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| September 23, 2005 | Friday | Sha'aban 18, 1426 |
WB agrees to give $500m to tackle poverty
ISLAMABAD, Sept 22: The World Bank has agreed to create the world’s biggest $500 million social fund in Pakistan to significantly alleviate widespread poverty in the country. Official sources told Dawn on Thursday that the new fund will be created in 2008 when WB’s ongoing $230 million poverty-related programme ends, which is mostly being carried out by the Pakistan Poverty Alleviation Fund (PPAF).
However, the bank wanted the government to conduct various poverty-related programmes through PPAF in order to discourage corrupt practices. The PPAF is a government-supported organization which works independently.
After the World Bank, the United States Agency for International Development (USAID) and the International Fund for Agricultural Development (IFAD) were considering creating special fund for Pakistan to help reduce poverty which is said to be still increasing despite billions of rupees being spent by the government.
During his recent visit, World Bank president Mr Paul Wolfowitz had said that Pakistan needed special attention and funding by the international donor agencies to put some effective dent on poverty which was more alarming in the rural areas.
The focus of the new $500 million World Bank funding, the sources said, will be health and education programmes for their rapid expansion. A decision has also been taken to increase the outreach of poverty-related expenditures.
“The World Bank president had asked the government to remove the difference of education between the poor and the rich, and that all the students should be imparted education without discrimination,” a source said.
It is in that backdrop that the PPAF has decided to build new schools in rural areas where quality education will be ensured for all with a view to achieving the objectives of poverty alleviation.
The World Bank had first offered $90 million to the PPAF which then increased to $230 million under the second programme. Now for the third programme, $500 million have been indicated by the bank.
Mr Wolfowitz has written a letter to the chief executive of PPAF, Kamal Hayat, appreciating the countrywide operations of the Fund.
The sources said that out of $230 million WB assistance earmarked for the second programme, the amount of $137 million is expected to be released to PPAF next week.
The sources said that the World Bank was of the view that Pakistan’s commitment to reducing poverty in the medium-term should be reflected in the Poverty Reduction Strategy Paper (PRSP) finalized in December 2003. Also, the thrust of Medium Term Development Framework 2005-2010 (MTDF) should be on balanced growth to progressively rise to 8 per cent by 2009-10, with substantial rise in allocation to the social sector in order to achieve the poverty reaction goals by the year 2015.
The government maintains that poverty and social sector funding have increased over 120 per cent in the last four years - from Rs114 billion to Rs254 billion which has now been increased to about Rs300 billion in 2005-06.
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