Despite PRSP''s progress in unemployment and poverty reduction, the government still faces challenges like high levels of rural poverty, rise in income inequality, gender gap in health and education, youth unemployment, sustainability in high economic growth and achievement of Millennium Development Goals (MDGs).
This is indicated in the Poverty Reduction Strategy Paper (PRSP-I) third quarterly progress report for FY2006, released by the finance ministry on Monday. "To sustain this growth momentum, more efforts and more growth critical reforms would be required," it added.
The report says unemployment level during July-December 2005-06 has declined by 1.2 percentage points to 6.5 percent as compared to 2003-04.
During July-December 2005-06, unemployed labour force stood at 3.32 million, of which 2 million unemployed were living in rural areas and 1.32 million in urban areas.
The gap between the rich and the poor (income inequality) has widened and the overall ratio has increased marginally from 3.76 percent in 2000-01 to 4.15 percent in 2004-05.
In urban areas, the gap between the rich and the poor has widened relatively more from 10.40 percent in 2000-01 to 12.02 percent in 2004-05 compared to the rural areas, where the gap remained more or less stagnant: 2.22 percent in 2000-01 and 2.19 percent in 2004-05.
As the PRSP-I has completed its three-year term in June 2006, the finance ministry has planned to prepare PRSP-II for 2006-09 period to address these challenges.
To formulate PRSP-II, ongoing process of dialogue is enriching the strategy with the input of civil society and the poor. The government has started a dialogue process with the poor, development partners, provincial governments and civil society representatives. This process will lead to ownership of PRSP-II by all segments of the society and will also help in implementing the strategy.
An effort was made to include diverse groups of participants, including small farmers, daily-wage labourers, employees of public and private sectors, unemployed, mustahiqeen of Zakat, people engaged in small enterprise, students etc.
Main considerations for PRSP-II would be building upon lessons learnt in PRSP-I, ensuring macroeconomic stability and sustained high and broad-based economic growth by taking advantage of opportunities offered by globalisation, while at the same time unleashing the potential of domestic commerce, reducing inequalities and maximising employment generation, direct public policy debate toward needs of the poor.
It would also aim at empowering the poor, especially the women and the most deprived, by increasing access to factors of production, particularly land and credit.
The ongoing PRSP process aims for a complete alignment with the MDGs and the Medium-term Development Framework (MTDF). While the MTDF provides a strategy for translating the ''Vision 2030'' into action during 2005-10, its emphasis is on sustained long-term growth.
The PRSP on the other hand presents the strategy to ensure the growth is broad-based and leads to effective poverty reduction.
The report further says, "Pakistan is well ahead of its target on PRSP budgetary expenditures, which increased by 34.3 percent to Rs 258 billion during third quarter of FY2006 over FY2005 in the same period.
During the same period, as a percentage of GDP, these expenditures increased by 0.43 percentage points to 3.35 percent. Increase was also witnessed in micro-credit disbursement, a non-budgetary head of pro-poor expenditure."
Education sector is given the highest priority in terms of distribution of pro-poor expenditures as 37.4 percent of total PRSP expenditures were used for this sector during third quarter of FY2006.
Law and order stands second in priority, as expenditures made on this sector account for 15 percent of total pro-poor expenditures. Share of pro-poor expenditures made on irrigation increased from 11.1 percent during third quarter of FY2005 to 14 percent in FY2006 in the same period. Expenditures made on health and roads, highways and bridges account for 8.9 percent and eight percent, respectively, of the total PRSP expenditures during third quarter FY2006.
It also says the implementation of Tawana Pakistan project was sluggish in translating the envisaged targets. It is being redesigned and has been temporarily suspended. It is a nutrition target programme, which includes serving of meals and micro nutrient supplementation to schoolgirls. The programme has been launched in 5300 schools of 29 poor districts of Pakistan.
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