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Economic notes

May 22, 2018
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Economic reforms: Part-XXII

Opinion

May 22, 2018

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So far our focus has been on the economic policies affecting macroeconomic variables such as growth, inflation, money, investments etc. However, no less important are the policies that are impacting the social indicators of development.

While all development is advertised in the name of people, it is scarcely recognised that all development is embodied in the people. Every single manifestation of development – roads, bridges, towering buildings, machines, rails, aeroplanes, factories and computers – is the result of human imagination and have existed in peoples’ minds before taking a physical shape. Yet, all too often, planners have exhibited tight-fisted tendencies when it comes to allocating resources for human development. Investment in human capital is not considered a high-return proposition.

The story of three decades of economic reforms will be incomplete without an examination of what the country has achieved in human development. We begin by examining a path-breaking programme in this area called the social action programme project (SAPP). The programme was launched with the assistance of the World Bank during 1993-98 in collaboration with the Dutch and UK governments. The project was requested by the first Benazir Bhutto government, during a meeting of the Aid-to-Pakistan Consortium in Paris, but enjoyed patronage of different political administrations.

The project was aimed at enhancing the efficiency of the government’s own social action programme (SAP) by (i) improving implementation, (ii) removing design flaws and (iii) scaling-up expenditures once the capacity was expanded. Undoubtedly, the project made new resources available for investment but it was fundamentally focused on removing bottlenecks impeding the efforts of the social sector, protecting and enhancing budgetary allocations and closely monitoring the outcomes of various interventions. The areas selected were primary education and health and rural water supply and sanitation (RWSS) in the provinces, and the national population programme.

Each year an annual plan was negotiated between the federal and provincial governments and development partners, outlining respective commitments in budgetary allocations, investments, policy interventions and desired outcomes. New investments were allocated on a competitive basis across different sub-sectors depending on the performance.

The total cost of the project was assessed at around $7.0 billion over the five-year period with support of around $1.0 billion from the development partners. The cost included the existing, recurrent and development budgets over the programme period, thus protecting these expenditures from budgetary cuts, which, as we will see, came down very hard during the period of the programme. Though painful, it is a reality that many public-sector processes, especially in the case of social sectors, have virtually stopped functioning.

The factors impeding the development process included slow release of allocated funds, uncalled for ban on recruitments, shortage and high turnover of teaching staff or medical attendants, centralised management and poor participation of beneficiaries. SAPP was to support governments’ commitments of removing the recruitment ban, swiftly filling vacancies, ensuring timely release of funds, protecting budgetary allocation together with reasonable increases, and decentralising the management to district and local government levels.

The design improvement measures called for intensive and consistent focus on primary levels of social service with an eye on quality and access, especially for women and girls. To this end, it was necessary to provide books and medicine and follow approaches that had worked in other countries. For instance, using family planning methods as part of health services and inducting women for providing services to other women and girls. The lady health workers programme was considered an integral part of SAP.

As the implementation capacity expanded and design improvements took place, scaling-up expenditures was required. Therefore, it was envisaged that during the programme’s period, expenditures on basic social services will be increased from 1.7 percent of GDP in 1993-94, to 2.6 percent of GDP in 1997-98. Finally, since the programme was supporting social sector commitments of the government, an unqualified show of political will was needed to ensure the success of the programme.

The base-line indicators were recorded as follows: education – primary enrolment 53 percent (girls 41 percent, boys 63 percent); health – crude death rate 12 (above the average of 10 in comparable countries), widespread prevalence of infectious and communicable diseases, malnourishment in children 50 percent, infant mortality rate 139 (girls) 137 (boys) (compared to an average of 94 and 104 in comparable countries), total fertility rate was high at 5.7 percent (compared to the average of 3.8 percent for comparable countries). The Rural Water Supply Services failed to reach nearly half the population.

This was, then, the basic outline of the SAPP. It was implemented diligently and was considered a successful programme. The most notable success of the programme was to protect SAP expenditures during the period 1993-98. As against the target of 2.6 percent of GDP, SAP expenditures rose to 2.3 percent of GDP, which was commendable given the drastic cuts in all categories of expenditures, including defence and overall development.

The basis of the comparison of the programme’s success was made possible by the revival of the Pakistan Integrated Household Survey (PIHS), which was last carried out in 1991 as part of the government’s SAP initiative and repeated in 1995-97. Enrolment was nearly constant, but it showed marked improvement among girls attending public schools – the main focus of the programme. Health indicators showed dramatic improvements, such as the doubling of immunisation rates, use of contraceptives improved; infant mortality rates needed more time for assessment. Incidences of diarrhoea among infants fell significantly, but other indicators of improvements in water supply and sanitation were not available.

SAP laid the foundation of the social sector strategy which further developed in the years to come.

To be continued

The writer is a former finance secretary.

Email: [email protected]

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