in the details
For all the wrong reasons
The power of ideas
By Irfan Mufti
As I write these lines, ninety days have passed after floods in Pakistan hit villages in upper Kohistan and Gilgit Baltistan but the basic task of rehabilitating flood victims is still unaddressed. Early assessments confirm that 7 million affected people still need relief, health assistance, temporary shelter and early recovery support. The other 15 million, who have gone back to their villages, are waiting for the promised aid. Among many other needs for this population three are most important: shelter, livelihood recovery, and basic healthcare.
By Aasim Sajjad Akhtar
"Mainstream economics is the most peculiar of all theoretical failures. Unlike astrology or phrenology, economics becomes more discursively powerful the greater its incapacity to inform us on really existing capitalism." — Yanis Varoufakis, Professor of Economics, University of Athens.
Reading the annual report of the State Bank of Pakistan (SBP) is a particularly painful exercise. I would recommend it only to those who want to understand the extent to which our intellects have been made captive to an historically contingent discourse that poses as reason itself.
To be fair, the SBP is not the only institution in this country that incessantly spews out reports to placate our technocratic overlords in Washington, Manila and Brussels. Just about every Pakistani ministry has learned the language of ‘good governance’ and ‘structural reform’. And in the 2-3 decades that this new policy-speak has been imbibed by all and sundry, the structures of economic and political power that keep the majority of this country’s – and for that matter, world’s — people enslaved have become virtually liberated from the intellectual and political scrutiny that was prevalent until the 1980s.
The SBP report is relatively critical of the government’s policies even while acknowledging that serious shocks have made objective challenges much more daunting. Yet the criticism remains rooted within a familiar paradigm in which the ultimate end of economic and social policy is ‘efficiency’, the ‘unimpeded operation of markets’, ‘rationalisation of prices’ and the proverbial reduction of the fiscal deficit.
A great deal of emphasis is placed on the huge burden that is the energy sector, as it should. Pakistan’s oil import bill is already in the tens of billions and is increasing at a completely unsustainable level. And while the SBP is right in asserting the need for a serious overhaul of the energy sector its major gripe with the government has to do with the manner in which subsidies to consumers of electricity have been withdrawn.
One of the planks of neo-liberal policies has been cutting public subsidies across the length and breadth of the economy, both to producers and consumers. While there is no disagreement that direct or indirect subsidies from government accruing to the rich and powerful represent a major social injustice, the facts bear witness that it has been the poor and defenseless who have primarily been at the receiving end of the anti-subsidy crusade. If there is any doubt about this we need only to cast our thoughts to our electricity bills which have doubled in recent months. And if the readers of newspapers such as this one are feeling the pinch, then one can imagine how a family of six earning Rs10,000 a month is coping with an electricity bill of Rs2000 (and often more).
The SBP insists that the government should have phased out the electricity tariff subsidy more gradually. In other words, there is no questioning of the policy itself, just a recommendation relating to how the policy should be implemented. Similar assertions are made vis a vis what the authors clearly consider to be other self-evident policy staples throughout the report. Within neo-liberal discourse there is no questioning of the infinite wisdom of the market, the inevitability of privatisation of state enterprises, the liberalisation of trade and finance, and the imposition of regressive taxes. If the objective of social and economic policy is to improve the lives of working people then why is it that the very policies that have intensified dispossession and exclusion are exempt from ruthless and honest appraisal?
Of course, a genuine programme of structural reform is exactly what is missing in most of these reports. The SBP report repeatedly notes the importance of broadening the tax net, but continues to eulogise the general services tax (GST) as the panacea to our problems. There is no mention of reviving the wealth tax, for example, which was of course abolished under the Shaukat Aziz regime even while liquid earnings of the rich and powerful were increasing exponentially. There is no mention of properly accounting for and then taxing the earnings of military-run enterprises (whether mills, colleges, real estate, etc. etc.). These are the big fish that need to be giving up a significant chunk of their incomes, while GST is simply pushed onto the consumer in the form of higher prices.
And then, as always, there is the token mention in the SBP report about the white elephants that continue to paralyse our economy along with the standard caveat about how there is little that can be done: "Admittedly, there are significant rigidities in government spending, including debt servicing, defense, the government salary bill, etc." These three heads comfortably account for 75-80 percent of total public spending. But the SBP proceeds to note: "However, there appears little evidence of efforts to contain the growth in even the discretionary components". In other words, the government can only exercise discretion on matters other than defence and debt servicing. If this is true then the very exercise of being in government is a contradiction in terms!
The absurdity of the discipline of economics, at least as it has evolved in the past 25-30 years is indeed that its theoretical and policy exertions are in total dissonance with the actual lived reality of actually existing capitalism. The global financial crisis exposed this fact to an unprecedented extent yet mainstream intellectual and political circles are pretending as if the economic policy paradigm that precipitated the crisis somehow had little to do with it. The acknowledgment that there is something fundamentally wrong with the assumptions we make about human life, and in particular about the rationality that inheres in (individual) human behaviour is conveniently glossed over by blaming everything on the rapaciousness of a few greedy CEOs.
The problem is arguably much more serious in countries such as ours. Centuries of subjugation to Western imperialism has stunted our capacity to think independently and to defy our overlords, in spite of the evidence that such defiance is the only way forward. Among other things, the kind of economy mapped in the SBP report is a far cry from the actually existing Pakistani economy (and here I mean the real markets and real pricing mechanisms and real rationality that together constitute the so-called informal economy). It has been said before but needs to be said again: intellectual honesty is a pre-requisite to the kind of social change that we need in this country. The plethora of reports that are produced in this country prove just how much we lack exactly what we desperately need.
The real cause of concern is that structural constraints remain unaddressed
By Hussain H. Zaidi
The major thrust of the State Bank’s review of the economy during the financial year 2009-2010 (FY10) is that even when the economy performed well, the fundamental structural weaknesses remained unaddressed. In the presence of these weaknesses — large fiscal deficit, monetization of the debt, a narrow tax base, inefficient public sector enterprises, circular debt, energy shortage, a narrow export product range and low level of savings and investment — the economic recovery will remain fragile.
The economy made a moderate recovery during FY10. The real GDP grew by 4.1 percent compared with the target of 3.3 percent and revised growth figure of 1.2 percent for the preceding fiscal year (FY09). The manufacturing sector registered healthy growth of 5.2 percent surpassing the 1.8 percent target and negative growth of 3.7 percent during FY09. Large scale manufacturing (LSM), which accounts for more than 70 percent of industrial output, grew by 4.4 percent compared with negative growth of 8.2 percent during the preceding year. However, the LSM growth was not symmetrical as some of the sub sectors—electronics, rubber, engineering, automobiles and leather—registered strong growth while sub sectors like textiles, food and beverages, petroleum, metal, and wood products contracted.
The services sector expanded by 4.6 percent exceeding the 3.9 percent target and 1.6 percent actual growth in FY09. The growth of services was well supported by manufacturing growth. However, the agricultural sector grew only by 2 percent missing the 3.8 percent target and well below the 4 percent growth registered in FY09.
The current account deficit came down to 2 per cent of GDP ($3.49 billion) against the target of 5.3 percent and actual figure of 5.7 percent ($9.21 billion) during FY09. Trade deficit fell to $11.42 billion from $12.62 billion, while remittances increased to $8.90 billion from $7.81 billion during FY09. The fall in trade deficit was not merely due to decrease in imports ($31.05 billion from $31.74 billion) but also due to increase in exports ($19.63 billion from $19.12 billion). Exports grew by 2.7 percent compared with 6.4 percent contraction during the preceding year. However, foreign direct investment (FDI) inflows came down to $2.20 billion from $3.72 billion.
Fiscal deficit surpassed the 4.9 percent target to reach 6.3 percent of GDP despite drastic cuts in development spending as the Public Sector Development Programme (PSDP) was slashed from Rs646 billion budgetary allocation to Rs490 billion. Current expenditure surpassed the Rs2.26 trillion revised target to reach Rs2.40 trillion. Revenue receipts increased from Rs1.67 trillion to Rs2.05 trillion. However, as a percentage of GDP revenue fell to 14.2 percent from 14.5 percent a year earlier. Tax-GDP ratio also fell to 10 percent from 10.3 percent.
Investment-GDP ratio fell to 15.2 percent from 17.4 percent and against the 20 percent target. National savings-GDP ratio however increased to 13.8 percent from 13.2 percent but still missed the 14.7 percent target. CPI inflation dropped to 11.7 percent from 20.8 percent but still missed the 9 percent target.
Thus, the economic recovery in FY10 was not based on strong fundamentals. Sustained growth needs to have strong foundations, such as high level of savings and investment, moderate rate of inflation and fiscal consolidation, otherwise it will create domestic and external imbalances just as the growth towards the close of the General Musharraf period did.
The engine of GDP growth is investment or capital formation. The major cause of less than desirable level of investment is low savings-GDP ratio. As the SBP notes, Pakistan’s saving rate is the lowest in emerging Asia. Major reasons for this include a consumption-oriented society, losses by public sector enterprises, low and highly skewed per capita income, and lack of appropriate saving instruments. To fill the gap between the actual level of savings and the desired level of investment, foreign investment, particularly, foreign direct investment (FDI) is needed. However, mainly due to political uncertainty and bad law and order situation, the FDI is on the decrease despite the fact that Pakistan has a very liberal FDI regime.
Pakistan has one of the lowest tax-GDP ratios in the world. Two options are available to the government to increase tax revenue: one, to broaden the tax net, for instance, by taxing agriculture income; two, to increase the existing taxes. For reasons political, the first option has not been exercised, with the result that those who already pay tax — the salaried class — are burdened with more taxes. The government can substantially raise tax-GDP ratio by levying tax on agriculture income. Successive governments including the present have toyed with the idea of levying agriculture tax. But the enormous political influence of the landed gentry has prevented materialization of such an idea. Hence, it is the salaried class which bears the brunt of government efforts to shore up revenue either through direct or indirect taxes, such as the general sales tax (GST).
The SBP review also contains projections for the current fiscal year (FY11). The major budgetary targets for the current fiscal year (FY11) included (a) economic growth of 4.5 percent, (b) average inflation of 9.5 percent, (c) fiscal deficit of 4 percent of GDP, (d) development expenditure (of both federal and provincial governments) of Rs766.5 billion, and (e) projected tax revenue of Rs1. 66 trillion including direct taxes of Rs657.7 billion and indirect taxes of Rs1.12 trillion — 9.8 percent of GDP.
The havoc wrought by the floods has however necessitated revision of these targets. The central bank has projected the GDP to expand between 2 and 3 percent, inflation in the range of 13.5-14.5 percent, imports of around $35 billion (up from $31.7 billion original projection), fiscal deficit of about 6 percent and current account deficit of 4 percent (up from the 3.4 percent target). Exports and remittances are, however, projected to surpass the targets to reach $21 billion and $10.5 billion respectively.
Rehabilitation of the flood-hit people will put serious pressures on the public exchequer in a situation when revenue collection is likely to be lower due to disruption of economic activity. It is here that the SBP sees an opportunity to take some tough decisions. These include widening of the tax base, the tax system reforms and adoption of austerity measures. However, if the past is any guide, the efforts to re-prioritize budgetary allocation will end up in diverting development expenditure to rehabilitation of floods affected people. As for broadening the tax base, it is easier said than done and the only measure will be a reformed general sales tax (GST) incorporating features of a value added tax (VAT) — a sovereign commitment to the IMF — which will add to inflationary pressures.
The major economic indicators in the post floods scenario present a mixed picture. During the first quarter of the current fiscal year (FY11 July September), current account deficit (without official transfers) went up to $741 million compared with $570 million for the corresponding period of the last financial year (FY10 July September). Imports increased to $8.2 billion compared with $7.4 billion; however, exports also rose to $5.2 billion compared with $4.6 billion. FDI dropped to $381 million from $477 million; however, remittances increased to $2.6 billion from $2.3 billion. Inflation (CPI) went up to 13.8 percent from 10.7 percent. The real cause for concern, however, is that the structural constraints remain unaddressed.
The writer is based in Islamabad
Another story on SBP annual report on page 2
By Huzaima Bukhari and Dr. Ikramul Haq
Release of annual report by the State Bank of Pakistan (SBP) on the state of economy has repudiated with authority the tall claims by stalwarts of the present regime that they "performed excellently" during the fiscal year 2009-10 and economic results for first nine months of the current financial year were "satisfactory".
The SBP has concluded that all the fiscal targets were missed, governance in all spheres was poor, structural flaws continued and overall economy was in thick soup. The findings of SBP have been endorsed by Pakistan Institute of Development Economics (PIDE) in a report made public on October 26, 2010 stating that "there is a serious threat that Pakistan economy could get entrenched into a prolonged and deep stagflation unless decisive and concerted action is taken by policy makers".
Both the SBP and PIDE reports predict that at least in the foreseeable future the economy will witness low economic growth and high double-digit inflation — the classical characteristics of an economy in stagflation. The real challenge, therefore, is to devise a coordinate strategic response to break out of stagflation by rekindling growth and checking inflation.
The SBP report noted with concern "persistent disagreements led to the deferment of a proposed expansion of the tax net through the introduction of a broad-based GST". It says the "proposed restructuring of public sector enterprises, to improve efficiency and lower the fiscal burden, did not take place," and that "there was little or no progress in either resolving the energy sector debt chain or substantially improving electricity supply".
The most worrisome area, according to SBP, is the government’s expenditure — the "principal structural problem". It pointed out that "the fiscal deficit bounced back to 6.3 per cent of GDP in fiscal year 2009-10 having climbed 110 basis points within 12 months. Echoing the complaint of various private sector enterprises, SBP said that increasing expenditure of the government "crowded out and otherwise undermined private sector activities".
The SBP in categorical terms opined that fiscal expansion is responsible for persistent double-digit inflation as well as substantial increases in total public debt and liabilities which jumped from 68.7 percent of GDP in fiscal year 2008-09 to 69.5 percent in fiscal year 2009-10. For the first time using strong words, the annual report said "slippage on the expenditure side was more disappointing". The SBP, while acknowledging that the government has limited options to cut down spending on "debt servicing, defence, the government salary bill, etc.", noted that "there appears little evidence of efforts to contain the growth in even the discretionary components".
SBP has aptly mentioned that subsidies and losses of public sector enterprises increased by 10 percent compared to the previous fiscal year and "to put this in perspective, in Fiscal year 2009-10 these expenditures, as a percentage of GDP, were almost equal to the combined total budget for health and education". According to SBP, this was by no means "an acceptable situation".
The SBP highlighted improvement in real GDP growth which, "rose to 4.1 per cent compared with an anaemic 1.2 per cent in FY09". The current account deficit, it noted, also narrowed to "only 2 per cent of GDP in FY10 from 5.7 per cent in the previous year". The country’s trade deficit also continued to narrow for the second consecutive year and exports grew by a remarkable 9.4 percent over the previous fiscal year, SBP noted. However, it pronounced conclusively that, "investments fell for the second consecutive year", and, "all fiscal targets of the government were missed during the year".
According to SBP, inflation is expected to continue in the range of 13.5 and 14.5 per cent for the current fiscal year — this is higher than SBP’s own forecast of 11 to 12 percent issued earlier. SBP has expressed the fear that persistent double-digit growth in inflation may be fuelled further by "any weakness in the exchange rate". It also added that recent 50 per cent hike in government sector salaries, anticipated rise in energy tariffs and removal of GST exemptions to broaden the tax base are also likely to exacerbate the already sky-rocketing prices. The SBP asserted that losses to agriculture, livestock and other sectors have limited prospects of GDP growth for FY11 to the range of "2 to 3 percent".
According to SBP report, in the wake of devastating floods nearly 20 million people were displaced and forced to live without shelter, food, clean drinking water and basic health facilities". It is predicted by SBP that despite international assistance and public support, "the resources available are likely to be quite inadequate against anticipated needs". It has thus warned that immediate attention is needed to improve economic governance and to build social safety nets given the increasing incidence of poverty in the country.
The SBP’s report testifies that euphoria of rapid growth — much talked about by Musharraf regime — was nothing but a ‘great delusion’. The present government suffers from the same malady as its predecessors — self-praise typical of Musharraf-Shaukat duo creating hyperbola of "economy’s performance" without any long-term sustainability. In the light of latest SBP’s findings and conclusions, the government should be worried about burgeoning fiscal deficit — the mother of all ills.
On the revenue front, failure of FBR in tapping actual potential of Rs4 trillion, inability to curb wasteful expenditure of over Rs8500 billion by central and provincial governments, which include heavy cost of perks and perquisites of rulers, and unabated corruption, are real issues that require tackling on a war-footing.
The government should seriously consider concerns relating to ever-rising inflation and employment, widening trade, fiscal and current account deficits, rising cost of doing business, burden of new taxes, price-hikes of petroleum products, increases in utility bills, economic stagnation and industrial slow down. People’s purchasing power is diminishing, banks have less liquidity, lending rates are getting high and activities at stock markets are sluggish. Investors are shy and afraid, mainly due to perpetuation of political instability and economic uncertainty.
Although we claim to be an agricultural economy yet a vast majority of the people do not have enough to eat. It is tragic that we even import agricultural products and have miserably failed to develop any worthwhile agro-based industry in the last 63 years.
The policy of appeasement towards tax evaders, money launderers and plunderers of national wealth is showing its impact in all spheres.
Undoubtedly, governance problems have precipitated a vicious circle in Pakistan. Historically, fiscal policies were formulated that de-emphasized social spending; implemented with excessive leakage and insufficient attention to efficiency and equity; that eventually led to serious fiscal and social gaps. A different strategy, focused on governance reforms, could have created a virtuous circle, in which growth accelerated and resources freed for spending, helping to effectively close both the social and fiscal gaps. It was due to sheer failure in good governance and better fiscal management that Pakistan is still faced with acute economic problems.
If the $98 billion in development assistance provided to Pakistan from 1960 to 2009 had been invested during this time to yield a moderate real return of 8 percent, it would have grown into assets equal to $619 billion in 2008, many times Pakistan’s current external debt. Instead, this debt now stands at over 70 percent of GDP, and is in and of itself a constraint on growth.
The most troublesome sector of economy is agriculture. The rural population is constantly being pushed below the poverty line making all the targets of growth unachievable. Keeping in view the fact that nearly one-fourth of the total GDP and 44 percent of total employment is generated in the agricultural sector, the country can never progress unless the rural population (constituting 65 percent of the total population of 180.4 billion according to SBP report) is taken care of. If we have to develop economically, agriculture will have to play a critical role in the fight against poverty.
The dismal performance in agriculture during the last 30 years has affected the entire economy of Pakistan. Vital areas like mechanisation, irrigation, plant protection and improved seeds have not been given proper attention although on paper there are many departments (including agricultural universities) spending millions and millions on claiming to have achieved wonders. In reality, even the issue of loans to small farmers is nothing but just another scandalous affair where a few are making huge money in the name of poor farmers. The planners have never bothered to look forward and provide for an efficient irrigation system. The result is acute water shortage.
Experts sitting in the ministry of finance talk about more revenues without determining the incidence of taxation and transparent spending of taxpayers’ money on public welfare. Industries are already over-taxed but instead of getting any relief, these are being asked to pay exorbitant taxes. There is no political will to tax the mighty sections of the society, especially absentee landlords, and the entire tax burden is being shifted on the poor.
This does not end the list of problems: avoidable imports continue, trade deficit remains worryingly large, inflation persists as a major headache, no acceleration in exports, and domestic industry remains both high cost and uncompetitive, while growing steadily obsolete. Overall growth strategy is lop-sided as it does not take into account the role of rural population in the economy. The single-most factor that 65 percent of the country’s population living in the rural areas are directly or indirectly linked with agriculture for their livelihood, has been totally ignored by the planners and economic managers.
All the governments pretend that serious economic problems can easily be disguised by statistical sleight of hand — this has now been exposed by the excellently-prepared report by SBP.
The writers, tax lawyers, are Adjunct Professors at Lahore University of Management Sciences (LUMS)
A study advises Punjab government to cut its size and move out of businesses best suited to private sector
By Shahzada Irfan Ahmed
In Pakistan, the word reform has always been a misnomer and synonymous with breaking the status quo. Any one propagating change, especially in the working of the government and its infrastructure, has faced resistance of all sorts. And those who have succeeded in breaking this status quo to some extent have seen their successive governments (obviously formed by their rival groups) undo all that they achieved, in a single go.
The Punjab government has also expressed, repeatedly, its resolve to remove inefficiency, duplication, and overlapping from its ranks, cut down its expenditures and make reforms public-centric. Though the situation on the ground does not seem rosy and the process of change is not that visible, an encouraging factor is that the government has succeeded in getting a comprehensive review of its working and infrastructure done by a set of highly qualified professionals.
Working under the umbrella of UK Department for International Development (DFID) funded Technical Assistance Management Agency (TAMA), they have pointed out the problem areas, criticised mismanagement wherever it is and also suggested solutions. The results of the project titled, High Level Government Review (HLGR) were discussed by different stakeholders who had gathered at the Center of Public Policy and Governance (CPPG), Forman Christian College (FCC) University earlier this month and participated in a policy dialogue titled, "Creating a Leaner Government."
The event, held jointly by CPPG and UK Department for International Development (DFID) funded Technical Assistance Management Agency (TAMA), gave the opportunity to speakers to highlight the need of revising the government structure and making it more efficient and responsive to the needs of service delivery of the people.
No doubt, the cash-strapped Punjab government needs immediate steps aimed at improving its efficiency and decreasing its financial dependence on the federal government.
For example, the study proposes some departments, having similar area of operation may be clubbed together for more coherent policy and planning e.g., Departments of School Education and Literacy, Department of Health and Population Welfare. "Some departments having similar functions may be merged to form new entities with some additional functions assigned to them, e.g. Departments of Social Welfare and Zakat may be merged to form Department of Social Protection with common databases to ensure delivery of targeted subsidies to the needy," it says.
The HLGR was launched in 2009 and its first task was the desk study which was intended to identify previous efforts to restructure federal and provincial governments in Pakistan. The study found that virtually all previous reform attempts have targeted the federal government. "These interventions have focused on changing the way the civil service is structured and managed, neglecting the wider service delivery and public management agenda, the study found."
The HLGR team also found that many departments were established either at the time of independence or in the two decades which followed. 1997, however, the number of new departments which have been established has escalated. One third of the departments which currently exist were created in a little over 10 years. According to the review, the provincial government is substantially larger than state governments in Malaysia, Canada and the USA. Indeed, there is no central government which has more than 38 departments.
It has been suggested that the government bring the number of departments to 21 and merge the functions of more than one department in different cases to end duplication or ambiguities. For example, farmers should be given a single government window for all farming related matters, including cropping and livestock.
Similarly, it is proposed that the functions of the Home Department should change. It must retain the responsibility for public safety and security functions, with prison and probation services being transferred to a new Justice Department. "Having a narrower mandate would enable the Home Department to focus more effectively on the urgent public safety and security needs of the province. A similar structural change was adopted in the UK immediately following the 7/7 terrorist attacks in London," the study suggests.
Besides, the government has been advised to leave certain functions to the private sector as, "Running livestock/poultry farms and tourist resorts in prime commercial locations, undertaking mining activities and developing sites and services for housing schemes, are all functions in which the private sector is already playing a vibrant role and in which the government does not have the requisite competence and motivation to manage these services and facilities efficiently and effectively."
The Punjab government has also been advised to suspend its credit subsidy scheme for small-scale industry managed by Punjab Small Industries Corporation. What normally happens is that the government ends up bearing a cost considerably higher than the interest subsidy, because of loan defaults resulting from poor borrower identification/selection procedures or from changing economic or other circumstances.
Fingers were also pointed at the functioning of the government printing press at a time when the use of information technology in government departments is increasing and e-governance is the order of the day. Hence, the need for printing and publications, and, therefore, the role of the government printing press, has become increasingly marginal in nature, especially with a private sector actively marketing and providing the associated services.
Education and social protection departments were the ones discussed the most and those where reform are needed on a priority basis. It is also proposed that Punjab Sports Board should be established as a funding entity under the Education Department. Under this option, a dedicated Sports Department is unnecessary since the policies for the major sports are established by their respective federally-constituted bodies and sports associations, whilst sports as a function has been devolved.
The above-mentioned are a very few of the suggestions out of an exhaustive list prepared under HLGR. It is hoped the government takes them seriously and has the will to implement most of them, if not all, and more importantly that the successive governments do not undo all the good done by the predecessors, as has always been the case.
Ignoring the threat
Safe practices are a must to fight the threat of hepatitis C in Pakistan
By Waqar Gillani
The 2009 survey of Pakistan Journal of Gastroenterology says Pakistan has the highest number of people carrying Hepatitis virus in the world. Up to 15 million out of 180 million population of Pakistan are carrying Hepatitis B or C virus. Despite this alarming ratio of prevalence of this virus the issue seems not on the priority list of the government.
In the last fiscal year (2009-10), federal spending on Prime Minister’s Programme for Hepatitis Prevention and Control was Rs350 million only. While, for the current fiscal year, an amount of Rs13.9 billion is lying before ECNEC for the final approval and only Rs600 million have been released against it, which is about one sixth of the total required amount to cope with the threat.
According to official documents, the current estimated prevalence of Hepatitis B is 2.5pc, and Hepatitis C is 4.9pc of the total population of the country. There was smallpox vaccination in Pakistan in the late 1960s and early 70s in which one syringe was repeatedly used and there was no proper sterilisation procedure. Medical surveys of Gastroenterology societies and associations reveal that the large number of people carrying hepatitis C virus is among the age bracket of 35 to 40, among the children who were vaccinated for smallpox at that time. Medical science says Hepatics C virus becomes chronic after 35 years.
Interestingly, the same is the case with Egypt which is the second largest country with the people carrying Hepatitis virus where mass vaccination was done to tackle a disease called "Bilharzia". As many as 12 percent of Egypt population (eight million out of 80 million) are hepatitis carriers. The Egypt is worse than Pakistan but due to higher population of Pakistan the number of patients in Pakistan is more than Egypt.
"If drastic steps are not taken the threat will continue to rise," Dr Aftab Mohsin, National Programme Manager of PM’s programme tells The News on Sunday. In Pakistan, among the total affected population, 90 percent carry hepatitis C virus, which has no vaccination, and 10 percent carry Hepatitis B virus, which spreads due to the use of syringes, alcohol, drugs, diabetes and obesity.
There are 10 percent chances that hepatitis C virus will not become chronic while there are 10 percent chances that hepatitis B virus will become chronic and severe, doctors say. Hepatitis C, Dr Mohsin says, is 80 to 90 percent due to the use of unsafe injections. "Pakistan has the biggest ratio of giving injection to patients", he says, adding, according to World Health Organisation reports the annual consumption of injections in Pakistan is up to 1,500 million, the highest in the world. The international standards allow less than five injections per person per year, while In Pakistan this ratio is 13 (12.6) per person per year. "We are going to recommend PM to run this hepatitis programme under the safety injection theme for the coming and next fiscal year," Mohsin says.
Mohsin says that 90 percent injections in Pakistan are given unnecessarily while 80 percent of them are given by quakes. "We, the doctors, and our associations like Pakistan Medical Association and the government organisations have miserably failed to control it as there are no regulatory mechanisms."
Another policy failure in controlling the disease in Pakistan is non-implementation of IDSR (Integrated Disease Surveillance and Response) network. IDSR is the strategy of WHO which is supposed to be opted by the WHO member countries that have signed International Health Regulations (IHR) 2005. "Pakistan is one of the IHR signatories but it has yet to form IDSR," Mohsin tells TNS.
Dengue, the mosquito virus which has terribly hit the country currently, would have been detected and procured if there would have been the IDSR. Epidemics can also be controlled through this strategy which gives necessary benchmark to measure progress and trends in coping different diseases.
The IHR 2005 is a legal binding to assist countries and to work together to save lives and livelihoods endangered by the spread of diseases and other health risks. The IHR 2005 entered into force in June 2007 and is currently binding on 194 countries including all 193 member states.
"As many as 20 percent of the chronic hepatitis C patients require the expensive liver transplant which is a heavy burden on resources," says Prof Dr Muhammad Umar, sitting President of Pakistan Society of Hepatology. Liver cancer is becoming the fourth most common cancer in Pakistan because of hepatitis. The implications of this disease are serious as five to seven percent deaths in Pakistan is due to liver problems. "One of the main solutions is behaviour change and legalisation," he says, adding, there was no programme to counter hepatitis in Pakistan till 2006. Its implementation started in 2007. "Hepatitis B vaccination is free and it will start giving results after 10 years."
"We have planned awareness programmes at Union Council level under the Prime Minister’s programme and workshops for dispensers and quacks are required. Safe injection practices must be promoted. Auto disable syringes are must and by law injection always be sold with syringes," adds Dr Mohsin.
Karachi needs a right prescription for its ills
By Alauddin Masood
This is alarming. Some 1,233 persons have been killed in Karachi during the last 10 months. This was disclosed in a talk show by a private TV channel on October 21, 2010. To assure citizens about the government’s seriousness in putting an end to the killings, the interior minister lands in Karachi.
His statements that the writ of the state will be maintained at all cost have lost their meaning because, before his return to his seat in Islamabad, the killings overtook Karachi once again.
Till the mid-1970s, Karachi used to be a peaceful city where one came across people of different nationalities in streets, bazaars, restaurants, clubs, cinema halls, etc. Karachi University also used to have a sizeable number of foreign students and an exclusive hostel for their boarding and lodging. The peaceful environment offered an ideal opportunity for trade, commerce and gainful employment, both to citizens and foreigners.
The scribe has met scores of foreigners who were either educated in Karachi or visited it frequently for business or had lived there in connection with jobs. A couple of shops and restaurants remained open even at night to cater to the visitors. Hill Park and Clifton beach hummed with life till early morning.
Now a peaceful Karachi looks like a distant dream. Even mere mention of Karachi now instills one with fear, bringing to one’s mind target killings and shooting incidents. Now, even upcountry visitors to the metropolis restrict their movements to the places of their actual business. The situation had started deteriorating in Karachi in the 1980s. While referring to violence in the mega city in the 1980s and 1990s, at page 213 in his book, Jinnah, Pakistan and Islamic Identity, Akbar S. Ahmad writes, "Jinnah’s city has become a hell on earth." Now, things have gone from bad to worse.
But Karachi is Pakistan’s gateway. The law and order in the mega city has adversely affected foreign investments in Pakistan because foreigners view Karachi as Pakistan’s window. American, European, Japanese and South Korean investors have set up factories in a number of Afro-Asian countries to benefit from the cheap labour and proximity to the areas of demand. But, their presence in Pakistan is very thin as compared with countries where there is peace.
What to talk of foreign investments, even some of Pakistani businessmen are relocating abroad owing to poor law and order situation in Karachi. After Shanghai and Mumbai, Karachi is the third most populous city on the globe. It has all the problems which are usually associated with the big cities. Like Shanghai and Mumbai, it also has criminal gangs. But, in the case of former cities, the political leadership has the capability and capacity to check and counter the power of mafia groups.
With 12 million unlicensed weapons, globally Karachi has emerged at the top of cities with illicit weapons. If the population of Karachi is 18 million, it means, for every three residents — whether child, young or old, there are two illicit weapons. The number of licensed weapons in the city is also not very mean. It stands around 1.1 million.
What was known to citizens since decades seems to have come to Interior Minister Rehman Malik’s knowledge only recently. He said on October 21. Several extortion groups work in various areas of Karachi that have divided areas amongst themselves to extort money and that the law enforcement agencies have found lists from the arrested hands of elements involved in extortion.
When the authorities fail to provide justice, personal security and economic security to its constituents, benefitting from the law of necessity, non-state actors are bound to move in to fill the gap. But Karachi is Pakistan economic hub. The federal board of revenue collects some 53 percent of revenues from Karachi. About 30 percent of Pakistan’s manufacturing sector is located here and it generates some 20 percent of Pakistan’s GDP. This hub of commerce and industry now remains paralysed for many days every year.
Stabilising Karachi, therefore, needs to be given the foremost consideration. This would require a strong political will and determination; and granting political representation to major ethnic communities inhabiting Karachi in keeping with their demographic proportions followed by de-weaponisation and a crackdown on mafia groups, irrespective of their affiliations or patronage.
If we have a look at Karachi’s population, at 4-6 million Pashtuns constitute some 25 percent of the city’s population and around 15 percent population of the entire Sindh whereas Urdu-speaking mohajirs or MQM number around 7-9 million and thus account for some 45 percent of the residents of the metropolis and around 23 percent of the entire Sindh. Out of 168 seats in the Sindh Assembly, ANP has only 2, MQM 50, NPP 3, PML-F 8, PML-Q 11 and PPP 93.
Until political power remains out of sync with demographic realities, Karachi would continue to simmer with tensions and conflicts. To cater to demographic realities, suitable changes would have to be made in the election system to ensure election of people belonging to each major ethnic group to the provincial assembly and the local government tiers. To begin with, say 25 to 33 percent of the total number of seats could be contested on the basis of demographic patterns through the system of proportionate representation and the rest on the basis of existing first past the post system.
A bleeding Karachi continues to send wrong signals to the world, adversely impacting prospects for growth of trade and industry in Pakistan. Therefore, the government needs to move swiftly, and call a meeting of all stakeholders and assure them of a share in the political governance of the city on the basis of demographic strength. Simultaneously, the authorities need to build the capacity of law enforcements agencies and organisations to deal with mafia gangs.
The writer is a freelance columnist based in Islamabad
It is vital to learn what makes an idea work and thrive in the development sector
By Dr Noman Ahmed
An event was jointly organised on 25th October by Akhter Hameed Khan Resource Centre, National Rural Support Programme, International Islamic University, and the Council of Social Sciences Pakistan to commemorate the life and works of Dr. Akhter Hameed Khan in the realm of social development.
From the discussions, it came out very clearly that the power of ideas generated and applied by Dr. Khan was one of the key reasons that led his models to success. Whether it was the Comilla Projects in former East Pakistan or the Orangi Pilot Project, the strength of ideas was a key factor in acquiring success.
It is vital to learn what makes an idea work and thrive in the development sector. Lessons learnt from many experiences inform that knowledge and foresight are two denominating factors that play a vital role in the evolution of an effective idea. It may be noted that knowledge does not only confine to conventional assemblage of information; it has to be acquired through observation and experience.
Characteristics of communities, their compositions, interaction amongst each other, potentials, handicaps, social and cultural attitudes and the overall approach to life are few variables which have to be established in an accurate manner. And successful development practitioners always learned about such features of peoples by engaging and mingling with them. After they would win the trust of their fellow beings, various formulations of development projects would work successfully.
In addition to knowledge and observation, sincere application of work plans, maintaining absolute transparency in all transactions and communication, record keeping and accounting as well as readiness to respond to the objections by any member or group in the community have been the other desirable attributes.
Not all approaches in the country have failed. There is a rich repository of ideas that have contributed immensely to their respective contexts and sectors. The idea of incremental housing for the urban and semi-urban poor has been tried and found useful. Instant access, compatible affordability, relevance to socio-economic profile of target groups and ability to transform in different localities caused this model to generate results.
For this reason, locations in Karachi, Gharo, Gulshan-e-Shahbaz (near Hyderabad) and Kala Shah Kaku (near Lahore) have demonstrated the worthiness of this approach. This idea needs to be scaled up from its incubation to mass level application. Rural support programmes are organizations that facilitate development in almost all the areas in the country. With financial support from donor agencies and partial assistance in the form of public endowments, these organisations have been able to expand the various components of development to some of the remotest locations.
Though criticised for being aid-driven and costly institutions, they have enormous potential if allowed to self improve their working deficiencies. A healthy approach shall demand critical appraisal of the functioning of these institutions to improve them for their respective objectives and recipient communities.
Extending the benefits of capital to the poor sections of society is another idea. The wide realm of entrepreneurship of the working classes has been effectively supported by micro credit institutions. Interestingly, there is a wide range of approaches that have been applied in this domain.
Credit programmes have been devised on the basis of gender, vulnerability status, skill and product promotions and identified locations. It has been found that where technical advice and assistance is facilitated and monitoring of disbursement is done in a professional manner, results have been outstanding.
Even the difficult terrain of Gilgit-Baltistan and deserts in Tharparker has shown worthwhile consolidation of livelihoods of the people. Experts in the micro-finance sector found small scale enterprising class as bankable and enthusiastic towards the prospects of progress. Group and community credits have also helped in the development of community infrastructure for mutual benefits. Works under the auspices of Pakistan Poverty Alleviation Fund (PPAF) are cases in point.
Some pre-requisites have to be fulfilled in making development ideas nurture and flourish. An environment of hope and promise is essential. People should be made to dispel the belief that nothing positive can work in our context. This can be done by a pro-progress media campaign which can lead the ordinary people to restore their faith in themselves. It can change the mindset towards avenues of enterprise and productivity.
The next step is engaging the political decision-makers into the development debate. If correct decisions and informed responses are contributed by government functionaries, a great deal of impact can be created. A sensitised ruler can help boost a positive idea in a very short span of time. This was admitted by Dr. Akhter Hameed Khan when he praised President Ayub Khan for his support and state approval of Comilla projects in the 1960s. That strategy can surely be emulated by our present ruling classes.
By Aoun Sahi
Minar Pimple, regional director Asia Pacific for UN Millennium Campaign,
and a social work masters from Bombay University, has been working for
India at the grass-root level since 1977. Minar, at the age of 50 with a
grey ponytail and receding hairline, has hope in the future. He admires
Pakistan’s performance in sectors like education and IT. Minar discusses
at length the MDGs in Asia, their significance and prospects in the
developing world and also mentions his journey from becoming the first in
his family to pass secondary school certificate, his Dalit background, and
teenage dilemma of English language learning. The News on Sunday sits with
Minar at his regional office in Bangkok. Excerpts of the interview follow.
Minar Pimple (MP): Before giving you perspective on the Outcome Document adopted at the UN Millennium Development Goals (MDGs) summit held in New York in September 2010, I would like to add that since adoption of the UN Millennium Declaration in 2000 by 189 leaders from across the globe, a five-year review summit was held in 2005 wherein leaders agreed to tweak the targets and indicators a bit, retaining the eight MDGs and increasing targets to 21 and indicators to 60 amid new realities. The target of providing "decent work to youth and women" was moved from goal-8 to goal-1; a new target on reproductive health was introduced.
The 2010 Summit was a review of the last 10 years; how much we have been able to achieve, what are the gaps and what doesn’t work and what needs to done for the remaining five years to accelerate achievement of MDGs. I am satisfied with the Outcome Document of the Summit, especially in the areas where we need a certain push. It clearly emphasises the whole issue of decent jobs, health MDGs and accountability. I think the creation of decent jobs for youth and women as well as all the health MDGs is a big challenge in Asia and the Pacific. It also emphasises on the need for higher investment in agriculture. Poor countries, unfortunately, have been reducing their investment in agriculture and now are faced with food and nutritional insecurity.
The Outcome Document also emphasizes on nationalisation and localisation of MDGs. These goals can’t be left only for global debates and actions; they need to be discussed at the level of local communities who are the ones to decide what they need. It is important that the Outcome Document talks about citizens and civil society’s enhanced role in monitoring MDGs achievements.
TNS: Many people say that MDGs are not realistic targets. What would you say on this?
MP: When MDGs were adopted, I was a member of civil society and many of us were very critical of them. Many activists even today call them minimum development goals because they are at one level very basic minimum. For example, from human rights perspective, how can we choose to uplift 50 percent out of poverty, leaving the other 50 percent in poverty? Why not 100 percent? How can we say that 50 percent people can still go hungry because we are targeting to reduce hunger only by 50 percent? So, those are the kind of things which are criticised and may be rightly so but in my opinion the MDGs are the basic human needs and rights that should be guaranteed to everyone in order to leading a life with dignity.
With this perspective, I don’t think they are unrealistic and in my opinion they are not even ambitious enough. Yes, there are areas where we are lagging behind and there are also areas where we have moved forward. For example, countries like China and India have been able to reduce income poverty drastically. Countries like Thailand, Malaysia, and Indonesia are on track to achieve all goals. Thailand, in fact, has announced a MDGs-plus strategy which is a very good sign because they are looking for 100 percent reduction of poverty and hunger and infant mortality. I believe there is a lot more to be done beyond MDGs. So in my opinion this criticism that MDGs are unrealistic or over-ambitious is not true, rather it is a minimum starting point on which all the states had agreed.
TNS: How are food, fuel, fiscal and climate change crises affecting the pace of MDGs achievement? How do you see Pakistan’s progress on MDGs achievements amid these crises and now with massive floods turning more than 20m vulnerable to hunger and unemployment?
MP: Food, fuel, climate and financial crises have slowed down the MDGs achievement. Donor countries are not able to keep commitments they had made, developing countries have not been able to pull out required domestic resources because of multiple factors such as a decline in remittances and other financial issues. So, the overall impact has slowed down the achievements of MDGs and in some cases we are experiencing even reversal. For example, the increase in hunger was a reversal though now we are catching up. There was a time in the recent past when for the first time in human history one billion people (one out of every six) had been going hungry every day. You have had man-made and natural disasters which have, in a way, been a setback to MDGs in countries like the way you are talking about Pakistan or the tsunami-hit countries like Sri Lanka, Indonesia, and India. And that is a new challenge needing us to have to look at the MDGs from a resilience perspective; we don’t look at MDGs’ achievements in terms of 2015 but what you have achieved on the ground needs to be sustained and needs to be shock and disaster proof.
In the whole Asia and the Pacific region, it is a mix picture. The region has done a significant job to reduce the income poverty, the universal primary education enrolment has gone up tremendously in all the countries, including Pakistan but the quality of education and proper completion of primary education are a big question mark. In case of Pakistan, there are areas where it has done much better, for example under goal 3 commitment there are sufficient number of women in the national parliament, heralding women’s participation in law-making process. The political participation of women has resulted in some recently passed laws in Pakistan that give protection to women against violence and harassment. Then Pakistan has also done better in terms of reducing income poverty.
Similarly, in line with the MDG-6, Pakistan has not only achieved this MDG target but has achieved 100 percent DOTS (Directly Observed Treatment Short Course) coverage much ahead of 2015. So, there are areas where you have positive signs and there are areas, which remain big challenges in terms of achieving MDGs targets by Pakistan and other countries in South Asia. I think aggregated data in these countries does not adequately capture disparities in MDG achievement caused by gender inequalities and discrimination faced by caste and ethnic groups. In South Asian countries especially, we need to look at the data from the lens of gender, diverse regions and marginalised communities and minorities.
Most of the countries in Asia and the Pacific region registered a growth rate between 6 to 7 percent but this growth did not create adequate jobs and employment opportunities and has not been inclusive of all segments of society with growing inequalities. So, the benefit of the growth has not been equitably distributed. We need a better and sustainable investment in agriculture sector in countries like Pakistan. We have big challenge of hunger and malnutrition of children in South Asia region.
In a way, we are building a next generation, which is physically, mentally and emotionally at a disadvantage. Infant mortality and maternal mortality are also big challenges. Many of our countries also have demographic dividend which means we have a large number of youth population. It could be a dividend if used properly or demographic disaster if not engaged in constructive work. So, capitalising on the demographic dividend is a big challenge for countries such as Pakistan, India and Bangladesh.
TNS: The social sector development expenditures have already been cut by a huge percentage in Pakistan this year after floods, so do you think Pakistan will be able to achieve MDGs targets?
MP: In my opinion, while disasters are unsettling and loss of human life and suffering caused is unparallel, disasters also present some opportunities. If recovery and redevelopment is designed and managed well with active participation of affected people, without slippage, leakage and corruption then the real beneficiaries will be the people of Pakistan and it can move towards more sustainable development. If planning can be done keeping MDGs at the center it can provide a big opportunity to accelerate them in Pakistan with the support world community is providing. Look at the place like Ache, Indonesia. It was completely destroyed by tsunami and now you go there and the kind of economic activities generated after the disaster have transformed the area. But I always say the actual point is how much people on the ground are at the center of development process. If that does not happen and only somebody sitting in the capital is deciding what should happen; and slippage, leakages and corruption is not dealt with, then you can’t move from disaster to development. But who can decide it to go which way, is not only the leaders but also the citizens of that particular country. The people and media need to be vigilant and hold leaders to account to take right decisions.
TNS: Climate change has disproportionate impacts on countries like Pakistan and other developing countries that have contributed less to the problem. What could be a solution to achieve goal 7 on environment?
MP: One of the key things we are pushing for from the millennium campaign is that the climate change funding should be in addition to commitment and promises made in support of MDGs committed by developed countries. Poor countries or the poor in these countries are not responsible for climate change hence need for a just and equitable climate deal.
TNS: Developing countries have expressed their concerns over the ‘protectionist’ policies of developed countries that is already severely affecting its IT and BPO (Business Process Outsourcing) sectors. Are things unlikely to change? Your views on G20s open trade and investment policies that may have come up on the sidelines of the summit.
MP: Sustainable path for any country to get out of poverty is trade. So, trading is very critical for developing and least developed countries to achieve MDGs. But the big challenge is to have a trade where you do not have a situation of unequal playing field, so to achieve such a situation, it is very important not to compromise on development component of the Doha round while concluding it. The trade in the interest of achieving MDGs is a kind of priority to focus on. I think the financial crisis has created an opening to look at the present model of development whether it is sustainable both for economic and financial point of view as well as from the environment point of view. I think that discussion has gained momentum post financial crisis which is a positive sign.
TNS: What would be the consequences if the world fails to achieve MDGs by 2015?
MP: States and governments bear the onus because they are the ones who signed the Millennium Declaration on behalf of their citizens. We need to understand that MDGs are not the goals of the United Nations. They are the goals signed by member states of the UN, the vision of the world that world leaders wanted to create for the third millennium, by taking steps toward a more just, equitable and peaceful world for all women, men, youth and children to live life in dignity. We cannot afford to fail as the consequences of failure will be increased vulnerability of the poor, more children and mothers being denied an opportunity to live, social fragmentation and possible unrest, challenging the very foundation of democracy. In my opinion, investment in MDGs is a more viable, more sustainable and much more cost-effective option. The cost of no investment in MDGs will be unbearable. Hence, governments have recommitted themselves to accelerate achievement of MDGs.
Watan cards will certainly help the flood affectees, if they succeed in getting the facility
By Irfan Mufti
As I write these lines, ninety days have passed after floods in Pakistan hit villages in upper Kohistan and Gilgit Baltistan but the basic task of rehabilitating flood victims is still unaddressed. Early assessments confirm that 7 million affected people still need relief, health assistance, temporary shelter and early recovery support. The other 15 million, who have gone back to their villages, are waiting for the promised aid. Among many other needs for this population three are most important: shelter, livelihood recovery, and basic healthcare.
Government schemes have helped revive the situation and disseminate seeds of recovery to the affected. Transfer of cash to these poor flood victims through Watan cards will certainly help poor to recover from their immediate economic hardships. However, the mismanagement in the system of cash distribution and card allocation may kill the purpose.
Transfer of cash to the poor is a good strategy to trickle down economic gains to those that are otherwise excluded and invisible from planning and policies. Cash transfer will also boost the local economy and employment options for the poor. The well-intended objectives can be defeated if the distribution system is not made effective, fool proof and pro-poor.
Reports of violence in several parts of the country during distribution of the cards and obtaining cash from ATM machines must be checked and addressed without delay. All these incidents could have been avoided if the local political leadership was available. Local government would have provided a good leadership in these troubled times and reaching out to the needy and deserving.
Government has so far failed to provide the needed help and leadership. In several parts of Southern Sindh villages are still inundated while major reconstruction proceeds upstream in areas, including Punjab, Khyber Pakhtunkhwa, and Gilgit-Baltistan. Ironically, a fraction of government estimated $5billion for rehabilitation and reconstruction plans have been collected or committed.
The support thus far has come from the civil society, governmental institutions, and international community. Support from local NGOs, philanthropists, citizens groups, humanitarian groups and individuals was crucial, timely and useful. It will be difficult to quantify such help but the level of satisfaction shown by the affectees is a testimony to the effectiveness of these responses.
The assistance will decrease in coming weeks as the rehabilitation actions will take over immediate relief and recovery help. Rehabilitation and reconstruction work demand systemic planning, resource allocation, project financing and monitoring and only specialised institutions can perform such functions. Government has so far failed to set-up or strengthen institutional framework to manage rehabilitation and resettlement activities.
National Disaster Management Authority (NDMA) and its provincial and district arms have not been given any clear role and mandate, thus they haven’t evolved as viable institution to deal with complex nature of rehabilitation and recovery.
The international response was slow but substantive. UN agencies, (including UNICEF, UNFPA, UNHCR, World Food Programme, World Health Organization, etc.) have been actively from the very beginning of the crisis and meaningfully contributed in emergency, relief and early recovery phases.
Out of the major contributors of financing for recovery and rehabilitation United Nations tops the list. The United Nations approved $1.88 rehabilitation plan for flood-devastated areas and will finance 417 of the 471 projects submitted by the government in the field of agriculture, community restoration, education, health and shelter. The UN sent out three appeals to its 192 member states for 1.6 billion dollars, the largest financial appeal in the UN history and has garnered 668 million dollars, just over 64 percent.
The World Bank, instead of providing additional financing, has allowed the government to divert one billion dollar from its on-going projects for rehabilitation and recovery work in flood-hit areas. Out of this one billion dollar $700 million would be available for early recovery and reconstruction projects and $300 million for financing flood-related imports. The government has announced to use most of the financing facility for importing oil to meet higher furnace oil requirements in the power sector and additional petroleum products to offset supply gaps arising out of closure of the country’s largest oil refinery as a result of flooding.
USAID has provided $50 million under the 2009 Kerry-Lugar-Berman Act to support early flood recovery programs such as rehabilitation of community infrastructure and livelihood recovery activities. This funding will bring the total amount of US immediate humanitarian assistance in response to the flooding to more than $200 million.
The UK government has committed £64 million (more than 8.5 billion PKR) to help affected population. In addition, a £10million (approx 1.3 billion PKR) bridge project has been brought forward. Other international bilateral and multilateral donors have also promised assistance and the total of all such assistance will not go beyond 100 million dollars. With these figures confirmed the government is still faced with a challenge of raising more than $2.5 billion.
There are only two other options left for the government to consider filling this funding gap. Divert major part of public sector development programme funds to rehabilitation purposes or raise more revenue from the public. Punjab and Khyber Pakhtunkhwa governments have already indicated that their Public Sector Development Programmes (PSDP) for the current year had become irrelevant after the devastation caused by the floods and that they would have to divert most of uplift funds towards relief and reconstruction work.
Sindh and Balochistan governments are also planning to divert their funds for rehabilitation. Federal government rightly says that after new national finance commission formula most of the development funds are already transferred to provinces and now provinces have to decide about these funds. Federal grants can be utilised for rebuilding major infrastructure damages. The total allocation of PSDP for 2010-11 is Rs663 billion, while for other development expenditure an amount of Rs124 billion was being allocated. The provinces have been allocated an amount of Rs373 billion for budget estimates 2010-11 in their PSDP as against Rs300 billion in 2009-10. This means if provincial governments allocate 50 percent of allocated PSDP it can fill the financial gap for rehabilitation.
At this critical juncture government has to consider two important and interlinked choices: explore other options to generate resources to finance rehabilitation and reconstruction tasks and, secondly, to set up sustainable foundations to prevent and manage such disasters in future.
For revenue generation the government is walking on a tight rope. The idea of taxing the rich hasn’t kicked off well as provinces have not shown interest in this option. It is, however, important that the government should show its resolve to put this responsibility to those that enjoy perks and benefits but contribute very little in collective societal well-being.
Setting sustainable grounds for rehabilitation and resettlement should be part of government priority. Had there been effective land reforms, reliable irrigation and river management systems, efficient flood warning systems the effects of these floods would have been much less.
The recent natural disasters and subsequent humanitarian crises should provide enough cause of alarm for policy makers to attend to these long-term needs. Government must put such structures in place and provide sustainable policy and fiscal solutions. These include land reforms for poor and landless peasantry as ownership of land and control over natural resources will increase their abilities to cope with such disasters.
The writer is Deputy Chief of South Asia Partnership Pakistan and Global Campaigner