The Poverty Reduction Strategy Paper (PRSP) expenditures for FY05 stood at Rs 316.2 billion, which indicate an increase of 21 percent in FY05 over FY04. All provinces and Federal areas have also increased their PRSP expenditures in FY05 as compared to FY04.
The PRSP expenditures as percentage of GDP also increased from 3.8 percent in FY02 to 4.83 percent in FY05. According to Annual Progress Report of 2004-05, which was released by PRSP Secretariat- Finance Division Government of Pakistan, the PRSP expenditure during FY05 was utilised in roads, highways and bridges, water supply and sanitation, education, health, irrigation, land reclamation, rural electrification, administration of justice and law & order.
Further, the amount of non-budgetary transfers through micro-credit, EOBI and Pakistan Bait-ul-Mal increased by 38 percent between FY04 and FY05 and increased to Rs 10,930 million.
Pakistan's two-third population's livelihood is directly or indirectly dependent on the sectors of agriculture and manufacturing. By and large progress in these two sectors has immense implications due to their potential.
During FY05 agriculture sector saw a growth rate of 7.5 percent, which is the highest in the last decade.
Manufacturing sector also surpassed the PRSP target of 4.9 percent for the FY05. Presently, the large scale manufacturing with a growth rate of 15.6 percent during FY05 is higher than the average growth rate of the last three decades.
A high priority of PRSP is investment for development of human capital to defy poverty.
Concurrently, it is also critical towards accomplishment of millennium development goals (MDGs).
The Education sector results during the year depict that nearly all teachers in public, primary and middle schools are trained. The number of functional primary and middle public schools did show a marginal decline in FY04 over FY03.
Gross Enrolment Rate (GER) and Net Enrolment Rate (NER) at primary level showed an inspiring increase in FY05 as compared to FY04. There is 5 percent increase in the middle level GER in FY05 over FY04; whereas the middle level NER increased marginally. Gender disparity has declined in GER at primary level.
Over time the role of private sector in primary education has increased. The last three years have witnessed eight-percentage points increase in overall literacy from 45 percent in 2001-02 to 53 percent in 2004-05.
According to report, the progress in reducing the literacy gap either between rural and urban areas or between genders in both areas has been marginal.
The results of health sector indicate that TT-I and TT-II immunisation coverage for pregnant women increased in FY05 over FY04. With targeted population coverage of 71 percent during the FY05, the Lady Health Workers Programme continues to emerge as a success legend in the health sector.
The percentage of population with access to 'tap water' has also increased overtime. Furthermore, the emerging trends for FY05 reflect that a large portion of ailing people consulted a hospital, private doctor or dispensary. The PSLM survey for the first time included the household perception of their economic condition. Almost half of the households, both in rural and urban areas, perceived unchanged economic situation during the year 2004-05. There has been a modest decline in the unemployment rate between 2001-02 and 2003-04.
The development challenges for Pakistan include sustaining an accelerated economic growth, reducing poverty, providing essential social and economic services and infrastructure to poor, creating job opportunities and improving governance.
Social sector progress in Pakistan during the preceding four years has been considerable.
There is still a lot more to accomplish for reducing the gender gaps in literacy and enrolments, providing better health facilities and access to safe drinking water. The process of land distribution to the landless households also needs to be accelerated to shore up efforts in alleviation of rural poverty in Pakistan.
As shown earlier, PRSP has used the PIHS 2001-02 data for its baseline. With the availability of PSLM survey-CWIQ 2004-05 findings, PRSP baselines as well as targets are required to be revised. Poverty estimates based on the HIES-type consumption module included in the PSLM survey are likely to be available by the end of this year.
Poverty trends need to be incorporated in the revised PRSP to reflect changes in strategies and programmes. The national accounts have been re-based from 1980-81 to 1999-2000. As a result of re-basing, coverage of data has engulfed a new range of products, enterprises and economic activities such as, courier services, travel agencies, mobile phones etc. The coverage of manufacturing items has been increased.
The size of the overall GDP in 1999-2000 increased by 19.5 percent, agriculture increased by 18.5 percent, industries by 18.0 percent and services by 20.8 percent over the old base. The re-based national accounts need to be reflected in the revised PRSP. Recent developments in the economy, such as high GDP growth and macroeconomic stability, have resulted in changes or shifts in policy priorities, which will be reflected in the revised PRSP.
There are several capacity challenges for PRSP implementation particularly in the lower levels of government. These challenges will be addressed in the revised PRSP. There are gaps in certain areas such as gender and environment. The new PRSP will fill these gaps. Finally, the revised PRSP will be an MDG-based rolling plan.
All these measures now entail revision of PRSP. The PRSP Secretariat in the Ministry of Finance has initiated work to prepare the PRSP-2, which will cater for the period 2006-09.
The achievement of the millennium development goals (MDGs) has added a new dimension to the policy matrix. This new policy document will be MDGs based and it will be finalised by end June 2006.
The PRSP Secretariat mentioned that the fourth Annual Progress Report (16th quarterly report) since the release of Interim Poverty Reduction Strategy Paper (IPRSP) in November 2001. The PRSP is based on broad principles of engendering growth, investment in human resource development, bringing improvement in the governance, targeting the poor through public policy interventions and providing safety nets to the vulnerable; with an overarching goal to ameliorate human development and social protection.
The two pronged strategies comprising well targeted anti-poverty outlays and social safety transfers are essential elements of its comprehensive poverty reduction strategy. The reform agenda unfolded in December 1999 set the future direction that continued during the last four years.
The elected government inducted after the elections of October 2002 has shown its resolve to continue the reform process. The strong political commitment has not only ensured the continuity of reforms but has enabled institutionalisation of the reform framework.
The regular monitoring shows that Pakistan has managed to increase the pro-poor expenditures gradually from 3.8 percent of GDP in 2001-02 to 4.83 percent in 2004-05. During this period, it has also made sound progress in the PRSP intermediate indicators, particularly those related to the health and education sectors. For monitoring the progress in outcome indicators, PRSP has relied primarily on the Pakistan Integrated Households Survey (PIHS).
The results of the latest PIHS are expected by end December 2005.
The FY05 has a special significance for PRSP monitoring; the Core Welfare Indicator Questionnaire (CWIQ) component of a new data series Pakistan Social and Living Standard Measurement (PSLM) survey, carried out in 2004-05, has been released.
It provides data on social indicators, which have enabled to assess the progress in PRSP output indicators between the 2001/02 and 2004/05 periods. In terms of representativeness and definition of different variables, the PSLM survey-CWIQ is comparable with the earlier rounds of the PIHS. To make the present report more consistent, data on macro-economic indicators, pro-poor expenditures and others indicators have been discussed for the whole PRSP period, 2001/02 to 2004/05.
During the last four years, the growth of Pakistan's economy continued to accelerate, while maintaining macro economic stability. Real GDP growth increased from 3.1 percent in FY02 to 8.4 percent in FY05 - surpassed the PRSP target by 2.6 percentage points for the FY05.
Consistency in economic policies has contributed to this stability. After six years of extensive efforts through the reform of the tax system and tax administration, Pakistan has succeeded in attaining fiscal stability. Under Khushhal Pakistan Programme-I, allocation of funds has increased from Rs 845 million in FY03 to Rs 2830 million in FY05. In FY05, 5613 development schemes were approved under this programme. Micro-credit disbursement has also increased over time. The impressive growth performance, increased expenditures on the pro-poor sectors, development programmes and micro-credit availability during the recent period have contributed in arresting the rising trends in unemployment as well as poverty.