While considerable demands are made in successive IMF agreements to increase tariffs on utilities and fuel, and to withdraw food subsidies, we have never seen an IMF conditionality demanding a 100 percent increase in the education and health budgets. Pushed by the IMF and the World Bank, poverty reduction has been at the centrestage of the policy agenda in Pakistan since the beginning of economic reforms in the 1990s. Quite inexplicably, poverty indices show that the level of poverty has shown no sign of significant reduction, despite numerous financial and institutional initiatives undertaken by the government. The latest initiative has been launched by the government of President Asif Zardari, who has midwifed the Rs 34 billion Benazir Income Support Programme (BISP) with great fanfare. Under the scheme, three million families with earnings of less than Rs 6,000 per month will be paid Rs 2,000 every two months. The initial reaction to the BISP has been that it is too politicised, centralised, complicated and non-transparent. It contains no provision to equip the people with knowledge and skills, which would enable them to increase their earnings and move out from below the poverty line. Unless redesigned, it will become mired in bureaucratic and political wrangling. The programme is unlikely to provide relief that the people have been expecting from the PPP-led government. Nevertheless, the strucutural adjustment policies designed by experts comfortably ensconced in the IMF board rooms have little or no knowledge of the harsh realities that govern the lives of the people of Pakistan. Rationalisation of power tariff, elimination of subsidies, and imposition of the General Sales Tax (GST) has been largely felt by the common people because of an immediate significant increase in the cost of utilities, higher fuel costs and withdrawal of food subsidies. It is hardly surprising to see that the privileged traders and industrialists are able to cushion these by transferring the burden to the consumers through price hikes. The feudal agriculturists and landlords are also protected by inexplicable exemptions from income tax, whereas the ruling elite and bureaucrats are largely provided facilities of free utilities and fuel by the state. There is thus little to no empathy on the part of the policymakers and powerbrokers, who grace our Assemblies as to the impact of these policy changes on common people. In response to IMF conditionalities and the lack of will to curtail current non-developmental expenditures, the development outlay has come down to a paltry 3.2 percent of GDP compared to almost thrice that figure five years ago. While poverty has intensified in the last decade, the country's long-term prospects for achieving high growth are also being compromised by the low level of social sector investment. The UNDP's Human Development Index (HDI) shows that Pakistan's level of human development is low for its level of income. Pakistan's education indicators are the worst in South Asia. The fact that the education index in Nepal and Bangladesh, two countries with significantly lower per capita incomes than Pakistan, is 10 to 20 percent higher than Pakistan is a clear indicator of the low priority accorded to education in our countrys development policies. Pakistan's public sector spending on education and health, at barely 2.1 percent of GDP, is significantly lower than that of other countries in the region. At the same time, experience in Pakistan shows that accelerating human development is as much an issue of increasing expenditure on social sectors, as of improving the effectiveness of spending through better governance. While considerable demands are made in successive IMF agreements to increase tariffs on utilities and fuel, and to withdraw food subsidies, we have never seen an IMF conditionality demanding a 100 percent increase in the education and health budgets. There is also no conditionality attached to any of the IMF or World Bank agreements that there must be drastic improvement in the quality of education, which should be market oriented. Instead, the most recent agreement by the World Bank to accept the contention by government officials that funds for the social sector may only be available according to Pakistan's fiscal position, does not portend well for any change in this status quo. In the exact words of a responsible government official: We have told the donors that we have to allocate resources for the social sectors according to our own financial position, and as such we should not be pressurised that we must arrange an equal amount every year for this purpose. As always, the governments' contingency plans to meet the revenue targets for the IMF will continue to be a further reduction in the public sector development programme, rather than defence spending or non-developmental expenditure. The unemployed youth of Pakistan whose number is growing by the day are angry and frustrated. They are angry since they see little hope in traditional politics or improvement in the way of governance. They are frustrated because no one is prepared to employ them on grounds that they do not possess the skills and the knowledge required by the market. They are, therefore, attracted to the missionary zeal of the religious rightwing. The rapid growth of militancy and obscurantism is a direct consequence of poor governance and economic stagnation, and in no small measure to the failure of the international financial institutions to provide firm and consistent support to Pakistan geared towards human development, Truly, the government of President Asif Zardari has been unable to establish mechanisms that can even remotely gauge these societal impacts of structural adjustments. The writer is a member of the former Civil Service of Pakistan.