses and other micro-enterprises. Instead of paying cash or sending checks through the mail, they can instantly pay suppliers and distributors. This makes running a business more efficient, reliable, accessible and less prone to corruption.

The new digital payment system in Pakistan also makes it easier for the government to collect taxes by using the technology to track how much people owe and when they made payments. In 2019, the World Bank reported that Pakistan’s government collected half of what, theoretically, it should have been able to take based on its economy. Tax evasion is widespread, but it is also complicated and timely to file taxes in Pakistan. The World Bank found that there are many individuals and companies that would like to file taxes, but do not because of the time and money the process requires.

A More Inclusive Economy

In 2018, the Global Findex reported that only 7% of women age 15 and older had a bank account, and of the most economically disadvantaged 40% (men and women), 14.2% had an account. Particularly during the pandemic, it has been difficult for these underserved groups to receive government support without a bank account. Raast has the potential to serve vulnerable groups because it does not require people to travel to a physical bank, and is cheaper and easier for individuals to set up than a traditional bank account. In a report about payment systems, the World Bank stated that “secure, affordable, and accessible payment systems and services help expand financial inclusion, foster development and support financial stability.” However, without proper implementation, an endeavor such as this digital payment system in Pakistan could fall short of its goal.

In a statement at the launch, the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) Queen Máxima, discussed how important it is for all banks and service providers to adopt the new technology and to encourage individuals to use it instead of cash. If enough people and institutions use the program, it will reach its accessibility potential and spur economic growth. As Queen Máxima stated in her keynote address, the hope for this new digital payment system in Pakistan is above all to create a more digital and accessible economy.

 Caitlin Harjes
Photo: Flickr