PEOPLE as economic actors are often categorised with reference to their financial standing in a country. They are generally categorised in lower, middle or upper strata/class depending on their lifestyle and net worth.

Statements such as plight of lower class, dynamism of middle class or apathy of upper class are repeatedly used by public speakers and columnists and writers. Who make up these classes in Pakistan is far from clear.

An inquiry by Dawn into the definition of these classes exposed the level of disharmony in perception and understanding over the issue. In an informal survey, score of people in economic ministries, academia, professionals and representatives of the private sector were asked to define each class in terms of its income bracket. Responses exposed the level of confusion regarding the cut off income level that separates each class from the other.

Figures for income level of Rs4,000 and less to as much as Rs20,000 were quoted to be the cut off level for the lower class. For middle class, cut off was Rs50,000 to Rs100,000 and less. People earning above Rs20,000 to Rs100,000 were categorised as belonging to the upper strata of the society by different sets of interviewees.

The exercise, however, generated material that merit public sharing. At the start an attempt was made to describe the lifestyle of three classes before getting into numbers to quantify their earnings.

Most Karachiites interviewed described people living in Layari, Korangi, Orangi, Landhi, Lalukhet, Golimar, North Karachi and several hundred kutchi abbadis in and around city, to be making up the lower class. On an average, these households live a tough life. They are estimated to be about 25-30 per cent of the city’s population.

Average size of a family in such localities is bigger and in many cases all adults work to supplement family income. In extreme cases, even children are working to meet the family budget. They are low ranking government employees, factory workers, petty traders, plumbers, tailors, masons, drivers, electricians, school teachers, construction workers, guards, etc.

Besides kitchen expenses, they fully or partially avail public utilities, spend very little on education or health and manage simple household durables such as fans. Some households also have television and telephone.

In view of the people interviewed in Karachi, those residing in Gulshan, Nazimabad, North Nazimabad, Federal B Area and other such localities represent the middle class. These are white collar workers with comparatively smaller families. They are doctors, engineers, professors, lecturers, contractors, traders, businessmen, government officers, etc.

They typically own some property, a motorcycle or a car, send their children to private schools, are computer literate, have telephones and cable network, avail private health care and use many consumer durables. These are said to be the people behind surge in domestic demand.

The upper class in view of same interviewees typically reside in Defence, Clifton, KDA and PECHS. They belong to the class whose demand is price insensitive. A senior business leader and Chairman Karachi Chamber of Commerce and Industry felt that rich people tend to hide their assets for obvious reasons so it is hard to judge the real net worth of richest of the rich in the country.

“Elite in Pakistan is certainly richer than what most people contemplate”, said another businessman. A senior civil servant confirmed that in Pakistan, billionaires are not in hundreds, they are in thousands. “Pakistanis with property in elite localities in provincial capitals or in Islamabad have joined the rich men club. There are many such people in the country now”, said a retired economist.

Senior research officer Maqsood Sadiq of Centre for Research on Poverty and Income Distribution (CRPRID), a specialised cell in the Planning Commission, argued that this categorisation of classes is unrealistic. In his view, it may hold ground if perspective is limited to Karachi and Karachi alone.

From perspective of the country that include Thar and Kharan deserts and long stretches of land where even basic amenities are not available categorising people making Rs10-20,000 as poor is unrealistic. He said it would be absurd to pigeonhole a person living in a house in city with a job and supplementary income of other family members in lower class.

“Beyond cities there are few Pakistanis who enjoy luxury of living in a house with running tap water equipped with sewage, electricity and gas. To me except for, may be, small chunks in kutchi abbadis almost 90 per cent of Karachi’s population is not poor. They have already joined the ranks of middle classes. Roughly about 40 per cent of Karachi’s population may constitute middle class and the rest of 50 per cent belong to the upper class. How can a person living in a small flat in Gulshan-e-Iqbal that is worth no less than Rs2-2.5 million be counted in middle class”, he asserted.

The argument of the researcher does carry weight. His view was indirectly complemented by another interviewee who felt that rural/urban and inter-regional disparity is so stark that any generalisation would be misleading. There are all three classes of its own in each locality and income divide in different localities within a city render them incomparable. “I see such broad aggregation serving no purpose”, Ahmer Mustaffa a sociologist felt.

According to current official numbers at 7.5 per cent GDP growth rate, the population of the country is increasing by 1.9 per cent per annum and the real per capita has grown at an average rate of 5.6 per cent. The only measure that government has to assess the relative strength of sections is Pakistan Social and Living Standards Measurement (PSLM) survey that provides data on household income, consumption expenditure and consumption patterns at national and provincial level with rural/urban breakdown.

The Household Integrated Economic Survey (HIES), a component of PSLM survey provides important data on household income, consumption expenditure and consumption patterns. The key distributions in HIES are examined across five standardised per capita consumption expenditure quintiles. Each quintile contains 20 per cent of the total sample households. The first quintile contains lowest 20 per cent of the total households. In the second quintile the next better of the 20 per cent of the total and so on. In the fifth quintile, the richest 20 per cent of the total households are accounted for.

The results of the most recent survey of 2004-5 confirmed that richer households have comparatively smaller household size. The pattern of consumption expenditure showed that the level of consumption expenditure in urban areas is higher than the rural areas.

An analysis of quintiles in the report revealed that average consumption expenditure of the richest class in urban areas are more than three times higher than the lowest income class and double the same income class in the rural areas.

Similarly among total households 20 per cent of the highest income level in urban areas command income more than three times than the lower income level of 20 per cent of households.

The Pakistan Economic Survey 2005-06 analysed these numbers. According to the survey : “The estimates indicate that consumption inequality in urban Pakistan is higher than in rural Pakistan. Moreover urban inequality increased faster”. The economic survey uses Gini Coefficient as a broad aggregative measure. The trend of the Gini values indicated that consumption inequality has increased during the 2001-05 period.

This is about all in terms of trend that one finds in the official papers reflecting on the relative strength of different classes. A senior economist in Islamabad said that of five quintiles, the first two fell in the lower class and upper three represent middle class of Pakistan. He said that upper class in Pakistan is so miniscule— hardly one per cent— that it is not reflected in sample surveys.

Investigations revealed that most realistic estimates regarding the level of disposable income in different areas, districts and localities are available with marketing companies. These outfits need this data to fashion marketing strategies for their clients that include big multinationals specialising in consumer items such as Lever Brothers, Proctor and Gamble, etc.,

These outfits, however, carry out surveys and studies on demand for the clients and have no interest to share sometimes intriguing results with the public. The fact is that results are guarded as business secrets available only to those who are willing to pay for them.

Highest offices in the relevant ministries were contacted but probably the subject was too direct and in absence of readymade processed numbers, senior bureaucrats preferred to avoid commenting.

As there was no unanimity on definition of three classes it was not possible to project the numerical or relative strength of each class as percentage of Pakistan’s population with confidence.

“I cannot say anything. In absence of credible data rough projections can be very misleading. May be, the government should initiate a study on the subject to better understand dynamics of Pakistan’s economy”, commented a senior banker approached by the paper for comments.