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Synopsis At the beginning of the new millennium, 46 million Pakistanis live in poverty. The number keeps rising rapidly. Rightly so, the policy focus is now on poverty alleviation. However, for success to be achieved, the problem of poverty needs to be properly understood. Who are the poor? What are their economic circumstances? How do they cope with poverty? To what extent is the informal sector a poverty cushion? Is there a need for government intervention? If so, what should be the pillars of a comprehensive and effective poverty reduction strategy? Is the government doing enough to make a major dent on poverty? What policy reforms and safety nets have been put in place? Will these enhance economic opportunities for the poor, give them a voice and improve their endowments? Towards poverty reduction, SPDC’s third annual review of social development in Pakistan, attempts to answer all these questions? Its authors propose a three-pronged comprehensive poverty reduction strategy focusing on greater opportunity, empowerment and welfare, which goes substantially beyond what the government is doing. Established in 1995, the social policy and development centre is an independent and non-partisan private sector research institute that provides policy relevant research on social development in Pakistan.