STATUS PAPER ON POVERTY ALLEVIATION SCHEMES PLANNED BY THE GOVERNMENT OF PAKISTAN FOR THE YEAR 2013-14

1. Cash Support Programme Introduction It is relatively a new element in Pakistans poverty reduction strategy. Through cash support programmes poor and vulnerable are targeted and benefits are transferred directly to the poor (Arif and Farooq, 2012). An income support initiative, named Benazir Income Support Programme (BISP) was taken by previous government with the allocation of Rs. 34 billion in the year 2008-09 (GOP, 2013). A Nationwide Poverty Scorecard Survey was started in October 2010 to identify eligible households. Welfare status of the households was determined through the application of a Proxy Means Test (PMT). Annual disbursement of unconditional cash support under BISP was Rs. 41 billion in 2011-12. The allocation for 2012-13 was Rs. 70 billion with aim to provide cash support to 5.5 million families, which constitutes almost 18 percent of the entire population. BISP provided cash support to nearly 4.7 million poor household in 201213 (GOP, 2013a).

Current Status In continuation of the BISP programme, present government has allocated Rs. 75 billion for the year 2013-14 and also increased cash assistance limit to Rs. 1200 per month (GOP, 2013a).

Targets Changes in organization and design of the programme to avoid political pollution in its execution. Increase in budget allocation to cover large segment of the poor population. Avoidance of perpetual dependency.

Challenges The extent of benefits to the poor, from targeted income support programmes, has always been in some doubt (Arif and Farooq, 2012). Income support programme launched by the
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previous government achieved partial success in its coverage in terms of percentage of the poor population in the country. Though recent poverty estimates are not available, yet in wake of deterioration in macroeconomic situation an increase in poverty incidence is perceived. Similarly, keeping in view poor state of the economy increase in allocation to cover large segment of the poor population seems difficult. Avoidance of perpetual dependency is huge challenge in the country. Social and economic exclusion has resulted in multiple deprivations for more than 50 percent of Pakistans population. The data of poverty estimates of 2004-05 and 2005-06 suggests strong clustering around the poverty line (Bukhari and Haq, 2011). Political intervention in the selection of target poor people for income support programme is also a grave challenge. Way Forward There is need to implement Proxy Means Test approach in true spirit in the selection of target poor people for income support programme. Moreover, strong determination for development and execution of a public strategy to minimize political interventions in this regard is also required. Perpetual dependency can be avoided only by adopting a holistic approach for socioeconomic development by covering health, education, skill development and job creation. 2. Prime Ministers Youth Training Programme Introduction Youth is defined as a period during which a person is being prepared to be an active and fully responsible member of the society. In Pakistan the population in the age bracket of 15-29 years is considered in youth age (GOP, 2013a). Every year, thousands of youth complete sixteen years of education in a whole range of academic disciplines from recognized universities/degree awarding institutions in Pakistan. A considerable time gap between the completion of education and job availability in majority of cases results in a sense of frustration and waste of potential energy within educated youth. On the other hand, many public sector organizations also suffer from chronic shortage of officials in various cadres from time to time. In such circumstances, temporary placement of appropriate numbers of unemployed and educated youth in relevant and matching government outfits could be advantageous to the government as well as the unemployed youth (GOP, 2013b).

Current Status Government has allocated Rs. 4 billion for the scheme. Youth having sixteen years of education and less than 25 years of age are eligible to apply for the programme. Government will provide a monthly stipend of Rs. 10,000 to the trainees for a training period of six month (Dawn, 2013). Targets To provide training facility to entire interested youth.

Challenges Due to inadequate investments and lack of right policies, Pakistani youth currently is in a state of disarray and dissatisfaction. Youth particularly school and college drop outs fall prey to the vicious circle of poverty. A large number of female youth continue to be out of main stream economic activity. Their contribution in economic development remains unexploited and unrecognized. There is a shortage of skilled labour in the country for local as well as other labour markets. There is lack of opportunities for development of entrepreneurial skills among the youth for self-employment. Way Forward Though training facility for the youth provides them a chance for learning and makes them conscious of office working environment in public sector. However, it is a short term strategy. Along with internship programme, government should have a strong focus on skill development in youth. Under internship programme, placement of youth should be maximized in skill development institutes. Strengthening of the training institutes such as Technical and Vocational Training Authorities (TEVTAs), the skill training centres and other private sector skill development activities is very much required. Role of NGOs in this venture should also be sought. Interested youth, especially in rural areas may be offered stipend based training in livestock, poultry farming and allied activities. Young graduates, especially female should be involved in awareness raising campaigns by placing them in hospitals. Similarly, they should be placed in universities, colleges and schools to assist and teach. Micro-credit schemes for the youth along with appropriate training in entrepreneurial skills, especially those having some innovative ideas can go a long way in empowering youth.

3. Small Business Loan Scheme Introduction Pakistan is recently facing lot of problems like low growth, high inflation and unemployment (Haider, 2012). Rural and urban unemployment rates in 2010-11 were 8.8 and 4.7 percent, respectively (GOP, 2011). Small and medium sized companies have a special place in the strategy being formulated by the present government to revive the countrys economy (GOP, 2013d). Small business financing refers to the means by which an aspiring or current business owner obtains money to start a new small business, purchase an existing small business or bring money into an existing small business to finance current or future business activity (Wikipedi, 2013). Small business financing can help reduce unemployment and poverty in the country by stimulating economic activities. The theme of Small Business Loan Scheme of the sitting government is to enable youth to start their own businesses. Current Status Under this scheme educated youngsters, who wish to start their own business will get small business loans. Fifty percent of the loans will be provided to women. Loans ranging from Rs. 0.5 to 2 million will be given with a discounted interest rate of eight percent. The remaining cost will be borne by the government. Initially, these loans will be provided through the National Bank of Pakistan and the First Woman Bank. The government has decided to spend Rs. 5 billion under this scheme (Dawn, 2013). Targets In year 2013-14, fifty thousand loans will be offered.

Challenges The procedure of loaning scheme has not been devised/ available. Development of target group selection criterion also requires great deliberation and care. Way Forward Target group selection criterion for the loaning scheme should be very well devised and transparent. This would not only minimize political intervention in the scheme but also help in selection of deserving youth.

4. Prime Ministers Microfinance Scheme Introduction Microfinance in Pakistan has come a long way since 2000 and is gradually mainstreaming into the formal banking system. Eight Microfinance Bank (MFBs) have been established, and two of the world largest MFIs have started operation in Pakistan, reflecting private sector participation and institutional diversity. Pakistan poverty alleviation fund, Khushhali Bank and Rural Support Programmes are key micro-financing institutions in Pakistan. However, micro-finance sector have current outreach of 2 million borrowers, which is only seven percent of the potential market. Moreover, operating cost to loan ratio of the sector is high (22 percent), which results into very high credit cost for the borrowers (GOP, 2011a). Thus, in this perspective Prime Ministers Microfinance scheme is a logical step in the right direction. Current Status Government has allocated Rs. 3 billion to provide small interest-free loans to weak segments of society to encourage small businesses (Dawn, 2013). Targets Under this scheme loan with out mark-up (Qarz-e-Hassana) will be made available through selected micro-finance providers including Akhuwat, NRSP and Provincial RSPs. Half of the beneficiaries of this scheme (fifty percent) will be woman (Times, 2013). Challenges The micro-finance scheme will be executed through already existing community based organization of RSPs/NGOs. Two loaning mechanisms will be implemented, old one with very high loaning cost and new one without mark-up. Thus, loaning procedure and criterion for selection of target group for the scheme requires deliberated efforts. Way Forward Loaning procedure and criterion for the selection of the target group should be very well devised to turn the endeavor into a successful venture.

5. Prime Ministers Youth Skills Development Programme

Introduction Student drop out rate in Pakistan is the highest in South Asia with only an estimated 10 per cent of the population finishing 12 years of schooling (Xhaferri and Iqbal, 2008). Findings of Pakistan Social and Living Standards Measurement Survey (PSLM) 2010-11 showed that net enrolment rates at middle level (age 10-12 years) and matric levels (age 13-14 years) are 20 and 12 percent, respectively (GOP, 2011d). Prime Ministers Youth Skill Development programme will be initiated to provide training in number of trades to persons up to age of 25 years with a minimum qualification of eight years of schooling. The duration of the trainings will be six months. National institutions for vocational and technical training (NAVTEC) will manage the program in collaboration with Technical Education and Vocational Training Authorities (TEVTAs), and technical education & vocational training providers (Times, 2013).

Current Status Government has allocated Rs. 800 million for the scheme. Trainees will be given a stipend of Rs. 3,000 to Rs. 5,000 for six months (Dawn, 2013). Targets Under this programme skill development training will be provided to twenty-five thousand persons (Dawn, 2013).

Challenges The programme is a good initiative; however, considering huge number of unemployed matric and above levels school drop outs of less than 25 years of age, the coverage of the project is small.

Way Forward The coverage of project needs to be extended.

6. Prime Ministers Scheme for Provision of Laptops

Introduction In the tenure of last government, Chief Minister e-Youth Initiative was taken by Government of the Punjab. The objective was to provide free laptops to one lac brilliant students currently studying at public sector colleges and universities or high achievers of the Boards of Punjab in Matriculation Examinations. The motivation and enthusiasm behind this scheme is to help students rise above problems and hurdles they face in their path to gain knowledge and excel professionally. All first year / first semester students of 4-year BS / BSc Program, Medical/ Dental Colleges, Engineering Universities, Agriculture Universities, Veterinary & Animal Sciences Universities and Technology Colleges as well as first year / first semester students of 2year Master Degree Program enrolled in theses colleges and universities were eligible to apply for the laptop scheme. Eligibility criteria was 60% or above marks in the last annual exam in case of annual examination system or 70% or above marks in the last exam in case of semester system (GOP, 2013c). Following the Chief Minister e-Youth Initiative in the Punjab, Federal Government have planned to provide laptops to distinguished students pursuing higher education in any of the Higher Education Commission recognized universities or institutions and meeting the requisite merit criteria. It has been decided during a meeting for the implementation of the Prime Minister Youth Laptop Scheme held under the chairmanship of Higher Education Commission (HEC) Chairperson, Dr. Javaid R. Leghari that these laptops will be assembled locally. It is hoped that establishment of laptop assembling plant would strengthen the countrys indigenous capacity in laptop manufacturing and assembling. Half of the required labour (50 percent) will be provided by the Prime Ministers Skill Development Training Programme. A Project Implementation Unit will also be established at HEC to initiate speedy implementation of the scheme. HEC has been tasked to design the implementation strategy and form eligibility criteria to promote outreach of youth to information and communication technology. Under this scheme, laptops would be given to students acquiring higher education at federal universities (The Express Tribune, 2013a).

Current Status The government will spend Rs. 4 billion to provide latest laptops to selected students (Dawn, 2013).

Targets Under this scheme laptops would be provided to 100,000 deserving students (Dawn, 2013).

Challenges The scheme designed by the Punjab government was only for first semester students enrolled in public sector colleges and universities. Thus, many deserving poor students in higher semesters even involved in research and data analysis might have been ignored. Though locally assembling of laptops has many advantages yet quality of locally assembled laptops could be an issue in the success of the scheme.

Way Forward Prime Ministers Scheme for Provision of Laptops should be designed and implemented in such a way that all students pursuing their higher education in public sector colleges and universities should have equal chances to get its benefits. Quality of laptops should not be comprised in local assembling. Federal government should also devise a mechanism or oblige/assist provincial governments to start laptop schemes for the students studying in provincial educational institutions.

7. Fee Reimbursement Scheme for Less-developed Areas

Introduction The scheme is already being implemented in Balochistan, FATA and Gilgit-Baltistan. Bright student of these areas are being provided tuition fee support for higher education at Masters and Doctorate levels by provincial/federal governments. This scheme will be extended to other equally less-developed areas such as those of interior Sindh, Southern Punjab and
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Malakand, Kohistan and Dera Ismail Khan areas of Khyber Pakhtunkhwa. Extension of the scheme is a good step in the right direction as interior Sindh, Southern Punjab and selected areas of Khyber Paktunkhwa are poverty stricken areas of the country. Moreover, livelihoods of the people are also gravely affected by terrorism in Khyber Pakhunkhwa province.

The scheme is focused on enhancing opportunities for access to higher education especially to talented but financially constrained students belonging to remote and far flung areas of the country who despite possessing academic merit, are unable to finance their education. The fee disbursement would be ensured through a transparent and well defined mechanism. Under this innovative and special scheme, along with tuition fee, the federal government will pay other academic, incidental, or mandatory fees charged by educational institutions as one-off or on a per semester basis of Masters, MS/ M.Phil and PhD students of selected areas (GOP, 2013e).

All onboard students of Master & M.S./M.Phil. who are enrolled on merit in the academic institutions located in their area of domicile are eligible. The students from FATA, Malakand, Kohistan and Dera Ismail Khan studying in institutions located in Khyber Pakhtunkhwa will be considered. Ph.D. candidates having domicile of Balochistan, Gilgit/ Baltistan, FATA, Interior Sindh, Multan, Bahawalpur, D.G. Khan, Malakand, Kohistan and Dera Ismail Khan in any public sector university throughout Pakistan are also eligible (GOP, 2013e).

Current Status The government will bear the fee of students form far-flung areas, who want to acquire higher education. The scheme will cost Rs. 1.2 billion (Dawn, 2013).

Targets Benefit would be provided to 30,000 students (Dawn, 2013).

Challenges Allocated funds are limited and payment of tuition fee by HEC is subjected to provision of funds by the Government of Pakistan. Thus, discontinuity of scheme can result into a financial
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stress for the poor families, which may cause dropouts of the poor students pursuing higher education.

Way Forward Government should issue a lump sum amount to HEC, at least covering tuition fee of the selected students for entire durations of respective degree programmes.

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References Arif, G. M. and S. Farooq. 2012. Poverty reduction in Pakistan: learning form the experience of China. Pakistan Institute of Development Economics, Islamabad. Bukhari, H and I. Haq. 2011. Poverty figures. Business Recorder. October 21, 2011. Dawn, 2013. Nawaz unveils six schemes. Daily the Dawn 22nd September. http://epaper.dawn.com. Times, 2013. Government plans various poverty alleviation schemes for financial year 2013-14. http://www.dailytimes.com.pk/default.asp?page=2013\09\08\story_8-9-2013_pg5_10 (Accessed on 16th September, 2013) GOP, 2011. Pakistan Labour Force Survey 2010-11. Statistics Division, Federal Bureau of Statistics, Islamabad. http://www.pbs.gov.pk/content/labour-force-survey-2010-11 th (Accessed on 20 September, 2013). GOP, 2011a. Strategic Framework for Sustainable Microfinance in Pakistan. Microfiance Department. State Bank of Pakistan, Karachi. GOP, 2011b. Pakistan Social and Living Standards Measurement Survey, 2010-11. Pakistan Bureau of Statistics, Government of Pakistan, Islamabad. GOP, 2013. Benazir Income Support Programme, Government of Pakistan. http://www.bisp.gov.pk/ (Accessed on 16th September, 2013) GOP, 2013a. Annual Plan 2013-14. Planning Commission of Pakistan. Islamabad. GOP, 2013b. Official website of the Government of Punjab: Youth Development Program. http://www.youth.punjab.gov.pk/freelaptops.aspx (Accessed on 17th September, 2013) GOP, 2013c. Federal Budget 2013-14. Finance Division, Government of Pakistan, Islamabad. GOP, 2013 d. Chief Minister e-Youth Initiative Youth Development Programme. Government of Punjab, Lahore. http://www.youth.punjab.gov.pk/freelaptops.aspx (Accessed on 20th September, 2013) GOP, 2013e. Prime Ministers Fee Reimbursement Scheme for Less Developed Areas: Selected Regions. Higher Education Commission, Islamabad. http://www.hec.gov.pk/InsideHEC/Divisions/HRD/tfp/Pages/mainpage.aspx (Accessed on 23rd September, 2013) Haider, M. 2012. Poverty declined during last five years. Daily the News. 22nd July, 2012. http://www.thenews.com.pk/Todays-News-3-122003-Poverty-declined-during-last-fiveyears-report (Accessed on 17th September, 2013) Xhaferri R and K. Iqbal, 2008. When doors are closed to the majority. Daily the Dawn, 27th April. http://archives.dawn.com/weekly/education/archive/080427/education1.htm (Accessed on 20th September, 2013). Wikipedia, 2013. Small business financing. http://en.wikipedia.org/wiki/Small_business_financing (Accessed on 20th September, 2013)
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