The World Bank has expressed serious concern over sharp decline in social sector spending during the tenure of present government and development partner forewarned the economic managers that Pakistan would be unable to achieve Millennium Development Goals (MDGs) by 2015, if the status quo is maintained. A presentation made by the WB on social sector at the D-10 meeting, here on Monday also pointed out that quality and effectiveness of social spending is very low.
According to the WB, the focus seems to be on protection of (or increase in) wage expenditure and insufficient allocations are made for non- wage expenditure. There was no increase in social sector expenditure. The progress in improving health and education indicators was slowed down considerably after 2007 due to sharp deceleration in real public expenditures on social sector. Average growth in real expenditure on primary education was 4.9 per cent from 2002 to 2007 and 10.1 per cent in health sector but it sharply decreased to 0.7 percent on education and 1.8 per cent in health. The increase in expenditure during 2002-07 brought about change in social sector indicators with Gross Enrolment Ratio (GER) and net enrolment ration was improved significantly at primary level and immunisation.
However, the momentum of improvement in health and education dipped sharply from 2007 to 2011 and school related non-wage expenditure remained very low (between Rs 15 -20 per school per day) and development expenditure has not led to any improvement in social indicators. The present primary school GER in Punjab could be achieved with 46 percent less expenditure and social sector resources are inefficiently used.
There is a need for a better alignment of budgetary expenditures with the development priorities of the government and increases in social spending have to be consistent with available resource envelopes, need for fiscal consolidation and savings from low priority expenditures. There is also a need to enhance the effectiveness of social spending through improved governance, devolution/delegation, better resource management (including HRM) may require consolidation rather than expansion, effective monitoring and evaluation, including TPVs and building partnership with communities, NGOs and private sector.
The World Bank has on-going operations in social sectors in all four provinces and these are being leveraged to enhance allocation for, and efficiency of government's spending. To better under-stand the efficiency dimensions of government's social spending, the Bank has committed significant resources for analytical work from Bank's budget.
Khyber Pakhtunkhawa Public Expenditure Review (PER) was undertaken in 2011 which was heavily tilted towards social sectors. A Public Expenditure and Financial Accountability (PEFA) assessment was undertaken for the federal government and the government of Punjab in 2011/12 (both in collaboration with DFID, EU and ADB). The Bank and DFID are collaborating to undertake a PER for Punjab in 2012/13, focusing solely on social sectors (education, health and social protection). A PEFA assessment for Sindh is planned for 2012/13 and the World Bank resources are supplemented by other donors.
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