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Published Date: Nov 10, 1996

Structural Adjustment, Labour and the Poor in Pakistan (R-8)

Structural Adjustment, Labour and the Poor in Pakistan (R-8)
Shahrukh Rafi Khan and Safiya Aftab, SDPI
1995(Published in Economics International, Vol 69, No. 2, 1996.)

Abstract

In this paper we cite evidence regarding the impact of IMF/World Bank policies on labour and the poor in Pakistan.  Our findings show that since the 1987 bout of structural adjustment, public sector employment has decreased while wages have been frozen.  In addition, overall unemployment in occupations with a high incidence of the poor has dramatically increased.  In addition, subsidies that were critical to the consumption pattern of the poor have been cut while the burden of indirect taxes on the poorest income group has increased.   Not surprisingly, there has been an increase in poverty and inequality, particularly in the rural areas.  Given the deteriorating condition of the poor and given the riots that often accompany structural adjustment policies, policy makers in Pakistan are left with little margin for error.