The World Bank (WB) has said that the Poverty Reduction Strategy Paper (PRSP-II) is very ambitious relative to the sectoral institutional capacity to implement it over its stipulated timeframe.
The WB Country Partnership Strategy (2010-2013) has observed that perhaps the major concern with PRSP-II is its very ambitious thematic and sectoral scope relative to the institutional capacity to implement it over its stipulated timeframe. The PRSP-II recognises the limitations in the public sector's governance and institutional capacity for its implementation but proposes a limited reform agenda to strengthen these areas. The strategy explains why public financial management, civil service reform, tax administration, and judicial and public procurement reform are all good things to pursue, but in some cases-for example, in the case of public procurement and judicial and civil service reform-little is said about what is proposed for the coming years, how this will be attained and the extent to which progress (or lack thereof) in these areas will advance the execution of the overall PRSP.
The concerns about execution of the strategy have received added impetus in recent months in the wake of the recent NFC Awards and its changes in the distribution of fiscal resources between the federal and provincial governments. The government now envisages that there will need to be major strategic shifts in the role and responsibilities of the civil service, public enterprises and other public agencies and major enhancements in their capacity and effectiveness in order to ensure that service delivery, financial and development goals are achieved. The government plans to further revise the PRSP to reflect these expected strategic shifts, the WB report said.
The WB said that while PRSP-II provides a comprehensive framework for Pakistan's efforts to stabilise the economy and bring it back to a higher growth path, it also has several limitations. Progress in critical areas for poverty reduction will require greater harmonisation with provincial activities. While the strategy refers to provincial initiatives and programs, in particular in the areas of health and education where provinces bear most of the burden of service delivery, it is not systematically co-ordinated with provincial strategies and plans, or the co-ordination mechanism is not clearly spelled out.
The PRSP-II advocates a productivity-based export strategy. However, by focusing on specific product groups, the export strategy may invite introduction of distortions rather than a level playing field for all product groups and for firms of all sizes, especially if there are no effective criteria for choosing potential beneficiaries and the nature and duration of incentives provided to them. In this context, an important area of focus would be policy and program actions in areas which are seen as barriers to entry and growth, such as land markets, creditor right enforcement, an improved judiciary and strengthened competition policy, the WB report added.
The WB Country Partnership Strategy (2010-2013) stated that the current administration finalised the second PRSP (PRSP-II) in January 2009. PRSP-II reflects the Nine-Point Plan of the Prime Minister and is fully aligned with the MDGs and covers fiscal years 2008/09-2010/11. It focuses on regaining macroeconomic stability after the economic crisis and on structural reforms required to support the recovery of strong and sustainable growth.
The overall vision of PRSP-II is to steer Pakistan's economic growth back in the range of 5-7 percent per annum by stimulating growth prospects in the production sector; creating adequate employment opportunities; improving income distribution; and harnessing the country's economic competitiveness through economic liberalisation, deregulation and transparent privatisation. The strategy envisions an economy with competitive enterprises, productive employment opportunities, transparent governance and low poverty. PRSP-II is comprehensive with nine pillars, ranging from macroeconomic stability and real sector growth to social protection and governance.
The strategy recognises that to steer Pakistan back on a path of broad-based growth, create jobs, and reduce poverty, a prolonged period of macroeconomic stability, financial discipline and sound policies is required. The government's strategy aims to create adequate employment opportunities, and to improve income distribution and competitiveness through economic liberalisation, deregulation and transparent privatisation. To mitigate poverty, it aspires for pro-poor growth, with more emphasis than under the previous strategy on agriculture and manufacturing, as well as on services. It also seeks to strengthen the social safety net to protect the poor and vulnerable.
The strategy also recognises that gender disparities represent a critical constraint to achieving Pakistan's development objectives and reaffirms Pakistan's commitment to implementation of the Convention on Elimination of all forms of Discrimination Against Women (CEDAW). The strategy to address gender inequality features measures to increase women's access to services and opportunities in the short term along with a range of reforms to increase political, economic social and legal empowerment of women, WB report added.