Planning & Planning Process in Pakistan

Dr. Vaqar Ahmed

Planning Commission

Pakistan Institute of Development Economics 15 Feb. 2010

Contents
Current Economic Milieu
Planning Myths Planning in International Context Approaches to Planning Planning Process & Machinery in Pakistan A Path Forward

Current Economic Milieu

Planning Myths

Myth 1: Planning is useless because policies lack consistency

Myth 2:

LDCs including Pakistan have not completed the tenure of their economic policies

The discontinuity was not in policies but projects.

Myth 3:

Pakistan Vs. South Korea Model Myth

Aid Received

Model Focus

Planning for Growth

Financing for Growth
GDP Investment Savings

Debt Funding Equity funding Public Sector Funding : PSDP Assistance Equity

Planning for Income Distribution

Can growth & distribution be achieved simultaneously? Is growth necessary for distribution? Is it economic growth that leads to reduction in poverty or the process of distribution? Case of Trade Liberalization ?

Planning in International Context

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Changes in Planning Paradigm

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From Planning to Policy

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Policy Implementation Stages

1. Data Collection

2. Analysis
3. Planning & Prioritizing 4. Implementation 5. Monitoring

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Approaches to Planning

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Approaches to Planning
Reactive Past oriented Inactive Present oriented

Preactive Predicting the future

Proactive Create the future
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Planning Process and Machinery in Pakistan

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Objectives of Economic Planning

1. To increase per capita and national income 2. Higher level of employment 3. Price stability 4. Reduction of inequalities in income distribution 5. To remove BOP difficulties 6. Reducing regional disparities 7. Self-sufficiency in food 8. Redressing imbalances in the economy 9. Increase in savings 10. Reducing population growth 11. Reducing poverty levels 12. Provision of social services 13. Long term economic growth

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Conditions or Requirements of Successful Planning

1. Realistic goals of the plan 2. Appropriate policies and instruments 3. Adequate information 4. Rational institutions

5. Suitable administrative and technical apparatus

6. Public cooperation

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Main Instruments of National Planning

1. Policies

2. Plans i. Perspective Plan 10-25 Years

ii. Mid Term Plan

iii. Rolling Plan iv. Annual Plan

04-07 Years
03 Years 01 Year

3. Transformation of plans into projects/programmes

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Plan Periods in Pakistan

Plan
1. 2. 3. 4. 5. 6. 7. 8. 9. Colombo Plan (Six Year Plan) 1st Five year Plan 2nd Five year Plan 3rd Five year Plan 4th Five year Plan 5th Five year Plan 6th Five year Plan 7th Five year Plan 8th Five year Plan

Period
1951-57 1955-60 1960-65 1965-70 1970-75 1978-83 1983-88 1988-93 1993-98 1998-2003 2001-11

10. 9th Five year Plan 11. 10 Year Perspective Development Plan

12. Medium Term Development Framework (MTDF)

13. Vision 2030 14. 10th Five year Plan (under construction)

2005-10
2010-15
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Chronology of Planning Machinery

1. Development Board established in 1948 in the EAD 2. Planning Board set up in 1953. First 5 year plan prepared for 1955-60 3. National Planning Board established in 1957 4. Planning Commission setup under the Chairmanship of President in 1959 5. Second five year plan prepared for 1960-65 followed by the third five year plan for 1965-70 6. Fourth Five Year Plan (1970-75) prepared but remained dormant due to separation of East Pakistan 7. 1970-77 non plan period: Development on basis of Annual Plans

8. Fifth Five Year Plan 1978-83

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Chronology of Planning Machinery

9. Sixth Five Year Plan 1983-88 1988-93 1993-98

10. Seventh Five Year Plan 11. Eighth Five Year Plan

12. Ninth Five Year Plan (halted due to changed in government) 13. 10 Years Perspective Development Plan 2001-11 14. MTDF 2005-10 July, 2005.

15. Planning Commission restructured on 20 April 2006 with P.M. as Chairman. 16. Vision 2030 launched in August, 2007
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Functions of Planning Commission

Consultation with: Federal Ministries / Provincial Governments Donors Civil Society Formulation of National Plan Annual Plan Five Year Plan Rolling Plan Perspective Plan (15-25 Years)

Project Management Approval of Development Projects Monitoring of Major Projects Evaluation of on-going and completed projects Association with EAD in matters of Foreign Assistance

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Planning Process
Planning Commission
Preparation of approach paper Consultations with all Federal Ministries for input Formulation of technical working groups in all sectors Preparation of sectoral chapters by working groups Consultations with all Provincial Govts. for input

Sent to all Fed. Ministries and Dev. Partners for comments and input Finance Division (Resource Availability)

Draft Five Year Plan Finalization of draft plan by PC and its presentation before President/Prime Minister Submission to National Economic Council (NEC) Circulation of approved plan to all Provincial Govts. And Federal Ministries for implementation Transformation of plan into viable projects/programmes

Sent to all Provincial Govts. for comments and input Economic Affairs Division (Foreign aid availability)

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How Planning Leads to Development

Plans are transformed into viable project programmes Relationship: Projects and Plans

Ensure Desired Objectives of Development Plan

Crowding in phenomenon: Investment Coefficient Which modes of public investment?
25

Project Management Life Cycle

1. Identification and Formulation

2. Appraisal and Approval

3. Implementation 4. Completion and Closure 5. Ex-post Evaluation
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How are Projects Identified in Pakistan?

National Economic Council Planning Document (Annual / Medium Term Plan) Assistance and partnership strategies with donors Line Ministries / Public Sector Corporations Based on their sectoral strategies / work plans Public Representatives/NGOs/Pressure Groups Policy Debates

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Project Preparation PC I Performa

History Introduced in September 1952 Revised by Group of Experts 1995 including World Bank. 14 Forms of Various Sectoral Projects Present Only 3 sectoral PC-I Performa (Infrastructure, Social Sector and Production Sector)

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Project Preparation PC II Performa

Need for Feasibility Studies Projects costing Rs. 300 million and above Financing the Cost of Feasibility Studies Provision under PSDP Proposal to be submitted in the form of PC II Performa Highly Technical Projects Request donor for Technical Assistance Grant

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Project Preparation Project Formulation

Overall Objective Financial and Economic Viability of the Project Indicators over the life of project Inputs Baseline data Output Expected Outcomes Sustainability aspect after completion Yielding the required outcomes
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Project Appraisal & Approval

Appraisal involves a careful check of:

Basic data Assumptions and methodology used in project preparation In-depth review of work plan, cost estimates and proposed financing plan Assessment of organizational and management aspects Validity of financial, economic and expected social benefits

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Project Appraisal & Approval

Approving Authority

Departmental Development Working Party (DDWP) Up to Rs. 40 million Central Development Working Party (CDWP) Up to Rs. 500 million Executive Committee of National Economic Council (ECNEC) More than Rs. 500 million Provincial Development Working Party (PDWP) Up to Rs. 5000 million Corporations and Autonomous Bodies No Limit*

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Project Appraisal & Approval

PC III, PC IV, PC V

PC-III: Designed to furnish information on the programme of on-going projects on quarterly basis Any Changes in Scope of Design Any Revisions Any Changes in Management of Project PC-IV: Project History (Physical Completion of Project) Accounts Closed/amount unaccounted Employment generated by the project Suggestions for future planning Name of the operating agency
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Project Appraisal & Approval

PC III, PC IV, PC V

PC-V form is to be furnished on annual basis for a period of five years by operating agency Review of costs Review of financial results Arrangements for maintenance of project Difficulties experienced in operation, marketing etc. Repercussion of scheme General observation of Federal Ministry

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The Need for Monitoring

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Project Monitoring
Internal Monitoring Sponsoring Ministry

External Monitoring Provincial P & D Dept. Projects Wing at Planning Commission

Monitoring Cells Establishment of Planning and Monitoring Cells in ministries as directed by ECNEC. Monitoring Methodology Results Based Monitoring
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Project Monitoring
Stages of Monitoring Starting Phase Investment / Execution Phase

Completion / Operating Phase

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Project Monitoring
E-connectivity through Project Monitoring and Evaluation System (PMES)

Project Director Provincial P & D Departments Line Ministries Planning Commission Prime Minister Secretariat Funding Agencies

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Pending Weaknesses

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Weaknesses Need for Further Reform

Weaknesses in Project Management

Financial
. Unrealistic cost estimates . Delay in financial arrangements (Local/FEC) . Proper cash plan not prepared . Inadequate allocations/funding . Late release of funds, lengthy procedures . Cost over run

Monitoring & Evaluation

. Need for more effective monitoring

Political Intervention

Others

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Weaknesses Need for Further Reform

Planning Issues

o
o o o

Management
Human Resource Development Lack of Policy Formulation and Analysis Depleted Physical Infrastructure

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Path Forward

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9-Point Program for Economic Reform and Sustainable Development

Achieve Macroeconomic Stabilization Establish Social Safety Net Develop and mobilize human resources (HRD) Expand agriculture production and galvanize Agro-Business potential Galvanize industrial competitiveness with supporting strategies Integrated planning for Energy Development Deepen and diversify domestic Capital Markets Establish Public-Private Partnership as major method for infrastructure development Administrative Reform: Consolidation, Specialization and Devolution
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Final Message

Water for agriculture

Energy for industry

http://www.pc.gov.pk/

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