Human Resource Development for Better Livelihood and Growth in

South Asia Pakistan Prospects

EXECUTIVE SUMMARY
Annual Plan 2013-14
The outlook for 2013-14 depicts a recovery in growth trajectory, in spite of wide
ranging challenges which include; energy crisis, supply-side constraints,
inefficiencies of production, fiscal deficit and demand for structural reforms besides
security challenge. The existing pattern of consumption-led growth with falling
investment is unsustainable in the long run. Similarly, re-gaining macroeconomic
stability and adequate investment are critical for improved growth prospects and
enhancing job creating ability of the economy. Lack of structural reforms, high fiscal
deficit, and accommodative monetary policies do not necessarily support journey to
higher growth trajectory. The constraining factors also have serious consequences
for inflation, balance of payments and foreign exchange reserves. In order to tackle
these hurdles and place the economy on the right path Annual Plan 2013-14 aims at
higher growth rate and sectoral targets taking into consideration assumptions of
better energy supplies, normal weather conditions and political stability.
The growth of GDP for 2013-14 is targeted at 4.4% with contributions from
agriculture (3.7%), industry (4.8%) and services (4.5%). Nominal GDP is targeted to
grow by 12.8% and GNP per capita is projected at Rs.146, 445. The growth targets
are subject to risks like deterioration in energy availability, extreme weather
fluctuations, and fiscal profligacy. The underlying assumption for inflation is 8%
which is consistent with fiscal prudence and responsive monetary policy.
Poverty Reduction
Poverty is defined as the inability to attain a minimal standard of living. Poverty is a
multidimensional phenomenon characterized by low income, lack of access to
resources, few opportunities for participation in the economic activities or political
process, and high vulnerability to risks and shocks. Tackling poverty requires a
holistic approach that promotes economic growth and creates opportunities for the
poor to participate in economic growth process, provide them access to essential
services such as education, health, clean drinking water and proper sanitation etc.
Maintaining macroeconomic stability, improving governance, consolidating
devolution to the grass roots level and protecting vulnerable segments of the
society are the essential elements of any poverty alleviation strategy.
Overcoming poverty and sustaining growth cannot be achieved without
establishing an institutional framework for the provision of productive assets, both
physical and human, to the poor. Thus, engaging the poor in the process of
investment, innovation and productivity increase, enables them to actively
participate in economic growth, instead of becoming recipients waiting for trickle

down to take effect. This in view, the design to achieve the objectives of the
Government for poverty reduction includes:
1. Enhancing capacity of the people through human development programs in
education, health, population welfare, and skill development, access to clean
water & sanitation and gender mainstreaming initiatives.
2. Provision of productive assets inclusive of micro finance at individual level.
3. Provision of a comprehensive social safety net to protect the vulnerable and
those suffering from natural or manmade disasters.
4. Provision of adequate resources for financing the poverty reduction programs.
5. Reforming and strengthening institutions for better delivery of public services
to people.

Strategy for Poverty Reduction & Growth in South Asia:

Human Development
Pakistan has a low Human Development Index (HDI) value of 0.515 for 2012,
placing it at 146th in 187 countries compared to HDI of 2011 where Pakistan ranked
at 145th in "low human development" group of countries. In other South Asian
countries, India ranked 136th in 2012, down two steps from 2011's 134, while Sri
Lanka stood at 92nd, up five steps from 97 (Annexure-14.1).
UNs Human Development Report also measures human development using
Multidimensional Poverty Index (MPI). In South Asia, the highest MPI value is for
Bangladesh 0.292, followed by Pakistan 0.264 and Nepal 0.217. In Bangladesh
and Nepal, the living standards dimension contributes more than the health and
education dimensions, but in Pakistan, the health dimension contributes more.
Conditional Cash Transfers (Education and Health)
Cash support programme can provide the needed incentives to mobilize the poorest
households to register their children in school. Child Support Programme of Pakistan
Bait-ul-Mal provides cash subsidy to eligible beneficiaries for sending their children
to primary schools. Initially the programme was piloted in three selected districts
(Bhakkar, Tharparkar & Kohistan), which was extended to eight additional districts
(Rawalpindi, Multan, Quetta, Kharan, Muzaffarabad, Ghanche, Abbottabad and
Nawabshah) in 2009-10 after successful review of the pilot.
Benazir Income Support Programme (BISP) provided unconditional cash support to
nearly 4.7 million poor households in 2012-13. BISP annual disbursement was Rs. 41
billion in 2011-12. The Nationwide Poverty Scorecard Survey, the first of its kind in
South Asia, enabled the BISP to identify eligible households through the application
of a Proxy Means Test (PMT) that determines welfare status of the household. The
survey started in October 2010 and has been completed across Pakistan except in
two FATA Agencies. BISP provided much needed relief to over 4.8 million
beneficiaries including flood affectees and bomb blast victims across Pakistan. As of

March 1, 2013, BISP since its inception has spent close to Rs. 165 billion on various
activities including cash transfers, graduation program and emergency relief along
with conducting a nationwide poverty scorecard survey.

BISPs Waseela-e-Sehat provided group life insurance cover of Rs. 100,000 for the
bread winners of beneficiary families. Over 4.1 million beneficiary families now have
their bread earners covered under the group life insurance scheme launched by
BISP in collaboration with State Life Insurance Corporation of Pakistan. Over 7000
death claims have already been processed by SLIC during 2011-13. A
Comprehensive Health Insurance Scheme covering all members of BISP beneficiary
family has also been piloted in district Faisalabad since April 2012. Five additional
districts (Badin, Naushera, Quetta, Gilgit and Muzaffarabad) will be included in the
project in the next financial year.
A co-responsibility cash transfer Waseela-e-Taleem is designed to support children of
BISP beneficiary families (between ages 5-12 years) for primary education with
Poverty Reduction and Millennium Development Goals
Annual Plan 2013-14 148 additional cash transfer of Rs. 200 per child per month (up
to a maximum of three children) subject to their compliance with the required
school attendance. Under the Waseela-e-Taleem initiative, the objective is to enroll 3
million children of the ages of 5-12 during 2012-16 period. As of March 1, 2013, a
total of 24,536 families have been enrolled in the program in five districts and
59,380 children have been identified and issued admission verification certificates.
Skill Development
Skills development can play an important role in reducing poverty. Skills equip
individuals for practical work, and enable them to lift themselves out of poverty by
improving access to work and productivity and fostering national economic growth.
However, ensuring that skills development opportunities are accessible to the poor
and can be translated into livelihood improvements is challenging.
National Vocational & Technical Training Commission (NAVTTC) plays a direct and
meaningful role in poverty alleviation by supporting each of its trainees by a
monthly stipend of Rs. 2,000 under all its sponsored training programmes. NAVTTC
allocated Rs. 300 million in 2012-13 and projects under implementation, while the
demand for 2013-14 is Rs. 350 million. NAVTTC is conducting its training
programme through Funni Maharat Programme and Hunarmand Pakistan
Programme. Through Fanni Maharat & Hunamand Pakistan Programme, more than
10,000 trainees have been trained during July-December 2012.
Under Waseela-e-Rozgar initiative, BISP provided technical/ vocational training to
one member per beneficiary family to help them get vocational training. BISP is

collaborating with several public and private sector training organizations for this
training. Private sector training institutions were selected all across Pakistan
through a competitive process. As of March 1, 2013 around 11,644 persons have
been trained while 39,374 persons are currently enrolled. It is expected that by June
30, 2013 the total number of trained persons would be approximately 70,000.

Microfinance and Business Development

Microfinance services help the poor in accumulating their assets and building their
income generating capacities that can provide better social services such as health
and education, food security, and access to basic necessities of life. In addition,
savings help them better manage their resources over time and to enable them to
plan and finance their investments. Insurance becomes useful in order to mediate
the blow from unseen disasters such as floods, as have been witnessed in Pakistan
in 2010 and 2011, crop failures, hike in prices and other ominous macroeconomic
factors.
Within micro-credit, the number of average borrowers as on December 2012 was at
2.4 million. Outreach growth rate has increased to 13 percent compared to the
growth rate of 2011 which was a modest 0.7 percent. Micro-savings have recorded
savers growing at 17.9 percent in 2012, and value of savings growing at 60 percent.
Microfinance disbursements and number of beneficiaries during July-Dec, 2012-13 is
in Table 14.4. A number of new players have entered the market over the past 18
months either by launching Greenfield institutes or by acquiring existing
institutions. These MFPs Poverty Reduction and Millennium Development Goals
Annual Plan 2013-14 149 includes NRSP Bank, Apna Microfinance Bank, U Bank,
Advans Microfinance Bank, Waseela Microfinance Bank and Khushhali Bank Limited.
This trend is reflective of the industrys potential in the country and confidence of
investors in the business environment for microfinance in Pakistan.