7840-Pakistan I-PRPS - Ppt Lessons Learnts

8/10/2019 7840-Pakistan I-PRPS - Ppt Lessons Learnts

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Pakistans I -PRSP

in the Light of Evaluative Experienceof the World Banks Poverty ReductionStrategy and the Global Experience with

the PRSPs so far

Sohail Jehangir MalikChairman

Innovative Development Strategies (Pvt.)

Ltd


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Global Poverty Reduction during

the 1990sThe World Banks three pronged poverty

reduction str ategy of 1990

Growth social sector development and safety nets

had mixed resultsIn terms of the money-metric measure of

poverty


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By the end of the 1990s Global poverty rateswere down but progress was extremelyuneven


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Take away China and there wasactually a worsening of poverty

headcount numbers over the1990s!!!


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Reduction in child malnutrition has been slow prospect of reaching the targets of Millennium

Development Goal is in doubt


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120 million primary-school-age children were not in school in 1999.53 % of them girls.74 % living in South Asia and Sub-Saharan Africa.


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Ratio of girls to boys in primary and

secondary school (%)


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Infant mortality rates


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Pakistan - by the end of the 1990s

Not only was the poverty

situation alarming! but prospects for its reduction

were also bleak


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y = 38.68e -0.0316x

1015

20

25

30

3540

1 9 9 0

1 9 9 2

1 9 9 4

1 9 9 6

1 9 9 8

2 0 0 0

2 0 0 2

2 0 0 4

2 0 0 6

2 0 0 8

2 0 1 0

2 0 1 2

2 0 1 4

Expon. (Actual)

Expon. (Required)

Headcount Of Poor - Pakistan


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Pakistan: Prevalence of Child malnutrition (nuchildren under five)

38.240.2

y = 40.612e-0.0102x

y = 43.145e-0.029x

0

20

40

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Expon. (Past Trend)Expon. (Required Trend)


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Pakistan: Ratio of Literate Females to Mal

58.949 53.757.9 y = 48.094e0.0185x

y = 44.956e0.0294x

40

55

70

85

100 Expon. (Past Trend)

Expon. (Required trend)


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Pakistan: Under Five Mortality Rate

110.3

138118

112 y = 138.95e-0.022x

y = 160.27e-0.0451x

30

60

90

120

150

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Expon. (Past trend)

Expon. (Required trend)


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Details of the Poverty Trends in PakistanProvince FY93 FY94 FY97 FY99

Urban Areas 20.7 16.3 16.1 22.4Punjab 22.0 18.1 16.9 25.5Sindh 17.3 11.8 12.0 16.1NWFP 25.3 26.9 27.2 29.2

Balochistan 31.8 16.8 23.0 24.3Rural Areas 28.9 34.7 30.7 36.3Punjab 26.5 33.9 28.3 36.0Sindh 29.5 31.8 19.6 34.7NWFP 37.0 40.0 43.4 44.9Balochistan 28.1 37.9 42.5 22.5

Overall 26.6 29.3 26.3 32.2Punjab 25.2 29.5 25.0 33.0Sindh 24.1 22.6 15.7 26.6NWFP 35.5 38.1 41.2 42.6Balochistan 28.6 35.5 38.4 22.8


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Poverty Trends across Provinces

0.0

5.010.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

FY93 FY94 FY97 FY99

Pakistan Punjab Sindh NWFP Balochistan


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Poverty Diagnostics

Poverty is strongly related to lack of basic needs Poor have low access to health related

infrastructure Poor communities have lower access to health

facilities and immunization coverage Poor have higher dependency ratios More than 1/3 rd of the poor households are headed

by aged persons


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Poverty Diagnostics (contd.)

27% poor versus 52% non-poor households

are headed by literate persons Poverty is higher when head of the

household is unskilled agricultural worker

Cultivable land owned by poor versus thenon-poor is 0.27 and 0.84 acres per capita,respectively


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Investment as % of GDP


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Consolidated Public Expenditures(as % of GDP)


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The Poverty Reduction Strategy

PapersBorn in late 1999 out of the pressures from: HIPC

The lessons from the experience with theWorld Banks 1990 strategy of PovertyReduction

The Recommendations of the MeltzerCommission Report to the AmericanCongress


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The PRSPs are an essentialrequirement for debt relief under

the HIPC initiative and good business plan for concessional

assistance under IDA


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The PRSP requires: A long term domestically owned holistic Vision

with a strategic articulation of the perceptions of poverty and how to address these encapsulated in

a three year plan Clear and Verifiable time-bound M& E Indicators A participatory consultative process at the grass

roots level

Coordination and Efficiency through a MediumTerm Budgetary Framework

PRSPs ensure IFI partnership as well as means tomonitor domestic performance


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Lessons from the WB Experience -Policies A strategy that emphasizes the mutually

reinforcing benefits of growth and human resourcedevelopment is relevant.

Most recent empirical evidence however, points tothe importance of contingent factors such as: property rights, a capable bureaucracy and

the distribution of assets in mediating the povertyreducing effects of growth, and to the negative effectsof corruption on both inequality and poverty.


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Lessons from the WB Experience -Policies Human development has proven to be vital for

long-term growth. However: Need to improve the interaction between policies that

sustain long-term growth,

Need to improve the distribution as well as the stock ofhuman capital,

Need to curb corruption and enhance the social and physical capital of the poor, that are likely to make thereal difference.

These are all elements making up the newComprehensive Development Frameworkunderpinning the PRSP process.


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Lessons from Country Studies Growth that is based on rural development has a notable

impact on overall levels of poverty. Lack of social consensus and government commitment can be a major obstacle to reform, while weak institutionalcapacity can hinder prospects for implementation of aneffective country poverty strategy.

Slow private sector development, weak governance andhigh aid-dependence slow down the prospects for growthand reduce the long-term sustainability of growth andimprovements in the social sectors.

There is a need to monitor not only the level, but also thedepth and severity of poverty. Safety nets are a necessarycondition for ensuring that the poor are protected. All threeelements of the 1990 strategy are important for sustained

poverty reduction.


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Lessons from Project Experience

Reaching the poor and making tangibledifferences to their well-being depends on a good project design macro institutional environment specific local institutional capabilities cultural acceptability of different types of interventions.

Tightly targeted projects with good

communication, supervision and in-builtflexibility can work, even in difficultinstitutional/policy environments.


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Lessons from Project Experience(contd.)

There is no reason to expect that the benefitsfrom social funds and decentralization willalways be pro-poor.

There is a need to better understand thesynergy between key areas of public and

private actions to better address the priority

needs of the chronically poor.


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Core Principles of Pakistans

I-PRSP Engendering growth Governance reforms Creating income generating opportunities Improving human development Reducing vulnerability to shocks


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EconomicReforms

Physical AsseetCreation for

The Poor

Social AssetCreation for

The Poor

Social SafetyNet Governance

PrivateDevelopment

PublicExpenditure

Rationalization

Tax Reforms

KhushalPakistan

Programme

State LandAllocation

Zakat & UshrRehabilitationGrant

Micro Credit

PPAFKhushali Bank

Poverty &Environment

Social sectorProgramme

EducationHealthPopulationWelfareWater SupplyNutrition

Gender RelatedReforms

Poor Women &Children

Social WelfareProgramme

Zakat, Ushr &Baitul Mal

Systems

Food SupportProgramme

The SocialProtectionSystem

Pension PlanSocial Security

System

IndigenousPhilanthropy

JudiciaryReforms

PublicSectorEfficiency

CorporateGovernance

Rule of LawFor Society

RapidEconomic

Growth

Utilization ofAssets

LabourMarket

Mobility

Extreme PovertyElimination

Creation ofEmployment

Income of Poor

Poverty Reduction Strategy 2001 2004.


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Revenue and Expenditures

(1998-99 to 2000-01 actual)

(2001-02 to 2003-04 IPRSP)

-10

-5

0

5

10

15

20

25

30

1998-99 1999-00 2000-01 2001-02 2002-03 2003-04

P e r c e n t

Budget balance Total revenue Development expenditure Total expenditure IPRSP expenditures


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Trends in Crucial Growth Rates(1998-99 to 2000-01 actual)(2001-02 to 2003-04 IPRSP)

4.2

3.9

2.7

3.7

5.05.2

5.7

3.6

4.4

5.0 5.0 5.0

2.69 2.69

2.2 2.11.9 1.8

0

1

2

3

4

5

6

1998-99 1999-00 2000-01 2001-02 2002-03 2003-04

p e r c e n

t

Real GDP growth Inflation Population growth

T d i P


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Trends in Poverty(1992-93 to 1998-99 actual)(2000-01 to 2003-04 IPRSP)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

1992-93 1993-94 1996-97 1998-99 2000-01 2001-02 2002-03 2003-04

P e r c e n

t

Overall Urban Areas Rural Areas


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I-PRSP Challenges

extracting Pakistan from a debt trap,

accelerating growth, improving social indicators, and restoring the credibility and integrity of public

institutions.


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Major I-PRSP Challenge

Macroeconomic stabilization: Increasing tax revenue in order to provide more

fiscal space for poverty reduction initiatives

overcoming adverse debt dynamics. Maintaining a prudent monetary policy in order

to keep inflation low

Increasing export growth to improve theexternal debt situation.


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Major I-PRSP Challenge

Growth promotion: Acceleration of reforms in the areas of:

Privatization Irrigation and drainage Energy tariff rationalization Karachi electric Supply Company Gas pricing Civil service reforms Tax administration Agriculture support services


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The Bigger Challenge!

Getting growth going and ensur ing that the

Growth is pro-poor and translates into fasterpover ty reduction

tackling the distr ibution issue


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Success of the I-PRSP hinges on: Governance reforms and devolution: Reducing incentives for corruption

Governance reform agenda that includes reforms offundamental institutions

Central bank Tax authority CBR Police Judicial system Civil service Auditor general and controller general of accounts

Reforms in the public financial management systemsand institutions

Establishment of an effective anti-corruption agency.


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And the crucial assumption forPoverty Reduction under the

I-PRSP

The success of the devolution plan inimproving access to education, healthand other public services


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Major Strength of the I-PRSP

Confirms the governments commitment tosustaining and expanding targeted

interventions that focus on disadvantagedsections of society, especially in rural areas

Highlights the key role of agricultural sector

in poverty reduction


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Weaknesses

I-PRSP does not question whether current policies of poverty reduction are appropriateor adequate, especially in the rural strategy.

It does not present an analysis ofalternatives


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Weaknesses

The I-PRSP does not: recognize the fact that greater tariff

adjustments will be required in the energysector in future and that tariff increases mustbe accompanied by improvements inoperational performance.

acknowledge that privatization will taketime, and that in the interim pressinginvestments will be needed.


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Weaknesses

I-PRSP does not fully exploit the potentialrole of the private sector in bringingeducation to the underprivileged.


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Challenges and Risks Outlined

by the I-PRSP Challenges:

To raise financing, and

To improve governance and institutional capacity Risks

Political opposition to reforms, Lack of continuity,

Insufficient institutional capacity, and Exogenous shocks


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Common weaknesses in all

PRSPs Inadequate information on the determinants of

pro-poor growth

Inadequate linkages between economic growth,macroeconomic and structural policies and

poverty reduction

Inadequate linkages between public expenditures, poverty outcomes, and costing.


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Comparison of I-PRSPs and

PRSPs showssignificant differences between the full and

interim PRSPs in terms of :

data availability quality of data analysis and policy

formulation

development of medium term budgeting procedures participatory processes


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Pakistan has committed todeveloping a FULL PRSP by

March 2003This requires:

A wide ranging consultative process to ensure thatthere is consensus on the long-term vision,ownership and sustainability of the program

The long term vision requires consensus on the perception of poverty and on the strategic prioritization of interventions at all levels


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The full PRSP requires:

Strategic coordination of resources -including aid - over the medium term

Development of detailed Provincial andsub-provincial level PRSPs


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The full PRSP requires: Expenditure tracking

To monitor spending in important sub-sectors and programs

To track expenditure data by economic classification

Monitoring of intermediate and outcomeindicators

Adequate implementation of monitoring system.

And the building of technical capacity (at provincial and district level)

Consensus on a nationally acceptable poverty line


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The full PRSP requires:

Systematic data collection and analyses of poverty dynamics and vulnerability that is

domestically owned Analyses informing of possible adverse impacts

of some key macro/structural policies on the poor and other socio-economic groups

Assessment of key poverty programs likeKhushal Pakistan and Katchi Abadi etc.


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The time is extremely short the

challenges are enormous!

Documents

7840-Pakistan I-PRPS - Ppt Lessons Learnts