KARACHI, May 31: The World Bank and the Asian Development Bank have observed that the number of poor in the urban and rural Sindh is growing fast with simultaneous shrinking of the middle class. According to these two leading financial institutions, the number of poor in Sindh increased from 6.5 million in 1993-94 to 9.2 million in 1998-99 and to 13.6 million in 01-02. In 04-05, the number of poor is estimated to have increased to 15.1 million. By 2007-08 the poor will be 18.3 million and it will go to 22.9 million by 2010-11.

During all this period, the total population of the province increased from 27.8 million in 1993-94 to 33.6 million in 01-02. It is likely to go up to 36.5 million in 04-05, to 37.4 million in 07-08 and to 39.2 million in 2010-11. A team of the World Bank and ADB consultants held meeting for 10 days from May 9 to May 18 with the ministers and senior officials of the Sindh government to prepare a report on Sindh economy. “The business as usual approach will not be enough,” declares an aide memoir of the World Bank and the ADB given to the Sindh government.

In October 2004, the World Bank gave a Concept Note to announce the consultations and survey for preparation of a report on Sindh’s economy with four basic themes — (i) accelerating growth and employment opportunities, (ii) reducing poverty and bridging disparities, (iii) improving service delivery and revitalising Karachi and (iv) financing development. The authors of the Concept Note had observed the provincial economy has grown slower than the national economy and that the Sindh has gradually lost its leadership role.

In continuation with the same exercise a team of the consultants of the two financial institutions held in-depth and detailed meetings with the political leadership and bureaucrats on specific issues, outlines in the aide memoir. Observing that the current pace of improvement in the education indicator is “unacceptably slow’’, the aide memoir warns that five to seven million children will never attend a school during 10 years period of 02-12.

The number of four to nine years old children in the province was 6.39 million in 2002, which is estimated to have grown to 6.87 million. The number of school-going children is estimated to go up 7.33 million. Of these, 2.58 million children were said to be enrolled in government schools in 2002, which may increase to 2.84 million in 2006 and to 2.87 million in 2010. It means 4.12 million to 5.13 million children will remain out of schools if no immediate reforms are taken.

Net school enrolment in Sindh is 39 per cent as against 47 per cent in Punjab, where per student expenditure is Rs4,458 as compared to Rs 2,933 per student in Sindh. In Sindh, there are 59 students per school as against 86 students in a school in Punjab. Punjab has 31:1 student-teacher ratio as against 24:1 in Sindh.

While dealing with urban-rural economy linkage, the aide memoir points out that one per cent increase in farm income will push up demand for industrial goods by 0.3 per cent.

Challenges facing the economic development and growth for Sindh have been rated by the consultants of the two banks. The overall governance is rated at 8.1 per cent in terms of the challenges followed by widespread corruption at 7.2 per cent and law and order problem at 7.1 per cent. The inadequate and poor quality infrastructure, inefficient use of public expenditure, water shortages, low-level of public investment, regional inequalities, lack of provincial unity, remnants of feudalism and gradual fall of Karachi are some of the other challenges for Sindh’s development.

Emphasis is on improving the governance, without which the greater public expenditure and more public infrastructure and spending on bricks and mortar on construction of schools and hospital buildings and increasing the employment by engaging more teachers and doctors will be of no significance.

Access to land is the single most important difference in investment climate indicator between Sindh and Punjab. The other factors are rate of taxes, tax administration, cost of financing, business licensing, access to finance, macroeconomic stability, electricity, customs, crime, transport, labour regulations, skilled labour and telecom.

Within Sindh, access to land is a problem in Karachi but not in Hyderabad or Sukkur. In Hyderabad crime is as big a problem as electricity. Corruption is identified by the companies to be more acute problem in Sindh than in Punjab followed by utility hook ups, law and order, uncertainty in regulatory policies, electricity.

In a proposed development framework, the emphasis is on accelerating growth and employment opportunities by creating more jobs in urban Sindh and through revitalisation and modernization of agriculture in rural areas. For achieving these objectives, the World Bank and the ADB want improvement in services delivery, provision of quality basic education and health care to all citizens and improving the efficiency of public expenditure.