development planing

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Dr. Vaqar Ahmed

Planning Commission

Pakistan Institute of Development Economics

15 Feb. 2010

Planning & Planning Process in Pakistan


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Contents

Current Economic Milieu

Planning Myths

Planning in International Context

Approaches to Planning

Planning Process & Machinery in Pakistan

A Path Forward 2


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Current Economic Milieu

3


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Planning Myths

4


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Myth 1: Planning is useless because policies lack consistency

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Myth 2: LDCs including Pakistan have not

completed the tenure of their economic policies

The discontinuity was not in policies but projects.

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Myth 3: Pakistan Vs. South Korea Model Myth

Aid Received

Model Focus

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Planning for Growth

Financing for Growth

Debt Funding

Equity funding

Public Sector Funding :

PSDP

Assistance

Equity

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GDP Investment Savings


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Planning for Income Distribution

Can growth & distribution be achieved simultaneously?

Is growth necessary for distribution?

Is it economic growth that leads to reduction in poverty or the

process of distribution?

Case of Trade Liberalization ?

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Planning in International Context

10


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Changes in Planning Paradigm

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From Planning to Policy

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Policy Implementation Stages

1. Data Collection

2. Analysis

3. Planning & Prioritizing

4. Implementation

5. Monitoring

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14


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Reactive Past oriented

Inactive Present oriented

Preactive Predicting the future

Proactive Create the future

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Planning Process and Machinery in Pakistan

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Objectives of Economic Planning

1. To increase per capita and national income

2. Higher level of employment

3. Price stability

4. Reduction of inequalities in income distribution

5. To remove BOP difficulties

6. Reducing regional disparities

7. Self-sufficiency in food

8. Redressing imbalances in the economy

9. Increase in savings10. Reducing population growth

11. Reducing poverty levels

12. Provision of social services

13. Long term economic growth 17


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Conditions or Requirements of Successful Planning

1. Realistic goals of the plan

2. Appropriate policies and instruments

3. Adequate information

4. Rational institutions

5. Suitable administrative and technical apparatus

6. Public cooperation

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Main Instruments of National Planning

1. Policies

2. Plans

i. Perspective Plan 10-25 Years

ii. Mid Term Plan 04-07 Years

iii. Rolling Plan 03 Years

iv. Annual Plan 01 Year

3. Transformation of plans into projects/programmes

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Pl P i d i P ki t


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Plan Periods in Pakistan

20

Plan Period

1. Colombo Plan (Six Year Plan) 1951-57

2. 1st Five year Plan 1955-60

3. 2nd Five year Plan 1960-65

4. 3rd Five year Plan 1965-70

5. 4th Five year Plan 1970-75






11. 10 Year Perspective Development Plan 2001-11

12. Medium Term Development Framework (MTDF) 2005-10

13. Vision 2030

14. 10th Five year Plan (under construction) 2010-15

Ch l f Pl i M hi


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Chronology of Planning Machinery

1. Development Board established in 1948 in the EAD

2. Planning Board set up in 1953. First 5 year planprepared for 1955-60

3. National Planning Board established in 1957

4. Planning Commission setup under the Chairmanshipof President in 1959

5. Second five year plan prepared for 1960-65 followedby the third five year plan for 1965-70

6. Fourth Five Year Plan (1970-75) prepared but remaineddormant due to separation of East Pakistan

7. 1970-77 non plan period: Development on basis ofAnnual Plans

8. Fifth Five Year Plan 1978-83 21

Ch l f Pl i M hi


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Chronology of Planning Machinery

9. Sixth Five Year Plan 1983-88

10. Seventh Five Year Plan 1988-93

11. Eighth Five Year Plan 1993-98

12. Ninth Five Year Plan (halted due to changed ingovernment)

13. 10 Years Perspective Development Plan 2001-11

14. MTDF 2005-10 July, 2005.

15. Planning Commission restructured on 20 April 2006

with P.M. as Chairman.

16. Vision 2030 launched in August, 2007 22


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Functions of Planning Commission

Consultation with:

Federal Ministries / Provincial Governments

Donors

Civil Society

Formulation of National Plan

Annual Plan

Five Year Plan

Rolling Plan

Perspective Plan (15-25 Years)

Project Management

Approval of Development Projects

Monitoring of Major Projects

Evaluation of on-going and completed projects

Association with EAD in matters of Foreign Assistance 23

Pl i P


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Planning Process

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Planning Commission

Preparation of approach paper

Formulation of technical workinggroups in all sectors

Preparation of sectoral chapters by

working groups

Consultations with allFederal Ministries for

input

Consultations with allProvincial Govts. for

input

Sent to all Fed. Ministries

and Dev. Partners forcomments and input

Sent to all Provincial

Govts. for comments andinput

Finance Division

(Resource Availability)

Economic Affairs

Division

(Foreign aid availability)

Finalization of draft plan by PC and

its presentation before

President/Prime Minister

Submission to National EconomicCouncil (NEC)

Circulation of approved plan to all

Provincial Govts. And Federal

Ministries for implementation

Transformation of plan into viableprojects/programmes

Draft

FiveYear

Plan


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How Planning Leads to Development

Plans are transformed into viable project

programmes

Relationship: Projects and Plans

Ensure Desired Objectives of Development Plan

Crowding

in phenomenon:

Investment Coefficient

Which modes of public investment?

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Project Management Life Cycle

1. Identification and Formulation

2. Appraisal and Approval

3. Implementation

4. Completion and Closure

5. Ex-post Evaluation

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How are Projects Identified in Pakistan?

National Economic Council

Planning Document (Annual / Medium Term Plan)

Assistance and partnership strategies with donors

Line Ministries / Public Sector Corporations

Based on their sectoral strategies / work plans

Public Representatives/NGOs/Pressure Groups

Policy Debates

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Project PreparationPC I Performa

History

Introduced in September 1952

Revised by Group of Experts 1995 including World Bank.

14 Forms of Various Sectoral Projects

Present

Only 3 sectoral PC-I Performa (Infrastructure, Social

Sector and Production Sector)

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Project PreparationPC II Performa

Need for Feasibility Studies

Projects costing Rs. 300 million and above

Financing the Cost of Feasibility Studies Provision under PSDP

Proposal to be submitted in the form of PC II Performa

Highly Technical Projects

Request donor for Technical Assistance Grant

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Project PreparationProject Formulation

Overall Objective

Financial and Economic Viability of the Project

Indicatorsover the life of project

Inputs Baseline data

Output

Expected Outcomes

Sustainability aspect after completion

Yielding the required outcomes

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Project Appraisal & Approval

Appraisal involves a careful check of:

Basic data

Assumptions and methodology used in project

preparation

In-depth review ofwork plan, cost estimates and

proposed financing plan

Assessment of organizational and management aspects

Validity of financial, economic and expected socialbenefits

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Approving Authority

Departmental Development Working Party (DDWP)Up toRs. 40 million

Central Development Working Party (CDWP)Up to Rs.500 million

Executive Committee of National Economic Council

(ECNEC)More than Rs. 500 million Provincial Development Working Party (PDWP)Up to Rs.

5000 million

Corporations and Autonomous BodiesNo Limit*

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P j A i l & A l


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PC III, PC IV, PC V

PC-III: Designed to furnish information on the programme of

on-going projects on quarterly basis

Any Changes in Scope of Design

Any Revisions

Any Changes in Management of Project

PC-IV: Project History (Physical Completion of Project)

Accounts Closed/amount unaccounted

Employment generated by the project

Suggestions for future planning

Name of the operating agency

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P j A i l & A l


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PC III, PC IV, PC V

PC-V form is to be furnished on annual basis for a period of

five years by operating agency

Review of costs

Review of financial results

Arrangements for maintenance of project

Difficulties experienced in operation, marketing etc.

Repercussion of scheme

General observation of Federal Ministry

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The Need for Monitoring

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P j t M it i


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Project Monitoring

Internal Monitoring

Sponsoring Ministry

External Monitoring

Provincial P & D Dept.

Projects Wing at Planning Commission

Monitoring Cells

Establishment of Planning and Monitoring Cells in

ministries as directed by ECNEC.

Monitoring Methodology

Results Based Monitoring36

P j t M it i


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Project Monitoring

Stages of Monitoring

Starting Phase

Investment / Execution Phase

Completion / Operating Phase

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P j t M it i


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Project Monitoring

E-connectivity through Project Monitoring and Evaluation

System (PMES)

Project Director Provincial P & D DepartmentsLine Ministries Planning Commission PrimeMinister Secretariat Funding Agencies

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Pending Weaknesses

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Weaknesses Need for F rther Reform


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Weaknesses Need for Further Reform

Weaknesses in Project Management

Financial

. Unrealistic cost estimates

. Delay in financial arrangements (Local/FEC)

. Proper cash plan not prepared

. Inadequate allocations/funding

. Late release of funds, lengthy procedures

. Cost over run

Monitoring & Evaluation. Need for more effective monitoring

Political Intervention

Others 40



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Planning Issues

o Management

o

Human Resource Development

o Lack of Policy Formulation and Analysis

o Depleted Physical Infrastructure

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Path Forward

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9-Point Program for Economic Reform and


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9-Point Program for Economic Reform and

Sustainable Development

Achieve Macroeconomic Stabilization Establish Social Safety Net

Develop and mobilize human resources (HRD)

Expand agriculture production and galvanize Agro-Business

potential Galvanize industrial competitiveness with supporting strategies

Integrated planning for Energy Development

Deepen and diversify domestic Capital Markets

Establish Public-Private Partnership as major method for

infrastructure development

Administrative Reform: Consolidation, Specialization and

Devolution


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Final Message


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Water for agriculture

Energy for industry


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http://www.pc.gov.pk/
http://www.pc.gov.pk/http://www.pc.gov.pk/

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