June 14, 2006	Wednesday	Jumadi-ul-Awwal 17, 1427

ISLAMABAD, June 13: The government is seeking sizable additional foreign assistance from the World Bank and the Asian Development Bank (ADB) to alleviate poverty especially in the rural areas during 2006-07.

Informed sources told Dawn on Monday that initially the ADB had agreed to offer Rs3.7bn special assistance to remove wide spread rural poverty in the North West Frontier Province (NWFP), covering Buner, Shangla, Swat districts and Malakand Agency areas.

The government had informed both the donors that the focus of the additional foreign assistance would be on small land-holders, tenant farmers, women and the landless. Both the donors were also told that out of Rs415bn new Public Sector Development Programme, major funding would go into infrastructure development and poverty alleviation.

However, sources said that the World Bank and the ADB had sought details about the government’s claim of 10 percentage point reduction in poverty, from 34pc to 24pc during the last six years. The opposition political parties continued to challenge the reduction in poverty and said that the government was fudging numbers to show poverty reduction in the country.

According to the government, a large majority of population directly or indirectly depended on agriculture with 79pc farms being less than two hectares especially in the NWFP, of which average cultivated area was only 0.7 hectares. These farms as such comprise uneconomic holdings, were leading to poverty with too low income to suffice for food and nutrition and basic needs.

According to a socio-economic survey of the NWFP government, 72pc population in many areas was living below the poverty line with only about 41pc income coming from agriculture.

The annual per capita income in Malakand division of NWFP was estimated to be Rs7,809 and per capita expenditure at an average of Rs6,514. "This is the lowest per capita income but our government is claiming that per capita income has risen to unprecedented $845 (Rs50,700) and this is hardly believed by the people", said an official of the Planning Commission.

He said that the government would have to prove 10 percentage point reduction in poverty and a big increase in per capita income while negotiating new funding line with the major international donor agencies.

For many parts of the NWFP, a poverty line of Rs6.240 has been chosen allowing for a caloric input of 2,550 calories per adult per day. "At this poverty line, 72pc of the population of various parts of NWFP are below the poverty line, compared to national average of about 40pc ", says an NWFP document submitted to the Planning Commission.

The national average for women’s literacy in Pakistan was 32.6pc compared to 56.5pc for men, but the male literacy, was the lowest in NWFP at 52.8pc, while the female literacy was only 21.1pc.

One of the important features of new poverty alleviation programme of the federal government was to offer a “Rozegar Scheme’ for which Rs12bn had been allocated in the budget 2006-07.

Under the scheme, the government planned to extend loans for self- employment to the people aging 18-40. The purpose was to help them establish PCOs, mobile utility stores (through a franchise for Utility Stores Corporation (USC) and own transport (taxi etc.). The government would share the risk associated with loan by picking up half of the mark up and other half would be shared by an individual.