Pakistan is a developing country, and also a country
plagued by poverty, unemployment and low literacy rate. In these
circumstances it is paramount for us that poverty alleviation be one of
our primary concerns. Along with debt repayment, poverty alleviation
should be one of the key objectives of the government and an essential
part of it's economic policies.
Under its poverty reduction strategy the Government
stresses that it is working to achieve this aim but more needs to be
done and it needs to show increased commitment to increasing poverty
reducing public expenditure as a percentage of GDP. To assess the impact
of poverty reducing public expenditures and policies, the Government
monitors a number of intermediate human development indicators related
to education, health and population planning. The ADB also released a
report analyzing poverty reducing public expenditures, and intermediate
human development indicators related to health based on data released
since the last Economic Update.
So for the indicators are sending out a mixed signal,
with some areas receiving increased attention at the cost of others.
This has in certain instances served to reduce the overall positive
impact of the program as a whole, as well as in specific areas.
The pro-poor expenditures incurred in FY2003, at Rs
158.0 billion, were 18.3 percent higher than FY2002, although they fell
marginally short of the budget target of Rs 161.0 billion. As a
percentage of the GDP, the pro-poor expenditures increased from 3.7
percent in FY2002 to 3.9 percent in FY2003. Their share in total public
expenditure also increased from 16.2 percent to 17.6 percent
There are basically 12 sectors identified for
pro-poor expenditure, and of these education, health, population
planning, social security and social welfare, water supply and
sanitation (WSS), and rural development are considered to be the core
areas. Expenditure in these sectors taken together registered an
increase of only 10.0 percent in FY2003 compared with the previous year.
Of individual sectors, expenditure on rural development and family
planning showed substantial increases, while increases in expenditure on
education and health were much smaller than the increase in total
poverty reducing expenditure. Expenditure on water supply and sanitation
(WSS) declined by 29.7 percent. Under devolution the responsibility for
WSS is with the tehsil governments, and the decline may be because of
inadequate implementation capacity at tehsil level, and lack of clarity
in relation between district and tehsil governments, as well as between
concerned provincial departments and tehsil governments.
Within the education sector, in FY2003 there was a
discernable shift in expenditure from primary and secondary education to
university and professional education.
Expenditure on primary education declined by 4.4
percent and that on secondary education increased by only 4.1 percent.
On the other hand, expenditure on general college and university
education increased by 51.2 percent and that on professional education
by 15.4 percent. While large increase in expenditure on higher education
is a positive development, it should not come at the expense of spending
on primary and secondary education, as basic education indicators for
the poor, who benefit the most from primary and secondary education
provided by the public sector, are extremely low and need considerable
In the health sector, there was a much larger
increase in expenditure on basic health facilities and preventive
measures (21.8 percent) than on general hospitals and clinics (8.1
percent). Expenditure on family planning more than doubled to Rs 3.1
Among non-budgetary income transfer programs,
disbursement of Zakat, at Rs 8.0 billion, in FY2003 was 52.4 percent
higher compared with FY2002. Priority was given to rehabilitating the
poor on a permanent basis through one-time rehabilitation grants to help
them set up their own small-scale businesses. There was a more than
three-fold increase in disbursement under this head, and its share in
total Zakat disbursement increased to 60.7 percent from 29.3 percent
last year. On the other hand, disbursement of subsistence grants
declined by 10.1 percent and its share decreased from 49.5 percent to
Disbursement of micro credit through Khushali Bank
(KB), Pakistan Poverty Alleviation Fund (PPAF), and Zari Taraqqiati
(Agricultural Development) Bank (ZTB), taken together, increased by
140.0 percent to Rs 2,518 million in FY2003. The largest increase was
seen in disbursements by KB, which increased by 149.4 percent to Rs 980
million. However, PPAF remained the biggest source of microcredit,
accounting for almost three-fifths of the total disbursement.
Besides the Zakat Fund and micro credit, the
Government finances small public works under the Khushal Pakistan
Program (KPP). Public works, administered by local governments, provide
gainful employment to the poor, besides creating essential
infrastructure (farm-to-market roads, water supply schemes, repair of
schools, etc.) in rural and low-income urban areas. Under KPP, the
Government provided temporary employment to 80,758 persons a sharp
decline from 347,384 temporary jobs generated in FY2002.
Total number of beneficiaries of Zakat Fund, food
support program, and micro credit increased from 2.9 million in FY2002
to 3.1 million in FY2003. Assuming that each beneficiary represents one
poor family consisting of 6-7 members, about 19.7 million persons, or
about 41.2 percent of those below poverty line were helped through the
Government supported social safety net. But this is still a very small
number and hopefully will continue to grow at an increasingly faster
INTERMEDIATE INDICATORS PRESENT MIXED PICTURE
Changes in intermediate health indicators in FY2003
present a mixed picture, with improvement in some and deterioration in
others. There was an increase in the proportion of population covered by
lady health workers (LHWs) and in utilization rate of hospitals.
Similarly, first level health care facilities (FLCFs)
not experiencing stock-outs of any of five essential supplies (ORS,
cotrimoxazole, foalte tablets, chloroquine, and syringes), and their
percentage with supplies of contraceptives also increased.
On the other hand, immunization coverage of children
and pregnant mothers declined sharply and so did the percentage of FLCFs
meeting staffing norms. This deterioration in some intermediate health
indicators, despite increases in expenditure, reflects poorly on the
effectiveness of expenditure and highlights the need for improving
governance of the health sector.
The Government's poverty related expenditure
increased by 0.2 percentage points of GDP in FY2003, as agreed with the
IMF under the Poverty Reduction and Growth Facility (PRGF). If this
upward trend in the pro-poor expenditure is maintained, the target of
4.0 percent of GDP in FY2004 agreed with the IMF under PRGF is likely to
be exceeded. However, within the overall I-PRSP expenditure, expenditure
in some core sectors like primary and secondary education and WSS has
either stagnated or declined substantially, which is of concern from the
perspective of poverty reduction.