April 3, 2006	Monday	Rabi-ul-Awwal 4, 1427

ON March 17, Prime Minister Shaukat Aziz launched of Khushal Pakistan Fund (KPF) with a hefty overlay of Rs5 billion for remaining three months of the current fiscal year. Water, sanitation, roads, income-generation schemes, health and education are the key sectors to be served by the KPF. Schemes initiated by the tehsil, taluka and town level administrations (TMAs) will be financed by KPF.

The KPF will be managed in a corporate style with a board of directors And with the prime minister’s active participation. The KPF will act as a supra-institution to finance development schemes at local and grass root level.

In a situation where the local government institutions are struggling to acquire functional and financial autonomy for routine assignments, inception of KPF raises many issues.

The quality of governance, particularly related to development projects, is below a satisfactory level. The duplication of responsibilities amongst various tiers of official and non-official bodies is one reason for this state of affairs. As developmental funds are limited, different tiers want to take the credit for whatever little work accomplished.

Urban highways and major corridors are developed by the National Highways Authority (NHA) which is a federal body. It’s projects are designed and executed independent of local consultation. Local institutions have to align their work after such major interventions.

Similarly, the MNAs and MPAs are given the mandate and funds to undertake works in their areas in coordination with TMAs. To gain maximum political mileage, law-makers act without involving TMAs in an appropriate capacity. Such efforts are counter- productive.

Duplication of development work, lack of commitment on the part of local bodies to manage schemes and limited relevance are some of adverse impacts in such financial allocations. With KPF in the race, confusion will multiply further. TMAs would be found seeking funds from KPF as a ‘favour’ what it otherwise their legitimate right under the Local Government ordinances. Alternatively, the KPF may allocate blanket amounts to TMAs as done by the Khushhhal Pakistan Programme (KPP) in many parts of the country.

The creation of KPF indicates that the regime intends to tighten its control on local affairs. At present, the internal financial condition of the local bodies is entirely dismal. While they possess the power and authority to impose few taxes and levies, internal revenue generation is a miniscule of the budgetary requirements.

At the inception of devolution plan, the federal government showed its desire to devolve the powers of all kinds at the grass root levels. The reality is otherwise.

The local bodies have to entirely depend upon the federal transfers. This disbursement is done in a completely whimsical manner. The expected fate of the KPF releases will be no different.

TMAs are expected to keep preparing project proposals and justifications for funding to obtain the best deals out of the accessible common pools. When this kind of approach builds up, the emphasis of the local institution shifts to acquire funding rather than conducting routine functions properly. It also creates a feeling of gross insecurity about the projects and their finances.

The PM has wants development profiles of districts to be prepared for disbursement of KPF funds and a bilateral donor agency has been requested to support the exercise. However, it may be understood that the conduct of baseline survey, analysis and synthesis is a comprehensive project in itself. This very useful work needs to be done before any disbursement is contemplated.

There are many areas where the basic information and profiles do not exist. Those localities will be at a loss to identify the priority areas of development funding.

KPF will function according to corporate sector norms. The intention is well-meaning but pre-mature. This is likely to create a mismatch between the local bodies and the KPF management. The development process and decision-making linked to it are essentially dealt according to political priorities of the nazims. At times, they demand development schemes which may not suit corporate considerations. Rural electrification schemes are a case in point. These schemes were proposed and partially implemented in many parts of the country primarily through a subsidy based mechanism.

The objective was to raise the level of productivity, life style and socio-economic status of rural people. It was assumed that electricity will help elevate the occupational performance and increase the options of livelihoods. It is feared that for corporate-oriented funding outlets such as KPF, support to such socially-valid development projects may not be an acceptable option. Besides, the format of conceptualizing, developing and executing the schemes is likely to be steered by the donor agencies and their consultants.

Experience shows that the approaches devised by donors are generally top-heavy, resource intensive and prescription-based. Unless the stipulated pre-requisites are not fulfilled, the schemes are not allowed to move forward. Typical examples are the various rural support programmes which evolved as technical and managerial assistance components for their respective jurisdiction. With the passage of time, these programmes moulded and re-moulded their modus operandi according to the standardized practices of donors. Enormous resources are annually spent simply to keep the staff and organizations of these programmes alive.

Sustainability of such development initiatives by itself becomes questionable. When the support organization withdraws from a locality after contributing to the identified projects, the performance and existence simply falls apart. If the conceptual framework and line of action of KPF is structured on the same formats, little betterment can be anticipated.

The vast knowledge pertinent to the success or failure of development programmes is seldom applied while structuring a new initiative. There is a long history of development assistance programmes which were initiated with a great deal of enthusiasm but were unable to achieve the stipulated objectives.

Mechanization of farming and the application of green revolution technologies in the Ayub era; agricultural support initiatives during the 1970s; five points programme of late Prime Minister Junejo; People’s Programme; Social Action Programme (SAP I&II); Tameer-e-Watan Programme and the most recent ‘Khushhal Pakistan Programme’ are some of the examples.

If the government is sincere in supporting TMAs, it needs to devise an unconventional but realistic approach. One, the ongoing norms of development be strengthened. The TMAs require assistance to carry out their routine works in an efficient manner. For this they require focused and befitting support in human resource development and resource mobilization.

Barring a few exceptions, most of the TMAs do not even possess the essential staff at the technician and management level. Similarly, the internal capacity to generate revenue is completely worn-out. This aspect needs support. Unless local bodies are able to generate funds for carrying out routine functions themselves, no amount of aid can help support their ongoing development plans.

Two, the design of federally-run programmes such as KPF must care that the local autonomy is not jeopardized. This is a matter of real concern as federal approaches tend to overstretch and subjugate local capacities.

The capacity of the Provincial Financial Commission (PFCs) must be strengthened without prejudice to any other institution in this respect. And third, the implementation of schemes must be entirely left to the local government institutions with the privileges and flexibilities assigned to them. This strategy can help raise the institutional capacities.