Programmes for poverty reduction

Until the late 1990s Pakistan did not have an indigenously developed poverty alleviation programme. The countrys planning managers did not feel the need to consult all the stakeholders and develop a strategy. Poverty began to rear its ugly head when the democratic governments of Benazir Bhutto and Nawaz Sharif were taking turns at governing Pakistan. Forced by the rising number of people falling below the poverty line, and strong urging by the IMF and the World Bank, work began on the development of a Poverty Reduction Strategy document. This was in 1999. Since that time, Pakistan has developed at least three poverty reduction strategies. These strategies were conceived as instruments for incorporation in the countrys economic policy with the aim to alleviate poverty. The outcome of these strategies clearly establish that meeting the basic needs of education and health of the countrys poorest continues to be superseded by other objectives such as the construction of showpiece projects, other non-productive expenditures, the insatiable requirements of the military establishment and obliging the donors to receive the much needed dollars for budgetary support. Driven by the urgency for debt relief from international lenders in the middle of a balance of payments crisis, Pakistan adopted the process in 2000 by setting up a PRSP Secretariat in the Finance Division. The Secretariats location in the Finance Ministry made it clear that the PRSP was, first and foremost, a means of attracting foreign lending. The Finance Ministry saw no loss of self-respect in accepting financial support from the World Bank for the initial funding for the Secretariat. Even the staff for the Secretariat was recruited and appointed with the blessings of the local staff of the bank. The Secretariat hastened to develop an Interim Poverty Reduction Strategy Paper (IPRSP) for 2001-2003. Notwithstanding the primary purpose, which was to qualify for IMF and World Bank funding, the IPRSP was greeted with considerable fanfare and high-level ownership. Commando General Pervez Musharraf, who had overthrown an elected government which was planning to establish a Commission of Inquiry into the Kargil misadventure, viewed it as a tool to legitimise his rule and gain confidence at home and abroad. Private banker Shaukat Aziz, who was appointed as Finance Minister by the Commando President, used the IPRSP to showcase the governments resolve to improve the countrys economic and social situation. It was claimed by Shaukat Aziz and other drummers of the government that the strategies developed in the IPRSP were country-driven, result-oriented, and comprehensive with a long-term perspective. Consultants working in the PRSP Secretariat were more forthcoming than the usually glum-faced and tight-lipped bureaucrats manning the Secretariat. The former agreed that under the garb of poverty reduction the government was in fact responding to economy-wide structural reforms required by the IMF and the World Bank. Many actions contained in the IPRSP - tax reforms, public expenditure management, monetary policy, external adjustment, debt management and privatisation - required a great deal of imagination and a credulous audience to connect them with poverty reduction. Pakistans first formal PRSP (PRSP-I), was prepared in a much more optimistic economic environment than the IPRSP. Admitting that reducing poverty and inequality remained major challenges, it was based on four pillars: Achieving rapid and broad-based economic growth, while maintaining macroeconomic stability; improving governance, devolution, and social and economic justice; investing in human capital and improving public service delivery; targeting the poor and vulnerable and reducing inequalities. The government justified the impact of PRSP-I, as measured by the Pakistan Social and Living Standards Measurement Surveys (PSLM), in terms of a decrease in poverty headcount ratio from 35 percent in 2000-2001 to 22 percent in 2005-2006. The PSLM Surveys were challenged and some of the data was admitted to be doubtful. Disparities remained evident between the rural and urban areas and between various regions. The formative phase of PRSP-II was marred by the outbreak of terrorism at home, the waning of Musharrafs grip on power, following the unconstitutional action of sacking the Chief Justice, imposing emergency and adoption of other undemocratic measures. The positive economic outlook had dwindled due to the global financial crisis, food and fuel inflation, political uncertainty and the war against terror. Perhaps, it is too early to judge PRSP-IIs outcomes, but recent trends suggest that poverty in Pakistan is on the rise again. The Benazir Income Support Programme is unlikely to make any dent in the increasing number of people and families being pushed below the poverty line. The spending cuts in the development budget during the last two financial years suggest that the PRSPs have failed to fundamentally change basic public expenditure practices. When push comes to shove, spending on the voiceless, rural poor is still one of the first items to be cut. And while the Benazir Income and Waseela-e-Haq programmes can boast of having funnelled public expenditures toward poverty reduction, the extent to which these expenditures reached their target groups is hard to establish. Impacts and outcomes remain elusive. n The writer is a member of the former Civil Service of Pakistan. Email: shakeelahmad941@yahoo.com

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