KARACHI, Nov. 17: Prime Minister Syed Yousuf Raza Gilani is getting on Tuesday a formal presentation on report “Stabilisation with a human face” from the panel of senior economists led by an ex-minister Dr Hafiz Pasha.

The report is being presented at a time, when Pakistan government’s deal with International Monetary Fund (IMF) is almost finalised and signing of an agreement is now a matter of formality to be completed in next few days or at the most a week, the Friends of Pakistan - a loose club of developed and developing countries that are Pakistan’s well wishers - also held second meeting on Monday at Abu Dhabi.

The report offers a roadmap for next two years to bring macroeconomic stability not at a cost, which was seen when Pakistan took up IMF programme in 2000.

While suggesting Rs115 billion cut in non-development expenditure, Rs100 billion cut in development outlay, the report pleads for protecting social sectors’ allocation in 2008-09 federal budget and strongly advocates further strengthening of security nets and improving the reach of social welfare programmes.

“Pakistan’s social welfare programme in 2007-08 carried an outlay of only Rs11 billion,’’ a well-placed source in federal government in Islamabad informed adding that the total outlay of only two programmes in 2008-09 amounts to Rs56 billion.

These include Benazir Income Support Programme indicating distribution of Rs34 billion and Punjab government’s Food Stamp Programme that involves Rs22 billion.

For long Zakat, Baiul Maal, Employees Old Age Benefit Scheme, Workers Welfare Fund and a few provincial government institutions were the conduits from where disadvantaged classes were supposed to be served.

In addition, the previous governments used subsidies on food, fertiliser, electricity, health and education services to reach the poor. “But allocations for all these programmes were merely token and whatever was put in the budget was vastly misused,” the source said.

The source in the government estimated that a sum of Rs181.4 billion has been provided in the current fiscal year’s budget for targeted and untargeted social welfare programmes, which the Panel of economists want to protect.

“The IMF is said to have pleaded for protection of all those government expenditure, which aim at safeguarding economically disadvantaged in the country,’’ he said.

Estimate shows the number of those, who will benefit from targeted social protection schemes, for which Rs66 billion allocation has been made is 18 million. “The six times increase in fiscal commitment—from Rs11 billion in 2007-08 to Rs66.6 billion in 2008-09—is positive, more resources need to be committed for this purpose,’’ the panel stresses.

The report acknowledges that resource constraint prevents the government to reach all poor and hence by implication, the distribution will be done on rationing among the poor. “This makes the task of targeting all the more onerous and in the absence of a transparent and verifiable data, the schemes run the risk of losing credibility,’’ the report warns.

Knowledgeable sources in Karachi and Islamabad say that IMF wants the banks to pay depositors a rate of return on their savings, which should match prevailing inflation rate.

“While targeting IMF for harsh conditions, the critics are deliberately overlooking the other aspects — protection for social sectors and a just return for depositors,’’ a source in Karachi said.

Those in Islamabad and in Karachi, who are convinced that there was no option left but to seek support of IMF for balance of payment, contend that the current programme will be different than the previous one signed by the former prime minister Shaukat Aziz.

The macroeconomic balance was achieved by 2002 but at a very high cost when millions were pushed below the poverty line.

Pakistan’s economy is under tremendous stress from international factors and domestic imbalances and it is inevitable that the poor and the disadvantaged will be hit hard. “But as a matter of policy and a programme, on which there is a virtual consensus, efforts are on to dilute effects of this ‘tsunami’ and offer maximum protection to the poor,’’ he said.