The price of red tape: World Bank downgrades BISP rating
Govt has requested more money to convert it into a conditional assistance scheme.
ISLAMABAD:
The World Bank has lowered its rating for the Benazir Income Support Programme due to what it describes as an overly cumbersome procurement process that causes too many delays, a charge that the BISP management does not deny, though it blames the delays on the bank itself.
The Washington-based lender’s latest implementation status and results report on the programme, for which it is providing $60 million in assistance, rates the BISP as “moderately satisfactory”, a downgrade from its previous rating. The report is part of the Social Safety Net Technical Assistance Project, approved in 2009, under which the World Bank provides expertise on how to manage social programmes.
“Some institutional weaknesses have emerged as evidenced by the delay in signing of some important contracts due to cumbersome internal procedures and lengthy contract negotiations,” the World Bank findings say.
However, the bank said that the senior management of the BISP has now decided to strengthen its institutional capacity to avoid such delays in the future. A World Bank mid-term review mission would assess the progress in this regard.
The BISP management, meanwhile, blames the downgrade on delays caused by the World Bank itself. BISP Media Director Shoaib Khan said the delay in signing some key contracts came because of the World Bank’s own complex and lengthy process for approval of services and goods procurement. “Since the Bank also takes time to process requests for ‘no-objection’, it is not possible for BISP to unilaterally expedite the process.”
The BISP is designed to provide Rs1,000 as an income supplement to the poorest households in the country in order to help mitigate some of the most direct effects of extreme poverty. However, unlike successful income transfer programs in Latin America, such as Brazil’s ‘Bolsa Familia’, BISP offers cash without any conditions.
The World Bank wants the programme to start attaching conditions to the money received by poor households, such as a requirement to send their children to school and has begun processing Pakistan’s request for additional funding to convert the programme into a conditional one. In addition to the $60 million in technical assistance, Pakistan has also obtained a $200 million loan from the World Bank for the actual cash disbursements.
Due to capacity constraints, coupled with the financial woes of the government, for the last three years, the BISP has failed to achieve its disbursement targets. During fiscal year 2010, the government had allocated Rs70 billion to the programme to give stipends to 5 million of the poorest households. However, it was able to disburse money to less than 3 million families.
For the outgoing financial year the government had allocated Rs50 billion for the BISP, with a target to cover 7 million families. Actual disbursements were again much lower at Rs35 billion covering less than 4 million families. For 2012, the government has earmarked Rs50 billion for 7 million families.
While the government of Pakistan has not released poverty numbers since 2007, estimates based on data provided in the 2011 Economic Survey, released by the Finance Ministry, suggest that the proportion of the population living below the poverty line may have risen as high as 43%.
The BISP is in the process of finalising the national roll-out of a ‘poverty scorecard’ that will become the basis for future benefits. The World Bank report said that so far only 2.6 million people have gotten assistance through the poverty scorecard. The target is to cover 10 million people by July 2013.
Published in The Express Tribune, June 25th, 2011.
The World Bank has lowered its rating for the Benazir Income Support Programme due to what it describes as an overly cumbersome procurement process that causes too many delays, a charge that the BISP management does not deny, though it blames the delays on the bank itself.
The Washington-based lender’s latest implementation status and results report on the programme, for which it is providing $60 million in assistance, rates the BISP as “moderately satisfactory”, a downgrade from its previous rating. The report is part of the Social Safety Net Technical Assistance Project, approved in 2009, under which the World Bank provides expertise on how to manage social programmes.
“Some institutional weaknesses have emerged as evidenced by the delay in signing of some important contracts due to cumbersome internal procedures and lengthy contract negotiations,” the World Bank findings say.
However, the bank said that the senior management of the BISP has now decided to strengthen its institutional capacity to avoid such delays in the future. A World Bank mid-term review mission would assess the progress in this regard.
The BISP management, meanwhile, blames the downgrade on delays caused by the World Bank itself. BISP Media Director Shoaib Khan said the delay in signing some key contracts came because of the World Bank’s own complex and lengthy process for approval of services and goods procurement. “Since the Bank also takes time to process requests for ‘no-objection’, it is not possible for BISP to unilaterally expedite the process.”
The BISP is designed to provide Rs1,000 as an income supplement to the poorest households in the country in order to help mitigate some of the most direct effects of extreme poverty. However, unlike successful income transfer programs in Latin America, such as Brazil’s ‘Bolsa Familia’, BISP offers cash without any conditions.
The World Bank wants the programme to start attaching conditions to the money received by poor households, such as a requirement to send their children to school and has begun processing Pakistan’s request for additional funding to convert the programme into a conditional one. In addition to the $60 million in technical assistance, Pakistan has also obtained a $200 million loan from the World Bank for the actual cash disbursements.
Due to capacity constraints, coupled with the financial woes of the government, for the last three years, the BISP has failed to achieve its disbursement targets. During fiscal year 2010, the government had allocated Rs70 billion to the programme to give stipends to 5 million of the poorest households. However, it was able to disburse money to less than 3 million families.
For the outgoing financial year the government had allocated Rs50 billion for the BISP, with a target to cover 7 million families. Actual disbursements were again much lower at Rs35 billion covering less than 4 million families. For 2012, the government has earmarked Rs50 billion for 7 million families.
While the government of Pakistan has not released poverty numbers since 2007, estimates based on data provided in the 2011 Economic Survey, released by the Finance Ministry, suggest that the proportion of the population living below the poverty line may have risen as high as 43%.
The BISP is in the process of finalising the national roll-out of a ‘poverty scorecard’ that will become the basis for future benefits. The World Bank report said that so far only 2.6 million people have gotten assistance through the poverty scorecard. The target is to cover 10 million people by July 2013.
Published in The Express Tribune, June 25th, 2011.