Phase two of Pakistan Poverty Alleviation Fund (PPAF)
with World Bank support of about Rs. 14 billion (239 US Dollars) was
launched in Islamabad last week by Finance Minister Shaukat Aziz, who
declared that Phase-II programme, the highest ever micro finance
project, would enhance access of the poor to micro credit,
infrastructure, health, education and skill enhancement training.
The PPAF established in 1999 as an autonomous
institution would carry out the project, with an objective to facilitate
access to support and services to poor and disadvantaged people,
including micro credit, infrastructure, social services, skill
enhancement programmes and training. Women would be especially targeted
for this support. The programme would reach out to five million poor of
PPAF uses an integrated approach to address many
facts of poverty through challenging vulnerability of poor through
well-managed NGOs with good track record. It has reached 86 districts,
benefiting 4.6 million people, through 26,500 community organizations.
It has 178 PO field offices running 52,200 infrastructure projects and
has a base of 316,000 micro credit borrowers as of December 2003.
According to the World Bank, poverty in Pakistan has
persisted at more or less the same level since the 1990s. Almost
one-third of the population lives below the poverty line, according to
the official figures, and the Human Poverty Index of the UNDP estimates
40 percent people living in poverty. The International Monetary Fund (IMF)
has also said that the significant gains in the fight against poverty
are not visible. The rate of unemployment has also increased to 8.3
percent, according to the last labor force survey.
One of the key dimensions of poverty is the fact that
poor have little to sustain themselves, and lack access to basic needs
such as education, health, clean drinking water and proper sanitations.
More over, the incidence of poverty is much higher in rural areas and
much worse if gender disparities are taken into account. According to
the poverty of opportunity Index, more than half of the women in
Pakistan suffer poverty of opportunity compared to one-third of men.
Women and girls often suffer more in poor households primarily due to
their low social status, limited access to economic options and social
service and lack of control over financial/productive assets.
"The government is fully alive to the endemic,
and clearly unacceptable, levels of persistent poverty, Shaukat Aziz
said. Sustained, consistent and coordinated national effort is required
to be mounted for a comprehensive assault on the structural roots of
poverty. He claimed macroeconomic recovery, particularly in the external
sector, as one of the pre-conditions that would allow the government to
expand budgetary outlays for development and pro-poor programmes, as
identified in the Poverty Reduction Strategy Paper (PRSP). "The GDP
growth of 6 percent is now well within our grasp," he claimed. A
sustainable growth rate is a necessary condition to make an impact on
poverty, but not enough to actually reduce it.
Rising levels of PRSP programme and robust recovery
in the private sector is needed to create more income generation
activity and to provide new jobs to the large unemployed population.
Despite a rapid growth in the private sector credit off-take, there are
no signs of a real turn around. The foreign private investment continues
to be at low levels. However, the Finance Minister said there is healthy
indication of a reversal in capital flight. "Private sector
development is the cornerstone of the strategy and civil society
institutions are visualized as strategy partners of devolved local
governments together with provincial and federal agencies in the resolve
to accelerate growth and raise per capita income," he maintained.
Qazi Azmat Isa, Task Leader of the World Bank said
the PPAF-II would build upon the strong foundations laid down by the
first project and scales-up operations. Whilst concentrating on its main
activities of providing micro-credit and small scale infrastructure the
project is also set to bring in second generation innovations, like
offering inclusive financial and business solutions to the poor that
consist of marketing, skill development and a choice of lending
instruments; in infrastructure going beyond single to more integrated
schemes; expanding its agenda to support health and education;
encouraging linkages with local government; and comprehensive
institutional development of NGOs and community organizations.
According to the bank, access to services is grossly
deficient and is one of the main causes why substantial poverty persists
throughout Pakistan. This lack of access to both productive resources
and social services had resulted in low indicators of well being and
lack of employment opportunities. The situation is compounded in rural
areas, where access is even more difficult due to the inadequacy or
complete lack of basic infrastructure.
The government interventions have little impact, as
they largely failed to involve intended beneficiaries, especially women,
in any meaningful way. Gender disaggregated indicators confirm this
state of affairs. Under the new project, PPAF would expand outreach and
move from a micro credit to a micro finance approach, offering more
comprehensive financial solutions to its clients. Approximately one
million new loans are planned for over half a million borrowers.
A PPAF release says that a third party evaluation
exercise of the first WB supported project, household's borrowing from
PPAF are better off today than they would have been if they had not
borrowed. On average, family incomes and consumption have increased and
personal and business assets like house have improved. The social status
of the borrowers especially women has improved. Second phase would work
on the model of first phase while introducing innovative ideas.