A national debate has been sparked off by World Bank seminars and workshops on a wide range of issues linked to poverty, going much beyond the reach of the government’s interim four pillared strategy, awaiting the final approval of Jamali-led political government.
And the dialogue among the stakeholders encompasses challenges that question conventional wisdom and embraces political economy.
Stimulated by the discussions at the WB workshop on poverty assessment held in Karachi on January 7, even the governor of State Bank Dr Ishrat Husain, chose to share his own thoughts, as a development economist, about elements which need to be strengthened to bring about significant changes in poverty profile.
He also spelt out the key elements of the official strategy and constraints in executing effectively the poverty reduction programme.
Before dealing with the discourse on substance of the official strategy, it may be pertinent to state that the WB seminars on poverty are well timed. The national debate has been initiated when the current slowdown in globalization requires that measures are taken to create more domestic demand by reducing the poverty levels.
The policy makers need to build upon the economic gains made in the past three years.
Poverty is a political issue, as some participants in Karachi workshop pointed out and the strategy on poverty reduction has to be based on consensus goals and warrants a strong political commitment. Perhaps, it is the pursuit of these twin objectives that the interim strategy was left by the multilateral agencies to be finalised by an elected government.Poverty is an issue that cannot be left even to the best performing technocrats.
As the World Bank report on Poverty Assessment , Vulnerabilities, Social Gaps and Rural Dynamics indicates the World Bank is moving gradually into a more sensitive territory , political economy.
The World Bank is ready to start a dialogue with the elected government on the poverty reduction strategy but would like the political set- up to take its own time because of the complexities and multi-facet dimensions involved in tackling poverty, says Tara Viashwanath, WB senior economist. A participant at the WB workshop told Dawn that the Jamali government should come out with a policy statement as President Musharraf did when he took over by unveiling his seven point agenda in 1999.
And Dr Ishrat Husain says that “political ambivalence about poverty, whereby the rhetoric is all thundering but the actions are missing, has to give way to a strong political commitment in words and deeds.”
The World Bank report has some explanation to offer for this ambivalence and traces it to electoral politics in Pakistan that undermines the provision of public services because of impermanence of elected governments.This shortens the political horizons of the decision makers and reduces any penalty to them of reneging on any electoral promises that they do make. On the basis of its own historical experience and global lessons, says the State Bank governor, the government has evolved a four pillared strategy for poverty reduction: accelerated growth, investment in human development, targeted poverty interventions and social protection.
Dwelling upon the “weak implementation” capacity, Dr Ishrat Husain also threw light on global experience with particular reference to China where human development has combined with emerging market to yield positive results. In China, he adds”market failures are tackled by strong government”. In her presentation on poverty assessment report,Tara Wishwanath pleaded for strengthening of the national government to enhance ownership of programmes, to provide fiscal incentives in such areas as female education.
On the policy level Dr Ishrat Husain also made a significant statement, often not fully reflected in formulation and execution of policy, programme and plan of action.
He says “It has become abundantly clear that accelerated growth per se is necessary but not a sufficient condition for bringing about sustainable poverty reduction”. There are other complimentary factors which have to accompany higher growth”. These observations have to be seen in the context of an emerging market like Pakistan. It has always been recognized that market is imperfect and lacks a human face. But in recent times, social exclusion has become louder as the welfare state is withering away. The social cost of reforms is very high and is a destabilising factor. The global, regional, countrywide and cyclic crises have become more frequent. And the industrial economies appear to be moving towards a prolonged recession/ depression. The United States, a big market for goods, services and investment, is struggling for economic recovery, so far, without much success.
Over the past decade or,so, the growth rate has declined and poverty has increased. The poverty trend has yet to be reversed. Regional disparities are widening.
Global experience also indicates, as pointed out by Dr Ishrat Husain ,that segments of population living in remote, isolated areas and marginal lands or living without any assets other than their labour may require targeted interventions by the government to create opportunities for them to earn livelihood. A key issue that has also remained unattended and has been raised by the workshop participants is land reforms. In its poverty assessment report, the World Bank has highlighted the problem of large landholdings in the countrywide. Kaiser Bengali says that land inequality is not only an institutional problem but affects productivity in agriculture as well. Restrictive land tenure system translates in reduced demand for agricultural inputs.
Other participants lamented that the landed gentry is also responsible for ghost schools.Big farmers do not pay income tax. Land reforms is not on the official poverty reduction agenda.
As spelled out by the State Bank governor the first pillar of the strategy for poverty reduction is macroeconomic stabilisation and resumption of growth. Macroeconomic stabilisation is the foundation upon which resumption of economic growth can take place.
Kaiser Bengali has a slightly different view. He points out that the WB study has made no reference to the impact of macro-economic policies on poverty and his own view is that the stabilization programme tended to suppress growth and fuel poverty. “A more pro-poor approach would have distributed the cost of restructuring more equitably, instead of placing the burden disproportionately on the poor,” he adds.
To quote the SBP governor, the second pillar of the strategy is to improve governance. The key ingredient of the governance agenda is the devolution plan whereby administrative, functional and financial responsibilities for delivery of social services are delegated to district governments.
Demand- driven development projects will be planned and executed by the direct beneficiaries rather than thrust upon them by the government agencies working from the provincial and federal headquarters in splendid isolation. Structural reforms form the third pillar of the strategy. Broad-based reforms in tax administration, trade liberalization, financial sector and privatization form the core.
And, finally the fourth pillar of the strategy is targeted interventions. The prominent among them are : education sector reforms, health for all, population planning, Zakat, Khushhali programme for employment generation and works programme, food support programme and Khushhali Bank. While education, health and population planning cover the entire population , the other interventions are targeted at the poor.
Stating that the formulation of strategy is easy part but the implementation is weak, Dr Ishrat Husain presents five points for consideration: a) political commitment: The strategy needs a strong political commitment on a long term action plan supported by all successive governments and implemented in a continuous and consistent manner to produce results. b) Decentralisation and delegation of powers: It has become abundantly clear that local communities are willing to share financial burden of social services if they can see the benefits will accrue to them directly. If they find that the user charges, taxes and fees disappear in a black box at Karachi or Islamabad they would be most reluctant to pay. The demand-driven nature of planning and accountability of the results improve the cost effectiveness of expenditures. Thus the delivery of services can become efficient and accessible to the poor if they are operated and managed locally. c) Limited institutional capacity: If we assume that there are no leakages or wastage Pakistan still faces a serious constraint in the form of limited and weak capacity of institutions to plan and deliver services. This capacity should be built at the local level and supplemented by public-private community parternerships. d) Gender face: Women are worse off among the poor compared to men. Economic literature has amply documented that there is no other investment which fetches higher rate of return than investment in female education. Unless attention is paid to uplift the status of 50 per cent of the population, no significant breakthrough in poverty is possible. e) Lack of access to justice, police and executive agencies: While robust informal social networks and non-profit civil society organisations can take care of the needs of the poor in education and health, there is no substitute available for justice, police and executive agencies of the government. Access to these agencies and their functionaries is almost non-existent and is a major source of helplessness and lack of empowerment of the poor.
Unless the mentality and attitude of the government functionaries is changed radically, Dr. Ishrat says, the poor will remain voiceless , their grievances will remain unaddressed and their vulnerability will not be tackled in any meaningful way.
More light has been thrown on the issue in a qualitative survey of poverty for the World Bank by Collective for Social Science Research, Karachi. QSP attempted to view poverty through the prism of “constraints to collective action and production of public goods.This framework proved to be useful one for beginning to make sense of a data-set that is large in size and rich in texture and detail.”
The CSSR survey carried out in six districts of Sindh and Punjab showed that voters expected elected representatives to intermediate on their behalf with formal government functionaries, particularly in any dealings with the police and the legal system.There was also a strong sense, in all survey sites, that people had easier access to their elected representatives than non-elected government or parasitical officials. There has been direct and substantive personal contact between local individuals—-mostly local leaders—-MPA level politicians in all survey sites.
The existing duality of local political factions linked up with higher political factions and ultimately with parties at the provincial and national levels. The two main political parties were PPP and PML(N) in the districts surveyed.
In so far as local elites are the only interlocutors with the government that the rural poor have at their disposal, their potential marginalization under non-elected governments may not benefit the poor, adds the WB report.
Speaking at the WB workshop,young social scientist Haris Gazdar said that the country has robust political conditions, as indicated by the two mainstream political parties, representing the right of the centre and the left of the centre. But, there is no recognition of the reality and policy makers distance themselves from politics.
He strongly pleaded that we must begin to recognize them because, despite everything, these two mainstream political parties were great assets for the country. Reforms have to be coupled with modern social networking, social values and sociology, he concluded. The poverty reduction strategy is being finalised through broad stakeholders consultations in the provinces, districts, academia, civil society, government representatives, media businessmen, etc. Barring elected district officials, the elected MNAs or MPAs were not invited to the Karachi workshop.If poverty is recognized a political issue and the poverty reduction strategy needs a political commitment, there is no reason why elected representatives at the national and provincial levels should be excluded from such consultations. After all the interim strategy has been left to be finalised by the elected government. Besides, the role of the district governments has to be co-ordinated with endeavours to utilize the funds placed at the disposal of MNAs/MPAs for development schemes in constituencies they represent. These funds may invariably be spent through the district government.