The writer is the outgoing Director General at the UK’s Department for International Development
But, imagine a Pakistan where the government has identified the poorest and the most vulnerable families; where every month, the mother receives a small amount of money to keep her family from destitution and extreme hunger; where Pakistani taxpayers help to send the family’s children to school and provide vocational training to help develop the skills necessary to earn a living. And where the government, NGOs and donors target their support towards the same people so that they can lift themselves out of poverty permanently.
Is this possible? Yes. In fact, the Benazir Income Support Programme (BISP) has already identified the poorest households across the country, using a carefully designed and tested scorecard. Five million women and their families are already receiving small cash payments every month so that they can purchase essential food items and medicine. This will expand to seven million families by 2018 –– nearly 50 million people. Recognising the strength of the BISP, Shahbaz Sharif’s new Khidmat programme will provide an additional Rs1,000 each month for the poorest families in Punjab. But to realise the vision of a ‘welfare state’ for Pakistan’s poor, the government needs to go further.
The basic cash transfer needs to be delivered on the same day each quarter so that the poor know that this is their haq, not sadqa. Only then can they plan to use the money effectively. In his first budget, Finance Minister Ishaq Dar took the bold decision to increase the basic transfer by 20 per cent to begin to restore its value after years of inflation. Further increases will be needed in the coming budgets. Even then, at 12 per cent of the minimum wage, the cash transfer will remain too low to distort the incentive to work or create a ‘dependency culture’. And to ensure effectiveness, the poverty scorecard survey will need to be rerun every few years.
At present, only 30 per cent of children in the poorest families go to school. The government needs to roll out its plan to provide each family with an additional Rs200 a child every month if their children have an 80 per cent attendance record at school. All the evidence indicates that this will help keep their children in school and that basic education will improve their children’s prospects. Nearly half of all under the age of five in Pakistan are chronically undernourished. This stunts mental and physical development, lowers IQ and achievement at school, and reduces earnings in adulthood. These children are half the future workforce of Pakistan. So why not use the scheme to provide them with essential food and nutrients so that they have a productive future?
Instead of wasting money and time designing new targeting mechanisms for every anti-poverty programme, the government and donors need to use the same poverty scorecard for all interventions. Can it work? Yes.
International evidence shows women receiving cash grants invest in their families, keep their children in school, feed them better, and buy medicine and healthcare. Over time, this future earning potential helps to break the cycle of poverty from generation to generation.
In Brazil, the anti-poverty scheme BolsaFamilia helped reduce poverty by a remarkable 28 per cent during the first term of President Lula da Silva’s administration, and helped reduce inequality by 20 per cent since 2001.
Can Pakistan afford to follow something similar? The BISP’s total cost is around Rs75 billion a year, only 1.6 per cent of the federal government’s expenditure. This compares with 26 per cent spent every year simply paying interest on debt and another 14 per cent on the military. Having helped develop the methodology along with the World Bank, the UK has pledged £300 million over eight years. Given the cost of poverty to the economy and society, the question is: can Pakistan afford not to invest in its people?
Published in The Express Tribune, February 7th, 2014.
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COMMENTS (13)
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@Observer: Yes, let's enter the 7th century and observe strict Sharia. That's the way to economic progress. Pakistan was meant to be a home land for Muslims, not a sharia state. Zia decided to make up his own rules and the country is now seeing the result of those seeds plants in the late 70's. Like what you see? Implement sharia in a nation of illiterates and fundos and there's plenty more where that came from. Cheers.
This is great idea indeed and also seems do-able. The welfare distribution relies heavily on targeting and hence will also need investment to keep BISP databases upto date which may require an on-going data revalidation effort. Though social mobilization may not be very high in Pakistan, factors such as migration, internal displacement and a natural change in household characteristics may affect the accuracy of data.
@Genius:
You said it all Sir! But how many of the readers have understood the message?
Rex Minor
Beneficiary to Welfare of Tax Payer being the Government Employee, the Armed Forces of Pakistan, Government Organizations like Pakistan Steel, PIA, Karachi Shipyard, etc and Political associates. Out right grants given to government organizatios of Tax Payer money rather a loan to pay back to Tax Payer. We pay Income Taxes and the Tax Payer are deprived once they reach retirement age and the Benefits continues with those of Government. The system is against Tax Paying citizen of Pakistan. There is No Return in Citizen Retirement being Tax Paying in Pakistan. And those responsible in running the government for the people least bothered to correct the anomolies yet they want to increase the number of Tax Payers. Repeat there is No Benefit to the Retire Tax Payers Citizens in Pakistan.
@Alam: Yes, empowering should be the goal for a family that can be taught to catch fish. But what of the middle-age widow with no income and 5+ children under the age of 12 to feed (and perhaps even educate). She immediately needs cash, no questions asked. You can supplement that by also giving her 'catching the fish' skills, but you take away her monthly cash allowance and the family collapses. There are millions of such families in Pakistan, they are the bottom of the bottom. If we call ourselves Muslims, there is no alternative but to give cash to all such families on a monthly basis, no questions asked until their condition improves (children are grown, etc.). Where will the money come from? Ditch that F-16, cut that general's perks, send the PM to a smaller house, so on and so forth.
@Alam: Are you living in Lahore?Even if 10% of schools are ghost which are not; still there are 90% percent schools are functioning.These poorest of poor can benefit from 2400 rupees per year. It is great idea.
The author is dealing with a subject which is the integral value of the religion of Islam. It has the ingredients of establishing a welfare state! If the county's political and/or the religious leaders cannot come up with the mechanism, they need to deliberate and think and seek advisors for formulating the system. The most important thing for the Government is to demonstrate its commitment for the welfare state.
Rex Minor
" The government needs to roll out its plan to provide each family with an additional Rs200 a child every month if their children have an 80 per cent attendance record at school. "
The author lives in La La land, far far away from this plant.
Pakistan has ghost schools problem: The schools dont exist. The teachers draw the salaries for no work, and buildings r used for keeping the cattle. Sometimes, even the buildings dont exist. The schools exist on papers only.
Welfare State should not be based on "robbing Peter to pay Paul". Its about empowering ppl, not enslaving them on cash handouts.
The real solution is to make Pakistan a true Islamic state ruled by sharia laws as Pakistan was originally intended to be.
We have already found those poorest of poor the Army officers! With lion's share of the budget there is little left for any civilin uplift. The country has to decided what is more imp.
If what you say about helping the poor has to be materialized, the country needs to reallocate budget to education. Are we in a position to reduce Defense? and if you do that, is the army going to take it lightly. I think our efforts should concentrate in reducing birth rate drastically from its present levels. China has managed to do that and we can see the results. Its economic expansion has increased standard of living there. It is a two way sword. Increase productivity in industry and reduce the average family to two children. In due course, things will see the light at the end of the tunnel. Poverty is a crime. It takes the self respect of human beings and lack of food brings health hazards.