[WORKING DRAFT]
MAY 31, 2010
THE
TENTH FIVE YEAR PLAN
2010 – 15
“INVESTING IN PEOPLE”
PLANNING COMMISSION
GOVERNMENT OF PAKISTAN
ISLAMABAD
THE
TENTH FIVE YEAR PLAN
2010 – 15
“INVESTING IN PEOPLE”
Contents
PART I:
Page
Objectives and Strategy: An Overview
v
ECONOMIC RECOVERY TO INCLUSIVE AND
SUSTAINABLE GROWTH
1
1. Macroeconomic Framework: Growth with Macro
Stability
1.1
Growth, Investment and Savings
1.2
Balance of Payments
1.3
Fiscal and Monetary Developments
1.4
Public Sector Development Programme (PSDP)
3
3
13
21
33
2. Expand Agriculture Production and Galvanize AgroBusiness Potential
2.1
Agriculture (Crop Sector)
2.2
Livestock and Fisheries
2.3
Rural Development
53
3. Galvanize Industry and Export Competitiveness,
Accelerate Development of New Leading Sectors and
Develop Supporting Strategies
3.1
Industry
3.2
Mineral Development
3.3
Information & Communication Technology
93
53
73
85
93
111
129
4. Develop and Mobilize Human Resources (HRD)
4.1
Population
4.2.
Education
4.3
Knowledge & Technology-based Development
(Higher Education, Skills, R&D and S&T)
4.4.
Health and Nutrition
4.5
Promoting Role of Women in Economic
Development
4.6.
Labour, Employment and Skill Development
151
151
169
183
5. Integrated Planning for Energy Development: Affordable
Energy
5.1
A Critical Review of the Past
5.2
The Fuel Sector
5.3
The Power Sector
251
203
223
235
251
261
273
6. Infrastructure Development
Partnership
6.1
Water Resources
6.2
Transport and Logistics
6.3
Urban Development
PART II:
through
Public-Private
287
287
303
323
7. Establish Social Safety Nets, Reduce Poverty and Achieve
MDGs
7.1
Poverty Alleviation and Achieving the Millennium
Development Goal (MDG)
7.2.
Social Protection
341
8. Deepening and Diversifying the Financial Sector
8.1
Capital Markets Development
379
379
9. Administrative Reforms and Plan Implementation:
Consolidation, Specialization and Development
9.1
Governance
9.2
Plan Implementation
387
SPECIAL AREAS OF FOCUS
10. Accelerating Development in Less Developed Areas
11. Environment and Climate Change
11.1
Environment
11.2
Climate Change
12. Disaster Risk Management
341
357
387
405
415
417
427
427
443
451
OBJECTIVES AND STRATEGY: AN OVERVIEW
Objectives and Strategy: An Overview
I.
New Directions: People Centred Growth and Development
Introduction: Key Challenges and New Directions
The Tenth Five Year Plan (2010-2015) is being issued at a time when Pakistan faces
multiple challenges on the economic, security and development fronts. These provide compelling
reasons to make fundamental changes to the growth and development path that we followed in
the past.
Our past strategies have delivered spurts of high economic growth. Unfortunately, these
have not been sustainable, and have only led to boom-bust cycles. In most cases, these spurts
have been ignited by favourable international developments and increases in foreign resource
inflows. Historically, once these flows slowed down, so did the momentum of economic growth.
This is because growth has been consumption-led and import-dependent, and not resulted in
desirable levels of investment and exports.
More importantly, this growth has not met our peoples’ expectations and there is
increasing disillusionment with the development process. Progress in human and social
indicators has been disappointing. Poverty levels remain high and income and regional
inequalities have widened in recent years. The situation is compounded by a lack of job
opportunities that meet the citizens’ aspirations.
Serious infrastructure shortages have emerged especially in energy, water and
communication, which have raised the cost of doing business, impeded growth and added to
peoples’ hardship.
Given this scenario, it is not surprising that Pakistan is described as a case of economic
growth without real economic development.
This situation must be rectified urgently. The Tenth Plan (2010-15) will play a pivotal
role in bringing about a fundamental change in the development paradigm so far followed. In the
new paradigm, ordinary people, especially those in less developed provinces and regions, will be
at the centre of and have ownership in the development process. The government too will need to
redefine itself so that it can play an effective part in steering the economy towards achieving these
goals.
New Directions for Nation-building in the Tenth Five Year Plan (2010-15)
To meet these challenges, the Tenth Plan (2010-2015) will provide a new direction. The
key objectives of the Plan have been formulated mindful of the resource constraints that the
economy faces, the demands of the security situation and the need to immediately solve pressing
energy and infrastructure shortages, while addressing basic structural fault lines that inhibit
sustained economic growth.
The key objectives of the Tenth Plan (2010-15) are as follows:
Using available resources in the most efficient and effective manner and curbing
wasteful expenditures (“more with less”).

Overcoming serious energy and water shortages through short term measures within
an integrated medium to long term plan.

Ensuring food security.

Achieving universal primary enrolment and 70 percent enrolment in secondary
school education with marked improvement in quality of education imparted.

Promoting gender equality and ensuring girls and women’s access to education,
health and new employment opportunities.

Applying modern technology (eg. ICT) to increase productive efficiency and faster
and better quality delivery of all especially public services.

Moving into the knowledge economy through increased investment in science and
technology as well as improved quality of higher education.

Reducing poverty through enlarging and better targeting of income support and social
protection measures and creation of productive and decent employment.

Redirecting resources to accelerate growth in Balochistan, Khyber Pakhtunkhwa;
FATA, Gilgit Baltistan, and less developed areas of other provinces.

Confronting extremism through broad based socio-economic development and laying
a solid foundation for just and equitable development.

Protecting the environment and preparing for climate change.
Getting Economic Fundamentals Rights
Raising Levels of Investment and Savings
If Pakistan is to break out of the stop-go cycle of growth, it must significantly raise its
present low levels of investment and savings, at less than 20 and 15 percent respectively. Such
measures are essential to ensure a sustained desirable growth rate. Despite the population growth
rate slowing down to around 1.8 per cent, the growth rate of the labour force remains high at
approximately 3 per cent. This necessitates a minimum GDP growth rate of 5.5 per cent to
maintain the present levels of unemployment. Indeed to keep up with fast-growing Asian
economies (China, India), the growth rate will have to be significantly higher.
Table : Macroeconomic Framework (2009-10 Prices)
2009-10
2014-15
Benchmark Projected
Items
GDP (fc)
Indirect Taxes (net)
GDP (mp)
Net factor Income from Abroad
GNP (mp)
External Resources Inflow (net)
Rs. Billion
14418
18859
807
1056
15226
19915
499
697
15724
20612
414
611
AACG@
(%)
5.5
5.5
5.5
6.9
5.6
8.1
As % of GDP (mp)
Total Investment
Fixed Investment
Public
(PSDP)
Private
Changes in Stocks
Financing of Investment
Foreign Savings
National savings
GDP (fc) growth
Per Capita GDP (mp) (in rupees)
@ Annual Average Compound Growth
17.1
15.9
4.2
3.3
11.8
1.2
17.1
2.7
14.4
24.7
23.0
5.4
4.7
17.6
1.7
24.7
3.1
21.6
3.3
6.6
91182
157946
The macroeconomic framework for the Tenth Plan (2010-15) envisages a gradual
increase in economic growth, from 3.3 percent in 2009-10 to 6.6 percent in 2014-15, an average
of 5.5 percent over the Plan period. The aim is to build upon the gains of macroeconomic
stabilization achieved in recent years as we move to a higher and sustainable growth trajectory.
The level of investment to achieve this growth is targeted to increase from 17.1 per cent
in 2009-10 to 24.7 per cent in 20014-15. This will be done through creating a conducive business
environment and supporting public investment in social and physical infrastructure. The Public
Sector Investment Program (PSDP) is targeted to increase from 3.3 per cent of GDP in 2009-10
to 4.7 per cent of GDP in 2014-15. With private investment having fallen in recent years the
PSDP will play an important role in drawing in private investment and concentrate on removing
binding infrastructural imbalances in the economy. The PSDP will play a catalytical role in reigniting economic growth but the private sector will serve as the main engine of economic
development during the Tenth Plan (2010-15).
Resource Mobilization
Moving on to a higher growth trajectory and higher investment levels, (especially
envisaged PSDP), will depend critically on a sharp rise in the level of saving through determined
revenue-generating efforts. The level of national savings is projected to increase from 14.4
percent of GDP in 2009-10 to 21.6 percent in 2014-15. This implies a very high rate of marginal
savings, but is essential if the economy is to avoid the re-emergence of macro imbalances.
At approximately 10 per cent, the tax to GDP ratio is very low, even by developing
countries standards. This will require political will and determination, especially in bringing
hitherto untaxed sectors into the tax net and effective, efficient, and speedy implementation of the
VAT and a marked improvement in the revenue administration services. The tax to GDP ratio is
projected to increase from 9 per cent in 2009-10 to 13.3 per cent in 2014-15.
It needs, however, to be emphasized that this effort will only be successful if tax payers
are convinced that they will receive in return good quality and reliable public services. This will
require a major change in the way that the government conducts itself and provides these
services. The Tenth Plan (2010-15) lays considerable stress on improvement in delivery of public
services and suggests concrete measures to move in this direction.
An improved system of financial intermediation, as reflected in real and increased returns
on financial savings, and development of long-term saving vehicles like pensions, will be put in
place over the Tenth Plan and will play an important role in raising the saving rate.
Overcoming Recurring Balance of Payment Crisis
In most cases an economic upturn has had to be abruptly halted due to an unsustainable
balance of payment situation. This has been for two underlying reasons. Firstly, growth has been
mainly consumption-led and import-intensive. Secondly, while the import-elasticity in respect to
GDP is high, Pakistan’s exports are relatively inelastic. This results in a widening gap between
export earnings and costs of imports, and in the absence of adequate foreign resource inflows,
falling foreign exchange reserves. This leaves little alternative but to put on sharp brakes on
growth, stabililize the economy and rebuild foreign exchange reserves to a desirable level.
The Tenth Plan (2010-15) therefore places very high premium on policy measures that
remove the anti-export bias in the existing trade regime and brings about a significant increase in
export earnings through reducing the cost of doing business and increasing export
competitiveness.
Prudent Management of External Resource Inflows and Debt Management
To meet the resource gap and overcome the foreign exchange constraint, donor assistance
from multilateral and bilateral sources will be sought. However, it must be ensured that the
assistance is used efficiently and is in line with Tenth Plan (2010-15) priorities. It should not
crowd-out domestic resource mobilization effort or be used as a cushion to postpone needed
structural economic reforms.
To ensure long-term stability and sustainability of the economy, efforts will be made to
keep the foreign and domestic debt within manageable levels and the limits set by the Fiscal
Responsibility and Debt Limitations Act 2005 will be adhered.
Growth, Employment and Poverty Alleviation
Economic growth is an essential but not sufficient condition for poverty alleviation.
Ensuring that gains of economic growth result in poverty reduction will require that growth
results in the creation of productive, remunerative, and decent employment. Moreover, growth
would need to envelop those sectors where the poor live and work, especially in rural areas.
The poverty alleviation strategy in the Tenth Plan (2010-15) will rest on bringing about
changes in the inequitable institutional structure, provide access to credit and assets, and job
opportunities through skilling that will help people in breaking out of poverty. A comprehensive
and enhanced social protection system will be put in place that builds on the Benazir Income
Support Programme (BISP), launched in 2008 and other programmes (e.g. skill development) to
protect and move people out of poverty.
While economic growth at an average of 5.5 per cent during the Plan period will be low
in relation to the high growth of labour force and effectively reducing poverty, the employment
intensity of growth will be raised through appropriate labour market and sectoral policies and
targeted support programmes put in place that will help create employment and reduce poverty
especially in less developed areas.
Box -1
Fighting-Terrorism and Extremism by Uplifting Less Developed Areas
Terrorism and extremism are clearly not just the product of economic conditions.
Yet, it is a stark fact that they have taken roots in areas which have benefited little
from the development process, where poverty levels are much higher than the
national average, job opportunities scarce and the social indicators significantly
worse as compared to the rest of the country. Even in the relatively better-off
provinces there are regions which have been neglected. This is the case for
example of southern Punjab and districts in rural Sind.
The Tenth Plan (2010-2015) will develop jointly with the concerned Provinces
comprehensive plans for which matching funds would be earmarked to uplift
socially and economically those areas which have fallen behind.
Priority in these targeted interventions will be given to job creation by establishing
Employment Guarantee Schemes (EGS) and the development of social and
physical infrastructure.
MTDF (2005-10) to 9-Point Programme
MTDF (2005-10) was launched at a time when the economy was riding on the crest of
high economic growth. Ambitious growth rates were therefore targeted during the MTDF (200510), including significantly higher levels of investment (and sharp rise in PSDP) and savings.
As in previous episodes of high growth, the economy was vulnerable to both external and
internal shocks. Beginning in late 2007, Pakistan experienced severe balance of payments
difficulties with a large deterioration in net external terms of trade due to an unprecedented
increase in oil and food prices. This together with the adverse effects of the turmoil in global
financial markets and ensuing global recession resulted in an unsustainable financing gap,
entrenched inflation, evaporation of investor confidence, and a sharp fall in foreign exchange
reserves as well as the value of the Rupee.
In addition, severe structural constraints emerged such as the energy crisis. The adoption
of a loose monetary policy to jump start the economy in 2002-03 resulted in unplanned energyintensive consumption growth. The MTDF (2005-10) thus had under-estimated growth in the
demand for energy.
In response to these challenges, the new Government took decisive action for restoring
macroeconomic stability as well as the confidence of markets under a home-grown stabilization
program with the support of the IMF. To this effect, general subsidies on fuel and food were
withdrawn through large increases in administered prices between March and October 2008
together with stringent fiscal and monetary measures to compress aggregate demand pressures on
the economy.
Aware that stabilization measures would adversely affect growth and increase pressures
on the unemployment and poverty situation, the government put in place direct income support
measures to protect the poor and vulnerable. Thus, the BISP was launched nationally while the
provincial government’s introduced various food support and social protection measures.
In the short-term, the spill-over of these adverse developments, made worse by energy
shortages, became painfully clear. Economic growth slowed sharply in 2008-09 to around 2 per
cent, and is likely to remain well below potential in 2009-10 at about 3.5 per cent. A direct fallout was on government revenue as well as development expenditures. Promised donor assistance
which could have improved this situation, failed to materialize and was much lower than
expected.
The economic slowdown with continued inflation of around 12 percent in 2009-10 is
expected to result in rising poverty, unemployment and the number of working poor.
In April 2009, the government adopted the “9 Point Program”, which aimed to address
these fundamental structural problems through wide-ranging and substantive reforms (Box 2).
Box-2
“9-Point Program” for Economic Reform and Sustainable Development
1.
2.
3.
4.
5.
6.
7.
8.
9.
Achieve Macroeconomic Stabilization
Establish Social Safety Net
Develop and mobilize human resources (HRD)
Expand Agriculture Production and Galvanize Agro-Business Potential
Galvanize Industrial Competitiveness and Develop Supporting
Strategies
Integrated Planning for Energy Development
Deepen and diversify domestic Capital Markets
Establish Public-Private Partnership as major method for Infrastructure
Development
Administrative Reform: Consolidation, Specialization and Devolution.
The Tenth Five Year Plan (2010-2015) will provide an overall medium-term
macroeconomic growth and development framework to operationalize the goals outlined in the 9Point Program in an integrated manner. The Plan will play an important role in identifying
priorities for using limited resources optimally and outlining the best economic route to achieve
them.
The Tenth Plan (2010-15) also has a broader objective. It is to address the underlying
social and economic tensions that are now strongly coming to the surface in the form of rising
poverty, stubborn persistence of inflation, deteriorating employment situation and rising interprovincial disparity. It must also take into account the economic costs of the military operations
to rid areas infested with terrorists and extremists as well as plan for the reconstruction of these
areas.
II.
New Development Strategy “Investing in People”
It is easier to speak of a shift in the development paradigm then to put one into practice.
Yet past economic performance, domestic imperatives and international developments all dictate
an important shift in development priorities and the effective, efficient and timely implementation
of policies and programmes.
The Tenth Plan (2010-15) will initiate this shift though its full impact and gains will be
felt in subsequent years.
At the heart of the new strategy is to move gradually but decisively towards greater
investment in the people of Pakistan – by increasing the share of total expenditures both public
and private – in education, health, and meeting the MDGs (see Box 3).
Box-3
Overarching
Development Strategy for 10th Plan (2010-15)
“INVESTING IN PEOPLE”
Investing in People:
 Spurs Economic Growth
 Reduces Poverty
 Ensures Sustainable Development
Investing in People implies five major goals:

Moving people out of poverty by ensuring that their basic needs are met, they
become capable of realizing their full potential and active contributors to economic
development;

Creating an educated, skilled and employable work force;

Ensuring productive and remunerative employment opportunities through economic
growth and development of supporting infrastructure to make the economy efficient
and globally competitive;

Removing disparities in human development indicators within and across provinces;

Protecting people against further environmental degradation that will adversely affect
their incomes and health and preparing the nation for climate change.
Total Pro-poor Expenditure
T otal P ro P oor E xpenditure*
Total E xpenditure
3,000
R s B illio n
2,500
As % of G DP
Selected Pro-Poor Budgetary Expenditure (2010-15 Projections)
10.0%
8.7%
(Rs. in
Billion)9.0%
7.9%
2,000
6.3%
5.9%
6.6%
7.2%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
1,500
1,000
500
0
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
Source: PRSP-II.
Selected Pro-Poor Budgetary Expenditure
(2010-15 Projections)
(Rs. in Billion)
2,500
2,000
1,500
1,000
500
0
2009-10
2010-11
Educa ti on
Hea l th
2011-12
2012-13
Soci a l Sa fety Net **
2013-14
2014-15
Tota l
* Figures from 2009-10 to 2012-13 are from PRSP-II. Projections for 2013-14 and 2014-15 are
based on trend growth of three years (2010-11 to 2012-13).
** Includes BISP, Food Support Programme & Pakistan Bait-ul-Mal.
The investing in people strategy of the Tenth Plan (2010-15) will envelop the PRSP II
and will be realized amongst others by significant increase in resources spent on key social
sectors namely education, health and social protection (see Graph ) and increases in pro-poor
total expenditures over the Plan period.
III.
Drivers of Economic Growth
Pakistan’s economy has performed well below its potential especially in comparison with
the East Asian economies, and more recently with fast growing China and India. This is
attributable to its weak fundamentals, deep-rooted structural problems and macro and sectoral
imbalances.
That said, however, when provided the right incentives and sound economic
management, major sectors of the economy have, though in spurts, performed well. Pakistan’s
overall long-term growth between 1950–2010 is approximately 5.0 percent.
During the period of the 10th Plan (2010-15) there are a number of inherent advantages
we possess and expected favourable developments that if properly tapped could move the
economy gradually but decisively towards a higher growth trajectory and lay the basis for
sustainable high growth post-2015.
These developments termed “major drivers of economic growth” are identified below and
their potential explained.
IV.1. Private Sector as the Main Engine of Growth: Reaching Out to New Global Markets
Pakistan is not only well blessed with nature’s resources but possess the spirit of
entrepreneurship that drives market economies. It is this latter spirit which has transformed the
structure of the Pakistan economy from one which was predominantly agrarian, to one in which
industry contributes significantly. This spirit of entrepreneurship will now be tested in a globally
competitive environment rather than in a domestically protected market. The private sector must
also become socially responsible and contribute actively to both economic as well as social
development.
The private sector will be the main engine of economic growth and development in the
Tenth Plan (2010-15). Currently, the private sector accounts for almost 80 percent of total
investment and for over 90 percent of economic activity in the country. The Government with
active buy-in from all stake-holders will carry out necessary economic reforms which will serve
as the main driver of growth for the private sector (see Box 4). Major role of the government will
be limited to creating a conducive environment to attract new domestic and foreign investment
and supply the essential public goods to support private sector development. Simultaneously, it
will try to ensure competition in factor and product markets through a transparent but effective
and independent regulatory framework.
Box-4
ECONOMIC REFORMS PROGRAM
Major thrust areas during 10th Plan (2010-15)
 Improving Governance through strengthening institutions with active
involvement of civil society and improving security and upholding rule
of law.
 Ensuring Independence, Accountability and replacing ad-hocism in
regulatory reforms: protecting consumers interests.
 Making markets work better (eg. Agriculture; trade regime)
 Reducing losses of SOEs and disinvesting state-run economic entitities.
 Improving quality and delivery of Public services (Civil Service
Reform; National Governance Plan).
 Improved economic governance (Public Expenditure Management)
As part of this strategy state-owned-enterprises will be disinvested to the private sector
through a transparent and open process. Also a determined effort will be made in the mean time
to plug the large resources lost through inefficient and unprofitable state-owned-enterprises.
While sectoral policies are dealt with separately the following will be the six broad areas 1 in
support of private sector development which will add additional momentum to its growth during
the Tenth Plan (2010-15).
1

Managing the macroeconomic policy for stability and financial sector deepening
including broadening the tax base, rationalizing the incidence of tax on corporations and
managing subsidies

Implementing a trade policy which reduces anti-export bias, the subsidy culture,
encourages new markets and participation in global supply chains, and places emphasis
on increasing Pakistan’s participation in regional trading arrangements

Improve the environment for the private sector through better market governance and
reduced cost of doing business. An important aim should be to increase the size of the
firm to improve their global competitiveness and become major players in global markets

Infrastructure development for power, telecommunications and transport (particularly
shipping and port development) through improved policy, reform of market structure and
public private partnerships for financing

Creating public goods for technology upgrading and human skills development

Enabling adjustment to changing market conditions through support for firms and
workers including safety nets
These areas were identified by the Private Sector Development Task Force set-up by the Planning
Commission.
IV.2
Young Entrants into the Labour Market
Source: Population Council of Pakistan.
Pakistan is now entering the stage of the demographic transition characterized by a
decline in the proportion of young dependent population with an associated increase in the share
of working age population. This youth bulge (15-24 years) provides a window of opportunity.
The benefits of this ‘demographic dividend’ can be reaped through increased investment in
education and skills, resulting in increased productivity of the workforce.
This youth bulge will mean that Pakistan will have a large, young population at a time
when most developed countries face an aging population with few new entrants to replace them.
Indeed the share of youth in Pakistan’s population will be higher than in China and India in 2015.
The new young entrants will serve as a major driver of economic growth in the Tenth
Plan primarily because they are better educated and skilled as compared to the rest of the work
force and more exposed through a free media to global developments and global opportunities.
As recent research on Pakistan has shown an average increase of one year of education in the
labour force increases overall growth by over one percent. Therefore as these new entrants join
the labour force and the average educational level increases, this will push up economic growth in
the economy.
Yet at the same time it is essential that a major priority of the Tenth Plan be in ensuring
employment opportunities to these new entrants. Otherwise an unemployed and frustrated youth
population can pose a serious threat to the socio-economic fabric of the country.
IV.3.
Empowering the Provinces – NFC Award and 18th Constitutional Amendment
Major Achievement of Democracy
The removal of provincial disparities and development of less developed areas is an
overarching goal of the Tenth Plan (2010-15).
The new NFC award, by decisively shifting increased resources to the Provinces, can
play an important role in improving Human Development Indicators (HDIs) and in accelerating
growth in less developed regions in the country. The closer expenditures are to the source of
financing the more effective is their implementation and monitoring.
The new NFC award also provides the basis to clearly demarcate development activities
between the federal government and the provincial government as well as between the provincial
and the local level. Vertical programmes that are clearly provincial subjects (e.g. health and
education) will be implemented by the Provinces. The role of the Federal Government in these
areas would be restricted to ensure quality and ensure basic standards across provinces.
IV.4.
Realizing the full Potential of Agriculture and Agro-business
The new government has initiated policies to reverse the neglect of agriculture and this
improvement in the incentive structure has already shown good results. The Tenth Plan (201015) will build on this growth momentum to make agriculture and agro-business as a leading
sector of growth and development through vertical integration of high-value agriculture and
livestock products.
This is an opportune time to concentrate on agriculture – both farm and non-farm – not
only because the vast majority of Pakistan’s population live in rural areas and the sector provides
employment to almost half the labour force, but also because the increased demand for
agriculture products has led to a secular shift in the international terms of trade in its favour.
Rising global food and commodity prices will not only make agriculture more attractive
and profitable but will also raise critical issues of food security and the need to protect the poor
and vulnerable households.
The shift and emphasis on agriculture – farm and livestocks – would need to be
developed in an energy and water constrained environment. As such, investment in research
would also be required in order to understand how to make such a shift feasible and efficient.
IV.5.
Total Factor Productivity: Knowledge and Skills
There is growing recognition that the global economy is increasingly driven by
knowledge rather than the traditional factors of production. Pakistan’s MTDF 2005-2010 and
Vision 2030 both recognized the key role of knowledge in economic growth when they described
the goal of transforming Pakistan by 2030 into a “developed, industrialized, just and prosperous
Pakistan through rapid and sustained development by deploying knowledge inputs.”2
2
See Preamble to the Approach Paper: Strategic Directions to Achieve Vision 2030, Planning Commission,
Government of Pakistan, Islamabad, February 2006.
Box-5
Total factor Productivity (TFP: Evidence from Pakistan)
It is possible to calculate the growth rate implied by the rates of change in capital stock and
labour force alone and find the deviations of the actual growth rate from this implied
growth rate. These deviations are the result of technological and institutional change and
are called growth in total factor productivity (TFP).
Between 1985 and 2005, Pakistan’s average GDP growth rate was 4.1 percent. During the
same period, the capital stock grew at an average of 4.2 percent a year, the labour force at
2.4 percent per year and TFP at 1.1 percent per year. 3 Overall growth was driven primarily
by increases in capital and labour: 33 percent of the GDP growth was due to growth in
capital stock, – 40 percent was due to growth in labour and 27 percent was due to growth in
TFP.
Pakistan’s TFP growth at 1.1. percent during 1985-2005 is much lower in comparison to
fast growing economies such as China and India. When looking at the TFP growth
experience of other countries, one finds that factors such as human capital development,
physical capital development, financial development, technology absorption and openness
have a significant impact on TFP growth and until Pakistan focuses on these issues in the
Tenth Plan (2010-15), growth will remain unsustainable.
The potential for a significant sustained growth in TFP starting with the 10 th Plan (201015) are enormous for Pakistan as new knowledge, technology and skills are employed to increase
productivity in key sectors – agriculture (farm and non-farm), industry, services and high valueadded exports.
During the 10th Plan (2010-15) the investments made earlier in Higher Education and
Science and Technology will be maintained with emphasis on improving quality and
consolidation of the high growth in numbers in the former. A major thrust will be on skills
development through a well structured public-private partnership and demand driven skills
development strategy.
As these investments begin to pay-off during the Tenth Plan Pakistan should see an
increase in TFP which will push up the economy’s growth frontier. Investment in knowledge and
skills will therefore serve as a major driver of economic growth in the Tenth Plan and beyond.
IV.6.
Pakistan Diaspora
The Pakistan Diaspora is variously estimated at between 7 to 8 million people living
outside the country. These include both contract workers mainly to the Middle-East as well as
permanent residents in the USA, UK and Europe.
So far overseas migration from Pakistan has been viewed mainly as a major source of
remittances which has eased the foreign exchange constraint and helped reduce pressures on the
domestic labour market.
In comparison, between 1978 to 2004, China growth in TFP amounted to 3 percent while India’s
amounted to 1.6 percent.
3
During the Tenth Plan (2010-15) the Pakistan Diaspora will be tapped, through suitable
policy measures and incentives, to become an active driver of economic growth stimulating
knowledge, ideas, skills, new investment and access to cutting edge technology.
US $ million
Remittances (US $ million)
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 Jul09 to
Mar10
Years
Source: State Bank of Pakistan
V. Overcoming Major Constraints to Growth
V.1.
Security Situation
Pakistan has achieved notable success over the past year in the fight against terrorism. In
addition, it has carried out successfully, with donor support, the rehabilitation and return of
internally displaced persons (IDPs) caught in this war against terror.
The cost of the war on terror is variously estimated at $5 - $7 billion annually in the last
two years. These costs include both the loss of fixed assets as well as the loss of income.
The negative global perception created by the prevailing security situation also has a
huge negative impact on both domestic and foreign investment.
The Tenth Plan (2010-15) will make a determined effort to improve socio-economic
conditions and create jobs in the affected areas.
V.2.
Energy and Water
Pakistan faces serious infrastructure constraints, which will act as barriers to reviving
growth in the medium-term. These constraints must be overcome to ensure high and sustainable
long-term growth.
The energy crisis is the result of neglect and inaction in the past. The energy crisis has
been accentuated by the circular debt caused by not adjusting prices to increased costs especially
imported oil.
Over the next two to three years measures to overcome energy shortages will concentrate on:






Overcoming the circular debt;
Better management of scarce energy to ensure needs of productive sectors is prioritized;
Bringing IPPs to maximum capacity;
Repairing and upgrading existing capacity, mainly in the power sector;
Conservation measures including energy savers; and
Importing LNG.
For the medium- and long-term an integrated energy plan is to be made operational in the 10th
Plan (2010-15). The same is true for the water sector and communications, the latter within the
framework of the National Trade Corridor (NTC).
An important lesson that has emerged from past experience is that infrastructure development
is not just driven by resource availability but equally if not more important is the efficient and
optimal management of these resources. A major objective of the Tenth Plan (2010-15) is to
develop this management capacity in a systematic manner so as to avoid the imbalances and
shortages that the economy now faces in the future.
V.3.
Skills and Competitiveness
Besides sound infrastructure to enhance the competitiveness of the economy it is vital to
improve the productivity of the work force. The Tenth Plan (2010-15) will take major initiatives
to skill the workforce through public-private partnership driven by market demand to ensure
placement and quality. These measures will be implemented through a system of internationally
recognized certification (including competency based certification) for those already possessing
required skills or those wishing to upgrade them.
V.4.
Governance and institutions
The return to democracy, the restoration of the judiciary, the 7th NFC award, and the 18th
Amendment are major steps in strengthening institutions and ensuring better governance.
A major aim of the Tenth Plan will be to ensure a legal and regulatory framework for
building individual capabilities and encourage private initiatives. Good governance also ensures
that the gain of economic growth reach those most in need. Also effecting administration
structures and a robust civil society are essential to ensure good governance and participation of
people in economic and social development.
The success of the 10th Plan (2010-15) will rest on improved quality of governance and
effective state institutions to ensure a conducive environment for sustainable and equitable
growth.
VI.
Plan Implementation
As important as the formulation of the Tenth Five year Plan (2010-15), will be the
implementation and monitoring of its progress measured against key milestones and targets.
This has been the proverbial Achilles’ heel of past development plans. In a period of
domestic and global uncertainty, this will pose even a greater challenge.
The main overall and sectoral objectives of the Tenth Plan (2010-15) will be cast in a
results based framework so as to monitor progress but with sufficient flexibility built in them to
adjust to the changing resource and financial position of the government.
To ensure harmony between resource availability and planned development expenditures,
the Tenth Plan (2010-15) forms an integral part of the 3-year MTBF [Medium Term Budgetary
Framework (2010-13)]. While the MTBF 2010-13 takes the form of a rolling Plan, the 10th Plan
(2010-15) also has the same flexibility as its main implementation tool is the Annual Plan which
can be suitably adjusted to changing economic and financial conditions.
Donor Agencies need to closely align their strategies with the objectives and proposed
policies and program of the Tenth Plan (2010-15).
The success of development programmes and projects also depends critically on the
criteria adopted for their selection. This must be based on their careful evaluation, detailed costbenefit analysis, expected private and social returns, and the extent to which they reflect national
priorities as determined in the Tenth Plan (2010-15). Only then can the best use of limited
resources be ensured. Capacity and the will to ensure this needs to be strengthened at the federal
and provincial levels.
An evaluation and monitoring system of selected ongoing development projects has been
set up in the Planning Commission. Similar capacity needs to be strengthened or built in sectoral
ministries at the federal level as well as in the provinces.
Following up regularly, at the highest level, on the progress in implementation of policies
and development programmes outlined in the Plan will form an integral part of the Tenth Plan
(2010-15). The proposed arrangements will involve close coordination and interaction between
key policy-makers – financial and development planners (i.e. Finance and Planning) - and key
sectoral ministries, both at the federal and provincial levels. The private sector will also be
closely associated in this process.
Table: GDP/Sectoral Growth Rates (%)
Items
2009-10*
2010-11
201112
Benchmark
Agriculture
2012-13
2013-14
2014-15
Projections
2011-15
Average
3.8
4.0
4.2
4.3
4.4
4.5
4.3
Major crops
3.5
3.9
4.2
4.3
4.4
4.6
4.3
Livestock
4.0
4.2
4.4
4.6
4.6
4.6
4.5
1.7
4.2
5.0
5.9
6.7
7.6
5.9
LSM
1.0
4.5
5.7
7.1
8.1
9.0
6.9
Services Sector
3.9
4.6
5.2
5.8
6.5
7.0
5.8
GDP(fc)
3.3
4.4
4.9
5.5
6.1
6.6
5.5
Industry
* As per Annual Plan 2009-10.
PART I
FROM ECONOMIC RECOVERY TO
SUSTAINABLE AND INCLUSIVE GROWTH
2
I. From Economic Recovery to Sustainable and Inclusive Growth
1.
Macroeconomic Framework: Growth with Macro Stability
1.1
Growth, Investment and Savings
1. Introduction
Macroeconomic stability is a fundamental pre-requisite for sustained economic growth.
The macroeconomic framework for the Tenth Plan (2010-15) has been designed to put Pakistan’s
economy on a robust growth trajectory through prudent macroeconomic management that would
ensure a stable macroeconomic environment with low inflation and sound internal and external
balances. In recent years, Pakistan has witnessed significant macroeconomic imbalances due to a
combination of factors, including rising international commodity prices, the global financial
crisis, and the war against terror. The immediate aim therefore, is to consolidate the emerging
macroeconomic stability through appropriate monetary and fiscal measures aimed at crowding in
private investment, mobilizing domestic savings, and reviving the process of economic growth.
2. Growth, Investment and Savings
Pakistan’s average growth performance has been quite respectable with the country
observing an average annual growth rate of 5.3 percent between 1972-2009. However, the
economy has experienced stop-go growth cycles with high growth periods being inevitably
followed by low growth episodes. Past experience has shown that macroeconomic management
remained focused on dealing with the boom-bust cycles of growth generated by various structural
bottlenecks afflicting the real sector, often at the expense of macroeconomic stability. The Tenth
Plan (2010-15) seeks to break this boom-bust cycle and to put the economy on a path of sustained
long term economic growth. In this context, key thrust areas include public private partnership in
the development process, improved productivity in agriculture and livestock sectors, enhanced
industrial competitiveness, better service delivery systems, and human capital formation.
Figure 1: Annual GDP Growth (1972 – 2009)
10
9
7
6
5
4
3
2
1
08
05
02
99
96
93
90
87
84
81
78
75
0
72
Growth Rate (%)
8
Years
Source: Economic Survey of Pakistan.
3
2.1. Evaluation of MTDF 2005-10
Table 1: Evaluation for the MTDF 2005-10
(Growth Percent)
5-Years 4-Years 5-Years
Items
Annual
Actual Actual**
Average
20062009
Targets* (Annual Average)
Agriculture
5.2
4.1
4.5
Major Crops
7
1.3
1.7
Industry
10.2
2.8
2.5
Manufacturing
11.6
4.6
4.1
Services
7.3
5.9
5.5
Wholesale & Retail
9.7
3
3
Trade
GDP(fc)
7.6
4.7
4.4
Inflation (CPI)
Total Investment
National Savings
Foreign Savings


7.4
12.5
As % of GDP (mp)
19.9
21.8
17.1
15.9
2.86
5.9
11.8
21.3
15.6
5.7
From MTDF 2005-10
**Based on actual for 2006-09 and Annual plan target for 2009-10
The MTDF period witnessed a promising growth trend in the initial three years but due to
rising international oil and food prices and the internal security situation growth in the later years
slowed down sharply (See Table 1). The five-year average targets in the real sectors could not be
achieved and five-year average GDP growth rate also fell short of the target.
A detailed analysis of the year-wise performance of the MTDF reveals that in the first
year, i.e. 2005-06, the economy maintained satisfactory economic growth of 5.8 percent in spite
of the extraordinary surge in energy costs and the devastating earthquake of October, 2005. The
growth performance improved further in 2006-07 as a growth rate of 6.8 percent was registered.
During this year economic growth was mainly driven by strong domestic demand and all the
major sub-sectors provided support to robust growth. A few sectors like minor crops and forestry
however, recorded negative growth.
The global financial crisis interrupted the growth momentum in 2007-08. This together
with political uncertainty, worsening law and order situation, supply shocks, soaring commodity
prices, and slump in external demand contributed to a sharp deceleration in economic growth
resulting in missed targets in almost all segments of the economy. The GDP growth rate dropped
to 4.1 percent as against the target of 7.2 percent due to negative growth in sectors such as major
crops, electricity, gas and water supply.
The lingering global financial crisis kept the economic performance under pressure
during 2008-09 as well. Along with the decline in official capital inflows, the domestic economic
environment was also not very conducive. The increased intensity of the war on terror claimed a
heavy toll on the economy and the growth rate for the year remained less than half of the target.
4
The severe financial crunch, which was partly contributed to by the rising current account and
fiscal deficits, compelled the authorities to sign a $7.6 billion Standby Arrangement with IMF.
On the domestic front, unprecedented shortage of power posed serious hardships for the
manufacturing sector, which pulled down the industrial sector growth to negative 3.6 percent.
Although the agriculture sector depicted a robust growth of 4.7 percent, the negative growth of
the industrial sector, resulted in the overall commodity sector growth amounting to 0.2 percent.
The performance of investment and savings in general was in line with the planned
projections: the MTDF (2005-10) target for average total investment as a percentage of GDP was
19.4 percent, while actual investment for the first four years remained above target (21.6 percent)
and is also expected to be above target for the fifth year (21.3 percent). The performance of
national savings was below the plan target (see Table 1) indicating a rise in external resource
inflow. The targeted average national savings as percentage of GDP for five years was 17.1
percent, whereas the average national savings as percentage of GDP will remain in the vicinity of
15.6 percent for 2005-10. The year-on-year evaluation of total investment and savings reveals
that total investment exceeded the annual targets for first three years of plan period and in fourth
year it was marginally below the target, while national savings remained behind the target in
2007-08 and 2008-09 (annexure II). The situation of foreign savings was not satisfactory and the
evaluation of the plan period indicates that the dependence on foreign resources almost doubled
(5.7 percent) during this period as against the envisaged (2.86 percent).
The macroeconomic situation eased somewhat in 2009-10 as the Government’s
stabilization program took effect. Fiscal and external imbalances narrowed, the exchange rate
stabilized, and foreign reserves rose. But inflation remained stubbornly high and growth plunged
as the economy faced crippling power outages, tight monetary policy, uncertain security, and the
on-going global recession. The reduction in macroeconomic imbalances was a consequence of
expenditure rationalization and slowdown in imports. Military operations and spending related to
the welfare of internally displaced people put additional strain on the budget. A modest
improvement in growth is expected in the next fiscal year, but even that is subject to substantial
risks. Major macroeconomic and structural reforms must be decisively implemented if the
economy is to climb onto a recovery and thereafter, a sustained growth path.
2.2. Proposed Tenth Plan (2010-15)
Recent trends in most macroeconomic variables suggest that the disciplined
implementation of the macroeconomic stabilization program has started paying some dividends.
Improvement in fiscal discipline is complementing the still relatively tight monetary policy
towards aggregate demand compression, which has improved prospects of lower inflation and
lower current account deficit. Keeping in view these developments, two alternate scenarios of
economic growth and related investment and savings configuration have been conceived. The
first is based on an average growth rate of 5.5 percent per annum and the second on 6.0 percent
per annum.
The distinguishing feature of the optimistic scenario, i.e. 6 percent, is based on: a) early
redressal of infrastructure shortages, particularly energy; b) an increase in the availability of
external resources; and c) faster recovery in the demand for exports. This scenario envisages an
average growth of 5 percent in agriculture during 2011 to 2015, with the major crop and livestock
sub-sectors growing by 4 and 6 percent, respectively. The industrial sector is envisaged to grow
by 6.6 percent with large scale manufacturing sector growing at an average of 7.5 percent per
annum. The services sector as a whole is projected to grow by 6 percent. This optimistic scenario
5
will require an investment to GDP ratio of 26.5 percent by 2014-15 to be financed by national
savings (21.5 percent of GDP) and foreign savings (5 percent of GDP).
The rest of the chapter is based on the first scenario, which takes into account the current
global and domestic socio-economic milieu and calls for prudent economic policy management
over the plan period. The principal objective of the Tenth Plan (2010-15) is to attain GDP growth
of 6.6 percent (Table 2) by the terminal year 2014-15 with an average growth of 5.5 percent
during the five-year period. This keeps in view the constraints and commitments towards
macroeconomic stability and recovery. The total investment and national savings as a percentage
of GDP are envisaged to be 24.7 and 21.6 percent respectively by the terminal year 2014-15. The
GDP at market prices of 2009-10 in the benchmark year is Rs. 15226 billion, and is projected to
go up to Rs. 19915 billion in the terminal year 2014-15. The increase will be achieved through a
rise in investment rate from 15.9 percent to 23 percent, to be financed through national savings
(21.6 percent of GDP) and foreign savings (3.1 percent of GDP) during the plan period. This
implies a declining reliance on the foreign resources by the end of the plan period. The larger
GDP will result in increasing per capita income in current prices from Rs. 91182 in 2009-10 to
Rs. 157946 in 2014-15.
2.2.1.
Sectoral Growth Projections
Considering the policy initiatives to be undertaken for agriculture, the sector is expected
to pick up and grow at 4.5 percent by the terminal year 2014-15. The industrial sector is already
showing signs of improvement and is envisaged to grow at 7.6 percent at the end of 2014-15 due
to an expected improvement in the energy situation, credit expansion, expected drop in the
interest rate and improved business climate for domestic investment. The services sector is
expected to grow at 5.8 percent on average for the next five years and at 7 percent at the end of
2014-15. Some long term investment is expected in the transport, communication, finance and
banking sectors.
Table 2: GDP / Sectoral Growth Rates (%)
Items
2009-10*
201011
201112
Benchmark
Agriculture
3.8
Major crops
3.5
Livestock
4.0
Industry
1.7
LSM
1.0
Services Sector
3.9
GDP(fc)
3.3
* As per Annual Plan 2009-10
2012-13
2013-14
2014-15
Average
Projections
4.0
3.9
4.2
4.2
4.5
4.6
4.4
4.2
4.2
4.4
5.0
5.7
5.2
4.9
4.3
4.3
4.6
5.9
7.1
5.8
5.5
2011-15
4.4
4.4
4.6
6.7
8.1
6.5
6.1
4.5
4.6
4.6
7.6
9.0
7.0
6.6
4.3
4.3
4.5
5.9
6.9
5.8
5.5
a. Agriculture
The agriculture sector plays an important role in the growth and development of
Pakistan’s economy. In 2008-09, it accounted for 21.6 percent of the GDP, employed 45 percent
of the labor force, provided livelihood to more than 60 percent of the population living in rural
6
areas, contributed 60 percent of export earnings from processed and unprocessed agriculture
products, and provided essential raw materials to the major large scale manufacturing sectors
such as textiles and sugar. The main objectives for agriculture development during the Plan
period are to achieve self reliance in agricultural commodities, ensure effective domestic supply
to the economy, achieve food security for the vulnerable groups, improve crop yields, and
enhance productivity in livestock and fisheries sub-sectors. Productivity-led growth in the
agriculture sector will be instrumental in achieving the target of 4.5 percent growth at the end of
2014-15.
The performance of the agriculture sector in the short-run will hinge upon weather
conditions, timely availability of inputs, and prudent pricing policies. All sub-sectors are expected
to provide a strong impetus to agricultural growth with major crops envisaged to grow at an
average of 4.3 percent, minor crops at 3.5 percent, livestock at 4.5 percent, fisheries 3.1 percent
and forestry at 2.6 percent (Table 2). In order to meet these targets, measures would be initiated to
increase the availability of improved seeds and fertilizers; ensure adequate water availability
through irrigation and drainage system reforms; enhance productivity through use of new
technology for crops, livestock and fisheries; and improve efficiency of agricultural inputs
through better agricultural research and extension. The prospects of introducing new methods
such as tunnel farming would also be evaluated for meeting the increasing food requirements.
b. Industry
The industrial sector for the next five years is expected to revive itself to play a pivotal
role in the overall production and growth of the economy. The industrial growth of 7.6 percent in
the terminal year will be led by the manufacturing sector (8.3 percent), followed by construction
(7 percent), electricity, gas and water supply (6.5 percent), and mining and quarrying (3 percent).
The robust performance of the industrial sector is expected on account of improved energy
infrastructure, rationalized cost of inputs, revival of external demand, conducive monetary policy,
and removal of structural bottlenecks. The textile sector will require better market access,
vertically integrated mergers and product sophistication. The fertilizer sector, having a substantial
weight in large-scale manufacturing, will require increased private sector investment for capacity
expansion. The role of PSDP, in particular PPPs, will play an important role in crowding-in
private investment in key sub-sectors of the industry. The engineering industry as a new leading
sector will require a skilled manpower, state of the art technical and managerial skills, embracing
technological change and developing industry-academia linkage
Keeping in view higher PSDP allocations for infrastructure including power projects and
reconstruction activity, the average growth for the construction sector is set at 5.4 percent. The
average growth for large scale and small scale manufacturing and slaughtering is projected at 6.9
percent, 5.6 percent and 5.8 percent, respectively. During the terminal year of the plan, the large
scale and small scale manufacturing sectors are targeted to grow at 9 percent and 7 percent
respectively; and these targets are expected to be met through projected recovery in exports on
the back of a favorable trade policy environment as outlined in the strategic trade policy
framework and a forward looking textile policy, expected narrowing of the demand and supply
gap in the energy sector with the help of financial assistance from the external partners, and
domestic investment in new segments with high export potential such as industrial minerals
including multicolored granite, marble and other gems and stones of high quality.
7
c. Services
The services sector growth is projected at 7 percent by the terminal year 2014-15 and on
average 5.8 percent per annum during the plan period. On average, the transport, storage and
communication sub-sector is expected to grow by 5.6 percent, wholesale and retail trade by 4.9
percent, finance and insurance 6 percent, ownership and dwellings by 5.4 percent, social services
by 7.4 percent and public administration and defense by 6 percent. These growth prospects are
expected to be achieved on account of expected improvement in the law and order situation and
other incentives, which will encourage foreign investment in the services sector. Wholesale and
retail trade has immense untapped potential for growth in areas such as offshore trading,
development of re-export oriented industries, development of retail chain stores and avenues for
foreign wholesale trade. The communication sector is still seen as the driving force as more
investments are expected in this sub-sector in view of its growth potential. The service activities
are expected to be well supported by growth in the productive sectors including large scale
manufacturing, and crop and livestock sectors. Value addition in the finance and insurance subsectors is expected to increase due to liberalized policy measures for commercial banks and
financial and exchange companies.
2.3. Investment and Savings
A high growth trajectory would require adequate investments financed through a high
rate of domestic savings. Historically, savings rate in Pakistan has been low and consequently the
country has to depend on foreign inflows to finance its growth and development needs. Increasing
the national savings in order to finance the investment needs will be critical for putting Pakistan
back on the high growth path in the long-term. In order to channelize investment in key subsectors having the potential to lift the economy from a low growth equilibrium, it is important to
sequence and prioritize the public sector investment to crowd in private investment and bolster
economic growth.
In line with the overall growth projections, the projected investment to GDP ratio has
been envisaged at 24.7 percent in 2014-15. This rate of investment would be achieved through
improvement in law and order situation, revival of business confidence, fiscal incentives for
attracting foreign direct investment, and providing new sectoral and regional avenues for
investment. Keeping in view the projected output growth and increased investment the national
savings in the terminal year is projected at 21.6 in 2014- 5 percent of GDP.
Table 3:
Macroeconomic Framework (2009-10 Prices)
Items
2009-10
2014-15
Benchmark Projected
AACG@
(%)
GDP (fc)
Indirect Taxes (net)
GDP (mp)
Net factor Income from Abroad
GNP (mp)
External Resources Inflow (net)
Rs. Billion
14418
18859
807
1056
15226
19915
499
697
15724
20612
414
611
5.5
5.5
5.5
6.9
5.6
8.1
Total Resources/Uses
16138
5.6
21222
8
Total Consumption
Total Investment
Fixed Investment
Public sector
(PSDP)
Private sector
Changes in Stocks
National Savings
Total Investment
Fixed Investment
Public
(PSDP)
Private
Changes in Stocks
Financing of Investment
Foreign Savings
National savings
13531
2608
2426
633
500
1793
182
2194
As % of GDP (mp)
17.1
15.9
4.2
3.3
11.8
1.2
17.1
2.7
14.4
16307
4916
4573
1068
929
3504
343
4305
3.3
6.6
91182
157946
GDP (fc) growth
Per Capita GDP (mp) (in rupees)
@ Annual Average Compound Growth
3.8
13.5
13.5
11.0
13.2
14.3
13.5
24.7
23.0
5.4
4.7
17.6
1.7
24.7
3.1
21.6
2.4. Growth, Investment and Savings Strategies
The Tenth Plan (2010-15) recognizes that a comprehensive strategy is required to sustain
robust growth through private and public investments financed via effective mobilization of
domestic savings. The strategy for the next five years is based on the projections for the revival of
growth, savings and investment keeping in view the underlying challenges being currently faced
globally and domestically. Some new initiatives are required to bring a paradigm shift in the
growth process.
2.4.1.







Agriculture
Improving the agricultural production and marketing infrastructure along with an
improvement in productivity of crop sector and livestock
Improving average yield at the national level to bridge the gap between progressive farms
and national average yield
Production of import substitutes like edible oils and tea to achieve savings in import bill
Timely and easy access to credit for the small and medium size farmers
Active labor market programs, research and development subsidies and technological
transfer for increasing overall productivity of the agro-business
Tapping the real potential of livestock through proper marketing at national and
international levels along with new methods in breeding
Introduction of international storage and packaging standards in crop, livestock, and
fishery sub-sectors
9
2.4.2.
Industry

Improving business climate through improvement in law and order situation and
provision of necessary physical infrastructure

Stable provision of electricity and gas for large scale manufacturing

Timely and easy access to credit for SME sector

Reducing the overall costs of doing business and deregulating markets with high
transaction costs

Promoting integrated supply chains and higher value addition in domestic production

Research and development grants for innovative industrial projects

Establishing industry-academia linkages for the improvement of technological base of the
industrial sector

Promotion of SME and cottage industry through technical and managerial support
coupled with favorable legal, regulatory, and taxation environment

Export-led industrialization by addressing market access issues and by raising quality of
exports

Training opportunities for the unemployed workforce for increasing labor mobility and
channelizing the idle manpower towards key growth sectors of the industry

Improving market information system

Rationalization of administrative regulation, labor levies and immediate removal of
barriers to entry and exit

Standardization and quality control measures
2.4.3.
Investment

Long term and predictable investment and tax policy environment

Development of human
telecommunications etc)

Investor friendly demand management policies

Structural reforms for reducing barriers and cost of doing business

Identification of and support to dynamic industries

Enhancing the competitiveness of the industrial sector

Development of long term debt market

PSDP would be geared towards crowding in private investment into industry and
agriculture via PPP mode
2.4.4.

and
physical
infrastructure
(ports,
roads,
power,
Savings
Increase in per capita income through a broad based growth strategy
10

Increasing incentives for channelizing household savings into banking /financial
instruments

Reduction in the banking spread, increasing provident fund rate and offering innovative
instruments for increasing savings

Controlling inflationary expectations through transparent and independent monetary
policy

Encouraging a shift from debt financing to equity financing

Timely implementation of tax reforms particularly in the agriculture and services sectors

Additional liquidity in capital markets by attracting foreign investments
11
Annexure-A
Annexure A-1:
Year on Year Evaluation of Target and Actual GDP and Sectoral Growth 2005-10
2006-07
Items
Target
I. Commodity Sector
A. Agriculture
Major crops
Minor Crops
Livestock
Fishery
Forestry
B. Industry
Mining & Quarrying
Manufacturing
Large Scale Manufacturing
Small Scale Manufacturing
Others
Construction
Electricity, Gas & Water Supply
II. Services Sector
Transport, Storage &
Communications
Wholesale & Retail Trade
Finance and Insurance
Ownership of Dwellings
Public Administration & Defence
Social, Community & Personal
III. GDP (fc)
* Target GDP from Annual Plans
Actual
7.2
4.8
6.6
4
3.5
4
5.1
9.5
5.2
11
13
7.4
3.1
7.5
3.5
6.8
Target
5.1
6.3
-3.9
0,4
15.8
20.8
-1.1
4.1
4.6
8.7
8.3
8.7
10.2
3.5
6.5
2006-07
Actual
7.0
4.5
4.3
2.3
5.2
4
3.5
9.1
3.8
11
13
7.4
2.5
7
3.5
7.1
6.6
4.1
7.7
-1
2.8
15.4
-5.1
8.8
3.1
8.3
8.7
8.1
Target
2007-08
Actual
1.4
1.1
-6.4
10.9
4.2
9.2
-11.5
1.7
4.4
4.8
4
7.5
24.3
4.7
7.0
7.4
4.8
4.5
2.3
5.7
4.2
3.5
9.4
4.5
10.9
12.5
7.5
5
8
3
7.1
Target
2008-09
Actual
0.2
4.7
7.7
3.6
3.7
2.3
-15.7
-3.6
1.3
-3.3
-7.7
7.5
-3.9
-22
6.6
4.8
3.5
4.5
2
3.2
3.4
1.5
6
5
6.1
5.5
8
5.2
8
3
6.1
-10.8
-3.7
3.6
2009-10
Target
2.7
3.8
3.5
4
4
2.4
1
1.7
1.8
1
3
4.3
2
0.5
3.9
5.8
4
6
4.7
5.9
5.7
4.5
2.9
3
9.3
6.7
3.6
3.5
5.8
7.0
-3.4
42.9
3.5
10.1
9.9
5.8
8.8
12
3.5
3.7
5.6
7.0
5.8
14.9
3.5
7.1
7.9
6.8
7.8
15
4
4
5
7.2
5.3
12.9
3.5
1.2
10
4.1
5.4
12
3.5
4
7
5.5
3.1
-1.2
3.5
5
7.3
2
3.3
3
3.6
4
6
3.3
Table A-II: Year on Year Evaluation of Target and Actual GDP and Sectoral Growth 2005-10
Target
Total Investment
National Savings
(NS) Savings
Foreign
2005-08
Actual
Target
18
22.1
15.8
18.2
2.2
4.5
Investment
87.8
82.4
Financed
by
NS
(%)
*Targets derived from Annual Plans
2006-07
Actual
Target
18.7
22.5
16.5
17.4
4.3
5.1
88.2
77.3
2007-08
Actual
Target
19.4
22
17.1
13.5
5
8.5
88.1
61.4
(% of GDP)
2008-09
Actual
Target
20.02
19.7
17.7
14.3
7.2
5.3
88.4
72.6
20
14.7
5.3
73.5
12
1.2
1.
Balance of Payments
Introduction
The 10th Plan (2010-15) aims to maintain a sustainable balance of payments position to
ensure macroeconomic stability. Pakistan has a high degree of dependence on oil imports,
essential industrial raw materials, and machinery and equipment. To meet such requirements
without excessive reliance on external borrowing, a competitive and dynamic export sector is
required that is capable of generating robust growth in export earnings to maintain a viable
balance of trade. The invisible balance would also need to be improved by attracting
private transfers, especially workers’ remittances. The capital account would be strengthened by
diversifying sources of financing with greater recourse to non-debt creating sources of financing.
2.
Analytical Review of the MTDF (2005-10)
The Medium Term Development Framework (2005-10) was prepared in the backdrop of
improving domestic macroeconomic conditions and a conducive external environment. The
world economic growth was projected at 4.5 percent with a sharp rise in global trade; and this
provided the basis for setting rather optimistic targets in the MTDF. However, most of these
targets could not be met as the economy witnessed two major external shocks during this period,
including the global hike in food and fuel prices followed by the global financial turmoil resulting
in the worst-ever global recession since the Great Depression.
Table 1: Key Indicators
Actual
Target
2005-06
2006-07
2007-08
2008-09
2009-10
GDP growth (%)
Trade deficit
(billion US$)
5.8
6.8
4.1
2.0
3.3
8.4
9.7
15.0
12.6
10.7
CA deficit as % of GDP
4.4
5.1
8.7
5.8
5.3
The export target could not be achieved due to the global economic slowdown and rising
competition in the international market, particularly textile exports. Also, policy initiatives did
not materialize regarding diversification and transition to high value added exports goods. The
import bill was very much above target due to the unusual increase in the international oil prices
and other commodity prices. The contraction in imports witnessed in FY 09 was due to the
deliberate government policy of curtailing imports, which brought both the ACGR and absolute
volume very closed to the MTDF targets.
The disproportionate rise in imports in relation to exports resulted in ballooning of the
trade deficit from US$ 4.7 billion in FY05 to almost US$ 15.0 billion in FY08 before declining to
US$ 12.5 billion in FY09. The invisible account continued to post surplus during the MTDF
period, despite a substantial increase in the services deficit. At the end of FY09, the invisible
account surplus stood at US$ 3 billion against the target of US$861 million. The rise in the
invisible account surplus was primarily on account of the robust growth in remittances supported
by payments for logistic support.
13
The current account deficit rose sharply from 4.8 percent of GDP in FY07 to 8.4 percent
in FY08 due mainly to global food and fuel price hikes. Consequently, Pakistan had a run on its
reserves, and it appeared that the country would not be able to meet its external obligations,
which brought further pressure on the reserves and exchange rate. Finally, Pakistan had to
approach the IMF for balance of payments support in FY08.
3.
Balance of Payments --- Baseline Scenario
A baseline scenario for the medium-term has been developed for the balance of payments
that takes into account the economy’s structural features and potential, trends in the volume of
global trade, and international commodity prices. The baseline scenario assumes that efforts will
be made to improve the law and order situation and address the energy crisis to facilitate
necessary investments, particularly in export-oriented industries.
Table: 2
Revised
Jul-Jun
FY09
-9339
-12627
19121
31747
-3473
-4402
-20502
11163
11265
7811
474
5674
3720
-1073
2492
1900
3642
2246
291
302
135
0
-3056
3056
-635
-635
3691
3902
211
ITEM
Current account balance
Balance on goods
Exports f.o.b
Imports f.o.b
Services Balance
Income (net)
Balance on goods, services and income
Current transfers (net)
Current transfers: credit, of which:
Workers Remittances
Capital account
Financial account :of which
Direct investment in Pakistan
Portfolio investment (net)
Other investment liabilities; of which:
General government
Disbursements
Amortization
Banks
Other sectors
Net errors and ommissions
Financing gap
Overall balance
Reserves and related items
Reserve assets
Foreign exchange ( SBP )
Use of Fund credit and loans
Purchases
Repurchases
Mamorandom Items
SBP Reserves (net of CRR & SCRR)
9529
In months of next year's imports of goods and services 3.1
Current account (% of GDP)
-5.6
Exports fob (growth rate %)
-6.4
Imports fob (growth rate %)
-10.3
Workers remittances' and other transfers (growth rate)-0.8
Proj
Jul-Jun
FY10
-5718
-11944
18356
30300
-2630
-3743
-18317
12599
12683
8750
1155
6068
1999
-96
4453
2827
5126
2176
562
-186
-583
0
922
-922
-4762
-4762
3740
3896
156
Proj
Jul-Jun
FY11
-6719
-12736
18762
31498
-2715
-4521
-19972
13253
13359
9581
160
4648
1673
300
2181
1974
3631
2158
-200
408
0
0
-1911
1911
-226
-226
2037
2221
184
Proj
Jul-Jun
FY12
-7235
-13905
19321
33226
-2916
-4502
-21323
14088
14194
10348
160
5187
1712
400
2581
1974
3631
2158
200
408
0
3232
1345
-1345
-220
-220
-1125
0
1125
Proj
Jul-Jun
FY13
-8475
-15131
20083
35214
-3651
-4451
-23233
14759
14865
10969
160
5546
1921
500
2631
1974
3631
2158
250
408
0
5699
2930
-2930
-122
-122
-2908
0
2908
Proj
Jul-Jun
FY14
-9058
-16331
20983
37314
-4094
-4213
-24638
15580
15686
11627
160
5858
2233
500
2631
1974
3631
2158
250
408
0
7647
4607
-4607
-418
-418
-4289
0
4289
Proj
Jul-Jun
FY15
-10249
-17515
22025
39540
-4761
-4170
-26446
16197
16303
12208
160
6072
2447
500
2631
1974
3631
2158
250
408
0
6888
2871
-2871
-363
-363
-2608
0
2608
14378
4.5
-3.2
-4.0
-4.6
11.7
14617
4.3
-3.6
2.2
4.0
7.0
14837
4.2
-3.6
3.0
5.5
6.3
14959
4.0
-4.0
3.9
6.0
4.8
15377
3.9
-4.0
4.5
6.0
5.6
15740
3.7
-4.2
5.0
6.0
4.0
14
4. Tenth Plan (2010-15) Outlook and Targets
The prospects of returning to macroeconomic stability have improved in the initial
months of FY10. Data available so far shows a revival of industrial growth, contraction in current
account deficit, improvement in foreign exchange reserves, and a relatively stable exchange rate.
The government is committed to the stabilization program and has initiated steps to resolve some
of the longstanding structural issues. On the global front too, there are indications that the worse
may be over. The latest World Economic Outlook (October 2009) reports that after a deep global
recession, economic growth has turned positive. However, with signs of economic recovery being
exhibited, it is expected that the rise in international commodity prices would pick up further. In
case of Pakistan the two most pertinent prices are that of crude oil and palm oil. Analysts and
market experts are predicting crude oil prices to stay above US$ 70 per barrel in the near future.
Also, analysts predict that palm oil prices may increase by 20 percent in the first half of next year
as drought disrupts supplies and demand grows in China and India.
The projections for the balance of payments have been set keeping in view the above
developments (See Table-3).
Table-3
US$Million
ITEM
Bench Mark
Projection
2009-10
2010-11
2011-12
2012-13
2013-14
-4839
-6505
-6955
-7589
-8238
-9284
-10715
-11742
-12645
-13362
-13717
-14176
Exports f.o.b
19185
19952
20950
22416
24209
26025
Imports f.o.b
29900
31694
33595
35778
37926
40201
Services Balance
-2630
-2809
-3031
-3752
-4152
-4762
Income (net)
-3743
-4590
-4824
-5423
-5759
-5746
-17088
-19141
-20500
-22537
-23628
-24684
Current Transfers (net)
12249
12636
13545
14948
15390
15400
Current Transfers: credit, of which:
12333
12742
13651
15056
15448
15503
8400
8990
10484
11399
11847
12272
Capital Account
1155
160
160
160
160
160
Financial Account: of which
6068
4804
6946
7582
7746
8196
1999
2500
3500
4000
4200
4500
-96
400
950
1200
1500
1600
2827
1974
1974
1974
1974
1974
Disbursements
5126
3631
3631
3631
3631
3631
Amortization
2246
1272
164
408
687
1647
0
0
1705
3754
4976
2796
Overall Balance
2384
-1541
1856
3907
4644
1868
Reserves and Related Items
-2734
718
-2856
-4632
-6096
-4453
-363
Current Account Balance
Balance on Goods
Balance on Goods, Services & Income
Workers Remittances
Direct Investment in Pakistan
Portfolio Investment (net)
General Government
Financing gap
Reserve Assets
2014-15
-4762
-175
-420
-422
-418
Foreign Exchange ( SBP )
-4762
-175
-420
-422
-418
-363
Use of Fund Credit and Loans
3740
2037
-1125
-2908
-4289
-2608
16189
Memorandum Items
SBP Reserves (net of CRR & SCRR)
14378
14566
14986
15408
15826
In months of next year imports of goods
5.7
5.5
4.1
4.0
3.9
3.7
Current Account Balance (% of GDP)
-2.8
-3.4
-3.3
-3.2
-3.1
-3.2
Exports f.o.b (growth rate %)
0.3
4.0
5.0
7.0
8.0
7.5
Imports f.o.b (growth rate %)
-5.8
6.0
6.0
6.5
6.0
6.0
15
It is presumed that the current account deficit would be reduced by a Compound Annual
Growth Rate (CAGR) of 13.9 percent under the program as compared to 12.4 percent growth
under normal baseline during the target medium-term. Exports would grow at the CAGR of 6.3
percent as compared to 3.7 percent in the baseline, while imports would grow by 6.1 percent as
against 5.5 percent in baseline. The exports of services are assumed to grow negatively at a
CAGR of 1.8 percent in the program as against a decline of 3.7 under normal circumstances. The
decline in exports of services would be due to the logistic support, which would decline as the
war on terror comes to an end. However, services other than logistic support are assumed to grow
substantially, mainly in the areas of computer and information technology, finance and insurance,
and transportation and travel.
Workers’ remittances are planned to grow by a CAGR of 8.0 percent as against the
baseline CAGR of 6.9 percent with policy measures to enhance the human resource capacity as
per demand in the international market. Other transfers are projected to grow by a CAGR 4.7
percent as compared with 1.9 percent under the baseline scenario. These developments in the
current account would bring the level of reserves sufficient for 3.7 months of imports of next
year’s goods and services. The current account deficit would be 2.8 percent of GDP as against 4.2
percent under the baseline scenario. The financing requirements would be smaller than the
baseline scenario, which envisages smaller inflows of FDI and FPI. It is presumed that under the
program scenario Pakistan would be able to generate financial resources at competitive rates
paving the way for development in the long-run.
The program is based on the following assumptions:










Efforts would be made to restore law and order and the country’s war on terrorism
will be concluded successfully. Both these factors are expected to pave the way for
an increase in production and exports. Also, these improvements should have salutary
effects on FDI and tourism together with related sectors
.Increase in FDI should lead to an inflow of advanced technology, expansion in
services, and growth in production
Inflow of FDI should also lead to capacity building in the human resource sector with
healthy effects on production. Even if skilled people move abroad, that should lead to
expansion in home remittances
Visible progress would be made in good governance: particularly transparent and
timely decision-making, monitoring and efficient implementation, and setting up
effective accountability mechanisms
Control of law and order situation will give a boost to our stock exchange and
consequently increase in Foreign Portfolio Investment (FPI)
The world economy is expected to register reasonable growth rate over the mediumterm and hence generate demand for our products
The quality of social and physical infrastructure will be improved
Alternative energy resources will be developed during the program period, leading to
enhanced production, including exportable surplus
There will be improvement in macroeconomic stability, with inflation contained to a
modest level and the Pakistan Rupee kept competitive
Serious efforts will be made to diversify our exports with emphasis on the services
sector, dairy products, fruit and vegetables and labor-intensive areas of small-scale
industry
16

4.
In addition to diversification of exports by products, untapped export markets would
be explored
Policies and Strategies
Strategic Trade Policy Framework 2009-12
The Strategic Trade Policy Framework (2009-12) is the most recent initiative undertaken by
the government to overcome the weaknesses of the past as well as to provide a way forward.
The main thrust of the Strategic Trade Policy Framework 2009-12 is on the following areas:






Preparation of a rational tariff policy and structure with short and long term tariff measures
aimed at making the industry competitive
Re-design of export refinancing scheme and sectoral credit allocation parameters, while
focusing more on high value sectors, sophisticated export products and non-traditional items
Adoption of an exchange rate policy to promote exports and manage imports
Measures to promote procedural efficiencies and trade facilitation, including effective
implementation of the National Transport and Trade Facilitation Strategy and other reform
efforts aimed at trade facilitation to improve the ranking of Pakistan in the global
competitiveness index
Revamping business processes in line with international best practices in order to enhance
productivity and improve competitiveness
Upgrading local industry’s capacity to integrate into the global supply chain and increasing the
capacity of Pakistani firms for technology absorption, technology development and innovation
creation
In line with previous policies, trade policy 2009-12 reiterates the need for developing coherent,
comprehensive initiatives to realize the objectives of product and market diversification. Some specific
sectors which will receive policy and development support during the next three years include: textiles
and clothing, leather, chemicals, pharmaceuticals, meat and meat products, agro-processing and dairy,
minerals, light engineering goods and machinery, gemstone and jewelry, and services. The policy also
proposes continuation of cluster development programs to increase the share of non-traditional products
in Pakistan’s exports.
The 10th Plan envisages a long term policy for the management of Balance of Payments
and a very clearly articulated external finance strategy to indicate a broad approach to finance the
projected current account deficits and a building of foreign exchange reserves through a
combination of equity and external debt flows. The long term sustainable level of the Balance of
Payments depends on two fundamental variables: the ratio of foreign savings to investment and
growth in foreign exchange earnings from exports of goods and services, workers’ remittances
and other private transfers. Depending on these variables, sustainable annual current account
Balance of Payments deficit should fall somewhere in the range of 2-3 percent of GDP. Hence,
there is a need for developing guidelines and a framework, which will keep the current account
Balance of Payments deficit at sustainable levels, taking into account the gap between savings
and investment and the growth in the foreign exchange earnings. These guidelines would
complement and reinforce the FISCAL RESPONSIBILITY AND DEBT LIMITATION ACT,
which puts limits on public debt growth. The following specific guidelines shall be followed to
ensure a sustainable external accounts position.

Establish a ceiling for the share of foreign savings in total investment to ensure that large
Balance of Payments deficits do not finance consumption and that the country does not
17



become over-reliant on external financing. Empirical studies suggest that foreign savings
should not exceed 20 percent of total investment in the medium-term and over the longrun should stay within a range of 12-15 percent
Place limits on total external debt and foreign investment obligations in relation to total
foreign exchange earnings just as the FISCAL RESPONSIBILITY AND DEBT
LIMITATION ACT places limit on public debt in relation to GDP. The purpose would
be to ensure that net debtor position of Pakistan in relation to the outside world is
reasonable, with the capacity to service foreign debt and investment obligations. Total
foreign exchange earnings would be treated as a proxy for repaying capacity
Relate the future build-up of total investment of income payments to the future foreign
exchange earnings and transfers. This guideline will make it possible to take into account
not only the size of debt and equity obligations but also the interest rate of external loans
and the rate of return on foreign investment. At present, total foreign investment income
payments are around 9-10 percent of total foreign exchange earnings and transfers. It
appears desirable to maintain this ratio at less than 10 in the medium term
Though Pakistan made some moves to generate equity financing in the past, there has
been a reversal of this strategy during the last two years. It is vital that in the mediumterm a reasonable ratio is maintained between gross debt and equity flows of around 1:2,
in other words 1/3 of the new foreign obligations should be in the form of external debt
Exports of Goods Strategy






The 10th Plan (2010-15) envisages a comprehensive strategy to increase Pakistan’s
market share in world trade, which at present is a paltry 0.15 percent. This would be
achieved by making export development a central plank of economic policy. In
particular, efforts shall be made to enhance export competitiveness through export
diversification of products and markets, improved product quality, certifications to
products and process standards, and higher value addition
In the past, the competitive pressures for Pakistan’s textile and clothing exports (64
percent of exports) arising from the phasing out of Multifibre Arrangement (MFA) were
not anticipated fully and new investments on the scale required to move up the value
chain have not been forthcoming. The 10th Plan recognizes the need for the textiles sector
to adjust to the realities of the world market and for restoring its competitiveness through
enhancing productivity. Economic policies would be geared towards encouraging major
investments in both plant and equipment and human skills in the textiles sector
Policy attention would be focused on non-textile manufactured exports, the new
promising areas of IT exports and agricultural and livestock products – areas where
Pakistan’s world presence is minimum
In order to broaden the export base, the Government policy will specially target foreign
investment in manufacturing, aimed both at improving technology and productivity of
promising export sectors
Reduced tariffs, particularly on imported raw material, imports, components and
machinery will boost exports
The export oriented enterprises would be encouraged to invest in skills which are
essential to raise their productivity and competitiveness
Services Development Strategy

The export policy shall give particular attention to the export of services by seeking
enhanced market access for the same, particularly under Mode 4 of the Services Delivery
18

A strong services sector can not only become a fairly significant contributor to the export
mix over time, but, more importantly, it can provide critical support to merchandise
exports
Capacity building for enhancing the exports of computer and information technology
related services
Income account

The financing of external deficit through external debt has serious implications for future
cash flows as a substantial part of foreign exchange earnings goes to the payment of
financial charges and interest on the debt stock. The 10th Plan aims to maintain the
current account deficit at a sustainable level with financing of the deficit through an
optimal mix of debt and equity instruments.
Transfers

Workers’ remittances have historically provided significant support to the balance of
payments. Policies to enhance these inflows shall focus on surveys to assess demand for
various skills in different countries. Based on the identified demand, programs for
capacity building and skill development will be initiated in the country. Such policies
would not only help migration of skilled labor with large earning and remittance
capability but also boost domestic production through provision of market based skills.
Foreign Direct Investment

Foreign Direct Investment is an important source of foreign exchange earnings. FDI into
Pakistan has been concentrated mainly in natural resources, import substitution
industries, telecom and banking services. Minimal FDI has been forthcoming in the
export-oriented manufacturing sector. The 10th Plan aims to make concerted efforts to
attract FDI especially into export-oriented industries by removing anti-export bias from
policies and improving the logistics of transportation, delivery, warehousing and
clearance at the ports as well as of shipping.
19
20
1.3
Fiscal and Monetary Development
Introduction
The 10th Plan aims to gear fiscal and monetary policies towards achieving robust growth
while at the same time ensuring macroeconomic stability. The fiscal policy would ensure a
sustained fiscal position through prudent tax and public expenditure measures including widening
of tax base, further streamlining the tax administration and prioritizing public expenditures in line
with growth and development objectives of the Plan. In tandem with fiscal measures, the
monetary policy would aim to maintain price stability, strengthen the financial sector, and ensure
the availability of credit to the productive sectors of the economy to facilitate their expansion.
Fiscal Policy
Sustained economic growth is a prerequisite for every economy in its quest for
development and prosperity. Whatever the direction and objectives of economic growth may be,
sufficient availability of financial resources is critical for all endeavours of economic growth to
be successful. A sound fiscal policy helps in generating resources by raising revenue as well as
maintaining the fiscal deficit at a level which is consistent with other macroeconomic objectives
such as controlling inflation, promoting private investment and maintaining external
creditworthiness.
The previous Five Year Plan (MTDF) 2005-10 aimed at achieving economic
sustainability through macroeconomic stability with emphasis on fiscal discipline, efficient debt
management, and enlarged tax base with equity. It also aimed at increasing fiscal space for
development budget and its orientation to growth promotion and poverty alleviation.
MTDF (2005-10), however, could not achieve macroeconomic stability and hence could
not provide the requisite platform to launch the economy to a self-sustained growth. The growth
strategy relied heavily on external financing and sale of assets. Due to poor resource mobilization
efforts, private savings could not keep pace with growing investment requirements. The tax
revenue efforts also faltered and in the face of rising current and development expenditure of the
government, led to increase in fiscal deficit.
During second half of 2008, Pakistan’s economy was adversely affected by a host of
international and domestic events. Global financial crisis, sharp rise in prices of oil and other
commodities, and delay in pass on of these prices to consumers destabilized major
macroeconomic fundamentals of the economy. Rising current account and fiscal deficits,
unprecedented rise in inflation, fall in the value of rupee and a near-crisis situation in balance of
payments placed the economy in a dire situation. Political turmoil, security problems and power
shortages also took a heavy toll on the country’s economy.
Performance of the economy during MTDF (2005-10) shows its failure to meet its targets
of GDP growth and fiscal balance. GDP which was planned to grow at an average rate of 7.6%
during 2005-10, is estimated to attain an average growth rate of 4.3 %. Fiscal deficit also could
not be maintained at the projected level (an average of 3.6 % for MTDF) and is expected to
remain around 5.2 % on average basis. Main reasons for overshooting of fiscal deficit over the
years have been earthquake related expenditure, a large increase in interest payments, higher than
budgeted oil, energy and food subsidies, rising current expenditure, expenditures on war on
21
terror, expenditures on internally displaced persons and tax revenue slippages. Average tax
revenue during MTDF is expected to be 10.3% of GDP against a target of 11.0 %. Table 1 below
depicts fiscal performance during MTDF period.
Table 1
Review of Fiscal Performance during MTDF (2005-10)
(% of GDP)
Average 2005-10
Total Revenue
Tax Revenue
Of which FBR
Non-tax Revenue
Total Expenditure
Current Expenditure
Defence
Interest
Development Expenditure
Overall Fiscal Deficit
Real GDP Growth
CPI Inflation
Targets
Achievements*
14.2
11.0
9.9
3.2
17.8
14.0
3.0
3.5
4.9
3.6
7.6
7.4
14.5
10.3
9.5
4.3
19.9
15.7
2.7
4.4
4.3
5.2
4.3
11.9
* Based on the estimates for the period 2009-10.
Tenth Five Year Plan 2010-15
Tenth Plan envisages a sustainable and inclusive growth that generates employment and
reduces poverty. It aims at an average growth target of 5.5 % per annum in order to achieve a
growth rate of 6.6 % by the year 2015. Achievement of this target needs allocation of
substantially large resources for strengthening the country’s physical and human infrastructure. A
right type of policy mix is required for boosting revenue generation, raising domestic savings and
devising a prudent fiscal policy to release maximum funds for development in order to achieve
the goals of sustainable and inclusive economic growth. Major thrust of fiscal policy would be to
broaden the tax net by bringing in the agriculture and the services sector, as well as to areas that
have traditionally been difficult to be documented. Equally important are the complementary
efforts to curtail government’s current expenditure; improvement in governance to eliminate
wastage of public funds and optimal allocation of development funds to increase both the
production of real sectors of the economy and their overall productivity.
Objectives
Main objectives of Tenth Five Year Plan are:

Adoption of a prudent fiscal policy to ensure macroeconomic stability, leading to
sustainable growth and building investors’ confidence in the future growth prospects
of the economy
22






Exploring avenues for raising fiscal space preferably through domestic resource
mobilization
Devising measures to pursue a rule based fiscal policy
Evolving buoyant and broad based taxation system with progressive rate structure
and enlarged tax net
Development of a growth-oriented tax structure ensuring optimum allocation of
resources within the economy
Wide-ranging tax reforms for increasing the tax-ratio gradually and systematically in
line with the countries at similar stage of development
A prudent debt management policy inter-alia aiming at availability of financing with
minimum stress on the financial sector as well as aiming at a lower debt-export ratio
to ensure external credit worthiness
Targets
For achieving the above objectives, following targets have been set:





Increasing total revenues from 14.2 percent of GDP in 2009-10 to 17.3 percent of
GDP in 2014-15
Enhancing tax revenues from 10.0 percent of GDP in 2009-10 to 13.2 percent of
GDP in 2014-15. FBR tax collection will increase from 8.9 percent of GDP in 200910 to 12.4 percent of GDP in 2014-15
Total expenditure will be increased from 19.4 percent of GDP in 2009-10 to 21.0
percent in 20014-15
Increasing development expenditures from 3.3 percent of GDP in 2009-10 to 4.5
percent of GDP in 2014-15
Fiscal deficit will be brought down from 5.2 percent of GDP in 2009-10 to 3.8
percent 2014-15
Strategies
Following strategies will be employed to achieve the above mentioned targets.







Mobilization of domestic resources through revenue generation, increased public
savings and minimum reliance on bank borrowing
A balanced tax structure based on rational and affordable rates covering a broad
range of sectors and taxpayers
Strict observance of the principle that income derived from whatever source ought to
be taxed. All exemptions and concessions be eliminated. Tax incentives be
objectively evaluated to serve none other than the long-term interests of the economy
Continued efforts to improve the working of tax collection machinery with emphasis
on maintaining highest professional excellence through improvement of skills and
use of latest information technology
An expenditure policy that aims at strict control of non-developmental expenditure
and is adequately accommodative for meeting pressing social and infrastructure
needs of the economy
Full commitment to the implementation of Fiscal Responsibility and Debt Limitation
Act, 2005
To make a judicious choice between subsidies vis-à-vis development expenditure
(PSDP) in the course of resource allocation since it has significant implications for
public as well private investment
23
FBR Tax Collection
Total revenues are projected to increase at an annual compound growth rate of 18.2
percent and the tax revenues at 20.2 percent during the 10th Plan period. FBR taxes are projected
to increase at an annual compound growth rate of 21.6 percent, with direct taxes to increase by
22.5 percent and indirect taxes by 21.0 percent. Among the indirect taxes, sales tax is projected to
increase by 25.6 percent, federal excise by 13.2 percent and customs duty by 9.6 percent. A
higher growth projection of sales tax is based on full scale introduction of VAT. Similarly, high
growth projection for direct taxes primarily hinges on tax reforms to enlarge the tax net, plug tax
loopholes and improve tax administration. The projections of FBR taxes are given in Table 2
below.
Table 2
FBR Taxes during Tenth Plan Period (At Current Prices)
(At Current Prices)
(Rs. Billion)
Projections
Average
2005-09
B.E.
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
ACGR %
Direct Taxes
346.7
530.0
685.6
839.6
1013.9
1228.3
1509.9
22.5
Indirect Taxes
584.8
802.3
1013.4
1222.4
1459.1
1748.7
2085.1
21.0
Sales Tax
358.5
504.4
657.4
833.1
1038.7
1285.2
1576.1
25.6
Federal Excise
83.8
134.3
164.0
179.8
195.8
222.1
250.2
13.2
Customs
142.5
163.6
192.0
209.5
224.6
241.4
258.8
9.6
Total FBR Taxes
FBR Taxes
(as % of GDP)
931.5
1350.0
1699.0
2062.0
2473.0
2977.0
3595.0
21.6
--
8.9
9.8
10.5
11.1
11.7
12.4
Provincial Revenues
Provinces are expected to get a big boost in the their financial resources during the next
Five Year Plan following successful conclusion of 7th NFC Award unanimously agreed by all
federating units as well as the Federal Government. A significant increase in the share of
provinces in the divisible pool of taxes will help them in effectively addressing the issues like
backwardness, poverty, unemployment and strengthen their commitment to address multiple
socio-economic needs, such as those of health, education and improvement of rural/local
infrastructure. (See Box: ) below.
24
Box
7th NFC Award
Most significant achievement of the present government is the accord on 7 th NFC Award, with
consensus of all the provinces. A prominent feature of the Award is the consensus to include multiple
indicators in the criteria for horizontal distribution amongst the provinces. These indicators and their
respective weights are: population (82.0 %); poverty/ backwardness (10.3 %); revenue collection/
generation (5.0 %) and inverse population density (2.7 %).
The share of provinces in the divisible pool taxes will be 56 % during Financial Year 2010-11 and
57.5 % from the Financial Year 2011-12 onwards. The corresponding share of the Federal Government will
be 44 % and 42.5 % respectively, for the said financial years.
The net proceeds of the divisible pool taxes will be derived after deducting 1% as collection
charges and payment of 1% of the net proceeds of the divisible pool to Khyber Pakhtunkhwa (KP) province
for its role in war on terror. This payment will cover the entire Award period. In order to meet its special
needs, Balochistan province will be given Rs. 83.0 billion (9.09% of the provincial share in the divisible
pool). Any shortfall in this amount shall be made up by the Federal Government from its own resources.
This arrangement for Balochistan would also remain protected throughout the remaining four years of the
Award based on annual budgetary projections.
After giving effect to the special needs of Balochistan and application of the aforesaid multiple
indicators, the final percentage share of the provinces for the distribution of provincial share in the
Divisible pool taxes will be as under:Punjab
Sindh
Khyber Pakhtunkhwa
Balochistan
51.74 %
24.55 %
14.62 %
9.09 %
The net proceeds of Development Surcharge on Natural Gas shall be distributed among the
provinces. For this purpose, the royalty on Natural Gas and development surcharge would be clubbed into
one. The provinces will also get net amount of royalty on crude oil which shall be paid to them according to
production in each province as per current practice.
The province of Sindh would receive an additional transfer of an amount equivalent to 0.66 % of
the provincial pool form the Federal Government.
The development surcharge on natural gas for Balochistan would be worked out from 1st July,
2002 and this amount, subject to maximum of Rs. 10.0 billion, would be paid by the Federal Government
in five years in five equal installments.
The Federal Government will also assist the provinces through specific grants in times of
unforeseen calamities.
Financing of Fiscal Deficit
The financing of projected fiscal deficit during 10th Plan period is shown in Table 3
below:
25
Table 3
Financing of Fiscal Deficit
(Rs. Billion)
B.E.
Projections
Average
2005-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
Total Revenues
1,431.2
2,162.0
2,612.0
3,091.0
3,622.0
4,233.0
4,992.0
Total Expenditures
1993.9
2,950.0
3,422.0
3,891.0
4,508.0
5,226.0
6,083.0
Fiscal Balance
-540.1
-788.0
-810.0
-800.0
-886.0
-993.0
-1,091.0
Financing
540.1
788.0
810.0
800.0
886.0
993.0
1,091.0
External Borrowing
149.3
256.2
292.2
312.2
325.6
350.1
367.2
Domestic Borrowing
347.9
512.8
498.4
468.4
542.8
625.3
706.2
i) Bank Borrowing
249.6
150.7
171.9
195.2
217.1
250.1
282.5
ii) Non-Bank Borrowing
98.3
361.9
326.6
273.1
325.7
375.2
423.7
Privatization
42.9
19.4
19.4
19.4
17.6
17.6
17.6
The consolidated budgetary scenario for the 10th Plan is given at Annex I.
Monetary Policy and Financial Sector Development
Economic policies aim at increasing the welfare of the general public and monetary
policy supports this broad objective by focusing its efforts to promote price stability. Embedded
in this objective is the belief that persistent inflation would compromise the long term economic
prospects of the country. The objective of monetary policy is to achieve and maintain monetary
stability in line with the targets of inflation and economic growth set annually by the government.
The monetary and credit policies have to be coordinated with other macroeconomic policies in
order to facilitate capacity expansion of real sectors and ensure soundness of financial sector
reflected by increased savings and credit flows being major propellants for real economic activity.
Historical Scenario
The role and effectiveness of monetary policy appeared more visible in the 2000s when
financial sector reforms started bearing fruit in terms of more market-based functioning of the
money and foreign exchange markets. Entering the 21st century, the easy monetary policy stance
in the face of low inflation, low growth and low twin deficits, along with structural measures to
open up the economy and alleviating some first round constraints, triggered the economy on a
long term growth trajectory of above 7 percent.
Monetary policy stance was, however, altered as inflationary pressures started to build up
in 2005. At the end of the fiscal year (FY 2005), the economy, which had been showing sustained
steady growth since FY01, registered a historically high level of growth (9.0 percent). However,
average inflation rose sharply (9.3 percent) and the external current account balance turned into
deficit (1.4 percent of GDP). Coinciding with these developments, the fiscal module started to
show signs of stress as the stock of external debt and liabilities, which had been declining since
FY00 after the Paris Club rescheduling, began increasing. These indicators largely captured the
high and growing aggregate demand in the economy on account of sustained increase in peoples’
income. The monetary policy was tightened during 2005 in view of rising inflation, and negative
26
external account and fiscal balance. Main focus of the monetary policy turned to ensure price
stability without disturbing growth momentum.
MTDF (2005-10) aimed at pursuing a market oriented and balanced monetary policy by
developing financial markets. Availability of sufficient credit to boost the economy and
suppressing of inflationary tendencies were its other main objectives.
Being a custodian of the country’s monetary policy, the State Bank of Pakistan (SBP) has
strived hard in achieving MTDF’s goal of ensuring price stability through an effective
management of inflationary trends. As stated earlier, SBP adopted an increasingly tight monetary
stance from 2005 onwards. This policy, together with the rationalization of fiscal subsidies and
expenditure controls, supported by easing international commodity prices, contributed towards
lowering aggregate demand pressures, improving twin-deficits, containing government borrowing
from the central bank, building foreign exchange reserves and bringing down inflation
significantly during second half of FY09. The improving macroeconomic fundamentals and
inflation outlook led SBP to ease the monetary policy cutting policy rate by 250 basis points (bps)
in three successive rounds during 2009. In addition to the rise in the policy rate, the central bank
focused on the short‐end of the yield curve, draining excess liquidity from the inter‐bank money
market and pushing up short‐tenor rates, as well as making requisite changes in CRR (Cash
Reserve Ratio) and SLR (Statutory Liquidity Requirement) as and when needed.
Apart from taking policy measures to address emerging challenges, SBP also introduced
structural changes in the process of monetary policy formulation and its implementation. During
the last couple of years, SBP has focused on institutionalizing the process of policy formulation,
stepping towards a more market-based credit allocation mechanism, developing its analytical and
operational capacity, improving its capabilities to assess future developments to act proactively,
and improving upon the communication of the policy stance to the general public.
Tenth Five Year Plan (2010-15)
During the next Five Year Plan, the monetary policy will be synchronized with other
macroeconomic policies to promote sustainable economic growth through ensuring price and
financial stability. A combination of economic and institutional arrangements will be made to
keep inflation under control. Efforts will be made to ensure that the future financial sector growth
should be based on increased private sector involvement, including banking, equities and
especially private debt markets. This would allow resources to be channeled to the private sector,
both for investment and consumption, which are the key drivers of growth in the economy.
Banking sector growth will require more competition and innovation and diversification of credit
away from the manufacturing sector to the presently under-served productive sub sectors. It is
expected that SBP and Securities and Exchange Commission of Pakistan (SECP) in their capacity
as leading regulators of the financial sector shall strive to play a facilitating role in enhancing its
growth.
The objectives and strategy of monetary policy and financial sector development during
the 10th Plan period are as follows:
Objectives


To curb inflationary expectations and ensure price stability
To keep money supply commensurate with requirements of the economy,
particularly the needs of a sustainable economic growth
27





Ensuring less reliance on government borrowing from SBP for budgetary
purposes, in order to improve the effectiveness of monetary policy
To improve the efficiency and strength of the financial sector and to strive for
maximum financial inclusion
To help in establishing a transparent and market-based credit allocation
system
To curb speculation and rent seeking in financial sector
To improve SBP’s institutional capacity in guarding vital financial interests of
the country
Strategies













Constant vigil of the economy for timely intervention through policy rate and
other regulatory adjustments to ensure price and financial stability
Interaction among key stakeholders to ensure an effective combination of
country’s fiscal and monetary policies with emphasis on operating an
independent, effective and proactive monetary policy
Adoption of both the policy and legislative measures to restrain
government borrowings from the SBP
Empowerment of the financial regulators, i.e., SBP and SECP for
developing the financial sector on the lines of best international practices
Strengthening competition and efficiency of financial sector through product
innovations and entry of new banks
Promotion of a banking system which meets all needs of the public for financial
services besides stimulating economic growth and contributing to financial
stability
Bringing improvement in banks’ corporate governance on the lines of best
international practices
Proper supervision and regulation of conglomeration of banks in order to
preserve the integrity of the banking system
Develop capacity of the banking system for an efficient, transparent and optimal
credit allocation system
Ensure financial inclusion by expanding the banking networks as well as through
cooperatives and non-bank MFIs to provide financial services for SMEs, micro
enterprises and rural areas thus tapping small savings and enhancing access to
credit in under-served areas and businesses, alike
Promotion of Islamic Banking especially in small towns and rural areas in order
to provide formal financial services to the population which has excluded itself
for faith reasons
Proper risk management in the operation of credit policy to safeguard against
insolvency and speculative activities
Facilitating market-based operations of financial markets, together with proactive
supervision to maintain financial sector stability
Projections of Monetary Sector during the Tenth Plan
Projections of monetary sector for the 10th five year plan period, summarized in Table
below are based on following key considerations: (a) broad money (M2) growth will remain
broadly in line with projected real GDP growth and inflation targets in the plan; (b) ratio of NFA
28
to M2 (stock) will improve gradually, (c) credit to private sector will grow at a faster pace than
both M2 and Nominal GDP; and (d) money multiplier will improve gradually, implying banks
deposits will grow at a faster pace than currency in circulation.
Table-4: Projected Monetary Expansion during the Tenth Plan Period
(Flows in Rs. Billion)
Stocks at
End June
2009-10
2010-11
Projections
2011-12
2012-13
ACGR*
2013-14
2014-15
(%)
2009
I. Government sector
517.3
267.6
272.5
215.0
230.0
255.0
300.0
9.2
Budgetary support
1681.0
154.8
242.5
185.0
205.0
235.0
285.0
10.2
17.1
112.9
30.0
30.0
25.0
20.0
15.0
14.0
Others
II. Non-Governmental Sector
3190.0
359.1
480.0
525.0
588.3
660.0
754.9
13.1
Private sector
2906.9
240.0
440.0
495.0
563.3
640.0
739.9
13.9
III. Other Items (Net)
(604.4)
(99.9)
(125.0)
(240.0)
(368.5)
19.3
IV. Net Domestic Assets (I+II+III)
4619.9
526.9
627.5
624.8
668.3
675.0
686.5
10.4
517.3
164.4
100.0
175.0
250.0
370.0
525.0
25.3
5137.2
691.3
727.5
799.8
918.3
1045.0
1211.5
12.6
13.5
12.5
12.2
12.5
12.6
13.0
V. Net Foreign Assets
Monetary Expansion (IV+V)
(115.2)
(150.0)
Memo items
M2 growth (%)
*ACGR- Annual Compound Growth Rate
9.6
Rural Credit
Based on a rather naive assumption, an agricultural economy is quite often treated synonymous
with the notion of a rural economy whereas in reality non-agricultural occupations account for more than
the rural income generated by the agricultural sector. The ratio of non-farm income to farm income within
the rural economy increases over time. The degree of this increase reflects the transformation of a rural
economy from a traditionally dominated agricultural sector into a more vibrant economy.
A study on rural financial markets has shown that, on average, non-agricultural activities in
Pakistan accounted for 52 percent of the total rural income in the mid-1990s. This share is likely to rise a
decade later, as a result of increase in labor productivity and significant population growth causing upward
shifts in the demand for various products and services.
Development of agro-based industries can immensely help in accelerating the pace of
transformation in the rural economy. The lack of capital for requisite investment in rural economy,
particularly for agro-based industries has been a binding constraint. A number of studies provide sufficient
empirical evidence that it is the lack of access to financial resources rather than the rate of interest which
hampers economic development of rural areas.
Some priority areas for extension of rural credit are:

Establishment of agro-based industries to promote rural employment, reduce post-harvest
losses and create export surpluses

Programmes for more opportunities for employment and self employment of rural women

Efficiency based extension of rural credit to non-traditional crops to improve land
productivity, variety of agricultural production and income levels

Focus on the neglected rural sub-sectors namely livestock, marine fisheries, cottage
industries and traditional arts and crafts to tap potentials of the rural economy
29
Inflation
In Pakistan, the changes in prices are measured by three indices, namely: Consumer Price
Index (CPI), Wholesale Price Index (WPI) and Sensitive Price Indicator (SPI), which are
compiled with base of 2000-01.The CPI covers the retail prices of 374 items in 71 markets of 35
major cities and show roughly the cost of living in the urban areas. The WPI covers the wholesale
prices of 425 items prevailing in 18 cities. The SPI covers prices of 53 essential items which are
collected from 17 urban centers.
Pakistan has been experiencing a varying inflation rate in the past two decades. Annual
inflation rate (CPI) averaged at 9.7 percent in 1990s and 5.2 percent during 2001-05. During the
last four years (2006-2009), annual average rate of inflation has remained at 8.2 percent. Inflation
was expected to be on average around 11.6 percent during MTDF period (2005-10) against a
target of 7.4 percent. On the back of rising food prices, inflation surpassed annual targets. Despite
tight monetary policy for the past four years, inflation could not be contained. CPI rise to 20.8
percent in 2008-09 with food inflation at 23.7 percent and non-food at 18.4 percent.
Inflation has declined during July-March 2009-10 as compared to similar period of 200809. CPI inflation has registered an increase of 11.3 percent during July - March 2010 against an
increase of 23.0 percent over the same period last year, with food inflation at 11.7 percent against
27.8 percent and non-food inflation at 10.9 percent against 19.2 percent. The decline in inflation
is mainly due to declining international commodity prices, weak domestic demand and tight
monetary policy. Inflationary expectations for the future are high in view of the higher food and
electricity prices as well as increase in global commodity and crude oil prices.
Price stability would remain a top priority goal during the next Five Year Plan since it
helps in mitigating uncertainty in making long term economic decisions without undue fear of
erosion of the purchasing power of money. Efforts would be made to bring the inflation rate
down to 6.0 percent by the terminal year of the Plan from 12.0 percent in 2009-10. The price
stability will be achieved through:






Maintaining a high GDP growth and enhancing production of essential
food commodities to meet rising domestic demand
Regulating aggregate demand through a balanced mix of monetary and
fiscal policies
Improving the marketing and distribution system
Ensuring timely measures to offset any possible domestic supply deficits
with expeditious imports
Ensuring exchange rate stability
Coordinating economic and administrative policies to keep strict check on
black marketing, hoarding and cartelization
30
Annexure-I
Consolidated Budget Projections 2010-15
(At Current Prices)
(Rs. Billion)
201011
201112
Projections
201213
201314
201415
2162.0
2612.0
3091.0
3622.0
4233.0
4992.0
18.2
987.2
1520.0
1862.0
2233.0
2656.0
3159.0
3810.0
20.2
FBR Collection
931.2
1350.0
1699.0
2062.0
2473.0
2977.0
3595.0
21.6
Non Tax Revenue
444.0
642.0
750.0
858.0
966.0
1074.0
1182.0
13.0
1993.9
2950.0
3422.0
3891.0
4508.0
5226.0
6083.0
15.6
500.0
622.0
741.0
898.0
1076.0
1303.0
21.1
Revenues
Tax Revenue
Expenditures
2005-09
(Average
)
2009-10
(Estimate
)
1431.2
ACGR
%
Development Expenditure
-
Overall Balance
540.1
-788.0
-810.0
-800.0
-886.0
-993.0
-1091.0
6.7
Financing
540.1
788.0
810.0
800.0
886.0
993.0
1091.0
6.7
External
149.3
256.2
292.2
312.2
325.6
350.1
367.2
7.5
Domestic
347.9
512.4
498.4
468.4
542.8
625.3
706.2
6.6
i) Bank Borrowing
249.6
150.7
171.9
195.2
217.1
250.1
282.5
13.4
ii) Non-Bank Borrowing
98.3
361.9
326.6
273.1
325.7
375.2
423.7
3.2
Privatization
42.9
19.4
19.4
19.4
17.6
17.6
17.6
Revenues
14.5
14.2
15.1
15.8
16.2
16.7
17.3
Tax Revenue
10.1
10.0
10.8
11.4
11.9
12.4
13.2
9.5
8.9
9.8
10.5
11.1
11.7
12.4
20.1
19.4
19.8
19.8
20.2
20.6
21.0
3.3
3.6
3.8
4.0
4.2
4.5
-5.3
-5.2
-4.7
-4.1
-4.0
-3.9
-3.8
Financing
5.3
5.2
4.7
4.1
4.0
3.9
3.8
External
1.6
1.7
1.7
1.6
1.5
1.4
1.3
Domestic
3.2
3.4
2.9
2.4
2.4
2.5
2.4
i) Bank Borrowing
2.4
1.0
1.5
1.4
1.4
1.3
1.2
ii) Non-Bank Borrowing
0.9
2.4
1.4
1.0
1.0
1.2
1.2
Privatization
0.5
0.1
0.1
0.1
0.1
0.1
0.1
15,226
17,277
19,625
22,312
25,391
28,899
Memo Items (As % of GDP)
FBR Collection
Expenditures
Development Expenditure
Overall balance
Gross Domestic Product (Rs
Billion)
13.7
31
32
1.4
Public Sector Development Programme (PSDP)
The Public Sector Development Programme (PSDP) is the main instrument by which the
government can channelize funds for the socio-economic uplift of the country as well as to bring
about a shift in its overall development strategy and priorities. The PSDP encompasses
development expenditures of (i) the Federal Government via the Federal PSDP (ii) the Provincial
Governments through their respective Annual Development Programmes (ADPs), (iii) support to
the Public Sector Corporations (to fund or support their investments to varying degrees); (iv)
support to organizations of the federal, provincial and local governments such as x for
undertaking development projects/ programmes in various sectors of the economy; and (v)
undertakings carried out for special purposes like ERRA.
2.
Review of PSDP 2005-10
To achieve the objectives of the MTDF (2005-10) in bringing about a structural shift
towards a knowledge-driven economy, achieving the MDGs, and reducing poverty, an amount of
Rs. 2042 billion, (2004 constant prices), was envisaged as public investment through the PSDP. It
was projected that the PSDP expenditures would increase from 3.6 percent of GDP at the start of
the plan in 2005-06 to 4.1 percent in 2009-10. The actual allocation for development outlay stood
at Rs 2476.7 billion and the estimated expenditure during this period was Rs. 2231.5 billion (90
percent). The PSDP/GDP ratio (actual allocations) increased from 4.4 percent in 2005-06 to 5.5
percent in 2007-08. Subsequently, it declined to 3.1 percent in 2008-09 and rose to an estimated
4.4 percent in 2009-10 as financial constraints improved with regard to the Federal PSDP (see
graphs below).
The higher allocation and utilization of development funds were achieved partly due to
increased investment by the provinces through their respective ADPs and partly due to the
efficient monitoring and evaluation system introduced by the Planning Commission at the
beginning of the MTDF in 2004-05.
Under the Federal PSDP, Rs. 570.2 billion (48 percent) were spent on projects of the
Water, Power, Transport & Communications and Fuel sectors, followed by projects of Rs. 349.8
billion (30 percent) on the social sectors, Balanced Development (comprising of x), Rs. 222.4
billion (19 percent) and Rs. 44.1 billion (4 percent) on the production related sectors (i.e.
agriculture, industry).
During MTDF (2005-10), Federal allocations were Rs. 1,326 billion less than projected
(12 percent). The provinces however, allocated Rs. 1,151 billion against the projections of Rs.
549 billion. Thus, the reduction in Federal allocations was compensated by the higher expenditure
of the Provincial Governments.
33
PSDP/GDP Ratio : Actual Allocations 2005-10
PSDP/GDP Ratio: PSDP Projections 2005-10
Nat ional
Federal
Nat ional
Provincial
Federal
Provincial
6. 0
5. 0
5. 5
5. 1
4.1
3.7
3.6
3.7
3.6
3. 0
2.7
2.7
2.7
3.0
2.6
2. 0
1. 0
1.0
0.9
1.0
1.0
1.1
%age of GDP
%age of GDP
4. 0
5. 0
4. 4
4. 4
3. 7
4. 0
3. 3
3. 1
3. 0
2. 7
2. 1
2. 0
2. 2
2. 0
2. 3
2. 0
1. 7
1. 7
1. 0
0. 0
0. 0
2005-06
2005-06
2006-07
2007-08
2008-09
2009-10
2006-07
2007-08
2008-09
2009-10
F is c a l Y e a rs
F is c a l Y e a rs
The MTDF (2005-10) period witnessed promising growth in the initial three years.
However, the economic slow-down, caused by high oil and food prices in international markets,
and ensuing stabilization measures resulted in constrained fiscal space for the PSDP post-2007 as
the Government absorbed this increase by providing subsidies.
Owing to this persistent depressed fiscal situation, during 2008-09 the Federal PSDP was
rationalized from Rs. 371 billion to Rs. 219 billion as a part of the Government’s fiscal
consolidation strategy. While rationalizing the Federal PSDP 2008-09, the following criteria were
adopted:






Projects nearing completion were protecte
Slow moving projects were deferred
Bricks and Mortar projects were delayed unless critical
New projects not yet started were also deferred
Contractual obligations at international level were protected
Maximum possible protection was given to the social sectors
The Planning Commission also undertook an exercise during 2008-09 for reducing the
throw-forward liability of the Federal PSDP by 20 percent to qualify for the Poverty Reduction
34
Support Credit-I by the World Bank. It adopted the following criteria for prioritizing ongoing/approved projects:




Projects of high priority to be fully protected
Projects which could be delayed for 1-2 years deferred
Projects which could be dropped from the PSDP were done so
Projects which could be shifted on Public Private Partnership (PPP) mode were also
done so
As a result of this exercise, 140 out of a total of 1,865 projects were either deferred or
transferred on a PPP mode, which reduced the throw-forward by Rs. 380 billion (20 percent)
The Federal PSDP 2009-10 was also rationalized during the course of the year due to
financial constraints. Expenditures were slashed from Rs. 421 billion to Rs 300 billion due to less
than expected revenue and promised foreign assistance failing to materialize. See Table 1 for
broad sectoral allocations and utilization of the Federal PSDP during 2005-10 (See Annexure –I
for a detailed review).
Table- I: PSDP 2005-10 Review
Sector
MTDF Targets
(constant 2004-05
prices)
Actual Allocations
(current prices)
(Rs. Billion)
Utilization
Physical Infrastructure
834.0
624.8
570.2
Social Sectors
435.6
400.7
349.8
Balanced Development
174.5
253.9
222.4
48.9
46.6
44.1
1493.0
1326.0
1186.5
549.0
1150.7
1045.0
Production Related
Total (Federal)
Total (Provincial)
Total (National)
2042.0
2476.7
Source: Planning Commission & Provincial Planning & Development Departments.
* Likely expenditure by June 2010.
3.
2231.5*
10th Plan (2010-15) – Strategy & Objectives:
Keeping in view the lessons learned during the implementation of MTDF-2005-10, and
the current constrained fiscal space, a more realistic approach has been adopted in designing the
PSDP for the Tenth Plan (2010-15) and improved provision of public services.
The strategic thrust of the 10th Plan (2010-15) is to facilitate the development and
productive utilization of human capital and provide support to the private sector as the engine of
economic growth. The PSDP would provide support in realizing the objectives of the Tenth Plan
through the provision of appropriate social and physical infrastructure and other related
expenditures. These efforts would help achieve an annual average growth of 5.5 percent of GDP
as envisaged under the10th Plan (2010-15).
35
The public sector organizations like WAPDA, NHA and Railways would be encouraged
to improve efficiency and profitability and to arrange funds through various modalities, including
bank loans under Government’s guarantees for financing mega projects. Further as per policy,
opportunities would be created for the private sector to finance Mega Infrastructure projects on a
PPP and Built-Operate-Transfer (BOT) basis. To facilitate investment by the private sector, the
Infrastructure Development Project Fund Facility (IDPF) under the Ministry of Finance has been
created. Also, the IDPF has been made a permanent member of the Central Development
Working Party (CDWP) to give its inputs at the project approval stage to help indentify projects
which could attract private investment and PPP.
4. PSDP Federal and Provincial: 10th Plan (2010-15)
A total amount of Rs. 4,640 billion has been allocated towards the PSDP in the 10th Five
Year Plan (constant prices) against Rs. 2,231.5 billion spent during 2005-10 (in current prices).
The PSDP to GDP ratio is projected to increase from 3.7 percent (2010-11) to 4.7 percent by the
terminal year 2014-15 (see graph below). The annual phasing of PSDP 2010-15 is given as under:
Table 2: Annual Phasing of PSDP 2010-15 (constant 2009-10 prices)
(Rupees Billion)
Year
Allocation
%age of GDP
2010-11
621.6
3.6
2011-12
740.9
3.9
2012-13
898.2
4.2
2013-14
1076.3
4.4
2014-15
1303.0
4.7
Total
4640.0
Average 4.16
Source: Planning Commission, Islamabad.
PSDP/GDP Ratio: MTDF 2010-15
National
Federal
Provincial
5.0
4.2
%age of GDP
3.9
4.0
4.4
3.7
3.0
2.0
1.9
2.0
1.8
1.9
2.3
2.1
2.1
2.0
4.7
2.5
2.1
1.0
0.0
2010-11
2011-12
2012-13
2013-14
2014-15
Fiscal Years
36
Sufficient flexibility is being built into the 10th Plan to ensure that needed adjustments
could be made to the PSDP if additional resources become available, especially through donor
support. The Federal and Provincial PSDP allocations for 2010-15 are given in Table-3 and
sectoral projections are outlined in Annex-II.
Table 3: PSDP (2010-15): Federal and Provinces
(Rupees Billion)
Agency
Allocation
% age
Federal:
2400.0
52.0
2183.0
90.0
243.0
10.0
Provinces:
2240.0
48.0
Total
4640.0
100.0
Federal Ministries/Divisions
Special Areas*
* Where are investments by PSO’s and other organizations finance by PSDP.
Source: Planning Commission & Provincial, Planning & Development Departments
Rs. 2,400 billion has been allocated towards the Federal PSDP against the Rs. 1,186.5
billion spent during the MTDF (2005-10). Due to the historic consensus reached on the 7th NFC
Award, additional funds would be transferred to the Provinces to finance their development
programmes. The decreased level of Federal share in the overall PSDP is expected to constrain
the Federal Government when allocating funds to national projects, which have been approved by
various Federal forums. Hence, the priority of the Federal Government would be to allocate
maximum funds to on-going mega infrastructure projects nearing completion in the next 2 to 3
years. In view of the NFC Award and the 18th Constitutional Amendment, it is expected that the
Provinces will spend additional funds mainly on the social sector projects under their respective
provincial ADPs (see Box-I).
37
Box-1
Analysis of the PSDP under Post NFC Scenario
Under the historic consensus reached on the 7th National Finance Commission Award among the federating
units on the distribution of resources formula between the Provinces and the Center, the former are expected
to get more resources from the fiscal year 2010-11. Accordingly, the share of Federal resources would
decline.
One can gauge the pressure on the Federal PSDP by the fact that the annual average allocation over 2010-15
of Rs. 480 billion would not even meet the annual requirement of Rs. 560 billion for just completing the
current throw-forward liability of Rs 2.8 trillion over the Tenth Plan (2010-15). Given this situation, the
federal government will face daunting challenges to meet the financial needs of on-going mega projects in
energy, railways, water storage dams, and motorways, which are primarily a federal responsibility.
For the development of the social sector, the federal government will provide broad policy guidelines to the
provincial governments but the latter will have the main responsibility to finance core social sector projects
i.e population, basic health facilities, basic education, technical and vocational trainings, and projects of
basic rural and urban development through their respective ADPs. Only by doing so the existing huge
throw-forward liability in the federal PSDP could be sequenced out in a manageable form and fiscal space
created to substantially finance the on-going mega projects. To achieve this, policy guidelines will be
formulated in consultation with the provinces and a consensus reached.
The “Transition Commission” being established will help to assure a smooth and harmonious transition to
the new roles of the Federal and Provincial governments in meeting the 10 th Plan (2010-15) objectives.
Federal PSDP Implementation Strategy (2010-15)
Physical Infrastructure
To ensure orderly sequencing of projects, the Federal PSDP would be executed as
follows: the Federal Government will ensure sufficient allocation to fast track on-going Mega
Physical Infrastructure projects with priority given to the completion of energy related projects
(Nuclear, Hydel and Thermal Power) in order to over come the energy shortage in the country.
These will include: Chashma Nuclear Power Plants (C-2, C-3 & C-4), Diamer-Basha Dam, and
raising of the Mangla Dam. At the same time, given limited resources, major efforts would be
needed to explore innovative financing for Diamer-Basha Dam on a Public-Private Partnership
basis as well as through the DFIs.
Under the Federal PSDP, an overall allocation of Rs. 331 Billion has been earmarked for
the power sector during the Tenth Plan (2010-15). For water sector related projects, an allocation
of Rs. 353 billion has been envisaged to be utilized, mainly for the completion of large storage
dams like Mirani, Hingol, Gomal Zam, Akhori, Munda, Kurram Tangi and eight small and
medium dams in each province. The Federal Government would also focus on the completion and
improvement of strategic road and rail networks like M-4, M-9, other road projects located on the
national highway network, completion of the doubling of railway track on Lodharan - Khanewal
section, doubling of track Khanewal to Raiwind section, procurement / manufacture of 75 Nos.
New D.E. Locos Risalpur, and replacement of Old Signaling Gear from Khanewal - Shahdara
section. These investments are envisaged under the National Trade Corridor strategy (NTC) to
provide much needed logistic support to businesses in order to reduce their cost. The
modernization of the irrigation system by completing the on-going canal projects like Kachi,
Greater Thal, Rainee, and Chasma Right Bank Canal and the strengthening and rehabilitation of
38
centuries old barrages located all over the country will also be undertaken. Along with enhanced
water storage, equal importance will be given to its conservation. The national programme of
water-courses would be completed and a drip irrigation system will be introduced. The Federal
Government would also provide budgetary support for the development of special areas as an
approach to removing regional disparities and bringing these areas at par with the other developed
areas of the country.
Social Sectors
The Federal Government would work closely with the Provincial Governments in social
policy formulation. The Provinces need to undertake mega social sector umbrella projects in the
sectors of population, basic education, health, vocational and technical education, water supply
and sanitation, farm to market roads, and area development through their respective ADPs. The
Federal Government would extend its assistance where necessary through national programmes
like Primary Health Care, human research & development, treatment and control of catastrophic
and non-communicable diseases, social health insurance, health system and medical care, trauma
and accident, mental health and drugs abuse prevention. For these programmes, Rs 113.5 billion
have been estimated to be spent over the Tenth Plan Federal component.
Special Areas
The special areas comprise of Azad Kashmir, FATA and Gigit-Baltistan. Projects
/programmes in the social as well as in the infrastructure sectors will be undertaken in these areas
in line with their local needs and priorities for which the Federal Government will continue to
provide funds through the PSDP. For this purpose, Rs. 243 billion have been allocated. In
addition, substantial allocations would also be made to their individual projects as well as their
share under the nation-wide programmes of the Federal Ministries/Divisions undertaken through
the Federal PSDP.
Sectoral Priorities
For establishing national sectoral priorities, the Provinces were taken on board who
shared their sectoral projections. The sectoral programme at the national level indicates that the
Social Sector will receive 48.5 percent of the total outlay followed by the Infrastructure Sector
(39.5 percent), production related sector (5.6 percent), science and IT (1.9 percent) and
Environment (1.4 percent). The Social Sector will therefore receive a total allocation of Rs.
2,294.1 billion due to the increased resource availability of the Provinces under the new NFC
Award.
Within the Social Sector, Education including Higher Education, would get the highest
priority of the Government, with an overall allocation of Rs. 521.4 billion (11.3 percent). This
would be followed by Physical Planning and Housing at Rs 390.6 billion (8.4 percent), Special
Programmes at Rs. 366.2 billion (8 percent), Health and Nutrition at Rs. 326 billion (7 percent),
Population Rs. 39.2 billion, Governance Rs. 100 billion (2.2 percent). Other sectors including
Mass Media, Labour and Manpower, Rural Development, Women Development, Social Welfare
and Culture, Sports and Youth Affairs would also get an allocation of around Rs. 205 billion
under the Tenth Plan (2010-15).
Within the Infrastructure Sector, the highest share of Rs. 849 billion (18.3 percent) has
been allocated for Transport and Communications sector for the completion of on-going
motorway and national highway projects. This is followed by Water at Rs. 559.3 billion (12.1
39
percent) and Power Rs. 401.6 billion (8.7 percent) due to the highest priority set by the present
Government to over come acute shortage of power and water in the country. The Fuel sector
would be allocated Rs. 23.8 billion out of the Federal component.
To achieve food security by boosting the agriculture sector and establishing an efficient
industrial base in the country, the Production Related Sector would be allocated Rs. 261 billion
(5.6 percent). Out of this amount, Rs. 181 billion (4 percent) would be spent in the agriculture
sector followed by the Textile and Industry sector with Rs 65.6 billion (1.4 percent) and Minerals
at Rs. 14.5 billion.
To equip the nation with the latest technology and spark innovation in ways of
production, an amount of Rs. 89.8 billion (2 percent) has been projected in the field of Science
and Technology and I.T sector. To ensure sustainable development and prepare for climate
change an allocation of Rs. 64.2 billion (1.4 percent) has been envisaged for the environment
sector over the Tenth Plan (2010-15). The overall sectoral (national) programme is given in Table
4 and Figure-I and its details in Annexure-II.
Table 4: PSDP (Federal/Provincial) Programme by Sectors
(Rs Billion)
Sector
Total
% age share
Infrastructure Sectors
1930.3
41.6
Social Sectors
2294.1
49.4
Production related Sectors
261.6
5.6
Science & Technology &IT
89.8
1.9
Environment
64.2
1.5
Total:
4640.0
100.0
Source: Planning Commission & Provincial, Planning & Development Departments
Diagram-I: Sectoral Distribution of National Development Outlay
1.9% 1.4%
National
Infrastructure Sectors
5.6%
Social Sectors
41.6%
49.4%
Production related
Sectors
Science & Technology
&IT
Environment
40
5.
Federal PSDP: Challenges and Constraints
After the 7th NFC Award, the Federal Government has projected a development outlay of
Rs. 2,400 billion for the Tenth Plan (2010-15). With reduced resources, the Federal Government
would hardly meet the critical financial needs of main infrastructure related on-going projects of
energy, water and transport sectors. In this regard, Federal programme will face a number of
challenges in view of increased throw-forward liability. (See Box-2).
Box-2
Federal PSDP Throw-forward Liability
Projects contributing to the large throw-forward are Diamer-Basha Dam (Rs 894 billion),
Chashma Nuclear Power Projects i.e C-2, C-3 (Rs 185 billion), Highways & Motorways (Rs
336 billion), and water reservoirs and canals (Rs 440 billion). If resources are managed outside
the PSDP for the construction of Diamer Basha Dam which the government will need to
seriously pursue, the throw-forward liability would be some what reduced for the Federal
Government.
For up-gradation of physical infrastructure, especially in the sectors of Energy, Water
Highways and Motorways being the primary responsibility of the Federal Government, an
amount of Rs. 1236.7 billion (51.6 percent) would be spent, followed by the Social Sector at Rs.
963.0 billion (40.1 percent), Production-related sector, Rs. 98 billion (4 percent), Science and
Technology and IT Rs. 68 billion (2.4 percent) and Environment Rs. 34.3 billion (1.4 percent).
For the Production Related Sector, out of the total Rs. 98 billion allocated, the agriculture sector
will receive Rs. 58.6 billion so that agriculture can play a leading role in economic development,
ensuring food security and galvanizing the growth of agri-businesses. Emphasis has also been
laid on productivity enhancement and diversification of the rural economy through strengthening
agriculture growth. This will help alleviate rural poverty through generation of self- employment
opportunities in the agro-based industry and to provide raw materials for the manufacturing
sector.
To achieve the envisaged GDP growth of 5.5 percent, the Tenth Plan (2010-15)
articulates that knowledge and technology are the leading factors to be employed in the
development process to ensure total factor productivity growth in the economy. The Federal
Government will promote Higher Education, Science and Technology and Information
Technology in the country. For promotion of Higher Education through establishment of world
class institutes, the Federal Government has estimated an investment of Rs 140.5 billion (6
percent) spread over the 10th Plan (2010-15). The details of Federal programme are given in
Annex-II. The summarized position (sectoral) is given as under:
Table 5: Federal Programme (Sectoral)
Sector
Total
Infrastructure
1236.7
Social
963.0
Production related
98.0
S&T &IT
68.0
Environment & Climate Change
34.3
Total:
2400.0
Source: Planning Commission, Islamabad.
(Rs Billion)
% age
51.6
40.1
4.1
2.8
1.4
100.0
41
Diagram-II Sectoral Distribution of Federal Development Outlay
2.8%
4.1%
Federal
1.4%
Infrastructure
Social
51.5%
40.1%
Production related
S&T &IT
Environment
6.
Provincial Programme (ADPs)
The Provinces fund provincial programmes/projects on a self-financing basis through
their respective Provincial ADPs according to their sectoral priorities for development. In line
with the Tenth Plan (2010-15) overall objective of people centric-growth, special emphasis has
been laid on the social sector for the achievement of the MDG targets by 2015. An allocation of
Rs. 2,240 billion (48 percent of overall programme) has been envisaged by the provinces against
Rs. 549 billion allocated under the MTDF 2005-10 (though the provinces spent much more than
this allocated amount). The major chunk of the provincial development outlay would go to the
social sectors at Rs. 1,331 billion (59 percent).
All provinces have attached equal importance to Basic Education and Health Sectors with
an estimated allocation of Rs. 292 billion and Rs. 213 billion, respectively. However, firm
projections have not yet been provided by the provinces for Population programmes, which are
being devolved to the provinces for implementation in the Tenth Plan (2010-15) along with other
social sector programmes in view of the increased resources available to the Provinces under the
7th NFC Award. The infrastructure sector will be allocated Rs. 693.8 billion (31 percent),
Production Related Sectors Rs. 163 billion (7 percent), S&T & IT Rs. 22 billion (1 percent) and
the Environment sector Rs. 30 billion (1 percent). Provincial programme (sectoral) allocation is
summarized in Table-6, diagram-III below and its details are outlined in Annexure-IV.
Table 6: Provincial Programme (Sectoral)
(Rs Billion)
Sector
Total
% age share
Social
693.8
31.0
Infrastructure
1330.9
59.4
Production related
163.6
7.3
S&T &IT
21.8
1.0
Environment & Climate Change
29.9
1.3
Total:
2240.0
100.0
Source: Provincial Planning & Development Departments
42
Diagram-III Sectoral Distribution of Provincial Development Outlay
Provincial
1.0% 1.3%
7.3%
31.0%
Infrastructure
Social
Production related
S&T &IT
59.4%
7
Environment
Special Areas
A total of Rs. 243 billion has been earmarked for special areas. For FATA Rs. 96 billion,
for Gilgit-Baltistan Rs 72.5 billion and for AJ&K Rs 74.5 billion have been allocated. Special
emphasis has been given to these specified areas for the development of key sectors. In addition
to these allocations, substantial amount is being incurred on development activities by the
Governments through donor assistance for removing disparities and to mitigate the threats of
security being posed from these areas. These Areas, however, set their priorities for development
works as per needs of their people, education, health, and SMEs will be prominent. The Federal
Government has also launched new initiatives for developing the Industrial Estates including
Reconstruction Opportunity Zones (ROZs) in the less developed areas for exporting products
local to these regions. The area-wise allocations are given in Table- 7 below.
Table 7: Special Areas Programme: Tenth Plan (2010-15)
(Rs Billion)
Area
Allocation
% age
Azad Kashmir
96.0
39.0
Gilgit-Baltistan
72.5
30.0
FATA
74.5
31.0
243.0
100.0
Total:
Source: Planning Commission
43
ANNEXURE-I
REVIEW OF MEDIUM TERM DEVELOPMENT FRAMEWORK (2005-10)
(SECTORAL PSDP FINANCIAL OUTLAY & UTILIZATION)
S.
No.
Sector
1
2
A.
3
4
(Rupees Billion)
%age
Share
Utilization
5
6
834.0
624.8
570.2
48.1
1 Water Resources
218.0
242.2
204.9
18.2
2 Power
400.0
150.3
119.5
9.4
3 Transport & Communication
204.0
221.7
237.4
19.0
4 Fuel
4.0
8.7
7.0
0.7
5 Infrastructure Support / Development Fund
8.0
1.9
1.5
0.2
435.6
400.7
349.8
29.5
6 Physical Planning & Housing
44.1
59.4
59.5
5.4
7 Education & Training
26.7
29.3
23.8
2.0
8 Higher Education
95.0
75.3
70.9
5.7
9 Health & Nurtrition
56.0
75.2
69.3
5.7
10 Population Welfare
24.7
19.7
16.5
1.4
11 Women Development
3.5
1.2
0.7
0.1
12 Social Welfare
5.5
2.2
1.4
0.1
B.
Physical Infrastructure Sectors
MTDF
Allocation
2005-10
Actual
Allocation
Social Sectors
44
13 Manpower & Employment
5.0
4.6
1.5
0.2
14 Information Technology
23.0
19.6
15.8
1.4
15 Science & Technology
52.2
18.4
13.0
1.2
6.5
4.2
3.5
0.3
19.0
22.5
14.5
1.3
18 Rural Development
7.2
5.8
4.9
0.4
19 Media Development
5.0
3.7
3.1
0.3
62.2
59.6
51.4
4.3
174.5
253.9
222.4
18.7
21 Special Programmes
86.4
158.5
145.1
11.9
22 Special areas (AJK, GB & FATA)
88.1
95.4
77.3
6.7
48.9
46.6
44.1
3.7
39.4
27.2
25.4
2.3
24 Industry
8.0
17.7
17.3
1.7
25 Mineral
1.5
1.7
1.4
0.1
Budgetary PSDP- Federal:
1493.0
1326.0
1186.5
100.0
Provincial ADPs:
549.0
1150.7
1045.0
Total (National):
2042.0
2476.7
2231.5 *
16 Culture Sports Tourism & Youth Affairs
17 Environment
20 Governance, Research, Statistics & Planning
C.
D.
Balanced Development Sectors
Production Sectors
23 Agriculture
* Estimated Expenditure by June, 2010
45
ANNEXURE-II
10TH FIVE YEAR PEOPLES PLAN 2010-15
ANNUAL SECTORAL PHASING OF NATIONAL DEVELOPMENT OUTLAY
S.
No.
Sector
1
A
B
2
Infrastructure Sectors
1 Water
2
Power
3
Transport & Communications
4
Fuel
Social Sectors
5 Education & Training
2010-11
2011-12
2012-13
2013-14
2014-15
3
4
5
6
7
(Rupees Billion)
Total Five
%age
Years
Share
8
9
234.5
69.1
293.3
90.1
361.6
111.9
432.6
133.4
511.7
154.9
1833.7
559.3
39.5
12.1
45.3
56.9
76.4
98.9
124.2
401.7
8.7
117.6
142.9
168.9
194.7
224.9
848.9
18.3
2.6
3.5
4.5
5.6
7.6
23.8
0.5
331.9
46.0
373.8
54.3
441.4
64.0
511.6
75.2
593.8
88.5
2252.4
327.9
48.5
7.1
6
Higher Education
26.0
31.0
37.5
45.0
54.0
193.5
4.2
7
Health & Nutrition
50.9
56.3
62.5
72.0
84.3
326.0
7.0
8
Physical Planning & Housing
57.7
65.7
76.0
88.9
102.3
390.6
8.4
9
Population Welfare
5.7
6.6
8.1
8.9
9.9
39.2
0.8
10
Rural Development
15.6
18.6
22.0
25.8
30.5
112.4
2.4
11
Women Development
0.8
1.0
1.3
1.5
1.8
6.4
0.1
12
Manpower & Employment
0.9
1.1
1.4
1.6
2.0
7.0
0.2
46
C.
D.
13
Mass Media
0.8
1.1
1.4
1.8
2.3
7.3
0.2
14
Culture, Sports, Tourism & Youth
6.4
6.8
8.0
9.4
10.9
41.5
0.9
15
Social Welfare
12.2
14.6
17.7
21.2
25.4
91.1
2.0
16
Governance
15.3
16.8
19.2
22.3
26.8
100.4
2.2
17
Special Programmes
61.6
60.1
73.4
81.0
90.2
366.3
7.9
18
Special areas (AJK, GB & FATA)
32.0
40.0
49.0
57.0
65.0
243.0
5.2
36.3
25.3
42.7
29.6
50.3
34.8
59.6
41.4
72.7
50.3
261.6
181.5
5.6
3.9
Production Related Sectors
19 Agriculture
20
Industries
9.1
10.6
12.6
14.8
18.5
65.6
1.4
21
Minerals
1.9
2.5
2.9
3.4
3.9
14.5
0.3
11.5
5.5
14.3
6.8
17.8
8.7
21.3
10.9
24.9
13.3
89.8
45.2
1.9
1.0
6.0
7.6
9.1
10.4
11.6
44.6
1.0
7.4
10.0
12.5
15.5
18.8
64.2
1.4
0.0
6.7
14.7
35.8
81.1
138.3
3.0
621.6
740.9
898.2
1076.3
1303.0
4640.0
100.0
Science & IT Sectors
22 Science & Technology
23
Information Technology
E
Environment
F
Others
24
Block Allocation for emergent needs*
Total (National)
* 70% of this amount is earmarked for Infrastructure Sector and 30% for Social Sector
47
ANNEXURE-III
10TH FIVE YEAR PEOPLES' PLAN (2010 - 15)
ANNUAL SECTORAL PHASING OF FEDERAL PSDP
(Billion Rupees)
Sl.
No.
1
Sector
2
2010-11
2011-12
2012-13
2013-14
2014-15
Total five
years
%age
Share
3
4
5
6
7
8
9
A.
1
2
3
4
Infrastructure Sectors
Water
Power
Transport and Communications
Fuel
130.9
39.0
34.3
55.0
2.6
174.3
55.0
44.8
71.0
3.5
225.5
71.0
63.0
87.0
4.5
275.6
86.0
84.0
100.0
5.6
333.6
102.0
107.0
117.0
7.6
1139.9
353.0
333.1
430.0
23.8
47.5
14.7
13.9
17.9
1.0
B.
5
6
7
8
9
10
11
12
13
Social Sectors
Education & Training
Higher Education
Health and Nutrition
Physical Planning and Housing
Population Welfare
Rural Development
Women Development
Manpower and Employment
Mass Media
Culture, Sports, Tourism and
Youth
Social Welfare
Governance
Special Programmes
142.6
6.0
18.5
20.0
15.0
5.0
1.0
0.2
0.1
0.6
152.1
6.3
22.0
20.5
16.6
5.7
1.5
0.2
0.1
0.9
181.2
7.0
27.0
21.0
19.5
7.0
2.0
0.3
0.2
1.1
207.1
7.6
33.0
24.0
24.0
7.5
2.4
0.4
0.2
1.5
238.5
9.0
40.0
28.0
29.0
8.2
3.2
0.5
0.3
1.9
921.5
35.9
140.5
113.5
104.1
33.4
10.1
1.6
0.9
6.0
38.4
1.5
5.9
4.7
4.3
1.4
0.4
0.1
0.0
0.3
1.0
0.5
7.7
35.0
1.2
0.6
8.5
28.0
1.4
0.7
10.0
35.0
1.7
0.8
12.0
35.0
2.2
1.0
15.2
35.0
7.5
3.6
53.4
168.0
0.3
0.2
2.2
7.0
14
15
16
17
48
Special areas (AJK, GB &
18 FATA)
32.0
40.0
49.0
57.0
65.0
243.0
10.1
C.
19
20
21
14.5
8.8
5.5
0.2
16.1
9.8
6.0
0.3
18.4
11.0
7.0
0.4
21.7
13.0
8.2
0.5
27.3
16.0
10.7
0.6
98.0
58.6
37.4
2.0
4.1
2.4
1.6
0.1
D. Science and IT Sectors
22 Science and Technology
23 Information Technology
8.8
2.8
6.0
10.8
3.3
7.5
13.5
4.5
9.0
16.1
5.8
10.3
18.8
7.3
11.5
68.0
23.7
44.3
2.8
1.0
1.8
E.
Environment
3.2
5.0
6.7
8.7
10.7
34.3
1.4
F.
Others
0.0
6.7
14.7
35.8
81.1
138.3
5.8
Total (Federal):
300.0
365.0
460.0
565.0
* 70% of this amount is earmarked for Infrastructure Sector and 30% for Social Sector
710.0
2400.0
100.0
Production Related Sectors
Agriculture
Industry
Minerals
Block Allocation for emergent
24 needs *
49
ANNEXURE-IV
10TH FIVE YEAR PEOPLES' PLAN (2010 - 15)
ANNUAL SECTORAL PHASING OF PROVINCIAL PSDP
(Billion Rupees)
S.
No.
Sector
2010-11
2011-12
2012-13
2013-14
2014-15
1
2
3
4
5
6
7
A.
Infrastructure Sectors
Total five
Years
8
%age
Share
9
103.6
119.0
136.09
156.96
178.11
693.80
30.97
1 Water
30.1
35.1
40.9
47.4
52.9
206.3
9.2
2 Power
11.0
12.1
13.4
14.9
17.2
68.6
3.1
3 Transport and Communications
62.6
71.9
81.9
94.7
107.9
418.9
18.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
189.3
221.7
260.2
304.5
355.3
1330.9
59.42
40.0
48.0
57.0
67.6
79.5
292.0
13.0
7.5
9.0
10.5
12.0
14.0
53.0
2.4
7 Health and Nutrition
30.9
35.8
41.5
48.0
56.3
212.5
9.5
8 Physical Planning and Housing
42.7
49.1
56.5
64.9
73.3
286.5
12.8
9 Population welfare
0.7
0.9
1.1
1.4
1.7
5.8
0.3
10 Rural Development
14.6
17.1
20.0
23.4
27.3
102.3
4.6
11 Women Development
0.6
0.8
1.0
1.1
1.3
4.8
0.2
12 Manpower and Employment
0.8
1.0
1.2
1.4
1.7
6.1
0.3
13 Mass Media
Culture, Sports, Tourism and
14 Youth
0.2
0.2
0.3
0.3
0.4
1.3
0.1
5.4
5.6
6.6
7.7
8.7
34.0
1.5
11.7
14.0
17.0
20.4
24.4
87.5
3.9
4 Fuel
B.
Social Sectors
5 Education & Training
6 Higher Education
15 Social Welfare
50
16 Governance
7.6
8.3
9.2
10.3
11.6
47.0
2.1
17 Special Programmes
26.6
32.1
38.4
46.0
55.2
198.3
8.9
C.
21.8
26.6
31.9
37.9
45.4
163.6
7.30
16.5
19.8
23.8
28.4
34.3
122.9
5.5
21 Industry
3.6
4.6
5.6
6.6
7.8
28.2
1.3
22 Minerals
1.7
2.2
2.5
2.9
3.3
12.5
0.6
D.
Science and IT Sectors
2.7
3.5
4.3
5.2
6.1
21.8
0.97
23 Science and Technology
2.7
3.5
4.2
5.1
6.0
21.5
1.0
24 Information Technology
0.0
0.0
0.1
0.1
0.1
0.3
0.0
E.
4.2
5.0
5.8
6.8
8.1
29.9
1.33
321.6
375.9
438.2
511.3
593.0
2240.0
100.0
Production Related Sectors
20 Agriculture
Environment
Total (Provincial):
51
52
2.
Expand Agriculture Production and Galvanize Agro-Business
Potential
2.1. Agriculture (Crop Sector)
“Agriculture continues to be fundamental instrument for sustainable development and poverty
reduction in most agriculture based countries”
(Excerpts from World Development Report, World Bank, 2008)
A.
Introduction
The agriculture development strategy for the 10th Plan (2010-2015) aims at improving the
productivity, profitability, competitiveness, and environmental sustainability of agriculture. The
overall objective is to achieve an agriculture growth rate of 4 to 5 percent per annum during the
plan period in order to support the overall GDP growth trajectory of the Government, ensure food
security, and reduce rural poverty. The strategy is anchored on the 9-Point Agenda of the
Government for Economic and Social Stabilization which underpins the need to accelerate
agricultural development and galvanize agro-business potential. The strategy was developed
through a participatory process involving intensive consultations with stakeholders in the public
and private sector at the national and provincial levels.4It is organized under two Chapters
namely: (i) Agriculture and Food Security, and (ii) Livestock.
B.
Background
The agriculture sector continues to be a vital component sector of Pakistan’s economy
despite its declining share of GDP. In 2008-09, it contributed 22 percent to GDP, about 60
percent to exports and provided productive employment to 44 percent of the labor force. More
than two-thirds of the rural population still depends on agriculture for their livelihood.
Accelerated growth of agriculture is therefore a prerequisite for economic development in general
and rural development in particular. Over the past four decades (1960-2000), the agriculture
sector achieved an impressive growth rate of about 4 percent per annum -- well above the
population growth rate of 2.8 percent per annum during the same period. The momentum of
growth, however, could not be sustained beyond the year 2000 and growth rate fluctuated widely
during 2001 to 2009, ranging from -2.2 percent to 6.5 percent, and averaging about 3.2 percent
per annum. The decline in growth was particularly alarming in 2007-08 when it fell to 1.1 percent
amidst the global food crisis resulting in widespread food shortages, high prices of staple food,
and huge imports of wheat during 2007 to 2009 (4.4 million tons). If the declining trend in
agriculture growth is not reversed, it could jeopardize food security, increase malnutrition, cause
significant increase in rural unemployment and poverty leading to increase in rural urban
migration, and slow agro-based industrial growth.
4
In addition, the strategy also draws on recent reports on agriculture and rural sector prepared by ADB,
FAO, World Bank, and the Government of Pakistan , in particular the Poverty Reduction and Strategy
Paper-II (PRSP-II) and the Prime Minister’s Task Force on Food Security Report (2009).
53
A recent study5 of the World Bank has shown that GDP growth originating in agriculture
is at least twice as effective in reducing poverty as that originating in other sectors of the
economy. Moreover, it finds that agriculture continues to be a fundamental instrument for
sustainable development and poverty reduction in most agriculture-based countries. The
experience of rapid agricultural growth in Brazil, China, and Vietnam demonstrate its impact on
overall economic growth, poverty reduction and move towards industrialization. Yet, in Pakistan
there has been under-investment in the agriculture sector and neglect of agriculture infrastructure
and institutions over the past two decades as a result of decline in gross capital formation in the
sector and consequent slow down of overall agriculture growth.
C.
Review of Agriculture Sector During MTDF (2005-10)
Growth: The agriculture sector including Livestock was projected to grow at 5.2 percent
per annum and achieve food security and improved productivity during the Medium Term
Development Framework period (2005-2010). Although it achieved a satisfactory growth rate of
about 4.0 percent per annum, the rate of growth fluctuated widely in the crop sector (ranging from
-2.9 in 2005-06 to 6.6 in 2008-09) as against the target of 6.4 percent. The growth in livestock
and fisheries sector was however more stable averaging about 5.9 percent and 7.1 percent against
the target of 3.7 percent and 4.8 percent respectively (Table 1).
The below target growth rate are attributed to: underinvestment in agriculture particularly
in agricultural research and marketing infrastructure, inadequate implementation of envisaged
strategy in areas of improved seed, water management, timely announcement of government
support and intervention prices, and shortfall in credit disbursement targets.
Table 1: Agricultural Growth (Percent)
Year
Crops
Livestock
Fisheries
Agriculture
2004-05 (Benchmark)
13.3
2.3
0.6
6.5
2005-06
-2.9
15.8
20.8
6.3
2006-07
5.5
2.8
15.4
4.1
2007-08
-2.2
4.2
9.2
1.1
2008-09 (Provisional)
6.6
3.7
2.3
4.7
2009-10 (MINFA Targets)
3.6
4.0
2.4
3.8
Average (2006-10)
2.4
5.9
7.1
4.0
Source: Economic Survey of Pakistan 2008-09
Financial: Despite structural changes in the economy, the contribution of agricultural
sector to GDP remained around 22 percent. In absolute terms agricultural sector GDP, however,
showed an increase of about 17 percent between 2004-05 and 2008-09. Increase in GDP share for
crop and livestock sub-sectors was observed at 27.7 percent and 13.3 percent respectively. In
terms of public sector development programs, an allocation of Rs.50.5 billion was earmarked for
development projects of agriculture sector during 2005-10, which was subsequently increased to
Rs. 70.8 billion. However, only Rs. 53.5 billion were disbursed by 2009-10, resulting in
substantial delay in the implementation of these projects.
Physical: Production of major crops showed mixed trend during 2005-10. The MTDF
targets of wheat, sugarcane, rice and maize production were substantially achieved. However, the
2
World Development Report: Agriculture for Development; The World Bank, 2008
54
cotton target fell short by 23 percent due to pest attacks caused by the resurgence of cotton leaf
curl virus (CLCV), whitefly, and the emergence of mealy bug which could not be brought under
control. As a result the annual cotton production remained below the domestic demand
necessitating import of raw cotton in the order of 1.5 to 2.0 million bales per year to meet the
requirement of local textile industry. The production of minor crops fell short of MTDF targets by
20-30 percent, those of vegetable (with the exception of potato) by 20 percent and fruits by 10
percent. The under investment in agriculture (water, seed, technology) and deterioration of
agriculture terms of trade coupled with markets failures were the major reasons for less than
projected production. (Annex 1).
In the case of livestock (including poultry and fisheries), the production targets were
substantially achieved except for mutton, which declined by -4.0% and fisheries production
which fell behind the projected target by 11%.
Crop Sector
D.
Issue and Challenges
The major challenge in the agriculture sector planning is to create an enabling
environment to achieve an average growth rate of 4 to 5 percent per annum with a focus on small
and resource poor farmers. This would require a strategy which addresses the main causes of:(i)
stagnant productivity of major crops, (ii) declining investments in agriculture (both public and
private), (iii) increasing food insecurity and poverty; (iv) inefficient use of agricultural inputs
such as water, fertilizer and agro-chemicals, (v) slow development and dissemination of resource
e efficient and resource conservation , technologies, (vi) poor delivery of public services, (vii
market failures, (viii) weak institutions, (ix) inadequate agriculture credit, and (x) lack of
appropriate policies and incentives to make agriculture more productive and competitive. These
issues will be addressed by the agriculture development strategy outlined below for the 10th Plan
period.
E.
Strategy for Agriculture Development
a. Objectives
The main objectives of the strategy are to: (i) accelerate agriculture growth and reduce
rural poverty; (ii) achieve self reliance in essential food commodities; (iii) expand exports and
galvanize agro business potential; (iv) achieve an average growth rate of 4 to 5 percent per annum
to support overall growth strategy of the government; and (v) improve quality of growth by
adopting a strategy which is pro-poor, pro-small farmer and pro-environment.
b. Strategy
Achieving these objectives will require success in the following strategic areas based on
energy and water efficient high yielding production technologies and market oriented public
policy interventions:

ensuring food security and food safety for all (i.e. availability and access to quality
food at affordable prices) and setting up Institutional Framework within MINFA to
implement the strategy

Improving total factor productivity and competitiveness of agriculture production
systems through technology based interventions with emphasis on small and medium
size farmers (i.e. farm size of 10 ha or less) and landless tenants

Paradigm shift from resource-intensive to resource-conservation ( or Grow More
with Less ) technologies for more productive, competitive and sustainable farming
55
systems (particularly technologies involving more efficient use of water, fertilizer
and energy) such as laser land leveling, zero tillage, bed planting, pest and drought
resistant crop varieties, hybrid seed, band placement of phosphate fertilizers,
integrated nutrient management including green manuring, recycling of crop residues
and organic waste, integrated pest management etc.)

Managing natural resources in a sustainable manner by adopting good agricultural
production practices (e.g. Global GAP) with emphasis on sustainable use of land,
water and fisheries resources

strengthening of national agricultural research system and integration of agriculture
education, research and extension to synergize the financial and human resources and
enhance their effectiveness and relevance

market led approach to diversification of agriculture into high value crops, value
addition and supply chain infrastructure development;

improving post harvest management, marketing infrastructure and policies based on
public private partnership

improving sector governance, particularly the delivery and quality of agriculture
support services (research, extension, agriculture credit, marketing, inputs supply);

Ensuring fair price to producers and consumers by improving the procurement and
distribution system for essential food items through

Developing adaptation/mitigation strategies for climate change in different agro
climatic zones of the country
A balanced approach to agriculture development will be promoted for achieving
equitable productivity growth both at small and large farms. Pre-requisites to success will be
macroeconomic stability and sustained efforts to consolidate and deepen the agriculture policy
reforms to achieve improved productivity, food security, and better living conditions of the rural
people. The following paragraphs translate the aforementioned strategy into various plans and
programs for implementation during the Plan period.
F.
Plans and Programs
1. Improving Agriculture Productivity
Large gaps exist between current yields and what can be economically achieved with
better support services, especially in high-potential areas. This provides an opportunity to achieve
the growth targets envisaged in the 10th Plan. Improved productivity and competitiveness of crop
sector would require accelerated adoption of resource conservation technologies to grow more
with less, investments in agricultural research and extension systems, improved access to
agriculture credit, targeted subsidies to stimulate the use of new technologies, better mechanisms
for risk mitigation, and improved post-harvest management and marketing facilities.
Bridging the yield gap of smallholders in crops requires greater emphasis on enhancing
coverage of certified seed of improved varieties, efficient use of available water and fertilizer by
adopting resource conservation technologies (i.e. laser leveling, furrow irrigation, drill seeding,
band placement of fertilizer, minimum tillage, integrated pest management etc.), recycling rather
than burning of crop residues and increased use of organic matter.
The investments in agricultural research system will be enhanced to upgrade capacity for
development and /or adaptation of appropriate resource conservation technologies. Immediate
attention is needed for strengthening provincial agricultural research system through significant
56
increase in financial allocations for rehabilitation and up-gradation of research infrastructure
(including scientific equipment, laboratories and green houses); and improvement of service
structure of scientists in line with PARC and the Agriculture Universities. For high priority
research issues, the ongoing competitive grant system of PARC, HEC and PARB will be
strengthened. In addition, national and international cooperation in agricultural research will be
promoted.
Private sector-led inputs delivery and other agricultural services will be encouraged in
linking farmers with markets and processing industry to ensure fair returns to farmers by
enhancing their capacity to invest in modernization of agriculture production systems.
2. Diversification into High Value Agriculture
Given the diversity of the agriculture sector and export competitiveness in high value
crops, the strategy needs to balance food crops and higher-value horticultural crops. Growth must
come fundamentally from enhanced capacity of farmers to modernize their production systems
based on optimal utilization of land and water resources and commercial approach to agriculture
production and value chain. This would require economies of scale at the farm individual or
corporate/cooperative level, adoption of modern production and post harvest technologies, and
investment in supply chain infrastructure.
Accelerated growth in high value agriculture will be achieved on sustained basis, only if
the markets work better, ensure fair price to farmers, and mop up marketable surpluses for
processing and packaging into value added products for local and export markets. This would
require necessary market reforms and establishment of supply and cool chain infrastructure
through innovative public-private partnerships to realize full market potential. Experience of
other developing countries indicate that the given the large size and technical complexity, these
investment can best come through private sector led joint ventures with Government providing
the enabling environment in terms of incentive policies. In addition, better functioning of markets
requires addressing the public sector infrastructure deficit of farm to market roads to facilitate
market entry of small farmers in areas of good agricultural potential.
Treating production and marketing operations holistically, using the decision support
tools for precision agriculture, offer substantially higher financial and economic returns by
minimizing expenditures on capital inputs such as fertilizers, pesticides, energy and by reducing
risks of crop failure. The corporate and/or cooperative approach is best suited for diversification
into high value agriculture on commercial scale where production, processing and marketing
operations are integrated and managed as an agro-industry. The 10th Plan will encourage these
initiatives in private sector through appropriate public policy interventions and provision of
incentives.
3. Improving Sector Governance
The poor state of governance is common in the management of agriculture sector by the
public and private sector. It has adverse impact on agriculture productivity resulting from
litigations over land and water disputes, rent seeking by the revenue functionaries, tempering of
water course outlets (mogas) by the influential farmers upstream of distributaries, and market
failures, etc.
To improve governance in agriculture, it is imperative to re-visit the role of public
institutions and to change it from a control oriented and supply-driven system to one that is
decentralized and demand-driven. At the same time, appropriate regulatory mechanism must be
put in place to prevent exploitation of the small producers. The devolution at the local level is
important including improvement in their administrative capacity and accountability, and
57
strengthening of participatory process. An independent third party evaluation of the devolution
system implemented in 2002 versus the previous system would provide guidelines for needed
reforms. In addition, measures that improve governance and accountability such as stricter
enforcement of laws, legal reforms and wider dissemination of information on spending and
effectiveness of PSDP projects and programs can help spur both greater efficiency of
government, as well as growth and investment in rural areas.
Improving governance is also crucial for reduction of poverty through improved growth
in rural sector. Governance issues including litigation over land and water disputes and corrupt
practices in land transactions involving transfer, sale or purchase are a major bar to investments
and growth in agriculture as well as in efforts to reduce poverty. The government functionaries
with low level of accountability to stakeholders tend to breed inefficiency in the delivery of
agriculture support service services.
To address these issues, the strategy will emphasize: (i) improving financial management
and accountability at project and institutional levels; (ii) transparent and authentic land records,
water entitlements, (iii) increased transparency and information on government activities to
facilitate public oversight;(iv) capacity building of local government institutions; and (v)
safeguards against market failures.
4. Improving Water Use Efficiency
Inefficient use of water is one of the major issues confronting the agriculture sector. The
irrigated area in Pakistan has increased from 41.4 million acres (16.8 million ha) in 1990-91 to
48.4 million acres (19.4 million ha) in 2008-09 and is expected to expand further with the
opening up of new culturable lands to irrigation. Yet the water resources available for agriculture
continue to shrink due to increased demand from the urban and industrial sectors.
To overcome these problems, there is a need to follow the motto “More Crop per Drop”
by increasing crop productivity per unit of water through promotion of water saving technologies
such as, lining of watercourses, drip and sprinkler irrigation system, precision land leveling,
permanent raised-beds, and substitution of high delta water crops (e.g. sugarcane, rice) with low
delta crops (maize, oil seeds, pulses, etc). A multi prong strategy will be adopted for improved
water use efficiency to sustain food and water security in Pakistan. The main components of this
strategy will be:

Reducing water losses (both at system and farm level) and improving conservation of
available resource to enhance water productivity by early completion of on-going
National Watercourse Improvement Project and promotion of water saving technologies
referred to above

Minimizing system losses by improving operational management of canal system for wet,
average, and dry season scenarios and by monitoring of water discharges at moga levels

Increasing the water storage capacity through development of on-farm storage tanks,
small dams, check dams, and spate irrigation (rod kohi) in rain fed, sailaba and
mountainous areas

Strengthening on-farm water management research on crop water requirements, water
pricing, water losses/use efficiency, water productivity, cost recovery, and equity issues
under demand-driven vs. supply-driven irrigation management
58
5. Improving Land Resources
Pakistan is facing a serious issue of land degradation due to water logging, salinity,
nutrient mining and soil erosion. Inefficient irrigation and drainage systems, secondary
salinization, sea water intrusion, and lack of awareness are the major causes of land degradation.
About 3.2 million hectare of canal command area is severely affected by water logging (water
table less than 150cm) and salinity (MINFA, 2008). In spite of huge investment for reclaiming
land fertility, the menace of water logging and salinity still persists. In addition, soil fertility is
badly affected by water and wind erosion and inefficient application of fertilizers. For this
purpose, a strategy of mitigation and rehabilitation needs to be adopted in order to protect land
resources.
The strategy includes actions such as: establishment of groundwater regulation system to
monitor and regulate water and salt balance of aquifers; reduction in drainage surplus through
precision irrigation; strengthening and expansion of soil testing labs for issuance of soil health
cards to farmers for providing updated information on nutrients balance; improved watershed and
rangelands management; soil conservation program through technical, biological, chemical, and
social measures; promotion of Remote Sensing and Geographic Information System tools for
identification, assessment and monitoring of degraded lands; and improved coordination and
capacity building of relevant stakeholders.
6. Mitigating the Impact of Climate Change
Climate change is real and its manifestations are already evident by changes in rainfall
pattern, occurrence of droughts and floods, extreme temperature, etc. It is predicted to have
significant negative impacts on agriculture production systems in different parts of the country
particularly in the arid and semi-arid regions. Although the impact of climate change is not yet
fully understood and may not always be negative, there is a need to initiate research on adaptation
and mitigation strategies. The research agenda should focus on measures to minimize the impact
of climate change on crop production and water resources, including:(i) development of crop
varieties which are resistant to pests, diseases, and drought and also tolerant to extreme variations
in temperature;(ii) changes in cropping pattern and sowing dates based on more accurate weather
forecast for the cropping season; (iii) changes in planting methods and water management
practices for high delta crops such as rice, sugarcane and maize (e.g. from flat to bed planting and
from flood irrigation to furrow or drip/sprinkler irrigation, etc.), (iv) water resource conservation
and demand management through expansion of small scale water storage capacity and rain water
harvesting at farm level; (v) equitable water pricing based on delta of water for different crops;
(vi) development of water markets at farm level where the farmers could buy and sell water
through mutual agreements as is presently done in case of tubewell water; etc.
To address climate change issues in agriculture on a systematic and long-term basis, there
is a need to formulate a national policy for climate change impacts on agriculture. The Global
Change Impact Study Center (GCISC) is well placed to undertake this task in close collaboration
with key stakeholders under the overall guidance of Prime Minister’s Committee on Climate
Change – an apex body for policy guidance and oversight. (Report of the Task Force on Climate
Change)6. As per recommendation of the Task Force, the Ministry of Environment will take steps
on priority basis to formulate a National Climate Change Policy along with Plan of Action; and
the Global Change Impact Study Centre will take necessary initiatives for high quality research
and modeling studies on climate change.
6
Task Force on Climate Change, Final Report February 2010, Planning Commission
59
G.
Agricultural Inputs and Support Services
During the ongoing MTDF period (2005-10), the use of major inputs vis-à-vis specified
targets remained satisfactory in respect of water availability (97 percent), fertilizer off take (93
percent), and tractor availability (107 percent). However, improved seed distribution and credit
disbursement fell short of targets by 25 and 35 percent respectively. Some progress was made in
integrated pest management and in up-gradation of the national agricultural research system and
outreach; but a lot remains to be done.
Seed: Good quality seed is a prerequisite to realize the full benefit of modern crop
management practices. Any weakness in terms of genetic purity or physical health of seeds and
planting materials may undermine the other investments made during the course of crop life. The
seed sector is grossly under developed due to a delay in the enactment of requisite legislation
(Amended Seed Act and Plant Breeders Rights Bill). During this period, however, the number of
private seed companies has increased to around 700. Many of these exist only on paper with little
or no capacity for production and/or processing of certified seed. There is a need to strictly
enforce the rules and regulations for registration and monitoring of Seed Companies under the
Seed Act. Nonetheless, several initiatives such as the establishment of facilitation units and seed
testing labs were taken during the MTDF period, and specified seed distribution targets were
achieved up to 75 percent for major crops. The overall certified seed coverage still stands at about
18 percent. Recently, some progress has been made in commercial seed production in the private
sector by the local and multinational seed companies with a focus on hybrid and transgenic crop
varieties.
In addition to regulatory issues, wide spread sale of spurious seed by private companies is
a common problem. The lack of a system approach between breeder seed and certified seed for
most crops has been identified as a major constraint. Early enactment of Seed Act is a
fundamental step to resolve seed issues. High tech. seeds such as Hybrid and GM should be given
high priority and be developed indigenously (by technology acquisition or in partnership with
international seed companies) by the provincial seed corporations and private seed industry.
Certified nurseries of planting material in production areas with mother plant banks are needed to
meet the fruit orchard needs. A rigorous, yet convenient registration procedure, for new entrants
is also deemed necessary. Annual seed requirements for wheat, cotton, paddy and maize have
been worked out at 1087, 40, 40 and 30 thousand tons respectively (Table 2). About 50 percent of
improved seed for wheat is targeted by the end of plan period (2014-15).
Table 2: Seed Requirements and Targets of Improved Seed Distribution during 10th Plan
(2010-15)
(“000” Tonnes)
Crop
Total
Req.
Wheat
Cotton
Rice
Maize
Pulses
Oil seeds
Fodders
Vegetables
Potato
Sugarcane
1,087
40
40
30
54
13
40
5.5
366
5,701
2010-11
Target
%
208
19
19
46.5
24
60
18
60
2.7
5
2.0
15
9.2
23
3.0
55
11.6
3
114
2
2011-12
Target %
272
25
24
60
28
70
21
70
3.2
6
2.7
20
10.4
26
3.3
60
19.3
5
228
4
2012-13
Target %
380.5
35
28
70
32
80
24
80
3.7
7
4
30
11.6
29
3.6
65
31
8
342
6
2013-14
Target %
489.2
45
32
80
36
90
27
90
4.3
8
5.4
40
12.4
31
3.9
71
46.3
12
456
8
2014-15
Target
%
543.5
50
40
100
40
100
30
100
4.8
9
6.7
50
13.2
33
4.1
75
57.8
15
570.1
10
Source: Federal Seed Certification & Registration Department (FSC&RD)
60
Fertilizer: The use of fertilizer during the 10 th plan period is targeted to grow by 3.5
percent per annum. The growth rate for the nitrogen is estimated at 3 percent, while
phosphate and potash each by 5 percent. In quantitative terms, nitrogen use will increase to
3.65 million tonnes, phosphate 1.10 million tonnes and potash 32,000 tonnes by 2014-15. The
overall fertilizer consumption is estimated at 4.78 million nutrient tonnes (Table 3). Other
fertilizer products to meet micronutrient deficiencies such as Zinc, Boron, Iron and Copper
would also be needed for specific crops for improved productivity and quality. Pakistan will
be able to meet its entire urea fertilizer needs through local production, but has to rely on
imports for other products. Current nitrogen production is at 2.7 million nutrient tones, which is
expected to increase to 3.7 million tonnes by 2014-15. Present phosphate production is
around 421 thousand tonnes which will increase to 540 thousand tonnes -- about 50 percent
of the targeted consumption by 2014-15.
Table 3: Fertilizer Off-take Targets During 10th Plan (2010-15)
(‘000’ Nutrient Tonnes)
Year
Nitrogen
Phosphate
Potash
Total
2009-10
(Benchmark)
2010-11
3150
860
25
4035
3245
903
26
4174
2011-12
3342
948
28
4318
2012-13
3442
996
29
4467
1045
1098
5
30
32
5
4621
4781
3.5
2013-14
3545
2014-15
3652
Growth (%)
3
Source: National Fertilizer Development Center (NFDC)
In terms of fertilizer marketing, Pakistan has been experiencing problems of timely
availability of fertilizer to farmers due to heavy dependence on imports of DAP, delays in
imports, and weak regulatory mechanisms. To guarantee continuous supply, strategic reserves of
DAP and urea needs to be maintained and fertilizer availability during peak season assured to
meet the crop production targets. To improve fertilizer use efficiency, integrated plant nutrient
management based on soil testing, and band placement will be promoted. The existing Fertilizer
Policy 2001 has served the sector well but it needs to be revised to provide incentives for local
production of different fertilizer products. The use of organic fertilizers such as farm yard
manure, compost and crop residue recycling will be encouraged to build up soil organic matter
for sustained productivity.
Plant Protection: To sustain high crop yields, it is imperative to protect crops from
insects and pests and keep fields clear from weeds by judicious use of pesticides and herbicides.
Indiscriminate use of pesticides and other chemicals is harmful as residual levels in the food
chain could exceed permissible limits. Pesticide consumption has declined by 63 percent from
over 105 thousand tons in 2005 to over 39 thousand tons in 2008. During the MTDF period,
schemes involving IPM, biological control, pesticide quality control labs, and plant quarantine
services were taken up. To provide healthy food, integrated pest management with judicious use
of recommended pesticides and herbicides, along with monitoring of pesticide residues in
agriculture produce were promoted. This strategy will be continued during the 10th Plan.
Farm Mechanization: Accelerated farm mechanization is an important ingredient of the
strategy to step up agriculture growth. Range of current power and implements are insufficient to
support the need of the sector. During the MTDF, developmental schemes were initiated for high
efficiency irrigation system, provision of subsidized tractors and farm implements such as laser
61
leveler, zero or minimum tillage machine, seed-fertilizer drill, raised bed technology, combine
harvesters, threshers, etc. Crop Maximization Project (CMP-II) project has a sizeable component
for provision of farm implements to the farmers. Inspite of these activities, the level of farm
mechanization is basically confined to tractor cultivation. Currently a mega scheme with foreign
funding is under consideration to mechanize conventional farming practices in the country. To
improve the situation, availability of tractors along with modern farm implements for zero and
deep tillage, fertilizer band placement and laser leveling will be provided on credit. This will
enhance integrated use of inputs and farm machinery to improve productivity. Better enabling
environment for agriculture machinery manufacturers may improve their production capacity to
help reduce the lag period. The role of service providers will be enhanced for rental of farm
machinery and/or adoption of corporate or cooperative farming. Strengthening of R&D
organization involved in farm mechanization will help accelerate the pace of farm mechanization
through acquisition or development of appropriate farm machinery. Around 0.85 million tractors
with improved implements usage at farm are envisaged at the end of Tenth Plan as against 0.62
million units at present (2009-10).
Agricultural Research: The National Agricultural Research System (NARS) has
historically contributed well to agricultural development. However, since the 1990s, Pakistan has
grossly underinvested in agricultural research. According to IFPRI study (2008) the level of
investment in agriculture research in Pakistan declined by 23 percent between 1991 to 2002 while
in India and China it increased by 81 and 118 percent respectively. This adversely affected the
national capacity for research. Many of the research programs pursued by the agriculture research
institutions in the country have not kept pace with the needs of the farmers and economy. There
was more emphasis on knowledge generation than on moving from research to innovations and
technology development. The Provincial Agriculture Research System which is a backbone of the
Pakistan’s National Agricultural Research System (NARS) suffered from budgetary constraint,
brain drain, outdated research infrastructure and a service structure providing little incentive for
creative research and innovations.
To address these issues, restructuring and strengthening of provincial research system
along with improvement in incentive structure and enhanced budget allocations will be taken up
on priority basis in the 10th Plan. At the same time, an effective monitoring and evaluation system
will be put in place to measure the impact of research and technology generation on sustainable
agriculture development. The role of PARC as an apex research organization will be enhanced in
resource mobilization; acquisition, adaptation, and generation of cutting edge technologies; and
sustainable management of natural resources.
Agricultural Extension and Training: Extension is a vital link between the researcher
and farmer. The yield gap between small farmer and progressive farmers reflects both the
resource gap and knowledge gap. An effective extension service can play an important role in
assisting the resource and /or knowledge poor farmers to increase their productivity by adopting
cost effective production technologies. However, the quality of agriculture extension service has
deteriorated overtime and the extension methodologies and tools are outdated, while the crop
production systems have become more complex and diversified. The extension strategy envisaged
in the 10th Plan will promote the use of more modern and effective extension service based on
electronic and extension technologies and on provision of specialized extension service staffed by
subject matter specialists for precision agriculture and high value crops such as horticulture and
floriculture. The service may also include information dissemination on weather forecasts for
agriculture, global GAP or good agriculture practices, latest innovations in conservation
agriculture, post harvest management, and market information on crop prices etc. It will also
upgrade the training programs along the lines of technical and vocational training needed for
commercial farming. Greater involvement of the private sector (fertilizer, pesticides and seed
62
industry) in specialized extension services to address specific production problems at the field
level and provide services such as soil testing, integrated nutrient and pest management, drip and
sprinkler irrigation system, and production of hybrid and GM (genetically modified) crops will
be encouraged.
Agricultural Credit: Inadequate financial resources and lack of access to financial
institutions are major constraints for the adoption of modern agriculture practices by the small
farmers. It was envisaged to ensure adequate and timely availability of agricultural credit to small
farmers during the MTDF period. One window operation, revolving credit scheme, micro credit
scheme, and issuance of smart card for small farmers were some of the major interventions to
achieve cumulative credit disbursements up to Rs. 1665 billion during the five-year period from
2005 to 2010.
The disbursement of agriculture credit during the MTDF period has fallen short by 46
percent. In 2008-09, agricultural credit accounted for only 4.6 percent of banks credit portfolio.
Banks are not enthusiastic about agriculture credit due to the significant number of widely
dispersed clients they are supposed to cover, while farmers shy away from banks due to the
cumbersome procedure involved.
In view of potential role of agriculture in poverty alleviation and promoting rural
employment, the banks need to be more innovative and promote group loaning, inducting
agricultural graduates as their Mobile Credit Officers, and increasing branch network in rural
areas. To enhance outreach, number of branches in rural areas be significantly increased. The
Smart card facility supported by a system of due diligence may also be introduced. In view of the
recent enhancement of indicative credit ceiling by 70 percent on average and greater emphasis on
technology based agriculture in the future, the agricultural credit disbursement target for the 10 th
Plan period (2010-2015) is set at Rs. 2,500 billion (Table 4).
Table 4: Agriculture Credit Disbursement Targets
During 10th Plan (2010-15)
(Rs. Billion)
Year
Production Development
Total
2010-11
260
90
350
2011-12
310
115
425
2012-13
360
140
500
2013-14
410
165
575
2014-15
465
185
650
Total
1805
695
2500
H.
Agriculture Marketing and Storage Infrastructure
The present marketing policies and infrastructure facilities constitute major constraints to
increased agriculture production. The market failures are common in years of surplus production
of major crops (e.g. wheat, rice, sugarcane etc.) resulting in low farm gate prices and poor return
to farmers on their investment. This results in low production of the crops concerned in the
ensuing cropping season, hence leading to a cycle of food surplus and deficit years. These market
failures entail high cost for the producers, consumers and for the national economy.
At present, Pakistan is annually producing about 35 million tons of grain (wheat, rice,
maize) and 13 million tons of horticulture products. The existing grain storage capacity is about
4.5 million tons. Its marketing and storage infrastructure to handle these diverse agricultural
products is grossly inadequate and inefficient, resulting in high transaction cost to farmers and
significant losses during handling and storage. Losses are estimated at 5 to 10 percent for grains,
63
and 25 to 40 percent for perishable commodities entailing a financial loss of Rs. 22 to 43 billion
for grains and Rs. 24 to 38 billion for perishables. In contrast, the developed countries manage
their storage losses within 0 to 2 percent by following the modern storage technologies including
silos storage for grains and cool chain systems for perishables. The later includes: pack houses
(for washing, grading, waxing and packing etc) cold storages, controlled atmosphere chambers,
and refrigerated transport containers (for flowers, fruits and vegetables).
The issues relating to post harvest handling of agriculture produce such as marketing and
storage have been discussed at various levels in the Government for some years, and a number of
proposals for development of grain storages and cool chain infrastructure are included in the
PSDP for 2009-10. In addition, the ECC has recently approved, in principle, the formation of a
Storage and Agro Marketing (SAM) Holding Company under the Ministry of Food and
Agriculture to develop the feasibility for investment in storage and cool chain infrastructure under
PPP. The feasibility study will also recommend reforms in agriculture marketing and regulatory
policies which are considered a major constraint to investment in market infrastructure.
I.
Special Crops – Tea/Olive/Oil Palm
Pakistan imports tea and edible oil worth about Rs. 12 billion and Rs. 100 billion
annually. As import substitution measures, efforts are being made to promote tea, olive and palm
oil cultivation within the country.
Parts of Khyber Pakhtunkhwa and AJK have been potentially identified to have potential
for tea cultivation. Accordingly a research station was established at Shinkiari, Dist. Mansehra
which was subsequently upgraded to the level of a National Tea Research Institute (NTRI). The
NTRI developed varieties, production and processing technologies. It also established a tea
processing unit and started promotion of tea cultivation in these areas. An area of about 500 acres
has been brought under tea and cooperating farmers have been trained. Commercialization of tea
production with the involvement of private sector is planned on 3,000 acres each in Khyber
Pakhtunkhwa and AJK. Effective monitoring and independent evaluation is needed to assess the
potential of tea cultivation on a commercial scale.
Likewise, Pakistan is dependent on edible oil to meet its needs. Wild olive is indigenous
in Pakistan but cultivated species have been introduced only recently. About seven million wild
olive plants with cultivated species through grafting small plantations of cultivated species have
been established by PODB on an area of about 600 acres. No scientific data has been produced so
far to determine the success of the grafted plants and the varieties with production potential. As
such the project did not attract the growers for its commercial cultivation.
A recent GIS study has identified the tribal areas on Khyber Pakhtunkhwa and
Balochistan, and the adjoining areas of North & South Waziristan, Mohmand & Kurram agencies,
Bajaur, Malakand, Loralai, Barkhan, and Zohb, better suited for olive cultivation than the areas
with wild olive. An independent evaluation of the projects undertaken so far for promoting olive
plantation and olive oil extraction is needed to determine their economic and commercial
viability.
J.
Agro-forestry
Agro-forestry represents the integration of agriculture and forestry to improve the
productivity and sustainability of farming system and increase farm income. The perennial woody
plants provide direct and indirect benefits and assure livelihood security to the farming
community. The role of trees in soil conservation, erosion control and environment amelioration
is widely acknowledged and serve as compelling reasons for including trees as part of the farming
system. The present challenges of food security and diversification, issues of energy requirement
and clean fuel can be met through different agro-forestry systems. In addition, harnessing large
64
areas of arable land for plantation of suitable multi-purpose plants will promote sustainable
development of agriculture. The total area under agro-forestry in Pakistan is estimated 773,000 ha
with provincial breakup of: Punjab 435,000; Khyber Pakhtunkhwa 190,000; Balochistan 80,000;
Sindh 50,000; AJK 12,000; and Gilgit Baltistan 6,000 (Ministry of Environment, 2008).
The main issues in agro-forestry development relate to lack of systematic and sustainable
development of agro-forestry due to lack of institutional ownership either by the Ministry of
Agriculture or Ministry of Environment. As a result, there is neither a development plan nor
specific fund allocation for this activity. The research, extension and development programs are
non-existent. Given the stronger linkages of agro-forestry with sustainability of agriculture and
natural resources, the Planning Commission will set up a “Committee on Agro-forestry”
comprising all major stakeholders to prepare strategic plan for systematic development of agroforestry. The committee would address the following issues with specific recommendations: (i)
institutional home of agro-forestry at federal and provincial levels, (ii) past performance and
future outlook in terms of impact on sustainability of natural resource base, (iii) research &
development needs, (iv) current state of legislation and regulations for agro-forestry and need for
improvement, if any, (v) selection of suitable plant species with economic value and development
of nurseries for different agro-climatic zones, (vi) training and technology transfer, and (vii) need
for a dedicated knowledge acquisition and dissemination centre on agro-forestry.
K.
Policies and Institutions
Restructuring of Agricultural Policy Institute: Historically, Pakistan has substantial
experience and expertise in agricultural pricing policy analysis and the Agricultural Prices
Commission (APCOM), now renamed as Agriculture Policy Institute (API) was headed by
eminent experts of international repute. The present situation is just the opposite. Many of the
recent policy initiatives and interventions in the wake of the food crises lacked the requisite
analytical and prescriptive underpinnings. As the country is increasingly grappling with complex
policy issues, there is an urgent need to have a first rate autonomous Agriculture Policy Institute
to critically examine the emerging challenges and provide various policy options. The institute
will build on the existing capacity at the Agricultural Policy Institutes in the Ministry of Food and
Agriculture and given high priority to agriculture will be made fully functional within the first
year of 10th Plan. A lot of groundwork has already been done on its mandate, governance and
financial structure, and detailed terms of reference.
API, as an autonomous institution will have an independent professional Board of
Governors having representation of eminent experts (economists/agricultural economists,
agricultural experts), private sector (farmers, agro-industry, financial institutions, exporters) and
relevant representatives of ministries.
Agricultural Statistics and Database Management: Timely availability of reliable
agricultural statistics and the capacity to use them in support of effective planning and policy
formation are essential requirements for improved agricultural performance. Although Pakistan
has a long history of agricultural data collection as well as policy analysis, its capacity has
weakened overtime as evidenced by the recent interventions introduced in the wake of the food
crisis. This is primarily due to lack of real time quality data and weak analytical capacity to use
these data in policy formulation. The size of harvests and demand:supply balance of food
crops/products have become a contested issues necessitating improvements in agricultural
statistics to address the current challenges and provide policy options for sustainable agriculture
development in the longer run.
There are a variety of sources of agricultural statistics in Pakistan. The agricultural
census, livestock census, and farm machinery census are conducted at periodic intervals. The data
generated by these censuses are of reasonably good quality. The major issue with this data is its
65
availability in real time i.e. within a period of no more than one year. With the availability of new
software programs and the modernization of data entry systems this is feasible for quick
implementation. The data with respect to complete enumeration of land use, cropping pattern and
sources of irrigation have improved considerably, as has been that of crop cutting experiments.
However, recently doubts have been expressed regarding data quality in wake of the controversy
over the size of crops. Recently, there have been some pilot efforts to collect and/or to re-validate
crop reporting data through satellite imaging/remote sensing.
The above review underpins the need for improvement both in the quality of data and
analytical capacity to use it for policy formulation and planning purposes. It is proposed to
constitute a Committee to examine these issues and make recommendations for modernizing the
data collection, analysis and reporting system should be constituted. To ensure effective use of
these data, analytical capacity will be developed to prepare and publish reports on changes in
agriculture productivity, profitability and competitiveness, domestic resource cost of producing
major agriculture products, consumption and utilization of agro products, food security and terms
of trade indices, agriculture prices and parity, etc. This would contribute to informed decision
making by the Government.
Agricultural Terms of Trade: The agricultural terms of trade is an important parameter
determining changes in the profitability of the sector. The trends in the terms of trade shape the
economic environment faced by farmers and constitute an important component of the prevailing
investment climate. According to Task Force Report on Food Security, the decline in the
agricultural terms of trade since 1990 has been a major constraint in depressing investment. It is
important to arrest the historical resources transfer from the agriculture sector to the other sectors
of the economy.
There is a need to monitor the agricultural terms of trade by an official agency on a
regular basis. As recommended by the Task Force on Food Security, the Agricultural Policy
Institute may be mandated to estimate the series of agricultural terms of trade on an annual basis.
There is also an urgent policy need to strengthen the capacity in the Ministry of Agriculture for
judicious formulation of agricultural price policies.
Policy on Biotechnology: Biotechnology application in agriculture has emerged as a
major technical innovation of the 21st century to increase both the productivity and quality of
agriculture and livestock products. It is a powerful scientific tool for improved food security and
reduced environmental hazards of the current production system.
Biotechnology offers opportunities to develop pest resistant transgenic crop varieties (e.g.
Bt cotton, Bt maize, Bt canola etc.) as well as crop varieties tolerant to drought, salinity, and
resistance to herbicides. In addition, it covers other technologies which are crucial for sustainable
agriculture development such as bacterial based bio-fertilizers to meet the crop nutrient
requirements, bio-pesticides, and bacterial polysaccharides. In addition, tissue culture technology
is commonly used in floriculture, forestry and micro propagation of disease free planting
material. Bio-energy is another area where biotechnology has the potential to make a significant
contribution. With the help of genetic engineering, the production of enzymes used for converting
lignin to cellulose, sugars and then to biofuel can be initiated. In addition energy crops are being
genetically engineered to have lower content of lignin and higher cellulose making the process of
converting biomass to energy economically feasible.
Considering the current state of biotechnology research and its potential benefits, the
following policy road map is proposed to accelerate R&D activities: (i) immediate legislation of
the Amended Seed Act and Plant Breeder Right Bill; (ii) upgrading the research on biotechnology
to a level at par with other major agricultural economies through international collaboration with
CGIAR institutions and multilateral companies (e.g. Monsanto, Sygenta, Bayer’s, Biocentury, Du
66
Pont etc.); (iii) third party evaluation of existing biotechnology institutions; (iv) implementation
of the National Biosafety Guidelines and Rules; and (v) establishing a National Biosafety
Committee (NBC), which should gradually evolve into a National Biotechnology Regulatory
Authority as an autonomous body to take care of all IPR, biosafety, biosecurity and related
bioethical issues.
Integrating Agriculture Education, Research & Extension: To cope with the future
food and fiber demand in the country, the Agricultural Universities, Research Institutes and
Extension Departments hold the key to make the system more productive and economically
efficient. Most of the faculty members of the Agricultural Universities in Pakistan undertake both
teaching and research and to a limited extent the outreach activities as well. The agricultural
universities in the country have good human resources but weak infrastructure and resources for
applied research. On the other hand, the Provincial Research System has a country-wide network
of research infrastructure in the form of institutes, research stations and substations but
inadequate human and financial resources for research activities. The integration of the two,
along with extension services, would create much needed synergy.
Agriculture Extension is important to universities as a discipline within their curricula
and as a link to real-world agricultural concerns. University extension activities are presently
limited to teaching of extension methodologies, internships, preparation of extension materials,
and conducting research on extension media and methodologies.
Integration of Agriculture Education, Research and Extension is therefore vital for greater
coordination and cohesion and better quality of education, research and outreach to deal with the
emerging issues of the agriculture sector in a holistic manner. During the 10 th Plan enhanced
allocations for agriculture research, extension and human resource development will be made and
restructuring of provincial agricultural research system will be undertaken to introduce uniform
service structure. The Punjab Government has already taken some initiatives in this area and is
examining alternate modalities.
Intra-Sectoral Coordination: Agriculture development activities primarily fall in the
domain of provincial governments except for national policy and regulatory matters. The Five
Year Plan addresses new development initiatives and programs / projects relating to national food
and fiber security, international trade and trans-boundary research and development issues such
as introduction of new varieties, flow of agricultural goods and services, pests and diseases, and
research and development. During the plan implementation period, the provincial governments
will take up most of the development initiatives. For better planning and implementation of
development initiatives, the coordination between the federal and provincial ministries of
agriculture will be strengthened through more frequent interaction. The number of vertically
driven projects will be limited only to innovative high tech projects or those involving transboundary issues such as pest and diseases, quarantine, sanitary and phyto-sanitary measures and
compliance with WTO regulations etc.
L.
Ensuring Food Security
Notwithstanding the recent increases in food production, the challenge of food security
Pakistan remains a real one. Food availability, food safety, and affordability are three essential
ingredients of food security. Long-term food security requires not only producing sufficient food
to meet market demand, but also ensuring its timely availability in adequate amounts at
affordable prices to the common man. By best estimates, nearly one-third of the population still
suffers from varying degrees of hunger poverty and mal-nutrition.
67
According to a 2008 UN study7, the number of food insecure people across Pakistan has
reached about 45 million following the food price hikes during 2007-08. Ongoing inflation of
commodity prices in conjunction with declining economic activity is likely to have further
increased the incidence of food insecurity (potentially impacting one-third of the population). The
Government’s response was swift and effective to meet the food needs of the poor and vulnerable
groups through a number of food safety nets, most importantly the: Benazir Income Support
Program (BISP), Punjab Food Support and Sasti Roti Program, Benazir Women Support
Program in Sidh, and Expansion of Utility Stores, etc. Despite some problems of targeting
and efficiency of delivery systems, these programs were affective in meeting the urgent food
security needs of the poor. It is recognized, however, that income/food support programs, by their
very nature, are emergency measures and their fiscal sustainability in the long run is a major issue
in a resource constrained economy like Pakistan. There is therefore need to evaluate these
programs and make them more cost effective and sustainable by linking them with (i) Acquisition
of Productive Assets such as land, technical skills, credit for micro enterprises etc, (ii) Food for
Work,(iii) NGO-led Dal Roti Kitchens, and (iv) School Nutrition Programs as proposed under
WFP initiatives.
In addition to food security, food safety needs urgent attention due to poor compliance
with sanitary and phyto-sanitary (SPS) measures during food production, marketing, storage, and
processing, given the poor hygienic and sanitary conditions prevailing at work place as well as
due to lack of enactment and enforcement of food laws. The presence of pesticide residues,
bacteria, viruses, parasites, adulterants including hazardous physical and chemical agents are
largely responsible for food contaminants and consequent illness, hospitalization and death,
accounting for large financial losses to individual families as well as to the Government
exchequer. Similar to food security, ensuring food safety is central to human development and
poverty reduction in the country.
In view of the multi-sectoral nature of food security and food safety issues, it is proposed
to set up an “Institutional Framework” at MINFA for a holistic and multi-faceted approach to
food security and food safety issues to cover the entire supply chain of food, i.e. from plough to
plate. More specifically, the Framework should cover:

Monitoring of Food Security Index as a composite indicator of food security status at
any point in time. The variables covered by the index include availability, price,
access or affordability, absorption and ability to withstand shocks. The task of
preparing specific indices may be carried out by jointly API and PIDE in
collaboration with IFPRI

Determination of optimal size of strategic and operational stocks and their locations

Support and release prices

Size of procurement at and release prices and size of procurement

Market information on national, regional and global production, prices, stocks, future
prices

Food demand and supply balance and projections for imports, exports, and stocks

Food supplementation and fortification
7
Government of Pakistan: Five Year Food Security Plan, UN World Food Program, Pakistan, October,
2009.
68

Revision of the existing Pure Food Law to harmonize with international food safety
standards and sanitary and phyto-sanitary measures set by the Codex Alimentarius
Commission and WTO and

Upgrade food analysis labs to international level under international accreditation
MINFA, being the lead Ministry on grain food related issues, is well placed to implement
this Institutional Framework through appropriate strengthening of the analytical capacity of its
Food Wing and Agriculture Policy Institute. At the same time, the capacity of the Provincial
Governments will require strengthening in the area of food production, forecasting, pricing,
procurement, storage and distribution. The analytical capacity of the Planning Commission F&A)
will also be enhanced to provide intelligent inputs and views in policy making based on policy
analyses work. As a matter of policy, market based approaches will be followed for production,
marketing, and trade of food commodities with appropriate safeguards to ensure availability of
adequate, nutritious and safe food at affordable prices on sustainable basis.
M.
Financing the Plan
To realize the agriculture growth targets envisaged in the 10th Plan (Annex 2), it will be
necessary to significantly increase the level of investments in the sector, focusing on strategic
areas including marketing and storage infrastructure, farm mechanization, cost of agricultural
inputs, adequate and timely availability of inputs, water harvesting and conservation technologies,
post harvest management and supply chain infrastructure, etc. Most of these investments are of a
commercial nature and thus fall under the purview of the private sector. However, certain
investments comprise the nature of public-goods and would require continuing and increasing
amounts of PSDP funding for accelerated growth of agriculture sector.
The envisaged PSDP requirements based on the ongoing and approved PSDP projects for
the 10th Plan, are estimated at Rs. 128 billion. Its breakup includes agricultural research projects
(Rs. 25 billion); water conservation technologies (Rs. 50 billion), farm mechanization (Rs. 12
billion), capacity building in agricultural planning, policy analysis, monitoring and evaluation,
human resource development (Rs. 4 billion), post harvest management, agriculture marketing,
and storage infrastructure including cool chain (under public-private partnership modality (Rs. 37
billion). Nearly half of the total investments needs for marketing and storage infrastructure is
expected to come from the private sector.
Priority Investment Areas for 10th Plan
N.
Based on the foregoing strategic thrusts, the following priority investment areas are
identified for funding:
1.
Agriculture Intensification and Diversification

Development of a modern seed industry including local production of hybrid and
genetically modified plant varieties (e.g. Hybrid Rice, Maize, Bt. Cotton, Bt. Maize,
and Hybrid Vegetables, and disease free certified planting material for horticulture)

Promotion of resource conservation technologies for water and agricultural inputs

Diversification into high value agriculture and value added products

Farm mechanization with emphasis on farm machinery designed to improve efficient
use of agricultural inputs, particularly fertilizer, water and energy

Sustainable management of natural resource base
69

Crop maximization programs for import substitution crops

Floriculture and Agro-Forestry Development
2.
Policy and Institutional Reforms

Establishing an Autonomous Agricultural Policy Institute

Setting n institutional framework for food security and safety issues at MINFA

Strengthening of Provincial Agricultural Research System and integration of
agricultural education, research and extension

National Forum on Agriculture to provide platform for stakeholders consultations on
major issues for participatory planning and development

Promoting Corporate Agriculture and Cooperative / Contact Farming

Crop production forecasting and market information
3.
Marketing and Storage Infrastructure

Post harvest management, marketing, storage and supply chain infrastructure

Cool chain infrastructure for high value perishable commodities (Horticulture,
Floriculture and Livestock Products)

Farm to market roads and rural markets
4.
Capacity Building

Capacity building in agriculture policy analysis, resource management, monitoring of
food security and terms of trade indices, monitoring and evaluation, etc.

Natural resource planning and management

Agri. Business, marketing and international trade (Infrastructure & Institutions)

Moving from research and knowledge based technologies to innovations
5.
Agro-forestry

National survey and assessment of agro-forestry

Community based interventions in promoting agro-forestry development

Conservation and development of medicinal plants

Bamboo research and development program and establishment of Bamboo Research
Institute
70
Annex 1: Crop Production-Targets and Actual Achievements under MTDF 2005-10 (“000”
Tones)
Item
Wheat
Rice
Basmati
Others
Maize
Other Cereal
Cotton Lint
(Million Bale)
Sugarcane
Tobacco
Pulses
Gram
Other
Pulses
Cottonseed
Rapeseed &
Mustard
Sunflower
Other Oilseeds
Potato
Onion
Other
Vegetable
Fruits
Benchmark
Actual
Target
Actual
Target
Actual
Actual
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
21,109
4,992
2,348
2,644
2,775
600
14.6
45,316
84
1,041
761
280
4,967
227
500
150
1,888
1,850
3,250
6,000
200506
200607
200708
200809
200910
Avg.
21,277
22,139
5,547
5,000
2,920
2,627
3,110
2,905
461
621
13.0
15
44,666
50,095
113
90
685
1,146
480
833
205
314
4,423
5,120
181
240
348
575
107
159
1,568
2,001
2,056
1,943
3,125
3,559
7,148
6,570
23,295
22,914
5,438
5,504
2,736
2,703
3,088
3,029
510
643
12.9
15.5
54,742
51,860
103
90
1,089
1,222
838
871
251
351
4,355
5,280
221
312
407
621
108
169
2,582
2,121
1,817
2,040
3,138
3,847
6,011
7,194
20,959
23,608
5,563
5,779
2,643
2,921
3,605
3,166
562
665
11.7
16
63,920
53,418
108
90
755
1,325
475
932
280
393
3,946
5,443
185
366
604
760
119
179
2,539
2,249
2,015
2,142
3,137
4,267
7,179
7,878
24,032
24,505
6,952
6,068
2,901
4,051
3593
3,308
542
689
11.8
16.5
50,045
55,020
105
90
992
1,439
741
998
251
441
4,103
5,613
199
429
420
875
130
189
2,941
2,384
1,704
2,249
3,214
4,672
7,052
8,626
23,870
25,436
6,700
6,371
NA
NA
3,204
3,457
NA
713
12.7
17
49,000
56,716
NA
90
NA
1,561
571
1,067
NA
494
4,116
5,783
133
503
805
1,006
130
201
2,543
2,527
1,797
2,361
NA
5,116
NA
9,445
22,687
23,720
6,040
5,744
2,800
3,076
3,349
3,173
519
643
12.4
16.0
52,475
53,422
107
90
880
1,231
621
940
247
353
4,189
5,448
184
370
517
767
119
169
2,435
2,258
1,878
2,148
3,154
3,891
6,848
7,463
Annual
Growth
(%)
2.8
6.6
6.1
12.3
6.9
-1.5
-5.0
4.0
6.9
6.4
12.6
-0.8
-4.5
-1.7
1.1
-2.1
15.5
-1.3
-0.3
5.2
Source: MTDF (2005-10), Agriculture Statistics of Pakistan 2007-08, and MINFA
71
Annex 2: Physical Production Targets of Crop and Horticulture Products and Projected
Growth Rates for the 10th Plan Period
“000” tons
Crops
Benchmark
(2007-10)*
201011
201112
201213
201314
201415
Annual
Growth
(%)
Wheat
22,954
23,872
24,827
25,820
26,853
27,927
4.0
Rice
6,298
6,501
6,712
6,932
7,160
7,397
3.3
Basmati
2,574
2,702
2,837
2,979
3,128
3,285
5.0
Others
3,724
3,799
3,875
3,952
4,031
4,112
2.0
3,370
3,538
3,715
3,901
4,096
4,301
5.0
Other Cereals
549
562
576
591
606
621
2.5
Cotton (Lint)
(Million Bale)
12
12.76
13.52
14.33
15.19
16.10
6.0
54,322
56,495
58,754
61,104
63,549
66,091
4.0
Tobacco
106
108
109
111
113
114
1.5
Gram
650
669
689
710
731
753
3.0
Other Pulses
261
266
271
277
282
288
2.0
Cotton seed
4,123
4,370
4,633
4,911
5,205
5,518
6.0
Rapeseed,
Mustard and
Canola
172
181
190
199
209
220
5.0
Sunflower
610
652
698
747
799
855
7.0
Other
Oilseeds
126
130
134
138
142
146
3.0
Potato
2,830
2,972
3,120
3,276
3,440
3,612
5.0
Onion
1,750
1,837
1,929
2,025
2,127
2,233
5.0
Other
Vegetables
3,188
3,347
3,514
3,690
3,875
4,068
5.0
Fruits
7,094
7,662
8,275
8,937
9,652
10,424
8.0
Fodder
54,336
57,053
59,905
62,901
66,046
69,348
5.0
Maize
Sugarcane
Oilseeds
Vegetables
* three year average
Source: MINFA
72
2.2
Livestock and Fisheries
A.
Introduction
The livestock (including poultry and fisheries) sub-sector plays an important role in the
economy of the country and the livelihood of people. It accounts for 52 percent of agricultural
GDP and 11 percent of national GDP. It is a net source of foreign exchange earnings, constituting
more than 8.5 percent (about 1.6 billion US$) of the total exports, and provides raw material
particularly for leather products, carpets and woolen textile industry. Livestock is mainly raised
by more than 8.5 million small farmers and landless families in the rural areas and is their main
source of livelihood. It serves as a safety net for the poor and provides opportunity for selfemployment of women. Livestock raising is the only agricultural activity that generates daily cash
income. The farm-yard manure produced by livestock is a significant source of organic fertilizer
for crop production as well as domestic fuel. Thus the sub-sector plays an important role in
poverty alleviation, gender employment, and stimulation of agricultural growth given its
enormous potential for value addition and export.
During MTDF (2005-10) livestock registered a growth rate ranging from 3.7 to 7.5
percent. Pakistan is endowed with a large livestock population, well adapted to the local
environmental conditions. Comparison of the livestock population is given in Table 1. Livestock
produces 45 million tons of milk (36.3 million tones available for human consumption), making
Pakistan the 4th largest producer of milk in the world. Actual production of meat, milk, eggs and
fish during the MTDF period (2005-10) is given in Annex A. In addition, there is a vibrant
poultry sector with more than 562 million birds produced annually.
Table 1: Comparative Status of Livestock Population
Type of
Animal
Cattle
Buffalo
Sheep
Goat
Camel
Horse
Mule
Asses
Total
Livestock Population in Millions
1996
2006
2008-09
20.4
20.3
23.5
41.2
0.8
0.3
0.1
3.6
110.3
29.6
27.3
26.5
53.8
0.9
0.3
0.2
4.3
142.9
33.0
29.9
27.4
58.3
1.0
0.4
0.2
4.5
154.7
% Change Between
1996 & 2006 2006 & 200809
45
11
35
10
13
3
31
8
13
11
3
33
18
28
20
5
30
8
Source: Economic Survey of Pakistan 2008-09
B.
Review of Livestock Sector During MTDF (2005-10):
Growth: Livestock sector was projected to grow at 3.7 percent per annum during
Medium Term Development Framework period (2005-2010). In the event, it achieved a
satisfactory growth rate of about 5.0 percent per annum, which is attributed to the new
interventions launched during the MTDF (2005-10) period addressing the issues of cool chain
development, marketing, and livestock health. The growth in fisheries sector, however, averaged
4.1 percent per annum against the projected target of 4.8 percent (Table 2). The below target
growth rate in fisheries are attributed to: insufficiencies in fisheries research, value chain and
73
marketing infrastructure, non-compliance of SPS standards inadequate implementation of
envisaged strategy, and shortfall in credit disbursement targets.
Table 2: Livestock Growth (Percent)
Year
Livestock1 Poultry2 Fisheries1
Overall
Growth2
2004-05 (Benchmark)
2.3
0.6
2005-06
7.5
19.4
20.5
7.9
2006-07
4.3
7.1
4.2
4.3
2007-08
4.2
7.3
9.2
4.4
2008-09
3.7
7.2
2.3
3.7
2.4
2009-10 (MLDD Targets)
4.0
7.4
4.0
Average (2006-10)
4.7
9.7
7.1
4.8
Source: 1Economic Survey of Pakistan 2008-09
2
Derived Estimates of F&A Section, Planning Commission
Financial: The contribution of livestock sector to GDP remained around 11%. In
absolute terms agricultural sector GDP, however, showed an increase of about 29 percent
between 2004-05 and 2008-09. Increase in GDP share for livestock and fisheries sub-sectors was
observed as 7 percent and 12 percent per annum respectively. In terms of public sector
development programs, an allocation of Rs.50.5 billion was earmarked for development projects
of agriculture/livestock sector during 2005-10, which was subsequently increased to Rs. 70.8
billion. Out of this, 13.7 were allocated for livestock sector. However, against this allocation, Rs.
53.5 (Rs. 47.3 billion was disbursed for crops and 6.2 billion for livestock) by 2009-10 resulting
in substantial delay in the implementation of these projects. Historically the Government has
underinvested in Livestock sub-sector as it accounted for only 0.54 percent of federal PSDP
spending and 11.6 percent of Agriculture sector spending.
Physical: The MTDF targets of livestock (including poultry and fisheries) production
were substantially achieved except for mutton, which declined by -4.0% and fisheries production
which fell behind the projected target by 11%. The under investment in the sub-sector
(livestock/poultry/fisheries) insufficient releases, and deterioration of terms of trade coupled with
markets failures were the major reasons for less than projected production. (Annex 1).
Main initiatives undertaken were: Strengthening of Livestock Services for Livestock
Diseases Control in Pakistan, Eradication of Rinderpest; Prime Minister's Special Initiative for
Livestock; Milk Collection / Processing and Dairy Production & Development Programme;
Livestock Production and Development of Meat; Improving Reproductive Efficiency of Cattle
and Buffaloes in Smallholders Production System; The White Revolution “Doodh Darya”
Horizon – II; National Programme for Control and Prevention of Avian Influenza; Fisheries
Training Centre; Monitoring of Deep Sea Fishing Vessels, and Aquaculture and Shrimp Farming.
Main accomplishments include eradication of Rinderpest, effective control of avian influenza,
improvement in farm gate milk prices with community organization / provision of chillers, and
establishment of Center of Excellence in Bovine Genetics.
The growth targets of 6.5 percent for meat, 8.0 percent for milk 5.0 percent for eggs and
4.8 percent for fisheries was fixed in the MTDF 2005-10. The livestock and fisheries sub-sectors
showed growth as under:
74
I. Livestock
Livestock has an enormous potential to become the engine of economic growth given the
large potential for productivity increase and value addition. With the increase in population,
urbanization and income levels the national demand for a richer and more diverse diet with more
meat and milk products is increasing. Recognizing this, the Government has established the
Ministry of Livestock and Dairy Development (MLDD) with the mandate to accelerate the
development of this sector given its role in poverty reduction, national food security and export.
To achieve this, MLDD will put in place an appropriate policy framework that enables improved
marketing, efficient technologies, and food safety standards through the food chain. Promotion of
these practices would provide profitable business opportunities and help in reducing the incidence
of poverty amongst livestock holders.
i. Issues and Challenges
The issues and problems stated in the MTDF 2005-10 and in the Livestock Development
Policy (2007) continue to be relevant, in particular (i) low productivity per animal, (ii) poor
genetic stock, artificial insemination of only about 10 percent, yield gap of 61 percent between
national milk average yield and that of progressive livestock holders, (iii) inadequate animal
health coverage (25 percent) (iv) inadequate feed resources, (v) shortage of needed skills (vi)
primitive marketing infrastructure and unfair marketing practices (vii) weak research system and
ineffective extension services, (viii) inadequate development funds allocation, (ix) limited credit
availability, and (x) outdated regulatory framework, and inadequate database / analytical capacity.
ii. Development Strategy
a.
Objective and Strategy
The overall objective of livestock development during the 10th Plan (2010-15) is to
achieve broad-based economic growth, poverty reduction, and improved livelihood of rural
people. The specific strategies to achieve these objectives include:







b.
Improved productivity of meat and milk per animal through genetic improvement of
the indigenous livestock, and improved animal nutrition and health
Improved marketing facilities and infrastructure for livestock and its products to
enhance share of producer in consumer rupee
Reduced morbidity and mortality by effective preventive and curative control
measures
Development of high quality human resources for livestock, dairy, poultry, fisheries
development and value chain for animal products
Effective food safety regulatory measures
Improvement of database and analytical capacity
Promotion of private sector-led livestock and dairy development
Plans and Programmes
Special attention has recently been paid to develop the sector by launching some mega
development projects at the federal level under the MTDF 2005-10. The goal is to improve
marketing facilities, breed improvement and to extend proper health coverage throughout the
country. The investment priorities for livestock development during the 10th Plan include:

Focusing on small, landless farmers and women households

Breed improvement including (i) genetic improvement of indigenous livestock
through pedigree record keeping, production of progeny tested bulls, and (ii) artificial
insemination and embryo transfer technology
75

Nutrition through (i) production / import and distribution of certified fodder seed (ii)
balanced feed for large/small ruminants; (iii) rangeland management / development;
and (iv) imposing ban on burning of wheat straw after harvesting of wheat crop as it
is a very important roughage available for livestock feeding

Improve animal health by (i) enhancing effective veterinary coverage to livestock;
(ii) encouraging private sector role in veterinary cover; and (iii) controlling infectious
and contagious diseases by production of quality vaccines and mass vaccination
programmes and (iv) encouraging the pharmaceutical sector for production of quality
veterinary medicine

Quality control, marketing and value addition by (i) establishing effective testing and
regulatory mechanism for ensuring quality of feed, milk and other livestock products;
(ii) organizing livestock holders into milk marketing groups and promoting vertical
integration; (iii) value addition in dairy and meat industry for better gains; (iv)
deregulation of milk and meat prices; and (v) public private partnership in setting up
of livestock markets and state of art slaughterhouses

Capacity building by (i) strengthening of planning, policy making, analytical,
monitoring and regulatory capacity of MLDD; and (ii) imparting training in livestock
management, artificial insemination, embryo transfer, dairy technology, and
silage/hay making

Mechanization by (i) mechanization of livestock rearing operations; (ii) development
of machinery for making straw bundles simultaneously while wheat crop is being
harvested by the combined harvester

Credit by ensuring increase in institutional credit for accelerated growth in livestock
sub-sector by increasing its out reach and reasonable mark-up
c.
Feed and Forage:
Fodder is the cheapest source of food for livestock but its shortage limits the livestock
production in the country. Livestock is generally underfed and under-nourished which results in
their poor health and productivity. There is a shortage of 44 percent in total digestible nutrients
and 51 percent in digestible protein. It is established that simply by meeting nutritional
requirements of animals, production can be increased by 50 percent.
It is estimated that the livestock population in Pakistan would increase by 50 percent by
the year 2025. But the main issue that remains to be addressed is whether the supply of forage
from rangelands and residues from crop fields would be sufficient to sustain such a huge number
of livestock? This concern is magnified given that there had been a 12 percent decrease in the
area under fodder cultivation during the previous decade because of competing demand of land
for crops. It is evident that present forage resources would not be sufficient to meet the future
livestock population. Effective measures would be required to meet the future forage demand
through both introducing new high yielding forage crops (irrigated and rainfed) and efficiently
utilizing existing forage resources from the vast rangelands by their effective and sustainable
management.
Pakistan is an arid country, with 80 percent of its geographical area classified as arid and
semi-arid, with an average annual rainfall of 278 mm. A dominant part of these dry lands is
rangelands (65 percent of geographical area), which despite being overgrazed and highly
neglected has sustained more than 60-70 percent of the total sheep and accounts for 28 percent of
Total Digestible Nutrients (TDN) intake by the livestock. The present production capacity of
rangelands is only 10-15 percent which can be increased up to 50 percent if proper attention is
76
paid. Rangelands are managed by the provincial Forest Departments, but unfortunately have
received low priority. In the context of growing demand for feed and forage, rangeland has
assumed greater significance in the context of policy interventions in the 10th Plan.
i.
Issues and Challenges
The major issues in feed and forage are:

inadequate attention to research and development of high yielding, multicut fodder
varieties/hybrids by public and private sectors and its multiplication and resultant
inadequate availability of quality seed and the widening gap between its demand and
supply

lack of awareness of fodder and seed production technology by the fodder growers

decrease in the fodder cultivation area

non-availability of quality balanced ruminant feeds

neglect of rangelands development

and burning of wheat / paddy straws resulting in wastage of an important potential
livestock feed source
ii.
Development Strategy
The strategy for enhancing feed and forage production includes:
II.

increasing availability of quality fodder seed through strengthening fodder research and
seed multiplication arrangements / imports

promoting multicut fodder crops; training farmers in silage / hay making; creating
awareness for planting of cereal crops and legumes in rotation such as lucern to enhance
both fodder production and soil productivity

promotion of balanced ruminant feed

use of waste land for fodder cultivation

establishment of Rangeland Development / Management Authority to encourage
introduction of drought tolerant and high yielding grasses and fodder plant; rainwater
harvesting; establishment of nurseries; production of rotational grazing through
community involvement

and imposing ban on burning of wheat straw appropriate mechanization to enable wheat /
rice straw bail making
Poultry
A viable poultry sector is essential to national food security as the effective domestic
demand for meat continues to grow in step with increasing population and per capita income.
Poultry, during 2007-08, provided nearly 1.5 million jobs in the rural areas. In addition, informal
rural poultry can be started with low investment. It is an important means of improving nutrition,
self-employment of women and can help in poverty alleviation. The poultry sector is currently a
competitive business that is relatively free from government price and marketing restrictions and
barriers to entry or exit. In this unrestrained environment, the private sector has made substantial
investment in commercial poultry production. As a result, production in the early seventies grew
in the range of 20 to 30 percent per annum, and from eighties to mid-nineties, the annual growth
77
rate was between 10 to 15 percent per annum. This increased poultry production released the
pressure on the demand for beef and mutton. The real price of both chicken and eggs over the
years have not increased at the same rate as the prices of mutton / beef, and today the chicken
price is below beef price.
It was envisaged in the MTDF (2005-2010), that a new class of entrepreneurs would
come into broiler production with modern technology, adopting controlled environment houses,
with automatic feeding and drinking systems. However, the scenario did not materialized to the
desired extent because of frequent load shedding, increased energy cost and failure of selfgeneration resulting in heavy mortalities. The trend to apply modern technology is likely to
spread gradually in all segments of poultry production.
Poultry is by far the largest consumer of agro and livestock residue and by-products, such
as, oilseed meals, wheat bran, rice polishing, broken rice, corn gluten meal, guar meal, fish meal,
animals’ by-product meal. During 2006-07, about 4.41 million ton of poultry feed was produced,
of which about 2.14 million tons comprised of these residues and by-products. In addition to the
agro residue utilization, the poultry sector, during 2007-08, consumed about 2.7 million tons of
coarse grains like maize, sorghum, broken rice, rice tips, etc.
The main objective of poultry development for the Tenth Five Year Plan (2010-15) is to
have a vibrant private poultry sector which can flourish without much involvement of the
government.
i.
Issues and Challenges
Issues and problems currently constraining the development of poultry include:

supply and quality of poultry feed ingredients (lack of local soybean production)

disease prevalence; lack of trained supportive human resource

import of chicken meat without duty– the greatest threat

rationalization of levy of local Government fees / taxes, sales tax on poultry farms
electricity bills

sales tax on poultry feed which result in higher prices of poultry meat and contribute to
food inflation

non-exploiting full potential of rural poultry
ii.
Strategy
The strategy to be adopted for poultry development include:

incentives for enhancing poultry production in the form of relief in taxes, and import
duties on the modern poultry equipment

creating conducive environment for the industry by provision of level playing field for
local poultry industry i.e., protecting it from unfair competition from poultry imports

setting up of well-equipped laboratories for conducting detailed pathological tests,
monitoring of diseases and control methods at district level in intensive poultry producing
areas

provision of adequate credit to accepting poultry farm as collateral, equity debt ratio of
30: 70, repayment period 5 to 10 years depending on cash flow with a 2 year grace period

launching programmes for research, extension and increased production of soybean in the
country to meet the needs of poultry feed
78

training programmes to create skilled human resources in the filed of poultry

develop and improve markets for poultry industry of the country
III.
Fisheries
Fish is considered to be one of the best sources of animal protein and it can contribute in
balancing the diet of the protein deficient people of Pakistan. Pakistan produced about 0.65
million tons of fish in 2008-09. About 50 percent of the total fish production is consumed locally,
22 percent is exported worth Rs. 18.5 billion, whereas 28 percent is converted into fish-meal for
the poultry industry. Fish and fishery products from Pakistan are exported to 75 countries of the
world. A major fraction of seafood is exported in frozen form; whereas dried, chilled, fresh and
live seafood are also exported. There are 65 fish processing plants in Pakistan with the capacity to
process 800 metric tons of fish and shrimp daily.
i.
Issues and Challenges
The main issues and impediments currently constraining the development of fisheries are:

high post harvest losses due to inadequate infrastructure and lack of awareness

non-compliance of SPS standards

lower level of investment in the fisheries and aquaculture by public and private sector

competition of local fish production with low price imported fish

lack of trained manpower, infrastructure and modern technologies for fisheries and
aquaculture sector

inadequacy in supplementary fish feeds in various aquaculture systems

dependence on low yielding fish species with unreliable genetic potential in inland
fisheries

over fishing and destruction of habitat in coastal and inland fish resources
ii.
Strategy
Objectives of fisheries development are: to increase national fish supply based on
sustainable production and improved marketing of aquatic products.
The strategy to be adopted for achieving the plan targets of inland fisheries development
include:

providing enabling environment for private sector investment and infrastructure
development

detailed evaluation of freshwater resources by use of GIS; sustainable exploitation of
natural fisheries resources, control of aquatic pollution and enforcements of laws and
regulations

conservation of biodiversity and propagation of indigenous fish species for commercial
production and allocation of water for promoting aquaculture; sustainable release of
freshwater downstream Kotri for conservation of biodiversity of Indus river

sustainable development of inland aquaculture production to increase fish production by
modern aquaculture technologies and introduction of high value fish species in culture
system with emphasis on intensification/conservation of Trout/Mahaseer aquaculture
79

reducing post-harvest losses by developing proper cool chain from production to
consumption

development of skilled human resource by establishing National Fisheries Research and
Training Institute

provision of soft loans for fish farming, and replenishing the existing water bodies
The following measures would be undertaken for marine fisheries development:

promoting private sector investment in coastal aquaculture production (including
seed/fingerlings, feed and grow-out)

modernizing the capturing, handling, preservation and value addition of fish and aquatic
products; cool chain development for aquatic products

initiation and development of intensive coastal aquaculture and introduction of high value
fish species in culture system

exploring possibilities for saline and brackish water aquaculture

controlling over-exploitation of marine fisheries resources by establishing sustainable
harvesting and utilization of untapped marine resources

improving fishing facilities for local communities and fishermen in coastal areas and
establishment of modern fish markets

promoting export of high value aquatic products to international markets
IV.
Marketing, Value Addition and Cool Chain Development
Inadequate and poor marketing system and infrastructure and weak food safety measures
are a major constraint to improved production and marketing. It undermines both the quality and
value of the product with low return to the producer and high cost to the consumers. The existing
marketing system is exploitive of both the producer and consumer by the chain of middle men.
There were some suggestions in the MTDF (2005-10) to address the issues of marketing
but no discernable improvement could be made in this regard. At the institutional level, there is
disconnect between different organizations at the federal, provincial and district levels to address
marketing issues. Due to the perishable nature of the livestock products (milk / meat), its timely
disposal is critical to the profitability of the producer and quality and price of the product to the
consumer. It is reported that spoilage losses of milk alone are approximately 15 percent causing
an annual loss of Rs. 169 billion. The lack of infrastructure such as cooling facilities at farm or
collection points as well as transportation of milk is the prime cause. If properly handled and
channelized and processed, it has the potential to increase the availability of milk and dairy
products in the country worth at least Rs. 300 billion. The milk which is already reaching the
urban market, if chilled at source and processed has an additional potential of value addition
worth Rs. 60 - 200 billion.
i.
Issues and Challenges
The issues and problems constraining the development of proper marketing, cool chain
development and value addition in livestock, poultry and fisheries sub-sectors include:

outdated marketing infrastructure i.e. (markets / slaughter houses / retail outlets)
80

weak market information / research system; high wastage of milk and fish due to non
availability of proper cool chain

exploitation of producers / consumers by the middleman

lack of incentives for private investment, and inadequate analytical capacity
ii.
Strategy
To safeguard the interest of the producers/consumers following strategy would be
adopted:

policies will be formulated with the participation of stakeholders regarding incentives for
quality production, processing, marketing and value addition

development of cool chain for milk, meat and fish; and encouraging processing and
packing industry through dairy farmers associations

ensuring quality of processed and improved livestock products, vet medicines / vaccines
and animal feed by establishing testing labs and separate fully autonomous entity within
MLDD to avoid adulteration and enforcing punishments for defaulters

strengthening research on market issue and related aspects by producing trained cadre of
livestock business managers, technicians and farmers

providing necessary relief in taxes/import duties on processing equipment / slaughter
houses equipment

protection of consumer rights, and promote private sector investment / joint ventures
The major investment priorities for improving marketing, value addition and cool chain
development include: improving marketing infrastructures; promoting livestock holders
organizations at village level for collective marketing of milk as well as its processing;
establishing regulatory mechanism for ensuring quality of feed, medicines, livestock products;
improving market information system; enforcing quality standard / grades for local and export
markets with a proper certification and inspection system-establishment of testing labs, and
developing analytical capacity for studying of marketing issues.
Livestock, Poultry and Fisheries Research and Extension System: Research and
extension can not be overlooked for the development of any sector. In Pakistan the research
system of the sub-sector is very weak and needs complete overhauling along with the
establishment of new research institutes in the missing area / disciplines. We do not have a proper
livestock, poultry and fisheries extension system. Livestock extension system is primarily
confined to disease control, while livestock nutrition, management, productivity enhancement,
and marketing are neglected. In this age of specialization introduction of a composite DVM
degree during MTDF (2005-10) was a retrogressive step, which has been rightly reversed.
C.
Financial Outlay and Investment Priorities
The importance of livestock sector i.e. Dairy, Poultry and Fisheries will become more
important when Agriculture Sector has to contribute significantly in the overall GDP of the
country as the anticipated poor performance of the other sectors owing to financial and energy
crisis. To contribute significantly plan targets for Tenth Plan 2010-15 of the sub sector are
given in the Table 3 below:
81
Table 3: Livestock, Poultry and Fisheries Production Targets for Tenth Five Year Plan –
2010 -15
Benchmark
2010-11
2009-10
Items/Units
Meat (000 tons)
201112
2012-13
2013-14 2014-15
Growth
(%)
2,965
3,094
3,232
3,379
3,535
3,701
4.5
1,655
1,711
1,769
1,829
1,891
1,956
3.4
Mutton
603
616
629
643
657
671
2.2
Poultry
707
767
834
907
987
1074
8.7
Milk (000 tons)
44,980
46,440
47,950
49,510
51,120
52,790
3.3
Eggs (Million
Nos.)
11,839
12,457
13,114
13,813
14,556
15,346
5.3
Beef
Fish Production (000 tons)
Inland
246
258
271
285
299
313
4.9
Marine
457
480
504
529
555
582
5.0
Total
Source: MLDD
703
738
775
814
854
895
4.9
During the 10th Five Year Plan, an investment of Rs. 56 billion will be made. Major areas
of investment include: productivity increase through genetic improvement (Rs. 8 billion),
supporting feed lot fattening of large/small ruminants and development of meat processing and
marketing infrastructure (Rs. 7 Billion) establishing livestock / fisheries extension and
strengthening research (Rs. 6 billion), increasing certified fodder seed availability and ensuring
balanced feed (5 billion), effective disease monitoring and control (8 billion), marketing reforms
and cool chain development (Rs. 12 billion), quality testing and certification (Rs. 2 billion),
compilation of vital statistics and developing analytical capacity (Rs. 2 billion), and capacity
building Human Resource Development (Rs. 6 billion).
Proposed major development initiatives include:
Livestock

Enhancing productivity of large/small ruminants through selective breeding,
establishing livestock breeding societies/production of proven sires/artificial
insemination and embryo transfer technology

Supporting feed lot fattening of large/small ruminants and development of meat
processing and marketing infrastructure

Improving certified fodder seed coverage and creating farmer awareness for
fodder conservation technologies

Rangeland development / management

Establishing community organizations of livestock holders for milk collection,
processing and marketing
82

Effective prevention and progressive control of livestock diseases through
effective immunization programs by producing and distributing quality vaccines

Encouraging pharmaceutical sub-sector for production of quality veterinary
medicines. Establishing quality testing / certification labs for vet medicines,
animal feed and livestock products

Establishing
partnership

Capacity building of livestock / dairy, poultry and fisheries technicians /
farmers/professionals
modern
slaughterhouses
/
markets
through
public-private
Poultry

Promoting rural poultry and supporting commercial poultry by providing policy
support

Promoting soybean cultivation
Fisheries

Establishing a national fisheries research and training centre at Lahore

Promoting inland fisheries

Intensification of trade of aqua culture and introduction of high value fish
Common Interventions

Developing database and analytical capabilities

Strengthening of planning, policy making, monitoring and regulatory capacity of
MLDD

Establishing new/improved livestock, poultry and fish markets

Setting up livestock / fisheries extension services

Strengthening livestock, poultry and fisheries research capacity
83
Annex-“A”
Actual Production of Meat, Milk and Fish during 2005-2010
Items
Meat
Unit
Benchmark
2005-06
2004-05
2006-07
2007-08
200809
2009-10
Growth
(%)
000 tons
2,275
2,515
2,618
2,727
2,823
2,965
5.4
Beef
‘’
1,115
1,449
1,498
1,548
1,601
1,655
8.2
Mutton
‘’
740
554
566
578
590
603
-4.0
Poultry
‘’
420
512
554
601
651
707
11.0
Milk
‘’
29,470
39,590
40,870
42,190
43,560
44,980
8.8
Eggs
Million
No’s
8,466
9,712
10,197
10,711
11,258
11,839
6.9
Fish Production
Inland
000 tons
170
175
180
250
208
246
7.7
Marine
‘’
404
406
425
390
477
457
2.5
‘’
574
581
605
640
685
703
4.1
Total
Source: Agricultural Statistics of Pakistan, 2008-09
84
2.3
Rural Development
Pakistan is pre dominantly a rural country and the economy of country depends on the
rural sector. The prosperity of the country and welfare of the vast majority of its people are
intimately linked with the efficient harnessing of rural resources on a progressively sustainable
basis to cope with the needs of fast growing population. Pakistan has an experience of extending
government support to the villagers and operating rural development programs through technical,
self-governing and celebration political approaches. Sixty eight percent of total population lives
in rural areas, where the social and economic salutation has been deteriorating. Poverty has
become almost endemic. The rapidly growing population has also accentuated the tempo of
increasing mass unemployment and underemployment. There are a staggering number of people
living in absolute poverty, malnourishment, underfed and with limited access to necessities of life
(i.e. potable water, shelter, health etc.)
The rural areas of Pakistan lag far behind in terms of all social indicators; the rural
poverty in these areas increasing day by day due to poor governance, lack of institutional
mechanism, low level of investments in rural areas besides inconsistency in approach and wrong
priorities. Comparison of some important rural-urban indicators is summarized in table 1 below
Comparison of Rural Urban Indicators
Sector
Units
(million)
(%)
Rural
105.05
65.96
Urban
57.32
34.04
Total
162.37
100
Labor Force
Employed Labor Force
(million)
36.50
34.78
15.73
14.74
52.23
49.52
Un-Employed Labor Force
(million)
1.72
1.00
2.72
Population
Population Below Poverty Line
(%)
34
20.30
30
Literacy Rate
Male
Female
(%)
(%)
(%)
51
67
36
75
82
67
60
73
46
Rural Water Supply
(%)
57
86
65
Rural Sewerage/Sanitation
(%)
32
65
45
157350
258350
Roads
(kms)
101000
Basic Health Units
(Nos.)
5600
-
5600
Rural Health Clinics
(Nos.)
600
-
600
Village Electrified
(Nos.)
133,463
-
133,463
Source: Economic Survey 2008-09
85
Assessment of present Rural Infrastructure
Roads
Against required density of 0.5 Kms per square kilometer
the density is 0.32 Km per square kilometer
Rural electricity
About 10,000 to 12,000 rural localities do not have the
partial arrangements of electricity.
Waste water treatment facilities
More than seventy percent rural communities does not
have waste water treatment facilities ( Master Plan Report)
Drinking water
The 9600 rural communities do not have access to safe
drinking water.
Street pavements and drains
More than 20,000 rural communities do not have the pacca
streets and drains.
Educational facilities
More than 23,600 rural localities do not have educational
facilities
Toilet and Sanitation system
About 22,000 rural localities do not have the sanitation
facilities.
Source: Workinggroup Report on Rural Development.
Issues & challenges
Almost, one third of Pakistan’s people live below poverty line. Key challenges include
poor governance, poorly targeted social safety nets, inadequate infrastructure (i.e. energy,
transport, and irrigation), poor delivery of social services, lack of financial resources,
disempowered communities, exclusion of women from public sphere and the development
process, low social capital, ethnic and religious strife; and a spate of natural calamities in recent
years.
The Government has laid out a comprehensive development agenda, gives priority to
accelerating economic growth, improving governance, investing in human capital and targeting
the poor and the vulnerable, to increase pro-poor spending, including in education and health for
attaining the Millennium Development Goal.
Policies
The policy framework for development of rural areas requires new and fresh outlook,
based on recent experiences, success stories and result-oriented paradigms. Main fundamental
policies, which would play dynamic role during the 10th Plan period, are summarized below
Provision of adequate financial resources for development of rural areas

Support to new approaches and initiatives alongwith Regional and Cluster planning

Participatory approach, empowerment of disadvantaged sections in the community

Promotion of rural organizations formation in rural areas

Encouragement of Public Private Partnership
86

Rural development would link with available natural resources in vicinity

Environmental protection aspects for purposes of sustainability to minimizing the congestion/
pollution in rural areas
Strategies
The rural development required a holistic and comprehensive approach for betterment of
standard of lives of poor and pro-poor. The Government has recognized / emphasized and
identified measures for development of this sector because pervious experiences doesn’t proved
to achieve desired goals to helpful in triggering the development process in the rural areas.
During the next five-year plan highest priority would be accorded to following strategies.

Preparation of comprehensive policy with ample database for rural development

Improvement social and infrastructure facilities (i.e. rural health, rural education, rural roads,
portable water/ sanitation facilities, village electrification etc.). Specially, focusing on women

Institutional strengthening, for capacity development, responsive to the present needs

Empowering the communities through process of rural organizations and creating awareness
amongst rural communities, giving attention to allotting land to landless especially landless
women

Enhancing the economic base of rural areas through local economic development process and
create venues for enhancing the asset ownership of rural poor

Focusing the landlessness and devising the system for non-form sector development to ensure
sustainable livelihoods for poverty alleviation

Establishment of rural growth centers

Improving system of arranging credit facilities at doorsteps

Establishment of public private partnership process of rural areas

Reviving of rural industrialization and cottage industry

Promotion / Introduction of use of Information technologies in rural areas

Support endorsement of rural market development and marketing rural products

Establishing and supporting the use monitoring and evaluation techniques for result oriented

To create bank for rural development operating in regional countries for that purpose and
ensure access to credit for women
Rural Development programs
Various types of programs and projects were designed and implemented for betterment of
poor in rural areas, but the impact / outcome were not productive, due to various reasons. At the
same time, the successful stories of rural transformation in developed and developing countries
are in front of us. Some leaf is thus required to be taken from them to ensure that rural
transformation takes place. During next five years people’s plan, following programs will be
undertaken to implement the outlined strategy for rural development in the country.
87
Local Economic Growth Initiative
Realizing enhancing the productivity and economic potential of most backward rural
areas and their inhabitants through enterprise, investment – thereby boosting local incomes and
employment opportunities with aim to be supported by three outcomes (i.e. increase total
entrepreneurial activity among the population, support the sustainable growth, reduce failure rate,
locally owned business and attract appropriate inward investment and franchising into deprived
areas, making use of local labor resources.
Rural Industrialization
It has become essential to restart the process of rural industrialization by identifying new
locations and linking them with national and international outlets and network. In addition,
exclusive zones would be developed at various locations. This scheme would involve six
important components for rural industrialization, it is called cluster approach.






Identification of eight to ten villages in the vicinity
Connecting these villages with annular roads
Provisions of other infrastructure
Provision of credit windows
Identification of manpower and their development
Identification of industrial products and their linkage with international markets
Intensifying Market Development
The rural market development is essential to support local economic development,
productivity requirement and marketing of rural products. This market development would
require identification of farm and non-farm activities. Besides creation of supportive systems to
sustain the activities. The following steps would be undertaken during next five years for this
purpose;

Creation of growth centers, provision of all facilities including creation of linkages

Provision of facilities for rural credit for non-farm activities

Creation of National Rural Development Bank on the style of NABARD already
working in regional country

Identification of non-governmental organizations for support to cottage industry and
its working approaches

Improving accessibility of rural people to the production centers

Linking the whole system with responsive institutions and ensuring the involvement
of stakeholders

Creation of integrated system for export oriented components and support to skill
development and training to create trained labor

Support from government for rural market development and necessary arrangement
for marketing of rural products
88
Human Resources Development
The mechanism for human resource development would require networking of all the
institutions handled by rural development disciplines and conduct regular training for skill
development to using the services of trained work force, under the ownership of the federal and
provincial setups. The rural development institutions in country would be strengthening according
to new modern techniques.
Food Security
The household food security would require focus on two aspects, one related to the
people while other pertains to the government. The former requires the ensuring of availability of
food round the year by the people while under the second comes the control of export of food
items and hoarding by the millers. Additionally the subsidy is required to be allowed on staple
food. During, next plan period, hybrid verities of seeds, improved technologies practices and
increased inputs would be introduced, for increase the productivity per unit of area. Special
emphasis would accord to women, who playing a vital role in agriculture, would also provide
incentives (i.e. provision of land for landless, soft loans for purchase of equipment, seeds,
fertilizer etc).
Social Mobilization
Social mobilization and participatory development requires increasing in rural areas in
form of rural organizations, under the supervision of federal, provincial and district levels. During
the plan period, the rural communities would be involve in identification, implementation,
monitoring and evaluation of development schemes, as per procedure of National Rural Support
Program, Rural Support Program Network, Provincial Rural Support Programs and such district
level organizations and start up of permanent assignment like, sustainable village development
and local economic development. The women would play active participations in organizing
village level (i.e. development of cluster organization, community organization etc.). Ensures that
the partners have well targeted community outreach programs that are committed to enhancing
the economic welfare and income of the disadvantaged peoples particularly women. To empower
the targeted poor including women with increased incomes, improved productive capacity and
access to services to achieve sustainable livelihoods.
Employment Guarantee Schemes for women:
Introduction of Employment Guarantee Schemes during 10th five years Plan for women’s
who are un-employment can be a revolutionary step whereby a specific proportion of 20 % of the
schemes under PSDP are linked with 100 days guaranteed employment for women who enroll for
employment in any locality especially in rural areas and small towns. In case local schemes are
limited in generating employment the schemes in neighboring areas can be look for
accommodating the unemployed women’s in that particular areas. The modalities however,
needed to be worked out in consultation with government institution and local bodies.
People’s Works Program-I
The Program (PWP) was launched from 1st July 2008 under PM Directives at an
estimated cost of Rs. 4420.00 million allocated for small development schemes identified by 442
Parliamentarians to the tune of Rs. 10.00 million by each parliamentarian. The objective of PWPI is to supplement Government’s development efforts by execution of local development schemes
89
proposed by Parliamentarians in the sectors of Construction / Improvement of Roads & streets,
Provision of Electrification, Gas & Telephone Facilities, Sanitation and Drinking Water Supply
Amenities, Drains & Street Lights, Works and Equipment regarding Health, and Education
Facilities, Land Development through Bulldozers Hours. Schemes are funded and executed from
PWP-I based on prioritized list of projects identified by the parliamentarians in their respective
constituencies within the overall parameters of the approved policy and budgetary ceilings fixed
by the Government. The stipulation of “respective constituency” shall however, not apply to
project sponsored by Senators and MNAs elected on reserved seats.
Construction of Rural Roads Programs
Pakistan has a public road network of about 28214 kilometer which consists of 91112
km of national, 101000 kilometer Provincial, and 94102 km of district road and 54000 km
municipal and army roads including farm-to-market 64% of the national and provincial roads are
paved. Less than one fourth of the rural population is served by all weather farm-market-roads.
As against the minimum requirement of 3 km / square km of the cultivated area, there is hardly ½
km of all weather services road available in rural a area which is too small to serve the
requirements of rural population. The road density is only 0.32km/area which are very low when
compared with the neighboring countries. During next five years (2010-15) it is proposed that
3000 km of rural roads will be constructed in the country as per following. The main aims is to
reduce transport constraints, support agricultural rural development, enhance the mobility of rural
communities, allow better access to health, education and other social amenities.
Area Development Projects
The Government in collaboration with Narcotics Affairs Section (NAS) of the US
Embassy has initiated different areas development programs in Khyber Phaktoonkha and FATA
areas since 1999. The main aim of these programs is to eradicate poppy cultivation in these areas
and improve the quality of rural life by improvement in agriculture sector and infrastructure
development i.e, construction of farm to market roads, provision of electricity, construction of
irrigation channels and measures to control land erosion in these areas. It may be mentioned that
the poppy eradication campaign could not be launched successfully due to law & order situation
in FATA and NWFP. However, as a result of proactive strategy and poppy eradication campaign
the country has been successful in eradicating the poppy crops and is nearly touching zero level
of poppy cultivation i.e. 1000 hectares.
Public and Private Partnerships (PPP)
There is another pattern of public and private partnerships; it involves the steps given
below; Identification of locations with development potentials. Development of rural
development complex based on local core competencies/ work force available. Involve private
sector and public undertakings for outcome and trained the manpower and undertake
industrialization for nation level.
Financial Requirements
It proposed that Rs. 32.10 billion has been allocated for rural development excluding
special areas and less developed regions during Tenth Five Years People’s Plan 2010-15, to bring
Pakistan rural areas at par with rest of country. There are other programs/projects, which are also
under implementation in rural areas of the country but are reflected in respective sectors i.e.
health, education, water supply sanitation, water resources, irrigation, power and energy,
90
agriculture, transport etc. The details of financial requirement for next five years for particularly,
rural development sector are given below.
(Rs in Billion)
Projected Allocation for next Five Years
2009-10
Sector
Total
Bench
Mark
2010-11
2011-12
2012-13
2013-14
201415
(2010-15)
People’s
works
program-I
5.00
4.42
4.42
4.42
4.42
4.42
22.00
Rural
Development
1.40
1.00
1.50
2.00
2.40
3.20
10.10
Total (RD)
6.40
5.42
5.92
6.42
6.82
7.62
32.10
91
Annexure-I
SLECTED PHYSICAL TARGETS AND INDICATROS FOR
RURAL DEVELOPMENT
Sl.
No.
Sector
Units
Existing
Availability
2009-10
Projected
Availability
2010-15
Water Resources
1
Water Availability
Water Courses
New Tube Well
Surface Drains
2
Rural Roads
3
Rural Health
Immunization of Infants
Basic Health Units
Rural Health Clinics
4
Village Electrification
5
Literacy rate
Male
Female
6
Population
Rural
Urban
7
Labor Force
Employed Labor Force
Unemployed Labor Force
8
9
MAF
Nos
Do
MCM
KM
Million
Nos
Do
142.00
66750.00
1260
1612
148.00
47000
20,000
115
101000
110000
6000
560
25
6300
650
133,463
(%)
Do
Do
35791
60
73
48
66
80.3
52.85.6
Million
Do
Do
164.64
105.67
57.14
192
112
79
Million
Do
Do
52.23
50.21
2.72
61.33
56.71
4.62
Safe Water Supply Coverage
(%)
65
93
Urban
Rural
Do
Do
86
57
100
80
Planned Sanitation Coverage
Urban
Rural
(%)
50
90
Do
Do
65
35
86
52
92
3.
Galvanize Industry and Export Competitiveness, Accelerate
Development of New Leading Sectors and Develop Supporting
Strategies
3.1
Industry
1. 10th Plan vision for Industry
Rapid, broad based industrial growth is central to the 10th Plan objective of improving the
trade balance and generating productive jobs. Meeting these objectives during the ongoing
macro-economic stabilization efforts and weak external demand due to the global recession will
be challenging. The plan will take a policy strategic approach to address key structural
weaknesses that have resulted in a stagnant share of industry in the economy and of manufactured
goods in overall exports. The focus will be on strengthening the policy framework that affects the
incentive regime faced by industry and thus improve firm productivity and international
competitiveness and attract higher investment.
2. An assessment of Industry performance in the MTDF (2005-10) period and review of
major initiatives
2.1 Industry performance
The MTDF period registered robust industrial growth in the first three years that could
not be sustained in the second half of the plan period. Starting in the summer of 2008, macroeconomic imbalances resulting in high inflation and large, unsustainable, fiscal and current
account deficits, forced a sharp tightening of the fiscal and monetary stance. This happened in the
backdrop of rapidly deteriorating internal security and the turbulence of transitioning to
democracy. Furthermore, the global economic outlook deteriorated sharply culminating in a
severe international financial crisis and a global recession. As a result of these developments,
overall economic growth in the MTDF period at 4.8 percent was substantially lower than the Plan
target of xx. Slow down in the industrial sector towards the end of the MTDF period was a major
factor in the reduction of overall growth.
The early part of the MTDF period, 2005-7, coincided with a substantial improvement in
the enabling environment for the industrial sector. The external resource position that had started
to improve in 2001-2002 consolidated further and facilitated the relaxation of the credit crunch.
The banking sector and other structural reform measures of the late 1990’s made it attractive to
expand industrial activity. The result was robust average annual industrial growth of 8 percent in
the first three years of the plan period. Within industry, small scale manufacturing catering to
local demand and producing low technology intensity products, continued to grow throughout the
plan period. However, large scale manufacturing stumbled in 2008 and then shrank in 2009.
Table 1: Performance of Industry in the MTDF period
Overall industry
Large Scale
Manufacturing
Small Scale
Manufacturing
2005
11.4
19.9
2006
5.9
8.7
2007
8
8.6
2008
4.6
4.8
2009
3.6
-7.7
7.5
8.7
8.1
7.5
7.5
93
Table 2: Recent performance of key industries
Food, beverage & Tobacco
Textile & Apparel
Leather Products
Paper & Paper Board
Pharmaceutical
Chemicals
Fertilizers
Petroleum Group
Tyres & Tubes
Mineral Products
Steel Products
Engineering products
Electrical
Automobile
Cement
2007
7.8
9.1
8.6
-2.5
10.7
4.4
-7.7
-1.8
-31.5
23.1
29.3
21.5
9.5
6.0
22.5
2008
8.3
1.8
4.8
-2.5
25.1
4.9
-2.5
6.0
-7.1
17.4
-9.5
11.6
-4.0
-3.1
17.6
2009
-10.5
-0.7
2.9
2.9
0.9
3.8
21.5
-9.2
-4.0
4.8
-5.6
0.8
-31.3
-39.0
6.1
2.2 Major initiatives in the MTDF period
The prime focus of the government was on investment projects to enhance the
competitiveness of manufacturing firms. A number of projects were initiated in the public sector
during the MTDF period, that are in various stages of implementation. These include projects
addressing infrastructure constraints, skills deficiency, productivity enhancement and energy
efficiency. Three new public companies in gems & jewellery, furniture and marble, and granite
sectors were also established and made operational during the plan period. The aim of these
companies is to upgrade the local firms in order to connect with global value chains.
The MTDF period initiated the following projects in the last five years:
Initiatives to address infrastructure constraints

Establishment for Faisalabad and Lahore Garment City for clustering and value addition
activity
Initiatives to address technology, value addition and productivity issues






Establishment of the Gujranwala Tools, Dies and Moulds Centre to facilitate industry;
Foundry Services Centre, Lahore; Five CAD/CAM Training Centers; and Karachi Tools,
Dies and Moulds Centre
Establishment of Sports Industry Development Centre (SIDC), Sialkot
Completion if Cutlery Institute of Pakistan in Wazirabad
Hyderabad Leather Footwear Centre was revived
Pakistan Gems & Jewellery Development Company was set up to enhance exports from
the sector
Gujranwala Business Centre and Sialkot Business and Commerce Centre and Expo
Centre Lahore were initiated to assist market and product display capacity for exports
94

Agro Food Processing Facility, Multan; and Red Chillies Processing Centre, Kunnri
Sindh for value addition
Initiatives to address skills shortage


A Garment Technology Training Centre in Karachi was initiated
Pakistan Chemical & Energy Sector Skill Development company (PCESSDC) has been
formed
Technical Training Centre in Daharki, District Ghotki established to address the issues of
skills shortage faced by the fertilizer plants

Initiatives to address issues of Energy Shortage/efficiency

3
Energy Efficiency programme implemented for Textile Sector
Structural industry outcomes that need to be addressed in the 10th Plan
The focus in the 10th Plan will be to improve the policy framework that has resulted in
unsatisfactory performance of industry. A brief review below identifies the unsatisfactory
structural outcomes, measured in terms of industry’s overall contribution to GDP and
employment to overall GDP, and low industrial productivity and investment that have contributed
to these outcomes. This is followed up by a discussion, in section 4, of the policy framework that
needs to be addressed in the 10th plan period to improve investment and productivity in industry.
The 10th Plan is in cognizance of the fact that industry has not been the engine of growth of the
national economy both in terms of its contribution to overall economic growth as well as in
employment generation.
This is on account of low overall growth of manufacturing, poor product and export
diversification and low firm productivity and investment.
Figure I: Output Shares by Sector (%)
60
50
40
30
20
10
0
1970s
1980s
Agriculture
1990s
Industry
2000-09
Services
Source: Pakistan Economic Survey 2002-03, Pakistan Economic Survey 2008-09
and Bureau of Statistics data on GDP up to 2009.
95
Figure II: Employment Shares by Sector (%)
60
50
40
30
20
10
0
1980s
1990s
Agriculture
2009
Industry
Services
Source: Pakistan Economic Survey 2002-03, Pakistan Economic Survey 2008-09
and Bureau of Statistics data on GDP up to 2009.
3.1 Industrial growth
The low output growth of manufacturing relative to East Asian economies is a matter of
concern. The share of manufacturing in GDP increased significantly in countries like Indonesia,
Malaysia and Thailand over the last 35 years but has hardly changed in Pakistan. In fact, the share
of manufacturing has been virtually flat. Furthermore, the composition of manufacturing output
has changed very slowly in the last three decades. The Food and Beverages group continues to
dominate, albeit with a lower share in overall manufacturing, as do textiles (Table 3). However,
there have been some successes. The share of industrial chemicals has increased as has the share
of basic metals industry and electrical machinery. The share of transport equipment has also
increased albeit modestly. Within textiles also, firms have modernized their machinery and are
beginning to reap rewards of those investments.
Table 3: Change in Manufacturing Activity:1970’s-1990’s: Percentage shares
Food & beverages
Textiles
Apparel, leather & textile
Wood & wood products
Paper & Paper products
Printing & publishing
Industrial Chemicals
Petroleum & Coal Products
Rubber & plastic
Nonmetal mineral
Basic metal
Metal products
Nonelectrical machinery
Electrical machinery
Transport equipment
Others
Total
1970s
30.45
27.78
2.04
0.26
1.61
1.22
11.20
5.27
1.8
4.43
3.06
1.62
1.84
3.31
2.99
1.11
100.00
1980s
30.94
18.14
2.37
0.39
1.15
1.06
14.29
6.01
1.80
7.75
6.20
1.06
2.14
3.26
2.89
0.55
100.00
1990s
22.89
25.06
2.80
0.37
1.54
2.00
15.50
3.26
1.42
7.76
5.13
0.81
2.09
5.43
3.05
0.88
100.00
Source: A Note on Competitiveness & Structural Transformation in Pakistan (Asia Development
Bank, 2007)
96
None-the-less, the overall technology and scale indices of Pakistan’s manufacturing firms
are low compared with countries like China and India.
3.2 Manufactures exports
The share of Pakistan’s exports in total world exports has not grown in the last thirty five
years (Table 4).
Table 4: Country’s Exports as a share of World Exports
1974
1980
1990
0.14%
0.56%
0.55%
0.32%
Pakistan
India
Malaysia
Thailand
0.15%
0.43%
0.74%
0.37%
0.18%
0.57%
0.94%
0.74%
2000
2008
0.15%
0.70%
1.61%
1.13%
0.15%
1.32%
1.43%
1.25%
Furthermore, the range of products exported is narrow and the value addition is relatively
low. The Plan strategy for enhancing export competitiveness is to increase the number of
products in the export base and decrease dependence on the two major sectors: textiles and rice
which account for 70% of all of Pakistan’s exports.
The plan will seek to improve Pakistan’s export positioning in the world markets. Only a
small proportion of the exports, mainly chemicals, have good international prospects (Figure III).
World demand for pharmaceuticals is rising but their share in Pakistan’s exports is declining. The
vast majority of Pakistan’s exports constitute products whose share is declining in the world
market. Furthermore, exports are dominated by one large product group (textiles) and one mid
size group (clothing) while the rest constitute small shares in total exports.
The 10th Plan will seek to reverse the declining trend in merchandise exports and improve
the share of high technology manufactured goods in total exports (Figure IV). In turn, this is
expected to create higher productivity and higher wage employment by the end of the plan period.
Positioning of India's Major Manufactured Exports in
2007
10.0
Pharmaceutical
s, 3.1%
8.0
Iron and steel,
5.7%
6.0
4.0
Chemicals,
11.4%
2.0
Automotive
products, 2.4%
0.0
-5%
0%
5%
10%
15%
-2.0
-4.0
Clothing, 6.7%
-6.0
Textiles, 6.6%Machinery and
transport
equipment,
11.6%
-8.0
Annual growth of Country’s share in Product’s global exports in
2000-2007
20%
Annual growth of product’s share in world’s total exports in 2000-2007
Annual growth of product’s share in world’s total exports in 2000-2007
Figure VI: Competitiveness and Performance of Pakistan’s Exports
Positioning of Pakistan's Major Manufactured Exports in
2007
10.0
8.0
Pharmaceuticals
, 0.6%
6.0
4.0
Chemicals, 2.6%
2.0
0.0
-20%
-10%
0%
10%
20%
30%
-2.0
Clothing, 21.4%
-4.0
Textiles, 41.4%
-6.0
Machinery and
transport
equipment,
4.5%
40%
50%
Telecommunicat
ions equipment,
0.4%
Office and
telecom
equipment,
0.5%
-8.0
Annual growth of Country’s share in Product’s global exports in
2000-2007
Note: In Figure III, the vertical axis measures the world wide growth in the export of product x,
as a share of total world exports, while, the horizontal axis measures the growth in the export of
97
product x for a country as a share of total world export of product x. If the country’s product is
on the right hand upper quadrant (competitive quadrant), it shows that the product is gaining in its
international competitiveness. This is because its share in the export market for product x is
rising at a time when worldwide share of the product in total world exports is rising. Therefore,
the more products a country has in the ‘competitive quadrant’ the stronger is its international
competitiveness (Nabi, 2010).
Figure IV: Manufactured Exports as % of Merchandise Exports & High Technology
Exports as % of Manufactured Exports
(Source: Nabi (2010)
3.3 Industrial Productivity and Investment
Underlying the structural problems identified above is low productivity and investment in
industry. Improving industrial productivity will thus be an important strategic objective in the 10 th
Plan period.
Total Factor productivity: The macro perspective
Manufacturing growth has been driven predominantly by growth in inputs i.e., labour and
capital. The contribution of total factor productivity in aggregate manufacturing growth has been
low (Table 5). Growth in total factory productivity was impressive only in the 1980’s (Table 6)
and then to a lesser extent in 2001-5. The policy framework for industry in the 10th Plan period
will seek to improve total factor productivity by encouraging more efficient use of resources.
Table 5: Growth Accounting in Pakistan and Comparable Countries (%) 1961-2005
Pakistan
India
Bangladesh
East Asia & Pacific
Source: World Bank 2006
GDP Growth
Capital
Labour
5.28
4.57
3.38
6.46
2.31
1.77
1.16
3.15
1.89
1.50
1.64
1.74
Total Factor
Productivity
1.08
1.30
0.57
1.71
98
Table 6: Growth Accounting in Pakistan by Decades (%) 1961-2005
GDP Growth
6.97
1961-1970
4.58
1971-1980
6.09
1981-1990
3.86
1991-2000
4.55
2001-2005
Source: World Bank 2006
Capital
Labour
4.48
1.80
1.90
1.45
1.58
1.63
2.30
1.90
1.71
1.92
Total Factor
Productivity
0.86
0.48
2.30
0.71
1.04
In recent years, the larger firms have registered higher productivity relative to medium
and small sized firms (Figure V). Larger firms not only enjoy scale economies but also have
access to relatively modern and efficient production techniques resulting in the observed
productivity differential. The data also shows that established older firms have a substantial edge
in productivity and efficiency over younger firms.
Figure V: Total Factor Productivity by Firm Size and Firm Age, 2001-2006
2.5
Aggregate productivity
Average productivity
Efficiency term
TFP in logs
2.0
1.5
1.0
0.5
0.0
Small
(<25 employees)
Medium
(>=25 & <100
employees)
Large
(>=100
employees)
Young
(<5 years)
Old
(>=5 years)
Source: Investment Climate Survey 2007, World Bank 2008.
SME Productivity
The low level of productivity of smaller firms is primarily a consequence of financial
constraints. Smaller firms are credit rationed due to the lack of available collateral and
information asymmetry present in the formal credit market (commercial banks). Micro enterprises
and SME’s thus find it difficult to grow in size and scale and enjoy access to improved
technologies for higher productivity.
The micro and the cottage sectors chiefly comprise informal establishments scattered
around several clusters across Pakistan. The key clusters include textile and garments in Lahore,
Karachi and Faisalabad; surgical instruments and sports goods in Sialkot; light engineering and
electronics in Gujranwala, Duska, and Gujrat; cutlery in Wazirabad; leather and footwear in
Karachi, Sialkot, Muridke, and Kasur; carpets and artificial jewellery in Lahore; and livestock
and agriculture clusters all across Pakistan. The challenges facing the micro and cottage sectors
comprise: (i) limited financial penetration; (ii) inadequate human resources and, especially,
management capacity (at the senior, middle and field levels); (iii) sustainability problems because
of limited outreach; and (iv) low efficiency, resulting in high operational costs. The 10 th Plan
99
period will see a more focused effort to develop strategies to address these constraints including a
more conducive State Bank regulatory framework.
Productivity: A firm level perspective
Value chain analysis in selected manufacturing activities helps pinpoint the factors that
contribute to low productivity in industry at the firm level (Table7). The Plan will seek to
identify opportunities for public/private initiatives to address the bottleneck indentified in value
chain analyses.
Table 7: Firm level productivity constraints based on supply chain analysis
Sector
Textile Sector
Agro-Based
Auto-Sector
SME Sector
Firm Specific Issues
Denim Jeans: Firms are non-competitive due to:
 Inadequate up-gradation of technology
 Longer shipping and higher freight costs – Inadequate logistical support
 Electricity is too expensive and inconsistent – Infrastructure Constraint
 Scarcity of trained workers, technicians/engineers hampering productivity
 Non-integrated Mills (SMEs) access to finance is limited
 Weak chemical industry
Fisheries: Firms are non-competitive due to:
 Low productivity - Inadequate upgrading of technology
 Non-complaisance to SPS measure s – ban to the EU Market
Powdered Milk: Firms are non-competitive due to:
 Non-productive farming techniques
 Quality issues due to lack of collection infrastructure
 Inadequate system of quality assurance & health safety standards – non
compliance to international quality standards
 Insufficient testing facilities and scattered small farms
Radiators: Firms are non-productive due to:
 Low production scales and older technologies
 Low quality
 Non-availability of skilled workers to shift to more mechanized, precisionbased and robotic production technology
Marble & Granite: Firms are not competitive due to:
 70% losses due to inadequate technology and processes
 Inadequate technical knowledge of mining resources
 Weak enforcement of property rights
 Technology unable to prepare square tiles
Footwear Industry:
 Issues with raw material – lack of information and skills
 Inadequate technology upgrade
 Inadequate availability of skills
 Weak design and product development
Sports Goods:
 Technology not upgraded hence loosing share in world market – e.g. Shift
of football technology from stitched to thermo-bonded
 Skills shortage to work on specific technologies
 Quality and international compliance issues
(Source: World Bank, 2006)
100
4. 10th Plan Strategic Policy framework
Textiles
Pakistan is the 4th largest cotton producer and 3rd largest cotton consumer. The textile
and clothing industry has been the main driver of the export based industry for the last 50 years in
terms of foreign currency earnings and jobs creation. Textile industry nourished under official
patronage, but lost its euphoria in the post-quota regime. Its share in exports had declined from 66
percent in 2004 to 53.7 percent in current financial year. The Textile Industry in Pakistan has not
been able to reap all the benefits of post quota regime as compared to other regional competitors.
China, India and Bangladesh are posing tough challenge by virtue of their competitiveness. The
performance of the sector over the last three years has shown a declining trend with 2009 being
the worst year.
Engineering Goods
The engineering industry plays an important role in the value addition, increase in
exports, and employment generation in the economy. Unless the country has the capability to
produce engineering goods, particularly the capital goods, industrialization may present
tremendous difficulties in a competitive framework. The performance of this sector over the last
three has been reasonably better as compared with other industrial sectors. However the
performance slowed down in 2009.
Steel
Steel is fundamental to our lives and essential to economic growth. Steel provides
infrastructure, transport, energy delivery, housing and construction, and key consumer goods. The
sector has shown inadequate performance over the last two years due to slow down in the
economy and lack of demand both domestically and internationally pushing down production and
prices.
Auto parts
Apart from the production of tractors and motorcycles the auto industry has generally
seen a decline in performance over the last 5 years. A host of reasons are responsible for this
downturn. i) Imposition of corrective measures on the car industry in Budget 2008-09. ii)
Substantial depreciation of Pak rupee against major currencies. iii) Imposition of 35 percent cash
margin on import letters of credits. iv) Continued import of used vehicles-passenger cars and
heavy commercial vehicles. v) Increase in the rate of Sales Tax. vi) Stringent regulatory measures
and high mark up rates for financing of vehicles. vii) Decline in disposable income of the
consumer due to significant rise in inflation, rise in the costs of materials and general economic
conditions.
Cement
Pakistan’s cement industry is highly fragmented and comprises of 27 companies with a
total capacity of 44 million tons which is expected to reach 46 million tons by 2011. The cement
industry has spent more than $ 1 billion for its expansion in recent past, resulting in
approximately 20 million tons surplus capacities. This is one of the sectors which has continued
to perform well.
101
4.3. 10th Plan policy framework to strengthen incentives for improving productivity and
increasing investment in industry
1. Maintaining a competitive exchange rate
Historically, Pakistan’s exchange rate policy has tended to discriminate against industry.
Persistent overvaluation of the currency (from the perspective of the goods and services accounts
balance) can be attributed to large external inflows, in particular remittances and foreign
assistance. Since overvaluation alters the prices in favour of non-tradables (services) sector at the
expense of tradables (manufactures), it has adversely impacted the growth of industry.
A medium-term strategy to enhance industrial growth will include an exchange rate
policy that strengthens competitiveness of the country’s tradable sector. The East Asian
experience provides an important lesson for formulating a competitive exchange rate policy.
These countries consistently maintained a positive balance on goods and services trade account
(except Thailand, which had a small deficit) over the past three decades. The appreciating effect
on the exchange rate of the trade surpluses was neutralized by channelling the surpluses toward
increasing foreign exchange reserves.
To accelerate growth in the industrial sector, Pakistan will need to follow a pro-active
exchange rate policy with the specific goal of narrowing the gap on the goods and services trade
account. This will require not only correcting the existing overvaluation in the exchange rate but
also compensating for the appreciating effect of remittances. The combined real exchange rate
correction required is substantial and will have to be implemented gradually with the goal being
to achieve a competitive exchange rate (for the tradable sector) over the plan period.
2. Removing other policy biases against industry
The disincentive to industry associated with the over-valued exchange rate is further
reinforced by other policies. Together, they create a powerful policy framework that discriminates
against investment in industry. This policy framework will be monitored at various forums of
policy making and the disincentives to industry removed.
Credit allocation
Banking sector reform that encouraged domestic and international private commercial
banking helped in successful intermediation of the large volumes of remittances. However, banks
have shown a strong preference for new lending for consumption than to manufacturing
enterprises. In 2007, bank lending for personal loans far exceeded lending to private enterprises,
reversing the pre-2003 trend of higher lending to enterprises. The incentives to which the
reformed banks are reacting to bring this about will be examined and corrected.
Energy policy
High line losses and reluctance to charge prices that reflect the true cost of delivering gas
and electricity at the door step, have resulted in the energy sector becoming a fiscal drag on the
economy. Not withstanding the fiscal problems associated with energy, energy pricing policies
have preferred consumers over industrial units. The tariffs for both gas and electricity have been
consistently higher for industry compared to residential consumers, and the residential consumer
has been given preference in energy rationing decisions. This has had a discouraging affect on the
incentive regime faced by industry that will be monitored and corrected.
102
Tax regime
Tax policies are critical in levelling the sectoral playing field. Currently, agriculture, the
real estate and the retail sectors are largely out of the tax net while most manufacturing is
captured. This is an important factor in explaining the rapid growth of the real estate and retail
sectors in the last three decades. The tax regime will be monitored and adjusted to ensure that it
does not facilitate the diversion of resources away from industry.
3. Development of Industrial clusters
SME industrial clusters have traditionally played an important role in Pakistan’s nontextile manufactured exports8 and it is these that have the greatest potential for providing the base
for promotion of medium and high technology industry in Pakistan. Given that public resources
are limited, policies and investments will be targeted towards promoting industrial clusters in
selected areas. There are many industrial clusters in Pakistan, such as the engineering,
pharmaceutical, and clothing clusters around Karachi, and the light engineering and sports goods
clusters in the Sialkot, Gujarat, and Gujranwala triangle. By targeting infrastructure, skill
training9, development of common facilities10, and technology investments according to these
clusters’ needs, the government aims to unleash a dynamic process of technology-intensive
export growth. Furthermore, the availability of a reliable supply of gas and electricity is
significant in giving a competitive edge in the production of medium and high technology
exports. Currently, the country faces a severe shortage of electricity and gas and the plan will
prioritize the allocation of resources to ensure uninterrupted supply to the identified industrial
clusters.
4. International Value Chains
The largest and the most rapidly expanding portion of world trade today consists of intraindustry trade, as most medium and high technology products are part of an international
integrated production systems where different processes are separated and located by
multinational firms according to differences in production costs. Hence, upgrading of industrial
structure is difficult unless Pakistan can hook into the international value chains. The 10th Plan
will adopt an industrial policy that coordinates effectively between private and public sectors and
supports an incentive structure that encourages competitiveness rather than rent seeking
behaviour by firms. The existing broad and general subsidies and incentives will be replaced with
more focused and productivity enhancing ones. Further, the bureaucratic, anti-globalization
8
In 2008, Sialkot alone exported manufactured goods worth over US$800 million, i.e., more than 25% of
Pakistan’s manufactured exports, excluding resource-based, textile and clothing exports.
9
The ready availability of skilled workers facilitates the adoption and use of new technologies. At the
managerial levels capable managers and engineers are needed to adapt and use sophisticated technologies,
manage complex production processes and to develop and market products demanded internationally. The
proposed engineering university, technology park and technical training institute Complex in Sialkot to be
established in collaboration with Sweden is the kind of project which can provide a quantum jump in the
growth of SME based medium and high technology industry.
10
Some critical competitiveness constraints need to be addressed at the industry level as most firms in the
medium and high technology sector are relatively small. This will be done through the development of
common facilities for firms producing technology intensive products. The government plans to develop
these common facilities in the public-private-partnership mode with the aim that such projects will become
models for private sector involvement in this area and provide the technical base for industrial production
in the country to move up the technology ladder.
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attitude, which – together with the security problems – are perpetuating Pakistan’s international
isolation in manufacturing will be replaced by a policy mind set and approach that encourages
foreign investment and joint ventures in the manufacturing sector that are needed for Pakistani
firms to become a part of the international value chains.
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Annexure-A
Assessing Performance of Key Industries in the MDTF Period
Performance in Year 1 of the MTDF period – FY 2005
Industrial growth in FY 2005 was recorded at 11.4 percent which was well above the 9.8
percent target for the year and was substantially higher than the growth rates witnessed in
previous years. The robust performance of Pakistan’s industrial sector during FY05 came from
large-scale manufacturing (LSM), which accounted for approximately three-fourth of the total
industrial value addition. However, the FY05 LSM growth was less broad based as several of the
sectors failed to perform. The strongest contribution to LSM growth during FY05 came from the
textile sector that witnessed a remarkable growth of 24.7 percent. The overall growth recorded by
LSM was 19.9 %. A critical reason was supportive government policies as in FY04, the
government announced various supporting measures for the textile sector which were reflected in
the robust textile sector growth of FY05. One such measure was the reduction in the import duties
on textile machinery, which contributed to the 50.8 percent jump in their imports and, in turn,
spurred textile production.
Performance in Year 2 of MTDF period – FY 2006
The growth of the industrial sector in 2006 was 5.9% substantially lower than the 11.4
percent growth recorded during the preceding year. Similar to 2005, most of the subsectors of
industry witnessed a deceleration in growth, but the deceleration in FY06 was much sharper. The
growth in large-scale manufacturing remained below the annual target during FY06. The 13.0
percent target for FY06 was not achieved mainly due to: (1) the capacity constraints faced by
some industries; (2) the impact of an expected rise in international oil prices, and; (3) continued
monetary tightening.
Performance in Year 3 of the MTDF period – FY 2007
The industrial sector witnessed a moderate recovery during FY07, largely due to the
strong growth in the manufacturing, and the construction sub-sectors, as well as the lower
negative contribution from the electricity and gas distribution sub-sector. While large-scale
manufacturing (LSM) witnessed a weaker performance in FY07 relative to the preceding year, it
remained the biggest contributor to industrial sector growth. Both, large scale manufacturing
(LSM) as well as small-scale manufacturing (SSM), remained significant contributors to GDP
growth during FY07 despite a broad-based deceleration in the growth rates during the year. This
slower growth reflected a moderation in external and domestic aggregate demand, as well as
capacity and input constraints in some industries.
Given the importance of SME sector towards employment generation and in supporting
LSM, the sector received considerable policy attention in 2006. The government announced its
SME policy, and the SBP introduced separate prudential regulations to facilitate access to credit.
The most significant contribution to the FY07 outcome was from the textiles sector, which staged
a strong recovery, shrugging off the impact of a relatively disappointing domestic cotton harvest.
Performance in Year 4 of the MTDF period – FY 2008
The domestic industrial sector muddled through a mix of major economic, political and
structural setbacks throughout FY08. The rising fuel and commodity prices and intensifying
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energy shortages in the country obstructed FY08 industrial activities. The heightened political
uncertainty and law and order issues during the year also took their toll. As a result, the FY08
industrial growth went down to 4.6 percent compared with 8.0 percent in FY07. Manufacturing
sector growth also continued to decline for the third consecutive year and posted a six-year low
growth during FY08. Most of the slowdown was seen in large scale manufacturing (LSM) as
small scale manufacturing (SSM) decelerated only slightly. Similar to FY07, the deceleration in
LSM reflected a relative moderation in domestic demand, power and gas outages as well as
capacity and input constraints in certain industries.
Performance in Year 5 of the MTDF period – FY 2009
Pakistan’s industrial sector witnessed its worst-ever performance during FY09, with
production dropping by 3.6 percent in contrast to the 5.5 percent CAGR recorded in the previous
ten years. Indeed, overall industrial growth has been in the red only twice in Pakistan’s history
and this is by far the largest. The exceptionally poor FY09 industrial growth performance was
caused principally by domestic developments. Structural problems took their toll in the form of
severe energy shortages, the circular debt issue, the economy was hit by a deterioration in
security and law and order situation, and lower demand for major consumer durable goods as real
incomes weakened and credit contracted. To make things worse, net global economic contraction
(first time since 1930s) did not allow export-based industries to compensate for depressed
domestic demand. Also, prevalent macroeconomic imbalances did not allow room for monetary
or fiscal stimulus to support domestic industries. The production in manufacturing sector posted
first-ever decline in FY09. The entire decline stemmed from the large-scale manufacturing (LSM)
as the small scale manufacturing (SSM) and slaughtering activities showed respectable growth.
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Annexure-B
Firm Level Productivity Issues
A. Blue Denim Jeans/Textiles
In exporting denim jeans (and other textiles and apparels) to the US market, Pakistan is at
a competitive disadvantage because of the longer shipping time and higher freight costs as a
percentage of export values. Relative to China this disadvantage amounts to 6.5 percent of the
export value. Hence, to a relatively more efficient Customs administration, port operations, and
inland transport and logistics, and lower factory-gate costs can counteract this disadvantage.
In cotton spinning where power charges account for about a fifth of total costs and 42 percent of
conversion costs, competitiveness and profitability is adversely affected not only by the high
electricity tariffs for industrial users, but also by frequent outages -- commonly an average of 3
per day. With funds that the industrialists could otherwise use to automate some processes, many
textile mills install back-up generators, further raising their costs of production. A recent survey
done suggests that the cost of 1 unit of electricity by using a diesel operated generator is Rs 23 as
compared to the Rs 12 on average from WAPDA.
In ginning and weaving, the scarcity of trained workers, technicians/engineers (such as
ginning engineers) is hampering maintenance and productivity improvements. And due to the
rigidities of the labor market, contractual hiring is preferred, encouraging under-investment in
training by employers and workers. For non-integrated mills which are mostly SMEs (e.g., in
weaving), access to financing is limited by high collateral requirements.
In dyeing, material inputs account for over 55 percent costs. Chemicals, mostly imported,
account for 95 percent of these inputs. Collecting rebates on customs duties and other levies paid
on these imports can take 3-5 months, delays that create cash flow problems for the firms and
raise their costs.
B. Shrimp/Fisheries
Shrimp fishery yields are low and costs high. As a result, shrimp processing is marked by
low returns and low capacity utilization, factors that constrain upgrading of technology by vessel
owners and processors. For an average 45-foot keel-length trawler and about 20 trips/year, shrimp
may represent approximately 5 percent of the total catch, the rest being by-catch (around 8
percent of the total catch is marketable non-shrimp catch, and 87-90 percent trash fish).
Furthermore, the costs of over-crowding in the Karachi Fish Harbor --2,000 trawlers
instead of the recommended 600-700-- include wasted fuel, boat damage and over-fishing. At the
same time, poor management and unsanitary conditions in the hall where the trawlers’ catch is
auctioned result in losses due to poor icing (about 10 percent) and poor storage (8 percent). The
inability to guarantee that seafood meets hygiene safety standards keeps Pakistani shrimp, for
instance, off EU shopping lists.
C. Marble Tiles/Mining
Industrial waste in marble extraction (mining) and in processing (cutting and polishing) is
much higher in Pakistan than in other major competing countries. Mining losses exceed 70
percent, far in excess of international benchmarks (25-55 percent). Such mining methods crack
the marble blocks and produce less desirable, irregular-shaped blocks. As a result, the processors
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usually discard as much as 60 percent of the material. Hence, lack of coordinated regulation and
intervention at different federal and provincial government levels; inadequate technical
knowledge of mining resources; failure to implement ‘no blasting’ regulation effectively; opaque
and cumbersome leasing procedures; poor definition and enforcement of property rights with
respect to the surface land is impacting the sector. Under the recent initiatives of Marble and
Granite Company some machinery has been provided to reduce wastage and get better finish of
the square tile.
D. Powdered Milk/Agribusiness/Dairy Product
Low and volatile supply of milk for processing due to, scattered and fragmented
production points and marketing; informal system of collection leading to 10-15 percent losses
due to adulteration and poor quality; inadequate cold chain; and high seasonality of milk
production. These conditions raise the cost of milk collection and lead to low capacity utilization
in processing. Low capacity utilization raises processing costs. In addition, the lack of
infrastructure results in poor quality of milk which is not suitable for manufacturing high value
added products. Inadequate system of quality assurance and health safety standards due to, lack of
coordination between the provincial and local governments and low skills of the inspectors;
insufficient testing facilities; and the scattered small farms. Moreover, the practice of combining
milk from the formal sector with milk from the informal sector makes control and traceability
difficult.
E. Automobile Radiators/Light Engineering
Low production scales, old technologies geared to supplying the domestic automotive
assembly industry, and low quality characterize Pakistan’s auto radiator industry. While
international markets have already shifted to all-aluminum radiators, in Pakistan local firms
continue to produce copper tube/brass fin radiators for the domestic auto industry. A move
towards export orientation in auto radiators (and other auto parts) would require upgrading
technologies and increasing the supply of appropriate skills that can handle more mechanized,
precision-based, and even robotic production technologies. Some sources of current competitive
disadvantage include, very low production scales and old technology used in the radiator
subsector.
F. Leather Sector
Leather is one of the critical and most mature export sector in manufacturing for
Pakistan. However, due to lack of investment and availability of information the sector has failed
undergo a structural change with world market demand. Today footwear is the largest segment of
the world trade in leather (54% share with $55 Billion worth of exports (2009)) and Pakistan’s
share in this growing sector is less that ) 0.1%. Similarly, the leather garments sector is using
older machinery which is at least 4 times less productive to those installed in China and Turkey.
The sector also suffers from skills and research and development. The raw material quality has
not improved with changing market demands as there are no institutes working on leather science
in Pakistan.
G. Surgical Instruments Sector
The industry is suffering due to low value added and producing low end equipments and
instruments. The lack of investment is result of poor perception of Pakistan on quality, nonavailability of skilled labour and strict environmental and quality compliance requirements. The
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industry also lacks due to disconnect it has with the final consumers. This lack of consumer
feedback has always kept the industry at the back foot on innovation and diversifying into newer
products.
H. Sports Goods
The sector, although extremely critical for Pakistan's exports, is characterized by low
capital per worker and a poor ratio of skilled to unskilled workers. The key weakness of this
sector is chronically insufficient investment, which makes it difficult for the industry to adapt
technologically to keep pace with changes in international demand for sports goods.
The experience of two major items will illustrate the point. The largest single export item
from Sialkot is inflatable (soccer) balls. Over the last two years, Pakistan's exports of this item
have dropped from $226 million to $160 million, while world exports have increased from $984
million to $1.15 billion. The reason for this is a shift in technology, as the world's demand for
soccer balls has moved to thermo-bonded and machine stitched balls. Only one company in
Sialkot has acquired thermo-bonding technology, and only a few have moved to machine
stitching. The industry is therefore unable to compete with China. If this trend continues, the onetime prime export of Sialkot (soccer balls) will die.
This, in fact, was the fate that befell the rackets industry. Until about two decades ago,
Sialkot was one of the world's biggest exporters of wooden rackets for all sports, such as tennis,
squash, and badminton. However, as the world turned to composite-based rackets (carbon,
graphite, and other materials), the sports goods industry in Sialkot was unable to adapt and its
production of rackets is now virtually extinct.
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3.2
Mineral Development
Introduction
The mineral potential of Pakistan widely recognized to be excellent but the sector is
inadequately developed. This is evident from the fact that its contribution to GNP remained 0.5
percent to 1.0 percent, unchanged over the last many decades. Although many efforts have been
and are still being made in developing geological products, institutional, academic and R&D
infrastructure, enough remains to be done to enable the sector to take full advantage of its
endowment. As a result of these toils, devoted for the development of mineral sector, resources of
several minerals have been discovered over the last many decades, including world class
resources of lignite coal deposits at Thar; Sindh, porphyry copper gold in Chagai and lead-zinc
deposits in Lasbela, Balochistan; gypsum, rock salt, limestone, dolomite, china clays etc. in the
Indus Basin, ornamental and construction stones in various parts of the country; and about 30
different gems and precious stone deposits in northern Pakistan. There are many other mineral
projects in various stages of implementation from grass root level through exploration, evaluation
to development and utilization stages. MTDF 2005-10 covered various aspects of mineral
industry i.e. objectives and targets, issues, operational strategy for the development of mineral
sector giving emphasis to geological mapping, capacity building of institutions, setting up of
geological data base centers and technology upgradation. Further development of a few minerals
i.e. copper-gold deposits in Balochistan by M/s Antofagasta of Chile and M/s Barrick Gold of
Canada and MCC of China and lead-zinc deposits of Duddar area by Chinese Company shows
confidence foreign investors repose in the investment oriented policies initiated for the
development of mineral sector.
Recognizing that development of mineral resources is an early requirement to meet the
present and ever increasing demand of minerals in various sectors of economy, the thrust during
the 10th Plan would be efficient utilization of country’s geological endowment and mineral
potential. The emphasis, therefore, would be to harmonize right mineral policies with right
institutional mechanism, demand based training of professionals by building up capacity of
university departments and skill development by setting-up school of mines, developing priorities
in framing programmes and projects, providing incentives within fiscal policy framework for
attracting investment, Joint venture of public and private sectors duly supported by sectoral and
project(s) specific feasibility studies, development of geo-parks in certain thrust areas, close
collaboration with ECO countries in the mineral sector particularly in intra-regional trade,
technological information, inflow of capital and advanced technology from within and outside the
region, provision of infrastructure and utilities in mineral producing areas etc. In order to ensure
proper and effective monitoring mechanism for achieving the objectives and targets of the 10 th
Plan, an Action Plan would be devised.
Present Status of Mineral industry
Geological Endowment, Geological Surveys, Mineral Potential and Production
Pakistan has widely varied geological framework, ranging from Pre-Cambrian to the
Present that includes a number of zones hosting several metallic minerals, industrial minerals,
precious and semi-precious stones. Geological survey of Pakistan (GSP) is responsible for the
study of geology of the country in detail and assess its mineral resource potential through geochemical, geol-physical surveys followed by exploratory drilling and laboratory investigations to
prove the mineral deposits identified during the course of geological mapping. All along, it has
been emphasized in various plans that geological mapping to the scale of 1:50,000 and access to
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geo-scientific database is an early requirement of mineral investors and explorationists. To this
end, GSP have mapped about 60% of the total outcrop area of Pakistan to the scale of 1:50,000
while it has completed geological mapping of whole of outcrop area on 1:250,000 scale.
An economic geology study was carried out by German consultants hired by Asian
Development Bank with a view to identifying the most promising areas for mineral exploration
(1993). Applying modern geological models and concepts and reviewing available field data, the
project individualized fourteen metallogenic provinces. These provinces contain platinum and
platinum group, gold, silver, copper, chromite, lead-zinc, antimony, manganese, iron ore,
magnesite, barite, talc, marble, precious stones etc. The German consultants assisted GSP in
formulating ten years National Mineral Exploration Program (NMEP) that is worth to be mapped,
prospected and explored in detail. Summarized version of these metallogenic areas is given at
Annexure-I.
Regarding mineral potential and production, there is a large inventory of minerals and
rocks. Resource size and average yearly production over the last five years of a few major
minerals\ rocks is given at Annexure-II.
Constitutional Position, Mineral Policy and Mining incentives
According to the constitution of Islamic Republic of Pakistan (1973), with the exception
of oil, gas and nuclear minerals and those occurring in special areas: FATA, AJ&K and off-shore
zones, provincial govts are responsible for regulation, development and exploration of minerals
which fall in their domain. Geological surveys, preliminary evaluation, processing and
upgradation of minerals are federal functions. The subject of regulation labour and safety in the
mines appears on concurrent list. Regarding National Mineral Policy (1995) covering various
elements was announced by government of Pakistan in 1995. The practical application of mineral
policy depends on its implementation at the provincial level. However, necessary improvements
are being made to making mineral policy more attractive for investors.
Institutional Framework and R&D facilities
Public Sector agencies concerned with exploration and development of mineral resources
include: Geological Survey of Pakistan, Pakistan Mineral Developments Corporation, PCSIR
Labs, Mineral Wing of Ministry of Petroleum and Natural Resources Government of Pakistan,
Directorate of Mines and Minerals Department in all the provinces including Gilgit-Baltistan,
FATA, AJ &K, inspectorate of Mines in all provinces and special areas and mineral development
corporations/authorities in Punjab (PUNJMIN), Balochistan (BDA), Sindh (SCA) and AJ & K
(AKMIDC). R & D facilities, manned by highly qualified manpower and equipped with
sophisticated equipment are available with the Geological survey of Pakistan, mineral processing
and metallurgy center, glass and ceramic center, mineral technology division, fuel research center
of PCSIR, coal technology center of university of the Punjab, nuclear mineral survey center of
Pakistan Atomic Energy Commission (PAEC) and all the geo-scientific and geo-technological
labs of geological departments and mining engineering departments of about seventeen
universities.
HRD in Mineral Sector, Mines Safety and Welfare Departments
There are thirteen departments and Institutes in different universities of Pakistan that
award post graduate degrees in various branches of geological disciplines. Similarly there are four
universities producing graduates/post graduates in mining engineering. Regarding training of
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middle-line supervisors/technologists, there is only one Institute, Punjab School of Mines;
Chakwal; Punjab. Regarding safety and welfare of miners, the federal and provincial govts are
entrusted with the inspection and mining of mining operators. To address the safe working
conditions in this dangerous and hazardous profession, mine rescue stations have been setup in
Punjab and Balochistan.
Private Sector
The present status of small scale mining by the private sector indicates that it has
potential to create gainful employment (0.35 million in coal mines) generate income and help
stem migration from rural areas to urban areas.. Problems being faced by the private sector
particularly of small scale mine owners are: low capacity, low interaction, poor exposure,
unfriendly attitude of relevant departments, poor and/or non-existence of system for the
resolution of disputes, lack of accessibility to credit facilities, equipment and machinery and nonavailability of infrastructure (roads) & utilities(electricity, drinking water, housing & medical
facilities, schools etc.). Efforts have been and are still being made to put small scale mining on a
sound footing by providing them with necessary incentives, mining equipment and technical
input.
Review of Ninth Plan
Public Sector
Having recognized that mineral potential of Pakistan is excellent, yet its contribution to
GNP remained 0.5% to 1%, unchanged over the last many decades. MTDF (2005-10) envisaged
to develop mineral endowment by: i) accelerating geological mapping and geo-scientific
activities in 14 metallogenic zones individualized by German consultants hired by Asian
Development Bank (1993); ii) capacity building of geological and mining departments including
setting up of geo-data centers; iii) increasing the share of coal in the energy mix from the present
6.5% to 9% by 2010, finally reaching 14% by 2020; iv) provision of infrastructure and utilities in
minerals producing areas; v) facilitating joint ventures between local and foreign partners; vi) and
providing technology upgradation and Business Improvement Programme (BIP) to mining units,
through the SME upgrade programme. To achieve these objectives a total of Rs 5,800 million
was planned to be invested in the public sector against which an investment of only Rs 1350
million is expected to be made in the public sector, leaving a big gap to be bridged, particularly
on the part of provincial govts.
Implementation Status
Geological Survey of Pakistan, have geologically mapped 4,400 sq.kms area to the scale
of 1:50,000 for the identification of economic mineral deposits. Ground follow up of
aeromagnetic anomalous areas in Chagai district; up-gradation /strengthening of geo-sciences
advance research laboratories, exploration and evaluation of coal in various parts of the country
are in the various stages of implementation. Regarding capacity building of mines and mineral
departments of Federal and Provincial Governments and setting up of geo-data centers, necessary
physical and human infrastructures have been and are being developed by restructuring their
administrative and technical set up. For the popularizing and increasing the use of coal, different
projects are in various stages of implementation such as i) M/s Lurgi –Sasol of South Africa are
studying gasification characteristics of Thar coal; ii) studies of town gas at Bakhar (Punjab) by
utilizing Makarwal coal; iii) commissioning of power plants of 250 MW to 1000 MW capacities
based on Thar coal; iv) conversion of cement industries to local/imported coal from furnace oil;
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v) power generation by sugar industries using coal; and vi) pilot plant studies for the production
of smokeless coal briquettes for domestic use. Regarding copper-gold deposits, lead-zinc and iron
ores deposits, their status of implementation is as under:
Copper gold projects are being explored and/or are operated by three multi-national
companies namely i) M/s Antofagasta of Chile and Barick Gold of Canada and TCC of Australia
for the development of Reko Dik copper gold project. Negotiations on mineral agreement are
underway; ii) Saindak Copper Gold Project is leased out to a Chinese Company, M/s MCC who
have extracted/exported 63,000 tons of blister copper valuing US$ 382 million. and iii) M/s Lake
Resources of Australia is engaged in conducting exploration of gold and other base metals in
Chagai Area. Lead-zinc project at Duddar has been developed by MCC of China at an estimated
cost of US$ 120 million. The company has started trial production of lead-zinc. Iron ores –
feasibility study for the development of Chichali Iron ores at Kalabagh was prepared by MCC of
China and Iron ore deposits of Dilband (Balochistan) are being explored and evaluated by a local
mining company.
To develop granite, marble and onyx deposits, Ministry of Industries, Production and
Special Initiatives have set up Pakistan Stone Development Company, (PASDEC) Islamabad that
is working very closely with international natural stones mining and processing companies with a
view to preparing strategy for its development. To facilitate Gem Sector of Pakistan. Government
of Pakistan is establishing a facilitation cell in the M/O Petroleum and Natural Resources,
Islamabad to attract investment and enhance its value addition capability. M/O Industries,
Production and Special Initiatives have set up a public private company namely Pakistan Gem
and Jewellery Development Company for encouraging value addition by setting up training
centers for the training of workers in cutting and polishing of gemstones.
Regarding development of physical infrastructure in mineral producing areas,
Balochistan government would construct 350 kms black top roads estimated to cost Rs 1290
million; NWFP have finalized their schemes that would cost Rs 680 million; Punjab government
have proposed construction of 58 kms roads in 14 mineral producing areas estimated to cost Rs
58 million; Sindh government have indicated that they have already built metalled road and
developed necessary utilities, FATA informed that about 25 kms roads have been constructed
while work is in progress for the construction of 13 kms roads. Govt of Gilgit-Baltistan would
construct truckable roads in mining areas and for this purpose an allocation of Rs 20 million has
been made.
Private Sector-investment
It was envisaged that it would grow from the Rs 37.2 billion in base year 2004-05 to Rs
92.6 billion in 2009-10 mainly due to exploitation of Reko-dik Copper, Duddar Zinc-lead, iron
ore reserves, expansion of Saindak copper and other minerals.
Tenth Five Years Plan (2010-15)
Approach
Minerals, being non-renewable resources of the country, require special attention so
that these are exploited and utilized in an optimal manner. The role of mineral prospecting,
exploration, mining and utilization assumes importance in this context. Therefore, attention, will
have to be paid to utilizing airborne surveys, use of geo-physical methods and remote sensing
techniques in prospecting and exploration work. Efforts would also be needed to improve the
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speed of coverage, mineral discovery ratio as well as to achieve reduction in the cost of mineral
surveys and prospecting. Lead time for bringing a known occurrence to the stage of exploitation
will have to be reduced by the use of improved techniques of exploration and ore analysis
improvement in the speed of mine development. Formulation of a revised national mineral policy
(995) is desirable. Small scale mining in the country will need to be put on a sound footing by
providing them with necessary incentives and technical input. The mining of industrial minerals,
natural stones and gem-stones will have to be given due importance as they have a high export
potential/import substitution/domestic needs.
In all the above areas, scientific and technological inputs will have an important role.
Utilization of low grade and multi-metal ores, recovery of by-products, environmental protection,
improving productivity, efficiency, cost reduction and energy conservation are other areas in
mineral technologies requiring input of R&D institutions.
Programmes
Brief details of different components of the program during the tenth plan are given in
the following paragraphs.
 Review of National Mineral Policy---: National Mineral Policy (NMP) announced in
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1995 is being reviewed to bring it inline with international best practice in the
following areas: i) institutional capacity; ii) institutional structure; iii) information;
iv) standardization; v) transferability; vi) security of tenure; vii) obligations; viii)
environmental protection; ix) stability; and x) fiscal regime
Creation of Pakistan Mineral Exploration Corporation (PMEC) ---: To bridge the
gap between mineral discovery and development, it is a requirement to establish
technical and economic viability of targeted mineral potential areas. This requires
preparation of feasibility studies/bankable documents for their sale/transfer to
beneficiaries on payment or equity participation basis. As it is capital intensive and
risky phase, it is always carried out by public sector agencies. Accordingly, a new
corporation may be established & designated “Pakistan Mineral Exploration
Corporation (PMEC)” to deal with preparation of feasibility studies
Academia---: In spite of having a large number of institutions/ departments teaching
earth sciences and engineering disciplines, there is an acute shortage of qualified and
competent economic and applied geo-scientists and engineers having adequate
academic qualifications and field experience in mineral exploration and evaluation.
To overcome this situation, engineering geology and mining engineering departments
of UET’s may prepare curriculum of post graduate level meeting the requirements of
mineral sector by undertaking courses in detailed mineral exploration and evaluation
of mineral deposits
Skill Development---: To cater the need of existing and upcoming world class mining
projects in Balochistan and Sindh and other mineral exploration, development and
mineral processing projects, a number of schools of mines are required to be setup
Collaboration with ECO Countries ---: Co-operation in the mineral sector would be
developed particularly in intra-regional trade, technological information, inflow of
capital and advanced technology from within and outside region by utilizing human
and physical infrastructure available in ECO countries
Geo-Tourism---: There are many non-traditional areas in the country wherein
Geoparks would be established in consultation with the concerned departments.
Typical examples are Pamer-knot, Karakorum and Hindukush in Gilgit-Baltistan
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province, vast coastlines with sandy beaches and abundant sunshine in and around
Gwadar; Balochistan and development of the Salt-Range in Punjab from geological,
historical, archeological and wild life tourism standpoint
Promotional Material---: To attract prospective investors, regional and project(s)
specific promotional material covering techno-economic aspects need to be prepared
for advertisement through comprehensive website, electronic and print media and to
develop documentaries
Environmental Consideration ---: Necessary control and treatment of effluents
resulting from underground coal mining and surface mining of natural stones and
lime stones is envisaged. Pre-employment and periodic medical examination of all
miners and surface workers particularly chest x-rays and pulmonary function test
must be included in these examinations
Public-Private Partnership---: The broad division of responsibility between publicprivate partnership would be on the basis, that public sector would take the project(s)
to decision making stage by utilizing institutional setup, R&D facilities and
conducting detail feasibility reports leading to preparation of bankable documents
while private sector would take up the subsequent activities with or without the input
of public sector. The role of federal govt would continue to be of facilitator and
coordinator and to oversee overall development of mineral sector
Projects
Based on the following criteria, various implementable and viable projects that are at
various stages of exploration, development, production and utilization have been identified for
inclusion in the tenth plan. In this context federal agency(ies), GSP would generate the basic
geological data and PCSIR labs would study beneficiation and utilization characteristics of low
grade and multi-metal ores, recovery of by-products etc. while it is upto the provinces and special
areas to conceive development projects to tap their resources.
a.
Minerals, which have good chances of export and import substitution as well as assumed
to be attractive for prospective investors such as:
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
Exploration, development and utilization of copper-gold, silver, molybdenum
deposits of Saindak, Reko-dik of Balochistan, copper deposits of north waziristan and
gold from the placer and mineralized area of Gilgit- Baltistan
Mining and processing of lead-zinc deposits of Duddar; Balochistan and to
investigate other prospects i.e. Besham and Chitral; NWFP and Gunga, Khuzdar;
Balochistan
Processing of low grade chromite ores of Balochistan, NWFP and FATA by setting
up mobile concentration plants
Mining and processing of Nokkundi; Balochistan and Damman Nisar; NWFP, Iron
ore deposits to meet the present and ever increasing demand of Pak-Steel
To setup sand washing plants for obtaining gold and other associated minerals from
the banks/beds of Indus river and its tributaries
Detailed geo-scientific studies of scheelite deposits at Garam-chashma, NWFP-an ore
of tungsten metal for its quantification, mining and utilization
To investigate platinum and platinum group elements initially in Chilas and Jijal
areas of Gilgit-Baltistan
Exploitation of phosphate rocks of Hazara; NWFP for the production of phosphatic
fertilizers
116



b.
Development of magnesite deposits of Abbotabad; NWFP for setting up of
magnesite-chromite basic refractory plant
Development of marble, onyx, granite and other natural stones by modernizing the
existing quarries, setting-up of marble cities, establishment of warehouses, machinery
pools etc.
About 30 different gems and precious stones besides world renowned emeralds and
rubies are being produced that after cutting and polishing are exported and/or used
domestically. However to address various problems of high wastage, pilferage, poor
marketing mechanism etc, there is need to prepare and announce a separate policy on
gem-stones covering all aspects in entirety
Minerals for local consumption: The minerals that are important for the growth of
mineral based industries and their use in the other sector of economy are: Energy
minerals – coal; Agriculture minerals - rock phosphate, gypsum; Construction mineralslimestone, gypsum, natural stones, pozzolana etc; Refractory minerals- magnesite,
chromite, silica sand, dolomite, Glass and Ceramic minerals - kaoline, nephyeline
syenite, silica sand, metallic minerals- iron ores, copper, gold, zinc-lead, chromite and
antimony.
Sectoral Issues
Mineral development in Pakistan is inadequate and slow because of technical, financial
and organizational problems. Further owing to the nature of mineral industry being vast and
complex, and because of indigenous problems, this sector could not make significant progress.
The indigenous problems are: i) inadequate provision of geological products; ii) weak or nonexistence of mining traditions; iii) limited mining experience and inadequate capital resources; iv)
lack of vision in taking advantage of advancement in geological knowledge, exploration
techniques, mining and processing technologies; v) non availability of trained man power; vi)
finally lack of infrastructure and security in geologically promising areas and vii) Private sector
does not benefit from the feasibility studies conducted with govt funds and engage technical
expertise to benefit from geological and other data. Poor management and little co-ordination
amongst the various public sector institutions is another vital issue that need to be addressed.
Policies and Strategies

Announcement of revised National Mineral Development Policy (1995), to bring it
inline with international best practices and to provide incentives to ensure local
private investment

Geological Mapping of 14 metallogenic areas to the scale of 1:50,000, individualized
by German consultants (1993) as given in Annexure-I and geological mapping of
49920 sq. km to be carried out by GSP (Annex- )

Intensification of detailed exploration, evaluation and development of the known
mining fields particularly of World Class deposits: Thar coal fields Sindh; coppergold deposits and lead-zinc deposits, natural stones and precious and semi-precious
stones deposits

Policy of self reliance will be adopted regarding supply of local iron ores, cocking
coal and manganese ore presently imported by Pak-Steel and development of Hazara
117
phosphate rocks for manufacturing of phosphatic fertilizers costing billions of dollars
for importation

Policies and programmes would be devised for mining, cutting and polishing of over
30 different kinds of gems to increase its value addition and exports

Proposal will be formulated for gauging the potential of exports of rocks, minerals
and fossils in raw or processed form

Development, popularizing and increasing use of i. coal for gasification, power
generation, production of smokeless coal briquettes etc; ii. gypsum for reclamation of
saline sodic soils, treatment of marginal quality tube wells water and gypsum plaster
for buildings; iii. lime-stone for production of slaked lime for sanitation purposes; iv.
manufacturing of high quality iodated salt from rock-salt and waste materials of salt
mines; and magnesite for setting-up of basic refractory plant

Capacity building of federal and provincial mines and mineral departments with
special focus on those provinces and areas which are rich in minerals

Strengthening of multidisciplinary approach to mineral exploration by setting up
Pakistan Mineral Exploration Corporation and school of mines in various provinces
to have supply of skilled workers

To enhance the productivity and production of existing coal mines, mine equipment,
renting\leasing\selling shops would be established to reduce dependence of obtaining
loans for capital goods from financial institutions

Public-private partnership and joint venture between local and foreign partners would
be encouraged

Private sector would be put on sound footing by providing them with necessary
incentives and technical input

To develop physical infrastructure – roads, rails, telecommunications, utilities etc in
the mineral producing and mineral bearing areas

To attract prospective investors, regional and project(s) specific promotional material
covering techno-economic aspects would be prepared for advertisement through
comprehensive website, electronic and print media and to develop documentaries

Geoparks would be established in certain areas of Gilgit-Baltistan, development of
sandy beaches of Gwadar and Salt-Range from geological, historical, archeological
and wild life tourism stand point

Co-operation in the mineral sector with ECO countries would be developed

Necessary control and treatment of effluents resulting from underground coal mining
and surface mining of natural stones and limestones is envisaged
118

Measures would be adopted to shift basic research oriented activities of R&D
institutions to action oriented activities particularly by using multi-purpose ore
beneficiation plant of PCSIR laboratories

As thousands of distinctive commodities are produced from minerals, the concept of
the developing mono-mineral agency (ies) would be developed
 A proper monitoring mechanism would be developed to ensure optimal utilization of
existing facilities and to achieve physical targets and financial achievements of the
Tenth Plan
Investment
*Summary of Public-sector programme and projects of federal/provincial govts for the
Tenth five Year Plan (2010-2015)
(Rs. In million)
10th Plan
provision
I. FEDERAL
A. Ministry of Petroleum and Natural Resources
1. Geological survey of Pakistan (GSP)
2. Mineral Wing, M/o Petroleum & NR
B. Ministry of Industries & Production
C. Planning and Development Division
D. Special Areas
1. Federally Administered Tribal Areas Development
Authority
2. Azad Kashmir Mineral and Industrial Development
Corporation
II. PROVINCIAL
1. Balochistan
2. NWFP
3. Sindh
4. Punjab
5. Gilgit-Baltistan

Details of the public sector projects/programs for Tenth Plan may be seen at Annexure-III
119
Annexure-I
Summarized Version of fourteen metallogenic areas giving their location and mineral
potential as identified by German Consultants
Area 1: Chilas- Chilas Ultramafic–mafic Rock Complex Chilas Area.
Northern Areas, hosts, Pt, Pt-group elements and chromite.
Area 2: Jijal- Jijal Ultramafic–mafic Rock Complex Jijal Area.
Northern Areas. Pt, Pt-group elements and chromite occurrences
is well exposed between Jilal and Patan, Allai- Kohistan.
Area 3: Sakhakot– Qila- Sakhakot–Qila Ultramafic-mafic Rock Complex,
N.W.F.P, bearing chromite, Pt and Pt-group elements.
Area 4: Hunza - Suture Associated Gemstones Zone. Hunza
Northern Areas, ruby-bearing marble zone is present.
Area 5: Swat - Suture Associated Gemstones Zone,NWFP,
hosts emerald-bearing belt of talc-chlorite schists.
Area 6: Awerith - Polymetallic Mineralization Chitral NWFP, have
cluster of Au, Ag, Cu, Pb, Sb, Sn and W.
Area 7: Drosh - Polymetallic Mineralization Chitral NWFP,
contains cluster of Cu, Pb and Sb mineral occurrences.
Area 8:
Abbottabad - Precambrain – Paleozoic Tertiary Abbottabad- MansehraMuzafarabad, hosts deposits of phosphates, magnesite, talc, glass sand and
bauxite. Further deposits of Au,Ag, Cu, Pb, Mn and Fe do occur.
Area 9: Chiniot - Igneous – Contact Metasomatic Gold Punjab.
These rocks have deposits of gold and iron ores.
Area 10:
Muslim Bagh - Ultramafic – mafic- Basalt complex
Muslimbagh – Zhob valley - Detailed investigation are required for Pt, chromite,
magnesite, talc, vermiculite etc.
Area 11:
Khuzdar - Jurassic Mineralized Carbontes,
Khuzdar – Balochistan, hosts Pb-Ag, Zn, Ba and F.
Area 12:
Lasbela - Ophiolite Belt, Jurassic Mineralized Carbonates and
Tertiary Sediments, Bela- Duddar- Kundi – Balochistan, hosts Cu, Pb-Ag, Zn,
Ba, magnesite, talc, bauxite and low-grade phosphates.
Area 13:
Chagai Raskoh - Chagai Magmatic Arc, Chagai – Dalbindin,
Balochistan, Cu, Fe+Au, vermiculite and onyx marble deposits.
Area 14:
Saindak - Saindak Porphyry Copper Area, Saindak – Mashi
chan – Nokkundi, Balochistan, hosts Cu, Au, Mo, Ag, Fe and onyx marble.
120
Annexure-II
Five year Plan of Geological Mapping by Geological Survey of Pakistan
2010-2015
S.
No
ACTIVITY
1
Regional
Geological
Mapping
(Sq. Km)
2
Geochemical
Sampling
(Number of
samples)
3
Geophysical
Investigations
(Sq. Km)
4
Drilling
(Number of
Holes
cumulative
depth in meters)
5
Earthquake &
Environmental
studies
6
Basic and
Applied Research
projects
2009-10
2010-11
2011.-12
11520
9600
650
500
500
2200
1000
3500
10
3500 m
Studies in
earthquake
hit areas of
Balochistan,
NWFP
and AJK and
environment
projects in
Sindh and
Punjab.
Basic and
Applied
Research
Projects in
Sindh,
NWPP and
Northern
Areas.
Source: Geological Survey of
Pakistan 2009
41
14350 m
8960
41
14350m
2012-13
2013-14
10240
9600
500
500
1000
1000
41
14350 m
36
12600m
Studies in
earthquake
hit areas of
Balochistan,
NWFP and AJK
and
Environmental
projects in Sindh
and Punjab.
Environmental
Study projects
in Balochistan,
Sindh and
Punjab.
Environmental
Study projects
in various
parts of the
country.
Environmental
Study projects
in various
parts of the
country.
Basic and
Applied
Research
Projects in
N'WFP,
Balochistan and
Northern Areas.
Basic and
Applied
Research
Projects in
various
parts of the
country.
Basic and
Applied
Research
Projects in
various parts
Of the country.
Basic and
Applied
Research
Projects
various parts
Of the country.
121
Annexure-III
Resource Size and Production Targets in Tenth Plan
of Major Minerals
Sr.
No
1
2
3
4
5
6
7
8
9
10
11
12
1.
2.
3.
4.
a.
5.
6.
7.
8.
9.
10.
Minerals
Copper (blister)
Gold
Lead-Zinc
Iron Ore
Chromite
Coal
Rock-Salt
Gypsum
Marble & Granite
Lime Stones
Phosphate Rocks
Gem-Stones
Resource Size
Large
Medium
Medium
Medium to Large
Small to Medium
Large
Large
Large
Large
Large
Medium
100 million carats
Annual Production
Average
18,000 tons
45-50,000 oz
60,000 tons (conc.)
25,000 tons
33,000 tons
3.8 million tons
1.8 million tons
0.6 million tons
0.8 million tons
Tenth Plan
Targets
250 to 300,000 tons
-----135,000 tons (conc.)
2.0 million tons
100,000 tons
8.5 million tons
3.0 million tons
30 million tons
4000 tons
1,00,000 tons
Copper - Export potential as blister copper and cathode copper
Gold – Export, stock piling and for Jewellery.
Lead-zinc - Concentrates for exports and production of lead & zinc based chemicals.
Iron Ore - Feed stock for Paki-steels to substitute imports costing billion of rupees.
Chromite – Export potential of metallurgical grade chromite, production of chromates,
di-chromates and chrome pigments.
Coal – Thermal power generation, brick kiln, cement, sugar and other heat installation
units and for the production of smoke-less coal for households.
Rock-Salt – To produce iodated table salt, mineral mixture for livestock, chemicals like
soda ash, caustic soda, sodium sulphide, sodium sulphate.
Gypsum – As amender for saline sodic soils, correction of low quality tube-wells water,
building material as gypsum plaster and gypsum plaster sand blocks.
Marble & Granite – Mainly used as a building material.
Lime Stone – Production of slaked lime for sanitation, hydraulic lime for construction
purposes, cement industry, steel mills in blast furnaces, building & road material etc.
Phosphate rocks for the fertilizer production of SSP, TSP, and NP etc.
122
Annexure-IV
ALLOCATION FOR 2010 -15
A.
FEDERAL
Ministry of Petroleum & Natural Resources.
I. Geological Survey of Pakistan (GSP)
Detailed geo-scientific investigation of following priority
mineralized regions covering geo-logical, geo-chemical
geo-physical, preliminary drilling and geo-technology studies.
a.
i.
ii.
iii.
b.
i.
ii.
iii.
iv.
c.
i.
ii.
iii.
iv.
d.
i.
ii.
Balochistan
Lasbela Khuzdar Belt:
Contains lead-zinc deposits, chromite, platinum
group element, manganese, magnesite, iron
ores, vermiculite and barite deposits.
Chagai Volcanic Belt:
Hosts world class porphyry copper deposits
containing gold, silver, molybdenum , magnesite, etc
Makran Trench:
Sands contain zirconium and titanium
Sub Total 1 (a)
NWFP & Gilgit-Baltistan
Kohistan - Island Arc.
Includes placer and host rock gold, nickel, platinum, lead-zinc,
Precious minerals including ruby, tourmaline, and emerald.
Chitral Gold and Base metal investigation
Geophysical studies along MKT Areas
Mineralization studies along MKT & MMT
Sub Total 1 (b)
Sindh
Shield Rocks.
Contains pink granite and china clay, etc.
Igneous Rock Formations
Initiate geophysical / geo-chemical studies
for gold in the Nagerparker
Others including low grade iron ores
Sub Total 1 (c)
Punjab
Chiniot - Igneous – Contact Metasomatic Gold Punjab
These rocks have deposits of gold and iron ores
Indus Basin. Hosts non metallic minerals such as
rock salt, limestone, coal, dolomite, bauxite, iron ores
gypsum, clays, silica sand, radio active minerals
and sand stones.
400.00
300.00
100.00
800.00
300.00
200.00
100.00
100.00
700.00
200.00
100.00
100.00
50.00
450.00
200.00
100.00
Sub Total 1 (d) 300.00
123
e.
Other Projects
i)
ii)
iii)
iv)
v)
Establishment/ upgradation of
Remote Sensing Centre at
GSP, Quetta for the speedier and accurate
production of geological maps at various scales.
Upgradation of Geo-Science Labs., Islamabad
Establishment/ upgradation of
Geodata Center in all Provinces,
Plus in AJK, & FATA
100.00
200.00
Human Resource Development In
service training in geo-scentific,
drilling, photogrammetry, surveying,
chemical, mineralogical disciplines etc. by GSP
200.00
Mineral investigation projects such as ground water
and mineral exploration work for public/private sectors,
manganese prospect is zhob distt, spot investigation of
various minerals, toxic elements, constraints on water
quality in Neelam-Jehlum hydrul project etc.
500.00
Sub-Total 1(e)
II.
300.00
Mineral Wing Ministry of petroleum & NR:
i)
Basic Training for Gemstones Cutting Polishing
AJK (Muzaffrabad) and Gilgit- Baltistan
ii)
Training in gemstone mining, processing
and evaluation on scientific lines to private sector
in NA Gilgit (NA Admin)
iii)
National Coal Policy of Pakistan
iv)
Strengthening & capacity Building of Mineral Wing.
v)
Establishment of PMU for PHRD
vi)
Establishment of facilitation cell for Reko-diq
copper gold project.
vii)
Geo-hydrological exploration for development of
underground water in Human-e-Mushkhel Basin,
Chaghai distt. Balochistan.
1300.00
40.00
26.00
25.00
95.00
100.00
22.00
50.00
B. Ministry of Industries & Production
i) Pakistan Stone Development Company
Development and Upgradation of dimensional stone
Industry by establishing model quarries, upgradation
& mechanization of existing quarries (440), construction
of warehouses & establishment of marble cities for increasing
exports from US$70 million to US$1,616 million
ii) Pakistan Gems & Jewellery development company
45.00 billion
124
C. Planning & Development Division
Block allocation for mineral & mineral based
sectoral & project specific studies & other mineral planning projects
100.00
D. Ministry of States & Frontier Regions Division
I. Federally Administered Tribal Areas Development Authority (FATA/DA)
i. Exploration and Development of copper deposits in NWA.
ii. Development of chromite, manganese and iron ore deposits.
iii. Development of coal mines for setting up of coal
gasification and production of smokeless coal
briquettes plants etc.
iv. Development of soapstone mines and gypsum
quarries to setup processing plant based on these deposits.
v. Provision for physical infrastructures, roads, rails,
tele-communications, utility etc
vi. Block-provision for various studies, consultancies etc.
II. Azad Jammu & Kashmir (AKMIDC)
i. Development & Commercial Exploitation of Nangi
Mali Ruby Deposits, District Neelum, Azad Kashmir.
ii. Exploitation and Establishment of Graphite Processing Plant,
District Neelum, Azad Kashmir.
iii. Exploitation and Establishment of Activated Bleaching
Earth Plant, Bentonite deposits, District Mirpur, Azad Kashmir.
iv. Exploitation and Establishment of Cutting & Polishing plant
for Marble & Granite deposits, Districts Muzaffarabad
& Neelum, Azad Kashmir.
v. Provision for physical infrastructures, roads, rails,
tele-communications, utility
vi. Block-provision for various studies, consultancies etc.
PROVINCIAL
I. Balochistan
i. To setup facility for the production of copper-gold ingots
from the concentrate/smelting material of Reko-diq copper mines.
ii. Beneficiation of low grade chromite ores by setting
up Mobile Concentration Plants.
iii. Development of Pachinkoh and Chigendik; Nokkundi & Dilband
Iron ore deposits.
iv. Development of Chamalang and other coal mines in Sor Range,
Degari, Mach, Pir Ismail Ziarat Sharigh, Harnai and Dukki
coal fields for processing through coal washieries and utilization
for power generation and production of smokeless coal briquettes.
v. Development of Marble, Onyx and Granite of Balochistan by
modernizing the existing quarries, setting-up of marble cities,
establishment of ware houses, machinery pools etc.
vi. Development of Magnesite Mines and its Utilization for the
manufacturing of magnesite basic refractory Industries.
vii. Exploration, evaluation, processing studies of other Known
minerals: a. vermiculite b. laterite containing titanium
125
c. barite d. gypsum e. pumice.
viii. Setting up School of Mines at Quetta; Balochistan for training
of middle-line supervisors.
ix. To enhance capacity building of DG (MM) and Chief Inspector
of Mines Offices in accordance with the requirements of
National Mineral Policy (1995).
x. To prepare regional and mineral specific projects promotional material
for advertisement through comprehensive website, electronic and
print media.
xi. Construction of roads & provision of electricity, gas, water etc
in mineral development areas. Setting-up Mine Reserve Station
is also a requirement.
xii. Preparation of Mineral Sector and Mineral Project(s) specific detailed
feasibility studies leading to preparation of bankable documents.
v. Provision for physical infrastructures, roads, rails,
tele-communications, utility
vi. Block-provision for various studies, consultancies etc.
II. NWFP
i. Development of rock phosphate mines and to setup phosphatic
fertilizer industries based on these deposits.
ii. Development of magnesite deposits of Kumhar; Abbottabad area
and to setup basic refectory bricks magnesite-chromite plant.
iii. Development of iron ore deposits of Dammen Nisar; Chitral area.
iv. Installation of mobile concentration plants for the upgradation
of low-grade chromite ores.
v. Development of gemstones deposits of NWFP and to setup lapidary
centers for value addition.
vi. Development of Antimony deposits of Chitral and its upgradation studies
vii. Development of Scheelite (tungsten ore) deposits of Garam Chashman
Chitral;NWFP
viii. Development of setting up of Gypsum Plaster Industry; Kohat; NWFP
ix. Setting up of iodated salt plant/soda ash plant at
Karak/Bhadurkhel/Jatta – NWFP
x. Provision for physical infrastructures, roads, rails,
tele-communications, utility
xi. Block-provision for various studies, consultancies etc.
III. SINDH
i. Development of coal deposits of Sindh Province including
Thar coal deposits.
ii. Development of Pink Granite of Tharparkar area.
iii. Development & Processing of kaoline (china-clay) deposits
of Nagerparker.
iv. Development & Production of lime (slaked and hydrated)
from the abundantly available high quality limestone deposits
of Sindh province.
v. Development & setting up of gypsum plaster plant based on Dadu
gypsum deposits.
vi. Development of other mineral deposits such as fuller’s earth,
silica sand, lake salt, laterite and dimension stone industry.
126
viii. Setting-up of solar salt production facility around the
coastal area of Karachi.
ix. Provision for physical infrastructures, roads, rails,
tele-communications, utility
x. Block-provision for various studies, consultancies etc.
IV. PUNJAB
i. Manufacturing of high quality iodated salt for domestic
consumption and export.
ii. Setting-up slaked lime and hydraulic lime industries for sanitation
and construction purposes.
iii. Setting-up of under-ground coal gasification plant on pilot plant scale.
iv. Establishment of silica sand washing plant near Qammar Mashani, Mianwali
v. Setting-up of gypsum plaster plant for building purposes.
vi. Detail geo-physical surveys of iron bearing areas of Chiniot.
vii. Development of Salt Range from geo-tourism stand point.
viii. Provision for physical infrastructures, roads, rails,
tele-communications, utility
ix. Block-provision for various studies, consultancies etc.
127
3.3
Information and Communication Technology
Targeting New Sector
Information and Communication Technologies
1.
Overview
The paradigm shift, from industrial societies to knowledge-based societies that began in
early Twenty First Century, is transforming the overall fabric of our socio-economic framework.
In this transformation, Information & Communication Technologies (ICT) is playing a central
and multi-dimensional role. It is now considered as an enabler of societal change, a driver of
economic growth and a facilitator in better governance.
This extraordinary capacity of Information & Communication Technologies (ICT) to
drive growth and innovation can be utilized not only to handle the challenges faced in the wake of
global economic crisis but also to play a critical role in improving our national competitiveness
and effective delivery of services (e.g. education and health) to people in the medium to long
term. It is therefore important that while we concentrate on overcoming the short-term challenges,
we must also plan for exploiting longer-term opportunities and new engines of development (like
IT) to achieve sustainable growth.
The nascent ICT sector has to be strengthened and expanded at a highly accelerated pace
in the Tenth Five Year Plan (2010-15) to become a real enabler and facilitator of development.
Information Technology Sector
2.
Review of MTDF 2005-10
In the last five years, private sector has been very active and grew very rapidly. However,
due to the grave security situation occurring during the last two years has put brakes on the rapid
expansion of this small but very significant sector of the economy. Based on the recorded State
Bank of Pakistan figures, the IT exports increased from US$ 46 million in FY2004-05 to US$
250 million in FY2009-10 showing 40.3% annual compound growth rate. However, this small
export figure does not reflect the actual size of the IT industry. As per the WTO prescribed
formula, which is followed by many countries of the world for reporting the size and exports of
their IT industry, the IT industry size of Pakistan is currently (i.e. 2008-09) estimated at US$ 2.8
billion and the IT-related exports are in the range of US$1.6 billion. Furthermore, much of the
earnings which can be attributed to the ICT sector either enters in the shape of foreign remittances
or is re-invested outside the country. In OECD countries as well as India, the manufacture of TV,
radio and electronics are included in the ICT Sector.
During the last five years, IT exports increased five times. This phenomenal increase
shows the potential which exists in the IT sector. Private sector led the way in ICT sector and it is
expected that the Sector will further grow and become an important contributor in the economy of
the country. However, right and timely policy actions are required to be taken for this nascent and
emerging sector.
Satisfactory progress was also made in the private sector education and training sector.
However, in the area of Computer Hardware assembly, the progress was hardly noticeable.
Limited success was achieved in the network security and e-commerce while slight progress
could be achieved in localization and content development in Urdu language.
129
Financial
In the MTDF 2005-10, an amount of Rs 28.3 billion was allocated for Information and
Communication Technology Sector out of which Rs. 19.4 billion was allocated to IT and Rs. 8.9
billion to Telecom Sector (Annex-1). These programs and projects were executed by various
Ministries/ Divisions that included Ministry of Information Technology, Ministry of Interior,
Ministry of Women Development, Finance Division, Defense Division, and Cabinet Division.
The utilization for 2005-10 is estimated to be 58.2% of the annual allocations made in five years.
Utilization is above 80% when compared with the annual releases.
Physical
The significant initiatives undertaken during the MTDF 2005-10 are briefly described as
under:
A. Software Exports and BPO/ITeS
The important programs and projects undertaken in the Public Sector during the last five
years, to strengthen the IT-enabled services/BPO sub-sector were:

Standardization of Pakistani Software Industry. Programs were initiated to obtain
internationally recognized certifications (like CMM, CMMi, ISO 9000, COPC etc.)
by local companies. As a result, the number of CMMI assessed companies has
increased. Currently CMMI certified companies according to their level include, two
CMMI Level-5, three CMMI Level-3 and sixteen CMMI Level-2 companies. Also,
now there are 110 ISO-9000 certified companies. ISO 27001 consultancy and audit
of ten IT companies has also been completed uptil now.

Purchase of Land in Karachi, Lahore and Islamabad for Establishment of IT
Parks was partially made to build office space with appropriate facilities and
infrastructure to facilitate more companies to establish their businesses in Pakistan.
B. Quality of IT Education/ Human Resource Development
In the Human Resource Development area, programs were initiated to expand the base of
qualitative human resource for I.T. industry. Also, programs for short-term trainings were
introduced to create greater awareness and use of computer technology. Some of the
significant programs undertaken are as following:

I.T. Computer Science Teachers, Lab Incharges and Computer Labs Project –
Matching Program with the Provinces, AJK, FATA/FANA and ICT was a
landmark initiative of the Federal Government for establishing infrastructure in the
public schools. Under this initiative, 1,098 secondary/high schools/ inter-colleges
possess computer laboratories which are equipped with about 17,500 PCs. Also,
1,098 computer teachers and 1,098 laboratory incharges were employed. As a result,
about 44,000 students from all over Pakistan now have the opportunity to learn the
subject of Computer Science/ Information Technology at the level of classes 9 to 12.
Govt. of Punjab is now replicating this initiative of Federal Government in all the
remaining secondary /higher secondary schools and colleges of Punjab.
130

National ICT Scholarship Program was launched to provide opportunity for
students of the non-metropolitan areas to have access to quality IT/Computer Science
education in the country. About 7,300 students got foundation training for this
programme and about 500 successful students got scholarships for 4-years Bachelors
degree programme in various universities country wide.

Basic Information Technology Training aimed at improving the IT literacy and
skills of Government servants to carry out office work. Under this program, training
was imparted to about 13,000 Government employees.

IT Internship Program was launched throughout the country. About 1,200 interns
were placed in various organizations. The success rate of these interns getting
permanent jobs is more than 90%.
C. E-Governance
The area of E-Governance gained importance in the last five years. Some of the major
initiatives undertaken during this period are:

Machine Readable Passport/ Machine Readable Visa Project (MRP/MRV) was
initiated to provide the citizens with computerized passports that are in compliance
with the international standards developed by International Civil Aviation
Organization (ICAO). Through this initiative, the MRP/MRV System is now
deployed at 61 Regional Passport Offices (RPOs) and 62 Foreign Missions.

Development and Replication of e-Office (Basic Common Applications) in Federal
Government was started to provide computer-based workflow of six common
functions of the Federal Government. These functions include Inter-office
communication, human resource management, procurement, inventory, finance and
budgeting and project management. Currently, various modules of e-Office are being
tested and refined.

Establishment of Federal Government Data Center and Intranet provides the basic
fabric for interconnectivity among the all the Ministries/ Divisions to enhance
internal efficiency and effectiveness of the Government.

Land Revenue Records Management System for Punjab will provide for efficient
management of land records and will facilitate the citizens to have access to land
records at affordable cost.

Automated Fingerprint Identification System for online comparison/ identification
of criminals through fingerprints is being implemented to combat terrorism and
crimes.

Telemedicine: Three pilot projects were successfully launched for Holy Family
Hospital Rawalpindi, Jinnah Postgraduate Center Karachi & Mayo Hospital Lahore.
131
D. Promotion of Urdu Language in IT
Some of the initiatives that were started for enhancing the use of Urdu language in
information technology related tasks are as following:
3.

Centre of Excellence in Urdu Informatics was established in National Language
Authority (NLA - Muqtadara Qaumi Zuban). Under this initiative, the Centre of
Excellence is working on various aspects and developing tools such as lexicon, fonts
generation, keyboard code templates, translation systems, etc.

Centre for Research in Urdu Language Promotion established in National
University–FAST is also working on research and development of tools and
techniques that will be helpful in promoting use of Urdu language in software
products and applications.
Challenges of IT Sector
The IT sector has grown during the last five years. Yet in relation to its tremendous
potential, the present growth is only minimal. IT sector has the capacity to significantly transform
the national economy. This potential can be unleashed if we address the following challenges.
 Education & Human Resource Development
The most important factor in sustainable growth of information technology in any
country is the human resource. A strong focus on quality IT education will be very helpful for not
only meeting the domestic demand but also to cater for the international requirements since the
trained human resource is an excellent source of foreign remittances.
Figure: Internet Access in School Ranking - 2009
Quality of the Educational System
1
Singapore, 2
20
40
India, 37
China, 55
60
80
100
120
Korea (Rep.), 29
Singapore, 5
USA, 10
Finland, 1
China, 23
26
USA, 19
UK, 28
Ranking
0
S. Korea, 4
Finland, 7
UK, 17
51
India, 67
76
Pakistan, 75
101
Pakistan, 104
126
Countries
As shown in the Figure, quality of Pakistani educational system is one of the main
reasons for under-achievement in developing the IT sector. Pakistani ranking for “Quality of the
Educational System” stands at 104 well below India (37) and China (55)
(Source: Global
information Technology Report 2008-2009).
Furthermore, internet access in schools needs to be enhanced along with computer
education to improve Pakistan’s internet access in schools ranking. As per the ranking of Global
132
Competitiveness Report 2009-2010 (Figure at left), Pakistan is ranked as 76 for “Internet Access
in Schools”, compared to other leading countries and India e.g. Iceland tops the list, South Korea
is ranked 4, while China is ranked 23 and India at 67.
Pakistan needs to rapidly and consistently increase the base of primary, secondary and
tertiary education in terms of quantity as well as quality. An efficient and focused educational
system needs to be put in place in which thinking; innovation (Figure (below left) shows our
ranking in “Capacity for Innovation” amongst other countries) and creativity is encouraged and
promoted. For inculcating these traits in the students, teachers must be trained in the latest
teaching methodologies as well. Also, incentives in the shape of scholarships need to be offered
to the talented students for promoting IT education.
The second figure (on the right) shows Pakistan’s ranking at 99 in terms of the
availability of training services, whereas countries like India ranked at 32, China at 47, Singapore
at 14 and USA at 3 are much ahead.
Figure: Capacity for Innovation Ranking - 2009
1
South Korea, 15
China, 22
26
Finland, 5
Figure: Availability of Training Services Ranking - 2009
1
USA, 6
Finland, 5
UK, 16
India, 32
Ranking
Ranking
Pakistan, 56
76
101
51
South Korea, 35
China, 47
76
101
Countries
UK, 9
26
India, 35
51
USA, 3
Singapore, 14
Singapore, 18
Pakistan, 99
Countries
 Information Technology Exports
For 2009-10, the estimated official IT exports will be around US$ 250 million, which is
very low as compared to IT exports by other countries. For example, Korea’s IT exports were
US$97 billion, Ireland’s IT exports reached US$24 billion and India’s IT exports are estimated to
reach US$48 billion in FY2008 (Source: OECD Factbook 2009 and Indian IT Industry Factsheet
2009, India). According to the A.T. Kearney Global Services Location Index 2009, the three
leading destinations in the off-shoring and outsourcing industry are India, China and Malaysia.
For increasing the software and IT exports, besides attracting large multinational businesses in the
country, local entrepreneurs and investors in large numbers should also be attracted through
incentives and infrastructure support to give impetus to the sector.
Silicon Valley, USA, Multimedia Corridor in Malaysia, and Internet City in Dubai are
examples that have led to the growth of IT industry in the respective countries. A Multimedia/
Internet City and Knowledge Village in Pakistan on similar lines will help to attract large
software companies and multinationals to build their offices locally.
 E-commerce and IT Security
E-commerce is a major pillar of the emerging internet economy. It expanded rapidly
before slowing down in the face of the global recession. In Pakistan, e-commerce is still a long
way from being seen at a recognizable level. In this regard, many issues will have to be addressed
that include expansion in connectivity infrastructure, introduction of Public Key Infrastructure
133
(PKI), implementation of laws related to electronic transactions, data protection and cyber crimes
so that confidence is built up for doing business using this medium.
 Computer Hardware Industry
Pakistan’s computer hardware industry requires much more attention than being given at
present to make it a vibrant sub-sector of the overall IT industry. To promote it, computer
hardware firms in the private sector (both national and international) equipped with after-sales
maintenance/ repair workshops/ labs employing qualified IT professionals and having countrywide presence should be preferred for the award of large Government contracts. Also, there
should be tax concessions/ holiday for OEMs companies and manufacturers of computer
hardware components (e.g. storage media, networking equipment, keyboards, etc.) for a period of
next 15-20 years.
 E-Government
Emphasis on e-government initiative
continues since the year 2000 when Ministry
IT was established. According to the
Economic Intelligence Unit’s Report of
2009, Pakistan has shown that efforts are
underway in this area (Figure at left).
However, due to low no. of on-line services
(Figure below) for citizens, the impact of the
effort is negligible.
Figure-2: Availablity of Government Online Services
Source: Global Information Technology Report 2008-09
of
0
Singapore, 2
10
20
30
China, 35
40
50
USA, 10
Finland, 18
UK, 16
Korea (Rep.), 17
India, 49
60
70
80
90
Pakistan, 94
100
Figure: E-Readiness Index - 2009
(Source: Economic Intelligence Unit Report)
10
8.60
8.87
8.35
8.14
7.81
8
Index
6
4
4.33
4.17
3.50
2
m
ar
k
re
a
en
S
D
S
in
.K
o
U
U
C
ga
po
re
S
K
A
a
hi
n
di
a
In
P
ak
is
ta
n
0
Currently, in e-Government, Pakistan’s
position is stagnant as e-government initiatives
taken in the last few years have not shown
much success. The major factor hindering the
sustainability of e-government projects is the
retention of IT professionals in the longer run
as the private sector is offering very lucrative
packages for the same skills and experience
level.
 Promotion of Urdu language in IT
Figure: Internet Users - 2009
(users per 100 population)
100
80
79
77
80
71
70
60
40
22
20
11
7
K
U
SA
U
d
Fi
nl
an
Ko
re
a
So
ut
h
ap
or
e
a
hi
n
ia
In
d
C
Si
ng
Pa
ki
s
ta
n
0
The benefits from Information Technology (IT)
revolution cannot be reaped unless the masses
use it. This is not possible unless computing is
in a language understood by the masses. A
simple barometer of the pervasiveness of using
IT in daily life can be gauged from the number
of internet users. As per the Global
Competitiveness Report 2009-10, Pakistan has
still a very low level of internet usage (Figure at
left).
134
Availability of softwares in Urdu, conversion of electronic knowledge sources form other
languages to Urdu and R&D activities are some of the areas where huge potential exists and
appropriate investments should be made.
4.
Objectives and Strategy for the Tenth Plan (2010-15)
The major overarching objective of the Tenth Plan (2010-15) is to tap the ICT Sector to
transform the socio-economic panorama and leap-frogging into the ‘knowledge era’ by:
 providing ‘universal access to IT education, learning and knowledge sources’
 shifting from ‘follower’ strategy to ‘value addition/ leader’ strategy
 ensuring both quantitative expansion and qualitative improvement of the IT industry
 shifting from government-centered policy to private sector-centered policy with
government support and
 creating demand for local ICT products and services
Salient Features of the Plan
To implement this ICT strategy, following are some of the salient features of the Plan of
Action that will be put in place:
1. Increasing Human Resources with a Qualitative Edge
 IT in Educational Institutes: Provide IT infrastructure in public/ government schools
 Internationally Acceptable Skills/ Certification: Design and implement programs for
providing training and certification that are internationally accepted
 Reaching out to Talent: Establish a mechanism to reach out to talent in the under- and unserved areas of the country by equipping them with necessary skills and opportunities to
access quality education
2. Reaching out to International Market
 Promotion of software exports through establishment of International Marketing
Network, special bandwidth rates for software exporters, encouraging joint ventures, and
fiscal and regulatory incentives for software exporters through State Bank of Pakistan. A
special focus will be on small software firms with potentially high value products or
services to offer
3. Addressing socio-economic problems by using IT
 IT combined devices: Develop/ manufacture devices by combining them with IT
 Security-enablement: Make life safer and more convenient by designing and deploying
IT applications and devices/ equipment
 Outsourcing service network: Establish a productive system composed of devices and
services and support their exportation
 Software industry: Cultivate and encourage software companies that have globally
competitive power
4. Create industrial synergy by involving local IT industry
 Promote the fusion of IT with major industries and strengthen the basis of the fusion.
Promote IT use in domestic industries to improve productivity
 Use software as a catalyst for inter-industry fusion, and develop software applications for
all industries
135


Enhance the quality and productivity of the service industry using IT
Encourage development of software for embedded systems especially in consumer
electronics
5. Enhancing Domestic Market
 Encouragement of local software houses in Governmental projects
 Encouraging local content development, Urdu and other Pakistani languages’ software
development, etc.
6. Fiscal Incentives
 Fiscal and non-fiscal incentives will be provided to nurture, develop, and promote the use
of IT in organizations, to increase their efficiency and productivity. The strategies will
focus on promotion of venture capital industry through incentives, recognition of
software development as a priority industry for financing by the banks and DFIs, creation
of investment friendly environment, building investors’ confidence and changes in rules
to allow the technology companies to be listed on stock exchanges of Pakistan.
7. Legislation
 To provide protection and enhance the confidence of users, providers, and facilitators of
information services, legislation based on the recommendations comprising of IT and legal
experts will be framed that will encourage electronic transactions and further revise/
improve statutes/ rules, etc. that mandate a paper-based or manual process.
Re-orienting the current IT Policy
The salient features of the Tenth Plan (2010-15) are critically dependent on re-orienting
and revising the current IT Policy. To ensure this, the Ministry of Information Technology will
devise the new IT Policy and a Plan of Action based on the objectives and the recommendations
of the Tenth Five Year Plan.
5.
Recommendations and New Initiatives for Tenth Plan11
Following are the new initiatives and continuation/ reformation of the existing programs
and projects in various segments of the ICT sector for inclusion in the Tenth Plan (2010-15):
5.1.
Software Exports and BPO/ITeS
The major areas of focus for policy improvement are as following:
 With a major focus on software exports and outsourcing, also encourage
domestic consumption of indigenously made software products and IT-enabled
Services (ITeS)
 Encourage expansion of broadband infrastructure and web hosting infrastructure
within the country
 Improve upon participation of Pakistani IT companies in World Expos
 Re-prioritize e-government/ government on-line services for expanded access to
public services by citizen
Based upon the Report of the Task Force on “Information & Communication Technologies” setup for the
framing of the 10th Plan
11
136

Enforce implementation of legislation and laws related to electronic
communication/ transactions, acceptance of electronic documents/ signatures and
privacy of information
The major initiatives for Software Development and Export segment are:
 Actual / true size of IT industry will be estimated through development of new
measurement codes and key development variables by the Statistics Division
 Promote program for entrepreneurial startups and growth. Consultation to be
provided for startup, managing IT business, reviews of business plans and
facilitation of financing options
 Development of an effective IPR regime to protect intellectual property and to
encourage innovation and investment in IT industry
 Promotion the IT industry locally and globally through various media e.g.
CNBC. Development of Softer image as a potential IT destination
 Besides focus on software exports and outsourcing, also encourage domestic
consumption of indigenously made software products and IT-enabled Services
(ITeS)
 Improve upon participation of small Pakistani IT companies in world expos
 Enforce implementation of legislation and laws related to electronic
communication/ transactions, acceptance of electronic documents/ signatures and
privacy of information
 Establish incubators in Universities and under PPP arrangement
 Strengthen software industry by encouraging internationally recognizable brands
of Pakistani software products e.g. Pakistan Software Export Board (PSEB) to
subsidize under PPP to showcase Software products like Ultimus etc. Also PSEB
to advertise them on their website
 Provide Incentives for achieving CMM Level 5,3,2, ISO certifications 9001,
27001 etc. as in previous projects
 Mergers, acquisitions, joint ventures with foreign software houses to build worldclass companies. Provide interest free financing for such deals
 Establish Internet City and Knowledge Village to achieve critical mass of high
technology companies on PPP
 Build IT Parks near Karachi, Lahore and Islamabad Airports (four million sq. ft).
on PPP
The major initiatives for IT-enabled Services/ Business Process Outsourcing (ITeS/
BPO) are:




5.2.
Provide Incentives for achieving certifications of ITES/BPO certifications of SEI
as in previous certification projects
Certification Program for Individuals (PMP, PRINCE2, etc.) and other soft skills
Study on investment insurance for MNC investments (linked to company
performance) in Islamabad, Lahore and Karachi
Increase the internet bandwidth capacity and provide for alternate routes for
uninterrupted connectivity to the international clients
Quality of IT Education/ Human Resource Development
The initiatives for IT Education and Human Resource Development are as following:
137








5.3
Development of human resource plan for the IT industry. This plan will
identify key areas for development of competencies, such as software
development, project management and BPO
Implement program for vocational/ technical skills training in ICTs with
emphasis on international certifications aiming at gaining an appropriate
share in ICT workforce demand worldwide
Establishing Pakistan Computer Bureau (PCB) as Center of Excellence
(COE) for IT Training
COE to develop greater linkages with the Boards of Technical Education at
the Provincial levels to build their capacity and provide support on IT
related diploma and other courses (acceptable internationally)
Provide Scholarships for IT education
Improvement of IT infrastructure in educational institutions
Establishing IT Placement Centers for exporting trained IT manpower
Ensuring quality assurance of educational institutes through rigorous
monitoring and evaluation by National Computing Education Accreditation
Council and its capacity building
E-Governance
The initiatives for the E-Governance sub-sector include the following:

Greater automation drive by the Government.
The Government will accelerate the automation drive for achieving operational
efficiency by back office automation and improved service delivery to citizens.

Improved governance of e-government initiatives.
It is of prime importance to improve governance of e-government initiatives
through better leadership and improved practices requiring clear ownership and
demonstrable commitment.

Ensuring complete inter-operability of IT systems
It will be ensured that the E-Government programs across different government
departments cater for seamless provision of services to citizens and elimination
of duplication and inconsistencies.

Ownership at the Top-most Level
For success of any E-Government program, ownership at the top-most level
along with encouragement and support will be ensured.

Restructuring/Capacity Building of MoIT and its Departments
It has been observed there is a depletion/ lack of adequate professional resources
in the MoIT and its departments. It is high time to actively pursue and implement
the restructuring and capacity building of the Ministry of Information
Technology and its department so that not only e-government initiatives are
successfully implemented but also the whole IT sector gains accelerated pace of
growth.
138

Prioritization for development of software for delivery of services
Another aspect especially with context to E-government is prioritization of
development of software for delivery of services and content in Urdu language to
bring maximum coverage / visibility of the activities of the e-government
programs.

Formation of IT Cadre
The major issue in the sustainability of e-government projects is the retention of
IT professionals in the longer run as the private sector is offering very lucrative
packages for the same skills and experience level. To attract IT professionals in
the public sector, an IT Cadre at competitive salaries based upon performance
will be formed.

Making I.T. competence mandatory
The existing recruitment rules should be modified and competence in the use of
office automation tools and computers will be made mandatory for recruitment to
BPS-5 and above.

Give importance to regular training
Planned training programs will be organized to orient officers on use of
computers as well as awareness about the potential of IT.

Create online access points at public places
Online access points (tele centres) will be established at public places so that the
public may get access to the Internet and services at affordable cost. This
includes creation of demand by provision of e-services.

Extend internet connectivity to even rural areas
Incentives will be given for extension of infrastructure for provision internet to
rural areas.
5.4.
E-Commerce and IT Security
The initiatives for the E-Commerce and IT Security include the following:



Creating awareness among public and private sector organizations, and the
general public, about the importance of ensuring information security and the
measures that can be employed to secure information assets
A legal framework creating a trusted and secure communication environment is
critical for the Proliferation of e-services addressing key issues regarding

privacy

data protection and

securing of information assets at national and enterprise levels

Passage of Data Confidentiality Act etc.) will be put in place

Measures to ensure proper implementation of such legislation
Role of E-Commerce Accreditation Council (ECAC) will be enhanced further as
it can provide conducive legal and policy framework that creates an environment
of trust, predictability and certainty in the country
139

Encourage growth of Certification Authorities (CAs) to facilitate uptake of online
authentication services


Introduction of PKI, initially under the patronage of the Government and
when the critical mass is reached hand it over to the private sector for
managing and expanding the usage PKI operations
PKI to have compliance to I.T. security standards

Invite partners to invest in establishing e-commerce gateways and deployment of
Pakistan Internet Exchange

Provide incentives for up taking international best practices in information
security such as CERT

The government shall further invest on improving infrastructure conducive for ecommerce to take roots especially in rural/ un-served areas of Pakistan

Increase online applications available for common people

Up-to-date cyber laws and their implementation can play a pivotal role for the
improvement of E-Commerce status in Pakistan
5.5
Promotion of Urdu Language in IT
Following initiatives for promotion of the use of Urdu language in Information
Technology will be undertaken:
5.6

Encouraging availability of IT content and applications in Urdu to help increase
the uptake of technology among the masses

Govt. departments should be given a clear mandate to increase localization of all
information content and applications being offered to the citizens

Collaboration with software market leaders for making their software products
available in Urdu and regional languages

To develop standards for the use of Urdu in computers and Informatics for public
use and conduct research activities

Strengthen the National Language Authority (NLA) to evolve expertise in the
field of I.T. and Urdu to conduct R&D and localization of content

Development of Urdu applications on PPP basis (wherever possible)

Small and medium businesses shall be targeted for Urdu enabled solutions as the
English language is acting as a barrier to adopt the hi tech tools
ICT Hardware
140

Ensure level playing field for IT hardware industry by providing equal treatment
to import of components and finished computer equipment

Attract foreign investment and transfer of technology for manufacturing of
computer hardware at the component, device and fully-functional machine levels
to provide cost-affordable locally manufactured computers, communication
devices and accessories for use within the country and also export purposes to
Middle East, Central Asia and Africa

Equipment manufacturers and hardware manufacturers will be encouraged by
providing them incentives e.g.




B.
tax concessions/ holiday for next 15-20 years
Free land or land equipped with required utilities at reasonable cost
Guiding principles for Govt. procurement to provide special consideration to
locally manufactured hardware.
Above incentives to be given on manufacturing and not in assembly.

In addition to the above listed incentives, pioneer MNCs in the IT / network
/mobile /security devices equipment manufacturing sector may be offered
investment insurance/ guarantees due to any security hazards, if they create
employment opportunities in excess of 1,000 people

To encourage investment in establishing after-sales maintenance/ repair
workshops, employing qualified IT professionals and having country-wide
presence, the Government will prefer such establishments for awarding large
computer / network equipment procurement contracts
Telecommunications
There has been phenomenal progress in the telecommunication sector since its deregulation. Most of this progress has been made in the private sector. The telecom sector attracted
huge investments and resultantly enabled the hitherto un-served people of far-flung areas of the
country to have affordable access to the telecom services. In the public sector, the National
Telecommunication Corporation (NTC), Special Communication Organization (SCO) and
SUPARCO made significant programs during MTDF 2005-10 some of which consist of
following:

Establishing of Coastal Communication Optical Fibre Link between Port Qasim, PNAD,
Gwadar and Jewani

Expansion of Telecom Facilities in Northern Areas

Pakistan Communication Satellite System (PAKSAT-1R)
Performance of Private Companies
Presently there are 6 large private companies operating in the country, namely, Mobilink,
Telenor, Warid, PTCL, U-Fone and Zong. Following Tables and Figure show the number of
connections as reported by Pakistan Telecom Authority (PTA).
141
Table: Number of Fixed+WLL Telecom Connections
(2005 and 2009)
(Millions)
Item
CAGR
2005
2009
(%)
PTCL Fixed Lines
5.191
3.375
-8.25
Other Fixed Lines
0.086
0.148
11.47
WLL
0.265
2.616
58.08
Total Fixed+WLL
5.542
6.139
2.07
No.
1
2
3
Table: Number of Mobile Telecom Connections
(2005 and 2009)
(Millions)
No.
Company Name
CAGR
2005
2009
(%)
1. Mobilink
7.47
29.14
31.29
2. U – Fone
2.58
20.00
50.62
3. Telenor
0.84
20.89
90.17
4. Warid
0.51
17.89
103.71
5. Zong
0.92
6.39
47.35
6. Instaphone
0.45
0.03
-41.82
Total Mobile
12.77
94.34
49.18
Grand Total :
18.312
100.479
40.56
Fixed+Mobile)
Source: Pakistan Telecom Authority
Figure: No. of Mobile Connections - 2005-09
35
No. of Users (in millions)
29.14
25
20.00
20.89
17.89
15
7.47
6.39
2.58
5
0.84
-5
Mobilink
U - Fone
Telenor
0.51
Warid
0.92
Zong
0.45 0.03
Instaphone
142
Source: Pakistan Telecom Authority
Tele-density in Pakistan has increased from 11.9% in 2005 to 62% currently in 2009. For
comparison purposes, tele-density of some of the important countries in 2009 is given in Table
and Figure:Table: Tele-density – Cross Country Comparison
Country
Tele Density
Country
Pakistan
62.0
India
China
70.2
Singapore
Denmark
169.4
USA
Source: ITU – ICT Indicators Database
Tele Density
29.2
169.7
136.2
Figure: Broad Band Subscribers in Pakistan- 2009
500,000
413,809
No. of Users
400,000
300,000
168,082
200,000
100,000
26,611
45,153
0
2006
2007
2008
2009
Year
Country
Malaysia
UK
Egypt
Tele Density
106.8
176.5
55.8
The
broadband
connections
increased from 26,611 in 2006 to
413,809 in 2009. The major share in
broadband connections remains that
of DSL technology. But the recent
increase is mainly attributed to
aggressive launching in 2009 of WiMAX and EvDO technologies for
broadband access. Also availability
of triple-play services at affordable
prices has been one of the factors for
this increase.
 Telecommunication and Network Infrastructure
Since the privatization of PTCL in 2002, telecom indicators show positive signs of
growth. Foundation of this boom was led by government and private sector which acted swiftly in
143
U
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U
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nl
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ou
th
K
ap
o
in
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S
Fi
or
ea
re
a
C
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di
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In
P
ak
is
ta
n
the right direction towards voyage
Figure: Broad Band Subscribers - 2009
of a wired Pakistan. Mobile
(per 1000, people)
companies in many regions of the
350
320.0
world do not enjoy the subscriber
306.0
283.0
300
256.0
growth witnessed in Pakistan over
223.0
250
the last few years. Telecom
200
infrastructure
has
improved
150
dramatically with foreign and
100
62.0
domestic investments into fixed50
4.0
2.4
line and mobile networks; fiber
0
systems are also being constructed
throughout the country to aid in
network growth. Now the new
challenge is to reach out to the
under-served and un-served areas and also provide the latest connectivity technologies such as
broadband. The Figure shows that there is a huge potential for broadband services if appropriately
managed. This can be done by making available services that facilitate the common man in
carrying out his daily chores.
5.7
Telecommunication and Network Infrastructure
Initiatives for further facilitating growth in the telecom sector includes:









6.
Helping improve the security to facilities and personnel
Reducing burden of taxation on telecom services & personnel
Fostering local innovation and R&D through proper funding and
Encouraging greater uptake of telecommunication and network services through
awareness, bandwidth, infrastructure, availability of relevant content in Urdu and
Cheap access to communication hardware
 Plants to manufacture and assemble mobile handsets in the country shall be
established
Promotion of mobile commerce
Policies for the provision of high-speed connectivity infrastructure and services, such as
broadband, WiMAX, 3G, 4G, satellite and other emerging communication technologies
at affordable price to the consumers to have upward trend in telecom growth
Increase the internet bandwidth capacity and provide for alternate routes and channels for
continuous connectivity to the international clients for uninterrupted services
Technical solutions will be developed for detection of grey traffic for its consequent
elimination creating loss of $50 million per annum to government exchequer
The Path Ahead
The future of ICT industry in Pakistan has the potential to act as an enabler of high
economic growth. In the Tenth Five Year Plan, government aims to start new initiatives as well as
to re-orient and reform its current IT Policy. By the end of Tenth Plan, it is envisaged that ICTs
will be universally available in Pakistan and the digital gap will be reduced. Also, ICT will act as
one of the important enablers that will considerably facilitate in poverty alleviation.
144
7.
Financial Outlay
In order to launch and actualize the various initiatives and programs mentioned in the
recommendations, the financial resources required are estimated to be in the tune of Rs. 125.810
billion for the entire Plan period. The summary of the financial outlay for ICT sector is as
following:
S. No.
1.
2.
3.
4.
5.
6.
7.
Sub-Sector/ Area
Software Exports and BPO/ITeS
Quality of IT Education/ HRD
E-Governance
E-Commerce & IT Security
Promotion of Urdu language in IT
Hardware Initiatives
Telecommunication and Network Infrastructure
GRAND TOTAL
Estimated Cost
(Rs. Million)
25,070
27,400
30,490
1,050
1,300
3,000
37,500
125,810
The detailed financial outlay with associated programs and initiatives is at Annex-2.
145
Annex-1
Summary of Financial Outlay – MTDF 2005-10
Year
MTDF 2005-10
Information Technology
2005-06
2,875.0
2006-07
3,374.6
2007-08
3,825.0
2008-09
4,224.0
2009-10
5,078.4
Total I.T.
19,377.0
Telecommunication
2005-10
8,917.0
GRAND TOTAL
28,294.0
Annual
Allocation
(in Rs. Million)
Expenditures
3,621.0
4737.0
5,500.0
2,700.0
2,300.0
18,858.0
3,548.0
1,942.0
2,090.0
1,782.0
1,150.0
10,512.0
6,070.0
24,928.0
3,992.8
14,504.8
146
Annexure-2
INVESTMENT PLAN - INFORMATION & COMMUNICATION TECHNOLOGY (ICT) SECTOR
Federal PSDP Investment Plan
2010-11
Investment Plan (Source: Private/Prov./Foreign)
2011-12
2012-13
2013-14
2014-15
Total
2010-11
40.0
55.0
55.0
55.0
45.0
250.0
-
140.0
217.8
275.0
312.5
524.7
1,470.0
-
-
-
150.0
300.0
150.0
600.0
-
-
2,000.0
3,000.0
4,400.0
9,400.0
500.0
400.0
500.0
500.0
500.0
2,400.0
1,000.0
1,500.0
1,750.0
1,900.0
1,350.0
7,500.0
300.0
300.0
300.0
300.0
300.0
1,500.0
375.0
375.0
400.0
400.0
610.2
2,160.2
1,500.0
1,875.0
1,990.0
2,700.0
3,150.0
11,215.0
100.0
100.0
100.0
100.0
100.0
500.0
1,400.0
1,600.0
2,000.0
2,200.0
2,300.0
9,500.0
104.0
104.0
117.0
130.0
158.0
613.0
275.5
309.5
585.0
29.0
38.0
38.0
47.5
56.5
209.0
189.5
190.5
741.0
50.0
75.0
100.0
225.0
125.0
150.0
275.0
300.0
300.0
1,000.0
65.0
97.5
130.0
292.5
650.0
1,000.0
1,025.0
1,050.0
1,075.0
1,100.0
5,250.0
30.0
30.0
40.0
40.0
50.0
190.0
2012-13
2013-14
2014-15
Total
-
95.0
65.0
2011-12
123.5
200.0
142.5
200.0
1,000.0
1,000.0
1,000.0
1,000.0
500.0
4,500.0
-
-
-
-
-
-
-
475.2
815.7
899.1
600.0
210.0
3,000.0
-
50.0
50.0
70.0
150.0
224.5
544.5
-
150.0
150.0
175.0
200.0
325.0
1,000.0
-
184.0
184.0
184.0
184.0
276.0
1,012.0
-
26.0
26.0
26.0
26.0
26.0
130.0
100.0
184.0
150.0
184.0
200.0
184.0
250.0
184.0
300.0
184.0
1,000.0
920.0
-
147
20.0
20.0
20.0
20.0
20.0
100.0
120.0
240.0
240.0
300.0
300.0
1,200.0
25.0
34.5
40.0
41.8
50.0
191.3
25.0
50.0
65.0
75.0
75.0
290.0
60.0
60.0
60.0
60.0
60.0
300.0
300.0
300.0
450.0
660.0
900.0
2,610.0
3,673.2
4,050.0
4,646.6
4,746.8
5,178.4
22,295.0
5,724.0
7,222.5
10,221.5
13,159.0
14,409.0
50,736.0
100.0
125.0
150.0
250.0
400.0
1,025.0
400.0
800.0
1,000.0
1,280.0
800.0
4,280.0
600.0
600.0
600.0
600.0
560.0
2,960.0
100.0
125.0
150.0
150.0
175.0
700.0
50.0
50.0
75.0
100.0
225.0
500.0
600.0
1,050.0
1,300.0
1,680.0
1,375.0
6,005.0
650.0
650.0
675.0
700.0
785.0
3,460.0
1,726.8
2,400.0
3,053.4
3,873.2
4,946.6
16,000.0
3,200.0
3,200.0
3,200.0
3,200.0
3,200.0
16,000.0
1,726.8
2,400.0
3,053.4
3,873.2
4,946.6
16,000.0
3,200.0
3,200.0
3,200.0
3,200.0
3,200.0
16,000.0
6,000.0
7,500.0
9,000.0
10,300.0
11,500.0
44,300.0
9,574.0
11,072.5
14,096.5
17,059.0
18,394.0
70,196.0
-
148
Annexure-2 Contd.
TENTH FIVE YEAR PLAN (2010-15)
INVESTMENT PLAN (ICT SECTOR) - GRAND TOTALS
Investment Plan (Fed. PSDP + Private/Prov./Foreign)
2010-11
2011-12
2012-13
2013-14
2014-15
G.Total
40.0
55.0
55.0
55.0
45.0
250.0
140.0
217.8
275.0
312.5
524.7
1,470.0
-
-
2,150.0
3,300.0
4,550.0
10,000.0
1,500.0
1,900.0
2,250.0
2,400.0
1,850.0
9,900.0
300.0
300.0
300.0
300.0
300.0
1,500.0
1,875.0
2,250.0
2,390.0
3,100.0
3,760.2
13,375.2
1,500.0
1,700.0
2,100.0
2,300.0
2,400.0
10,000.0
104.0
104.0
117.0
405.5
467.5
1,198.0
124.0
161.5
180.5
237.0
247.0
950.0
-
-
50.0
200.0
250.0
500.0
-
200.0
200.0
300.0
300.0
1,000.0
65.0
65.0
97.5
130.0
292.5
650.0
2,000.0
2,025.0
2,050.0
2,075.0
1,600.0
9,750.0
30.0
30.0
40.0
40.0
50.0
190.0
100.0
150.0
200.0
250.0
300.0
1,000.0
475.2
815.7
899.1
600.0
210.0
3,000.0
50.0
50.0
70.0
150.0
224.5
544.5
150.0
150.0
175.0
200.0
325.0
1,000.0
184.0
184.0
184.0
184.0
276.0
1,012.0
184.0
184.0
184.0
184.0
184.0
920.0
26.0
26.0
26.0
26.0
26.0
130.0
140.0
260.0
260.0
320.0
320.0
1,300.0
50.0
84.5
105.0
116.8
125.0
481.3
360.0
360.0
510.0
720.0
960.0
2,910.0
9,397.2
11,272.5
14,868.1
17,905.8
19,587.4
73,031.0
100.0
125.0
150.0
250.0
400.0
1,025.0
1,000.0
1,400.0
1,600.0
1,880.0
1,360.0
7,240.0
150.0
175.0
225.0
250.0
400.0
1,200.0
1,250.0
1,700.0
1,975.0
2,380.0
2,160.0
9,465.0
4,926.8
5,600.0
6,253.4
7,073.2
8,146.6
32,000.0
4,926.8
5,600.0
6,253.4
7,073.2
8,146.6
32,000.0
15,574.0
18,572.5
23,096.5
27,359.0
29,894.0
114,496.0
149
150
4.
Develop and Mobilize Human Resources (HRD)
4.1
Population
With an estimated population of 172.6 million in 2010, Pakistan today is the world’s sixth
most populous country. With the existing trend, the total population will reach 191.1 million by
the year 2015 and 209.8 million by 202012. Pakistan stands apart from its populous neighbors in
South Asia, all of which (with the exception of Nepal) experienced substantial declines in fertility
prior to 1990 and therefore show markedly lower fertility levels in 2007. Pakistan has the highest
population growth rate (2.08%) and the lowest CPR (30%) amongst the SAARC countries, which
has resulted in annual addition of 3.0 million people. It continues to lag behind with respect to
other demographic indicators as well. An estimated 13,000 maternal deaths occur annually in the
country and the maternal mortality rate is estimated at 276 per 100,000 live births. The infant
mortality rate is 78 deaths per 1,000 live births and under-5 mortality rate is 94 deaths per 1,000
live births.
Population size and growth have a strong bearing on all aspects of a nation’s welfare,
especially health, environment and poverty alleviation. After reaching its highest rate of
population growth, fertility is declining as well as is the growth rate in Pakistan. Furthermore, the
demographic transition has entered a new phase with a broadening of the age distribution and a
reduction of dependency ratios, drawing new dimensions to policy concerns regarding population
issues. This Tenth Plan (2010-15) faces a serious issue of matching resources with the almost
unmanageable growing size of population; it is imperative that a sustained effort is made to
ensure that economic growth results in a healthy balance between employment and productivity
growth in conjunction with accelerating social development as key components in this process of
structural change. The overall vision of the population program, therefore, is to persue
stabilization of population as a development priority.
Recent Trends: Ensuring a “Demographic Dividend”
Changes in Population Size and Growth Rate in Pakistan: 1951-2010 are shown in Table
No.1 below:
Census Year
1951
1961
1972
1981
1998
2003*
2010*
Population
(Million)
33.82
42.98
65.32
84.25
133.32
147.69
172.57
Average Annual Intercensal Growth
Rate (%)
1.8
2.5
3.6
3.1
2.6
2.03
2.08
Percentage Intercensal
Increase
27.09
52.31
29.01
57.09
-
Source: Population of Pakistan: An Analysis of Population and Housing Census, 1998.
*Estimated
12
The estimates are based on the recent projections carried out by the Sub-Group II on Population
Projections for the 10th Five Year Peoples Plan (2010-15). The Sub-group consisted of the representatives
of the National Institute of Population Studies (NIPS), Federal Bureau of Statistics (FBS) and Planning
Commission. In the light of the decision of the ECNEC dated 21-1-2010, the exact figures of PDS in 2007,
i.e. TFR=3.7, Life Expectancy=64 & 68 both for males and females respectively, have been used in this
regard.
151
The growth trends even reflect stronger associations with education and employment
patterns. These have to do directly with the dramatic changes in age structure witnessed by
Pakistan in the last decade. The following table and the chart depict that the decline in fertility
and growth rate led to a rise in the proportions of young persons aged 15-24 and thus a decline in
dependency ratios. This boils down to the fact that on the one hand, an increasing number of the
aged poses new challenges in terms of catering to their physical and mental health needs. While,
on the other, a large number of young people, those aged between 10 and 29 (43 percent of the
country’s total population), represent a window of opportunity. Investing in their education and
skills development will ensure a ‘demographic dividend’ through their increased economic
output, and thus be an effective way to pursue a broad range of sustainable development
objectives.
Table 1: Pakistan’s Population Growth Rates (%) and Dependency Ratios
Survey Time
1962-65 (PGE)
1968-71 (PGS)
Survey
PGS 1976-79
Census 1981
PDS 1984
PDS 1991
Census 1998
PDS 2000
PDS 2005
Growth Rate
2.6
2.4
1976-79 (PGS)
1985-90 (PDS)
1990-1995 (PDS)
1995-2000 (PDS)
2000-2005 (PDS)
3.1
3.2
2.9
2.4
2.0
Dependency Ratio
97.9
95.3
98.7
98.2
87.3
85.5
81.5
Trends in Growth & Dependency Ratio
5
120
4.5
Growth Rate (%)
3.5
80
3
2.5
60
2
40
1.5
1
Dependency Ratio
100
4
20
0.5
0
0
1962-65
1968-71
1976-79
1985-90
1990-1995 1995-2000 2000-2005
Years
Growth Rate (%)
Dependency Ratio
152
Review of Past Performance
Review of Population Welfare Programme (2003-08)
There is awareness at the highest levels that Pakistan has strayed from prioritizing family
planning and the high levels of unmet need for family planning and their general stagnation is
seen as a primary responsibility of the state. Resources are pressed for the social sectors generally
once again, given that Pakistan is spending huge amounts on the war on terror and has other
priorities at this point in its history. But the consequences of low priority to family planning
during the last five years have shown stagnation in contraceptive prevalence rate, which is known
widely. More resources have to be directed and prioritized for this sector and for the program.
In an atmosphere where major donors such as USAID were not operating in Pakistan for
several years, the Government still committed scarce resources to family planning and
reproductive health. This trend became even more exacerbated with international donor funds
shifting very much in favour of reproductive health in general and HIV/AIDS in particular, away
from family planning. Pakistan Government has had to rely on its own funds almost entirely until
very recently.
Financial Review
As against the overall financial and PSDP allocations, amounting to Rs. 20.019 billion
and Rs.18.871 billion, respectively for the Federal and Provincial Population Welfare
Programmes (2003-08), the overall financial and PSDP utilization of the entire Population
Welfare Programme was Rs. 14.269 billion (68%) and Rs. 14.269 billion (83.2%) respectively.
However, as against the financial releases, amounting to Rs. 15.792 billion, the financial
utilization was Rs. 14.269 billion (90.4%). The financial situation reflects that there was no
shortage of funds for programme activities. However, there was acute issue of late releases of
funds by the provincial finance departments.
Physical Review
The component-wise service delivery achievements during the previous plan period
(2003-08) are as follows:
S.NO
1
1
2
3
Service Delivery Outlets
2
Family Welfare Center (FWC)
Mobile Service Unit (MSU)
RHS-A
Total
Target
3
2040
175
120
2335
(Cumulative)
Achievement
4
2846
292
176
3314
The service delivery achievements remained satisfactory.
153
Demographic Review
As per Pakistan demographic and Health Survey (2006-07), the Contraceptive Prevalence
Rate (CPR) has even declined from 32% (2003) to 29.6% (2007). As against the Contraceptive
Prevalence Rate (CPR) target of 44.92% for the Year 2008, the CPR has even declined from 32%
(2003) to 30% (2009). As against the target of reducing Population Growth Rate (PGR) to 1.72
percent, the Total fertility Rate (TFR) to 3.37 per woman, these could be reduced to 1.78% and
4.1 per woman respectively. As against the target of reducing unmet need, for Family Planning
and RH Services to 20 percent, it remained unchanged at 37 percent.
Review of MTDF (2005-10)
A review of the MTDF (2005-10) was also undertaken to assess the reasons for the short
fall in achievements in the MTDF (2005-10). As compared to the actual allocation of Rs. 19.7
billion, an amount of Rs. 24.7 billion was allocated to the Population Welfare Programme in the
MTDF (2005-10). However an amount of Rs. 16.5 billion was utilized during the MTDF period
(2005-10).
The review has lead to suggestions about the revised and more focused role of the Ministry
of Population Welfare, the Ministry of Health and other major stakeholders of the Population
Program. The following key issues/challenges were also identified by the review:








The Population Welfare Program is operating in isolation, it has little linkage with
other stakeholders / public sector institutions (health departments, PLDs and TGIs),
which have thousands of service outlets, but not offering family planning services
Non-existence of mechanism for the functional integration of the Population Welfare
and Health Departments at the service delivery level
Inadequate public-private partnership, non-existence of a mechanism for
strengthening the public-private partnership, private sector and NGO’s not fully
involved in sharing responsibility
For the last couple of decades, the “Population Welfare Programmes” are on
development budget and funded through the Federal PSDP. In the light of
recommendations of the Chief Executive’s Review Committee and decisions of the
Chief Executive, the Ministry of Population Welfare devolved the service delivery to
the provinces w.e.f. Ist July, 2002. At the time of de-federalizing the Population
Welfare Programmes, decision was made, that the provinces would finance their
respective Population Welfare Programmes. The programme is being executed by the
respective provincial governments the provinces have not picked up their recurrent
financial liabilities, to reduce the burden of Federal exchequer. There is lack of
ownership of the programme on the part of the provinces
Insufficient service delivery infrastructure, low coverage, services incompatible with
demand and low capacity. Low quality of care and services, unreliable contraceptives
methods and their detrimental side effects
Low turnout of clients at the Family Welfare Centres (FWCs), which are still
operating in the rented buildings, despite ECNEC decision for shifting these to
Health Departments static centres namely BHUs/ RHCs/ Dispensaries
Instead of adopting comprehensive / holistic approach of reproductive health
services, the programme is focusing only on the family planning activities
Lack of trained service providers, little emphasis on the need based refresher
trainings, lack of incentives to them, non-existence of their career planning and rising
154


discontentment amongst the service providers
Rampant absenteeism amongst the field functionaries of Population Welfare
Programmes, lack of commitment on their part and their lethargic attitude towards
the clients
Weak and irregular monitoring system at the Federal and Provincial levels for the
programme activities
It has been observed that these challenges need to be addressed within the context of a
coordinated and integrated approach that requires involvement of all other sectors, linked with the
cross cutting population issue. It is matter of grave concern that, so far there has been minimal
collaboration between the population and other related sectors. Since rapid growth of population
affects all efforts made in the sectors of health, education, women development and poverty
reduction, etc, thus there is need to build strong linkages between population and other sectors.
The functional integration of Population and Health sectors at service delivery level and
involvement of the service outlets of the provincial line departments and target group institutes
(i.e., WAPDA, Pakistan Army, Navy, Air Force, POF, Pakistan Railways, KPT, Pakistan Steel,
PTC, Postal Service Groups, PIA, ZTBL and Fauji Foundation etc.) is also essential to address
all of the above issues and challenges.
Revised Population Projections
Earlier, the Government of Pakistan was assuming fertility decline to continue at the
pace of the 1990s and past projections reflect population size and age structures based on that
trend. A possible approach is to aim for the reduction of unwanted fertility by 2015 by one child
which would bring down fertility from 4.0 to 3.0 and in doing so this might expedite future
fertility decline. The projections now being proposed are more in line with this more realistic
scenario.
The Tenth Plan (2010-15) projects what appear to be more realistic population
scenarios based on the fertility trends shown in the Pakistan Demographic and Health Survey
2007 and other surveys. The original Planning Commission projections are also presented for
comparison. The two scenarios are for 2015 and go up to 2030 based on the assumptions of
trends identified recently, of a moderately faster and slow decline in fertility accompanied by
a standard decline in mortality that reflects improved life expectancy over the years. The
expectation is that 2015, coinciding with the end of the T e n t h P l a n ( 2010-2015) and the
MDGs final year, would be a good time for re-evaluating prospects for further fertility decline.


In Scenario I, we assume that unwanted fertility will be eliminated by 2015 and that
the total fertility rate will come down from its level of 4.1 in 2005 to 3.0 children in
2015 and continuing its decline will reach 2.7 by 2020 and 2.2 by 2030
In Scenario II, we assume that fertility continues to fall at its current pace, with no
special efforts to accelerate the decline. The TFR will be 3.4 in 2015 and 3.1 in 2020 and
2.6 by 2030
Both projections assume that mortality will decline resulting in improved life
expectancy at birth for males from 63.7 years in 2005 to 70.0 years in 2030, and for females
from 64.1 years to 73.4 years for the same period. Assuming gradual improvements in mortality
reduction and leaving international migration out of the calculus for the moment, the major
determinant of population growth rates will be fertility.
155
The two scenarios differ in their implications for Pakistan’s population size as well as
for the age composition of the population in 2020 and 2030. According to Scenario 1,
population size by 2020 will be 210 million and 243 million by 2030; corresponding figures for
Scenario 2 are 216 million and 255 million. These figures are considerably higher than the
earlier projections of the Planning Commission which estimate population to be 181 million
in 2010, 195 million by 2020 and 218 million by 2030. This reinforces the very sharp
differences that fertility trends can make on population size and related outcomes.
Table 2: Projected Population (Millions) under Three Different Scenarios, 2009-2030
Scenarios
2009
2015
2020
2030
I. Proposed Course: Moderate decline
(TFR 3.0 by 2015, 2.7 by 2020 and 2.2 by 2030)
165.0
192.7
210.6
II. Current Course: Slow decline
TFR 3.4 by 2015, 3.1 by 2020 and 2.6 by 2030)
165.0
195.4
216.1
* “Original Projection in Ninth Plan
(TFR 2.08 by 2020 & 1.92 by 2030)
164.6
181.2
194.7
243.6
255.3
218.0
Tenth Five Year Peoples Plan (2010-15): A Way Forward
Objectives of the 10th Plan (2010-15)
The broader objectives of the Plan include:




Raising the level of current contraceptive practice from 30 percent in 2008-09 to 37.5
percent by 2014-2015
Increase the number of users from 8.426 million in 2008-2009 to 10.871 million in 20142015
Reducing the CBR from 24.91 per thousand population in 2008-2009 to 21.03 per
thousand population in 2014-2015
Bringing down the population growth rate from 1.88 percent per annum in 2007 to 1.49
percent per annum by 2014-2015
Policies and Programs
Population Policy
The previous Population Policy 2002 marked a distinct revival of interest in population
issue starting in the mid-nineties. The last several Prime Ministers have addressed the issue of
“population growth” as a national priority. The Population Policy’s main shift was not just
reducing population growth rate rather it had greater emphasis on providing accessible and better
quality services to meet the needs of the clients. It underscored the need to collaborate with
other public sector institutions, private sector and NGO’s. The policy also pointed out the
potential of the private sector and need of partnership between public and private institutions
156
especially for service delivery.
Fertility had just begun to decline in Pakistan when the Population Policy was being
formulated. Decline of Total Fertility Rate was very rapid from 6.5 in 1991 to 4.8 in 1997-98.
The Population Projections were drawn up by the Planning Commission in 2005, in line with the
Population Policy. There were expectations that this decline would continue with the same speed.
Furthermore, we would easily reach replacement fertility by 2020. But the signs have changed
and progress in this sector was disappointing according to the Pakistan Demographic and Health
survey 2007.
However, there are certain signs of progress, such as demand creation, awareness, and
certain points of failure, such as little expansion in service delivery, despite 37% unmet need.
Contraceptive prevalence rates have remained stagnant at 30-32 percent between 2001 and 2007.
The decline in total fertility rate from 4.8 to 4 has been largely a result of rising age at marriage
and high abortion rates rather than changes in contraceptive prevalence. The ever use of
contraceptive is almost 50 percent but current use is 30 percent, which indicates a large
proportion of dropouts and serious failure of take off in the family planning.
What is striking about the recent few years is the recognition and realization that family
planning services have not kept up pace with the increased demand. The high unmet need for
family planning services, the high levels of unwanted fertility and the large number of induced
abortions to avoid having and rearing an unwanted child are reflection of this reality. These
outcomes are largely a result of women, couples and families not having easy, accessible,
affordable resort to means of preventing an unwanted pregnancy, which includes good quality
information and services. The stagnation of the contraceptive prevalence rate at 30 percent is a
testimony that there is a disconnect between demand and provision of family planning services.
More than one out of three woman, want birth spacing, however not using contraceptives.
Furthermore on average, out of a fertility rate of 4, one child on average in unwanted. In
this regard, progress whether directly as a result of official advocacy and mobilization or an
indirect effect of ideational change, has permeated widely and now even apparent in rural areas
and among the uneducated people. Clearly, societal changes such as rapid urbanization,
expansion of education and employment for women, proliferation of information through
television and other communication channels, and some improvement of the economy over time
have changed social values. These influences are believed to underline the changes in marriage
behavior, with the rising age at female marriage and the proportions of women that do not marry
at all. They also affect reproductive intentions more directly with the large rise in desires to
control fertility within marriage and the high proportions of women who either want no more
children or want to space their next birth.
As envisaged in “Population Policy”, the universal access and replacement level are to be
obtained by the year 2010 and 2020 respectively. However, existing lower rate of CPR at 30%
and higher unmet need at 37% would not allow to achieve the said demographic targets. The
Population Policy 2002 had a target for reducing the fertility rate to replacement levels of 2.2 by
2020. However, this appears to be an unachievable target. In fact current trends in fertility if
extrapolated this target would not be achievable even by 2030. If one child family approach is
adopted, it would bring down fertility from 4.0 to 3.0 and in doing so this might expedite future
fertility decline.
A paradigm shift is also required for population policy planning in view of the ongoing
demographic transition. Policy approaches need to adapt to and align with emerging demographic
157
needs and realities. Population should be made a major denominator for policy development. First
policy mechanisms and requisite infrastructure should be focused and then the areas of
intervention. The rapid population growth can be controlled if provincial line departments
(including health, NGOs, CBOs, PPSOs and LHWs etc) make serious efforts to achieve the target
within the MDG goal period i.e. 2015.
The draft Population Policy (2010) aims at:
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Provide access of family planning and Reproductive Health Services to the remotest
and poorest areas of the country by 2015
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Reduce unmet need for family planning from 25 to 20 per cent by 2015
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Reduce fertility level from 3.56 (2009) to 3.1 births per woman by the year 2015
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Ensure contraceptive commodity security for all public and private sector outlets by
2015
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Improve maternal health by:
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encouraging birth spacing (of more than 36 months)
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reducing incidence of first birth (in ages less than 18), and reducing proportion of
mothers giving late birth (ages beyond 34)
The Federal Population Welfare Program will continue to provide policy guidelines to
Provincial and Special Areas Programs, procure contraceptives for distribution, meet the training
needs of employees of provincial departments, coordinate with provincial departments, line
ministries and international agencies, and create demand through an effective communication
strategy during the Tenth Plan (2010-15). It includes the following components:
The Federal Ministry of Population Welfare will have a major role of Policy and
Planning for the population sector as a whole. The Ministry will derive national policies and plans
that look at population trends, monitor changes and direct resources to the appropriate channels. It
will have oversight of the Program and the Population Policy. It will also have a major
coordination role to ensure that the various actors, such as Ministry of Health, the private sector
and the NGOs have sufficient funds, resources and manpower to deliver services. It will provide
training standards and inputs into advocacy strategies.
The distinct change will be that service delivery will be the joint responsibility of the
provinces, districts, the Ministry of Health and the private sector. It will be ensured that they will
all be accountable to fulfill their full role. The Ministry will therefore only have the role of
oversight, to ensure that the overall population is being covered in one way or another. Most
importantly, on the whole, monitoring the success of the Population Policy 2010 will be the
responsibility of the Ministry of Population Welfare.
The Ministry of Health launched in 1994, the National Program of Primary Health Care
and Family Planning administered by 40,000 Lady Health Workers. The number of workers has
now been increased to 90,000. The most recent development has been a realization and renewed
commitment to provide family planning services by the LHWs and the departments of health
which is bound to make a huge difference to service delivery in the next few years.
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During the Tenth Plan (2010-15) the Ministry of Health will with renewed commitment
put family planning squarely as part of its priorities in primary health care.
BOX
Lady Health Workers
Since 1986, Ministry of Health outlets have also been mandated to provide family
planning services and the Ministry of Health launched a scheme of its own a National
program of Primary health care and family planning administered by 40,000 Lady Health
Workers in 1994. The number of workers has been increased to 90,000 in the recent past.
The LHWs were found to be very effective in delivering family planning services in
2001. Now, as per third party evaluation, they are feeling the strain of an overload of
other duties on them, particularly the administrations of polio vaccine (OPM, 2009).
There is a realization and renewed commitment to provide family planning services by
the LHWs and the departments of health, which should make a huge difference to service
delivery in the next few years. During the Tenth Plan (2010-15) there would be
revitalization of Lady Health Worker Program with special focus on family planning.
Health outlets of Provincial Health Departments and these of AJK, Gilgit-Baltistan and
FATA (i.e. Basic Health Units, Rural Health Centres and Tehsil Hospitals) and Health outlets of
Social Security Dispensaries/Hospitals will be involved for provision of FP/RH services.
Training in contraceptive technology will be imparted to doctors and paramedics of
Health and other line Departments. An adequate and regular supply of contraceptives will be
made to the Health &PLD service outlets. Proper remedial measures will be taken to increase the
turn-up of doctors and LHVs of PLDs and health departments for training. The doctors and
paramedics of the health and PLDs will be provided training in family planning (clinical and
traditional methods) at the Regional Training Institutes (RTIs).
Effective measures will be taken at the highest level, to involve all the existing service
outlets of PLDs and health departments, to provide family planning/reproductive health services.
Since the Health and PLDs service outlets are much more in number compared to the service
outlets of the Population Welfare Program. This is the only way to minimize the high unmet need
at 37 percent.
Financial Plan (2010-15):
During the next five years (2010-15), an amount of Rs. 39.2 billion has been earmarked
for the Popualtion Sector. Out of which Rs. 33.4 billion will be funded by the Federal PSDP
whereas the rest of Rs. 5.8 billion will be financed by the provincial PSDPs. The detailed phasing
of the financing plan is given in the following table:
(Rs. In Billion)
S.No
1
2
3
2010-11
Federal PSDP
Phasing
Provincial PSDP
Phasing
Total National
Outlay
2011-12
2012-13
2013-14
2014-15
Total
5
5.7
7
7.5
8.2
33.4
0.7
0.9
1.1
1.4
1.7
5.8
5.7
6.6
8.1
8.9
9.9
39.2
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Key Future Recommendations:
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Population is a cross cutting issue and a national challenge so it should be integrated
into development plan and programmes should be launched with a national goals
A district-wise analysis may be undertaken to minimize the unmet demand for
contraceptives. Spatial programs should be launched in the far flung remote areas.
Pockets of high fertility rate need to be identified and special projects should be
designed for those areas on war footing basis
The Population Commission announced by the Prime Minister should be empowered
as an independent, autonomous organization with an elaborate structure and budget
and a functional secretariat or an autonomous body
Generalists are occupying most of the key posts at various levels of the population
welfare programme, in future only those duly qualified in demography should be
recruited. Young graduates/professionals from existing population studies centers
should be employed and further groomed to rejuvenate the existing population
structures and programmes; furthermore, staff development programmes need to be
planned for the existing old staff
Reproductive health should be incorporated into medical curricula
Paying due consideration to the social constraints and reactions of the people to
Population Welfare Programme’s initiatives, a comprehensive social security system
should be devised for the target population
Regional differences and practical implications may be taken care of, while analyzing
good practices of other regional partners of the country. Regional cooperation on
population issues should be strengthened to share lessons learnt and best practices.
Good practices of regional partners should also be replicated in Pakistan
To broaden the scope and efficacy of the Programme, the MoPW should ensure
greater and meaningful cooperation with the Health departments and NGOs in future.
The involvement of TGIs/RMPs, PPSOs, NGOs and CBOs should be enhanced to
reduce unmet need by strengthening and expanding service delivery
The strategy needs to be devised with great caution and in consultation with all the
stakeholders to make the population welfare programme more acceptable and
effective
To achieve the targets of the universal access, the rural and remote areas of the
country should be given equal attention for the provison of FP/RH services in future
Instead of an overall picture of the programme performance, there is a need to
introduce District specific positions (District Demographic Profiles), regarding
targets, achievements and impact of the programme. Impact indicators TFR and CPR
can be misleading, therefore, District Wise and Area Wise cluster surveys should be
conducted. It should equip the planners with broad based information about vital
events and contraceptive use etc.
Intense training and periodic refresher trainings should be imparted to staff/officers
working in all service delivery outlets of the programme
Complaint cells should be established in MoPW, provincial population welfare
departments and major districts of the country, to get feed back, improve
performance and enhance efficiency in future
Cross Monitoring System should be adopted. Monitoring of the monitors should be
carried out
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Youth Development and Population Education Programmes should be initiated for
promoting education and awareness, regarding the issues of adolescence, matrimonial
life, family planning and reproductive health
The issue of Women Empowerment, particularly for decision making in the issues of
FP/RH, should be voiced at higher forums to ensure their greater involvement.
Concerted efforts should be made for women development involving all the stake
holders, (i.e. Ministries of Women Development, Social Welfare, Education, Youth,
Labor and Manpower)
Campaign should be launched to delay marriage/pregnancies, first birth of the child
and Birth Spacing etc (at least until 18 years of age) for women. Awareness of
pregnancy related complications for women above 35 should be raised. Exclusive
breast feeding for 6 months and continued breastfeeding for two years should be
promoted. The slogan should be changed from “Two Child Happy Family”. The
messages on birth spacing and its benefits for mother/child health and family well
being should be focused through communication strategy and advocacy.
Furthermore, mentioning of “Khandani Mansooba Bandi” should be avoided
Empowerment of women can be fundamental in promotion of a real and holistic
approach for development. Documentaries on education, women empowerment,
health care systems, speeches of eminent scholars of those Muslim countries who
have taken a leading role in stemming population growth be dubbed in local
languages and shown through TV channels, festivals and melas
To make the Popualtion Welfare Programme cost effective, both technical and
financial support should be solicited from the international donor agencies like
UNFPA and DFID in future
Myths, misgivings/misconceptions regarding contraceptives should be identified and
removed through communication strategy (including electronic & print media and
interpersonal communication). An evidence based knowledge and information
campaign for clients and service providers should be designed and implemented
Ulemas/Khateebs and RMPs should be mobilized through advocacy campaigns to
propagate small family norms. After obtaining endorsements from key scholars,
about the curricula for Contraceptives (contraceptive methods and misgivings about
family planning methods etc), a training programme for the religious leaders should
be designed and implemented
Programme should be chalked out to get signed by prominent Ulemas of various
sects committing them to save lives reducing maternal and infant mortality through
advocacy of Birth Spacing. Debates / discussions should be arranged at electronic
media inviting religious scholars from different schools as well as social scientists /
economists and medical professionals to discuss the issue in a holistic manner taking
into consideration all aspects of human life. Motivating Ulema, Religious scholars
and Khateeb should be involved to promote the issue in their sermons and speeches.
Dissemination and popularization of Fatwa’s of other Muslim countries wpuld be
made. More Delegations of religious scholars should be sent to visit other Islamic
counties so that they can share their ideas/research. It should open their minds and
broaden their vision. Meetings with religious scholars and visit of religious
institutions of the host countries should also be arranged besides other organizations
Extensive Information, Education and Communication programme should be
prepared for all sections of society through debates, discussions, cartoons,
signboards, media campaigns, advertisements, dramas, speech competitions etc. The
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issues of family planning and reproductive health should be included in the
curriculum at University level
The level of awareness, motivation and sense of responsibility on the part of people
are fundamental for the successful achievements of objectives, where community, the
religious leaders / scholars, the politicians and women’s empowerment are the major
driving forces which can lead to achievement of replacement level, which we in our
country are dreaming to realize by the year 2020. Thus success of failure of family
planning / reproductive health service delivery programme in Pakistan should not be
looked in isolation, restricting it to the executing authorities only, but it needs to be
looked in a wider context, taking into considerations of all other factors that have
already been mentioned in preceding lines.
There should be Strong and explicit support from religious groups and Strong referral
base
Workers should be recruited from rural communities` in order to expand the service
network in remote areas
Child labour must be strictly prohibited by law thus parents have no consideration for
having more children as labour force
Education can play a pivotal role in creating awareness regarding population issues,
family planning / reproductive health and quality of life which contributed in
promotion of family planning and widespread use of contraception
Major issue in our country is low literacy rate and especially in rural areas. Education
needs to be focused on war footing basis. Though, there have been major reforms as
far as improvement of political representation of women is concerned. But providing
and ensuring access to education, employment and family planning / reproductive
health care are the major areas which require to be focused in national socioeconomic development planning
Writ of the state is required to establish on all institutions and specific legislations as
far as education, child labor and protection of women’s rights, property and divorce
and employment must be introduced
Incentives should be given to those parents who restrict their number of children to 2.
Firm political commitment and support for FP at all levels is required which should
give a positive momentum to programme
More focus should be given to rural areas with high population concentration
There should be high involvement of private sector midwives, LHVs and midwives.
There should be active involvement of NGO’s for designing and conducting
sensitization programmes on RH and FP issues for adolescents, young married
couples and parents such as pre marriage trainings, parenthood trainings, school
health education programmes
There should be revitalization of Lady Health Worker Programme with special focus
on family planning
Every important committee constituted for the projects, should ensure the
representation of the Planning Directorate of the MoPW and the P&D Division
Future Scope of the Federal Population Welfare Programme
Advocacy and Communication:
During the preceding years, the “National IEC & Advocacy Strategy” has bridged huge
communication gaps in highlighting the need for better communications on the issue of family
162
planning. There is a dire need for continuation of enhanced political, administrative and
institutional support in this regard.
Mass awareness has become universal as evidenced by various surveys and studies. But
the same surveys show that changes in behaviors have lagged far behind. It is evident that
awareness is not enough or there is not enough conviction power in the messages promoting
family planning.
A new campaign will be launched during the 10th Plan (2010-15) which will approach
family planning as a health rather than development issues. The repositioning of family planning
to birth spacing is a convincing strategy both from the point of view of health benefits for child
and mother and also greater compatibility and acceptability with religious values.
National media advocacy should remain the purview of the Ministry of Population
Welfare while mobilization should be devolved to the communities. This mobilization is best
done by community based workers such as the Lady Health Workers, NGOs and CBOs. The
Social Mobilizers cadre needs will be reviewed fully; for them to be effective they need to work
closely with other networks, particularly the LHWs, to gain entry into communities.
An extensive Information, Education and Communication program will be prepared for
all sections of society through debates, discussions, cartoons, signboards, media campaigns,
advertisements, dramas, speech competitions etc. The issues of family planning and reproductive
health will be included in the curriculum at university level.
Commodity Security
Resource mobilization, forecasting national contraceptive requirement, procurement of
national requirement, warehousing the contraceptive commodity at the national level would still
be the responsibility of the Ministry of Population Welfare. While there may be three or four
distinct channels of distribution which would be quite independent that is to the following
streams: National Program for FP&PHC, Departments of Health, Social Marketing and other
private sector such as hakims and homeopaths and NGOs.
Training
A major responsibility of the MoPW is maintaining national standards in RH & family
planning service delivery, across all sectors. The functions of training of skilled providers must be
spearheaded by the Ministry through its RTIs and RHS Training Centres. Further, inter-national
and national institutes should be affiliated for utilization of their research-based expertise for
ensuring up-to date knowledge and skills of the researchers, trainers and service providers in the
public and private sectors.
At the moment the PWTI and RTIs have not grown into elaborate training institutes as
envisaged earlier. To overcome the limitations of staff capacity and lack of financial resources
needed to revamp the PWTI, RTIs, NIPS and NRIFC, an expanded mandate will be given to
these institutes.
The Higher Education Commission will be approached for seeking grants for research
and training as it has an indigenous fund for establishing research institutes and centres of
excellence.
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Other areas of focus will be the following:
1.
Medical and Demography curriculum
Reproductive health would be incorporated into medical curriculum of medical
universities. Furthermore the teaching of demography in universities will be supported.
Generalists are occupying most of the key posts at various levels of the population welfare
program, in future only those duly qualified in demography will be recruited. Young
graduates/professionals from existing population studies centres will be employed and further
groomed to rejuvenate the existing population structures and programs. Furthermore, staff
development programs will also be planned for the existing old staff. Intense training and
periodic refresher trainings would be imparted to staff/officers working in all service delivery
outlets of the program.
2. Population Education
The Population education component aims to increase understanding and interest of
various groups/segments of population including community leaders, NGOs and policy makers
on the significance of population issues. The component proposes to inculcate responsible
behavior in relation to family planning (FP)/reproductive health (RH) issues, family life, gender
equity and social responsibility for human health. The component proposes awareness through
population education. Presentations will be made for different segments of population. Technical
support would be provided to the curriculum wing of the Ministry of Education for incorporating
population and its impact on development in the curricula of text books at Secondary and Higher
Secondary levels of the formal and non-formal education system.
A number of
workshops/seminars would be conducted for sensitizing the parliamentarians, senior policy
makers, planners, educationists and youth for mainstreaming the population concern to increase
advocacy of population issue.
3. Non-Clinical Training through Population Welfare Training Institutes (PWTIs)
Non-clinical training has been an on-going activity since 1965, through two existing
Population Welfare Training Institutes (PWTIs) in Lahore and Karachi. Their performance will
be regularly review to ensure relevance and high quality training including review of the
curriculum.
4. Clinical Training through Regional Training Institutes (RTIs)
Approximately, 320 – 340 FWWs are trained in thirteen Regional Training Institutes
(RTIs), located in the four provinces, ICT and AJK. The main training courses offered including
basic training of FWWs (24 months) and in-service and refresher training of FWAs/FWWs/FW
Counselors. These institutes also organize orientation and refresher courses for medical and
paramedical personnel of private sector and NGOs.
The curricula of the FWWs will be re-designed in consultation with the Nursing Council,
so that more than FWWs being trained (every year), they may then be accommodated in health
service outlets or seek employment in or outside the country. The MoPW will constitute a body
like Pakistan Nursing Council for the degree certification of FWWs.
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Research
There are each two research and training institutes working under the administrative
control of MoPW. Research institutes include National Institute of Population Studies (NIPS) and
National Research Institute of Fertility Control (NRIFC), whereas training institutes include
Population Welfare Training institutes (PWTIs) and Regional Training Institutes (RTIs).
A research inventory (database, e.g.) will be set up and maintained. NIPS will serve as a
coordinating/liaison body to collect and disseminate research. NIPS, while calculating population
projections, will work in close contact with the UN Population Division to increase credibility of
data. NIPS will also be responsible for publishing a quarterly research journal on population. The
practitioners and researchers will be encouraged to produce publications through the said journal.
The National Research Institute of Fertility Care (NRIFC) was started in 1962, in
collaboration with WHO. The NRIFC will develop the capacity to test the range of
contraceptives procured by the MOPW, as per its main function. It will recruit adequate technical
staff and non-technical staff working in technical positions will not be accommodated. The
performance of the NRIFC will be upgraded and 15 studies are envisaged during Tenth Plan
(2010-15).
Monitoring
During the Tenth Plan (2010-15) monitoring will be strengthened and joint monitoring
visits by the MoPW & P&D Division will be carried out. Representation of the P&D Division
and the civil society should be ensured for the field monitoring. All expenditures incurred in this
respect may be borne by the MoPW, through its monitoring component. There is also a
component of Management Information System (MIS), in the MOPW; the monitoring related
information from the MIS will be shared with the other stakeholders and P&D Division.
The recent evidence comes from the PDHS which shows a completely different
contraceptive mix than the obtained from the service statistics. The CPR has stagnated while the
CYPs are continued to grow.
The main thrust of the monitoring will be to improve the quality of services. The
Management Information System would be strengthened. The provincial monitoring cell will be
strengthened in terms of trained manpower and mobility and it will be computerized and linked
within the Provincial Secretariat Office, as well as with the field units. The computers will also be
connected with “Monitoring and Statistical Wing” of the Ministry of Population Welfare, to
ensure immediate access of information and feedback. Monitoring and Evaluation also needs to
be made more effective, for management of the program activities and for checking the rampant
absenteeism amongst the functionaries of the Population Welfare Departments.
The Provincial Population Welfare Programmes (2010-2015)
The Provincial Population Welfare Programs have been on-going activities executed by
the Provincial governments; however, funded by the Federal Government, The provincial
programs aim to promote small family norms on voluntary basis, extend family planning (FP)/
reproductive health (RH) services to desiring couples through static and out-reach services in the
provinces. The administrative control of the Population Welfare Program has already shifted to
the Provinces since 2002. Financial liabilities of the PWP programs will be transferred to the
respective provincial governments.
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The Population Welfare Program is the only Program which had not been devolved at
district level. This will be rectified by granting clear autonomy to the provincial programs while
receiving overall policy directions from the Federal Government. The main responsibility of
RH/FP service delivery will lie with the provinces.
Greater autonomy, both financial and in decision making, at the provincial level will
subsequently lead to district governments’ ownership of the Population Welfare Program. The
anomaly between two sets of administrations at district level has certainly affected the orientation
and focus of program personnel resulting in poor family planning services delivery; therefore
such changes will improve outcomes. Furthermore, the operational aspects of the program
suffered from persistent ban on recruitment in the provinces along with delays in budget releases
– this will be eliminated if funds are with the provinces.
Service Delivery
For service delivery Ministry of Health and the private sector will be made responsible to
fulfill their full role. Under the revised strategy the majority of the service provision of the Family
Welfare Centres (FWCs), Reproductive Health Services (RHS) A and B, Mobile Service Unites
(MSUs) and mobilizers will be the responsibility of the provincial Government.
Private sector
Increasingly the private sector through social marketing is taking on responsibility of
dispensing, advertising and training in reproductive health. The private sector is playing a very
vital role in providing FP/RH services in the country. The Population Policy and the interim
Population Sector Perspective Plan 2012 envisage attaining population stabilization goal and
bringing down the population growth rate through the expansion of social marketing’s role in
increasing contraceptive use prevalence.
Registered Medical Practitioners (RMPs)
The RMPs have the vast potential to promote the FP/RH services; however, the
Population Welfare Program has failed to exploit this potential, because enlistment of RMPs is
concentrated in urban areas. Maximum RMPs working in rural areas will be involved for
providing FP/RH services to eligible couples. Only those RMPs who are willing to extend FP/RH
services will be involved. The PW Officer will provide them with contraceptives and training in
family planning/reproductive health.
Evaluation of the RMPs component will be conducted to ascertain the bottlenecks/problems faced in achieving targets and determine remedial measures for improvement.
Hakeems & Homeopaths
Due to their considerable influence, particularly in the rural areas, the hakeems and
homoeopaths are involved in the Population Welfare Programs. Only those Hakeems &
Homoeopaths would continue to be involved who served as referrals and distribution points for
condoms and oral pills. The contraceptives will be supplied to them at nominal price by the
DPWOs. They will provide information to their clients about the family planning methods (along
with IEC material) and nearest service delivery points for referrals of contraceptive surgeries,
IUD and injectables.
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Orientation/training on reproductive health issues and contraceptive techniques will be
imparted to them. Display boards and relevant IEC material will also be provided to them. After
training, ‘Tabibas’ and lady homeopaths will also dispense injectables and undertake IUCD
insertion.
Social Marketing was expected to intensify its efforts to extend to peri-urban areas and
extend its outreach to rural areas. It was to broaden the scope of services through new
interventions in order to enhance the contribution of social marketing to the national population
goal. Social marketing too has yet to fulfill its full role in expanding service delivery coverage.
Increasingly the private sector through “social marketing” is taking the responsibility of
dispensing, advertising and training in reproductive health. The private sector is playing a very
vital role in providing FP/RH services in the country. It has been able to cover considerable
expansion of all the contraceptive users. The Population Policy envisages expanded role of social
marketing in the pursuit of attaining population stabilization goal by increasing contraceptive
prevalence rate and bringing down the population growth rate.
NGOs and CBOs
Historically, NGOs have played a pioneering role in establishing family planning in
Pakistan and in setting the reproductive health agenda. NGOs provided important clinical
services, including contraceptive surgery. Apart from service delivery, there has been a
considerable role of NGOs and CBOs in advocacy, BCC and community mobilization where they
have comparative advantage. During the Tenth Plan (2010-15) there role will be strengthened and
acknowledged.
Public – Private Sector Organizations (PPSOs)/ Target Group Institutions (TGIs)
The Public Private Sector Organizations (PPSOs) Partnership will address unmet needs
of the large male workforce by motivating them to adopt small family norms by providing
comprehensive family planning/reproductive health information and services through
infrastructure of respective organizations.
During the 10th Plan (2010-15) efforts will be made, through the Federal provincial and
district chambers of commerce to involve maximum number of service outlets of PPSOs to
provide FP & RH services and establish RHS “B” Centers. They will be provided technical
support, contraceptives and trained staff. The respective provincial population welfare program
will pay the salary of the staff. To involve business community, maximum Chambers of
Commerce & Industry will be approached for the sensitization in the matter. Big industries
throughout Pakistan for delivery of Family Planning Services through their health outlets will be
approached.
167
168
4.2.
Education
Basic and College Education
Introduction
Education must shape the human lives in accordance with the changing environment of
workplace, providing employable, efficient and suitably transformed skills and trades; and at the
same time education must deliver to make them tolerant and productive people. All the previous
educational plans have aimed at providing universal primary education and proportional increase
in the enrolment at secondary and higher education levels in the shortest possible time with
gender and regional equity. Curriculum changes and provision of technical/ vocational and higher
education also remained salient features of all previous plans. However, due to lack of political
will, inadequate capacity for planning and implementation, and underperformance in utilization
of development provisions, the targets remained unrealized.
Box 1
Policy Initiatives
National Education Policy (NEP) 2009 provides the basic framework for the Plan (2010-15). The new
initiatives of the Policy take into consideration achieving universal primary education, enlarging access at
other levels, ensuring quality, achieving regional and gender parity especially at elementary level,
providing demand based skills, and a rise in the share of resources for education, both in public and private
sectors.
The new policy initiatives are as much for increasing resources for this vital sector as they are for
improving the quality and delivery of education services. These include developing a standardized
curriculum and development of National Standards for education, emphasis on training of teachers and the
use of better teaching-learning methods.
Review of Medium Term Development Framework (MTDF) 2005-10
MTDF 2005-10 targets of literacy and participation rates could not be achieved although
a lot of improvement has been made. Details are at Annexure-I, however, following tables show
gender and regional achievements in various indicators:
Table 1: Benchmark and Achievements (%) in 2009-1013
Year/ Level
Male
The Gender Dimension
Literacy
65
GER Primary
94
GER Middle
51
GER Matric
53
13
2004-05
Female
40
77
40
35
Total
53
86
46
44
Male
73
101
66
65
2009-10
Female
46
88
56
47
Total
60
95
61
56
Based on PSLM Survey 2004-08, Federal Bureau of Statistics, Government of Pakistan
169
Benchmark and Achievements (%) in 2009-10
Provincial
Disparities
Year/ Level
Literacy
GER Primary
GER Middle
GER Matric
Punjab
55
95
49
45
Sindh
56
75
42
47
2004-05
NWFP
45
80
47
43
Balochistan
37
67
30
34
Punjab
63
101
67
60
Sindh
58
82
50
48
2009-10
NWFP
53
87
56
52
Balochistan
48
81
42
36
Rural female
Year/ Level
Literacy
GER Primary
GER Middle
GER Matric
Punjab
35
82
36
27
Sindh
18
44
13
10
2004-05
NWFP
23
62
27
19
Balochistan
13
41
14
9
Punjab
44
92
59
45
Sindh
22
57
18
17
2009-10
NWFP
31
70
39
29
Balochistan
18
60
16
10
Programmes of MTDF 2005-10 that have more than 100% achievements include opening
of literacy centres, strengthening of Teacher Training Institutes, and stipends to girls/talented
students. Computer Labs have been provided to colleges and most of the secondary schools.
Physical achievements in respect of establishing vocational/ commercial training institutes,
opening of primary schools, up-gradation of middle schools, and establishment of cadet colleges
remained over 60%. The slowest programmes remained mainstreaming Madrassa education,
addition of classes XI-XII, introduction of technical stream in secondary schools, opening of
polytechnics and establishment of degree colleges with 4-year stream. For enhancing enrolment
and removal of gender disparity at primary level, nutritional incentives were provided to girl
students especially in rural areas. Similar incentives were offered to female teachers in rural
areas. Details of achievements are in annexure-II. MTDF 2005-10, made an allocation of Rs.
119.7 billion (both federal and provincial) for development and improvement of Basic and
College Education. Actual expenditure made during the period is estimated at Rs. 115.74 billion
(97% of the allocation) as detailed in annexure-III. During the period, 15000 private
schools/colleges were established and private sector now forms about 26% of total
schools/colleges in the country. Enrolment in these private sector institutions rose from less than
10 million to more than 11 million; now forming about 31% of total enrolment in all
schools/colleges of the country.
Shortcomings, Regional Disparities and Gender Gaps
There is shortage in provision of school facilities for achieving universal primary/
elementary education and those for secondary, technical and higher education. Most of the
existing institutions lack facilities for quality education; particularly they lack requisite number of
qualified and trained teachers. Data14 regarding schools in the public sector shows that more than
half of the mosque schools which are mostly in rural areas have only one teacher while another
40% have two teachers. Similarly 60% of the rural and 20% of urban primary schools have only
one or two teachers. About 17% of middle schools, mostly in rural area have less than five
teachers. The system also faces the problem of teacher absenteeism. Shortage of teachers is also
faced by High/Secondary schools and colleges. Further, most of the teachers at Primary and
Middle level are Matric/Intermediate trained or untrained.
14
Pakistan Education Statistics 2007-08, Academy of Educational Planning and Management, Ministry of
Education, Islamabad.
170
The following table shows Gross Enrolment and Literacy Rates at various levels/areas:
Gross Enrolment/Participation Rate 2009-1015
Table 2:
Category
Male
Female
Total
Male
Female
Total
Male
Female
Total
Urban
Rural
Both
Primary
Age 5-9
110
108
109
95
78
87
101
88
95
Middle
Age 10-12
71
75
73
61
42
51
66
56
61
High
Age 13-14
74
69
71
59
34
46
65
47
56
Literacy Rate
Age10+
82
67
75
67
36
51
73
46
60
Youth Literacy
Age 15-24
87
82
84
80
59
70
82
67
74
Targets of Millennium Development Goals MDGs and Education For All (EFA) are yet
to be achieved. Gross Enrolment Rate (GER) at all levels of education shows increasing trend
both for rural and urban population and for the poor and the rich16. It is observed that moving
from primary level to higher levels of education, overall enrolment percentage in private sector,
compared to that in the government sector slightly decreases. In rural areas it remains constant at
about 25% but in urban areas it declines from 56% at primary level to 34% at secondary level17.
The Plan 2010-15
Objectives
The objectives of the Plan are:

To move the country out of “low quality of education, low skills, low productivity
and low expectations” trap that permeates in most spheres of national activity

To meet the Millennium Development Goals (MDGs) by 2015; increasing
resources and supporting policies for achieving target

To reduce regional and gender disparity in human development and social
indicators

To provide a large pool of highly skilled human resources for overcoming skill
gaps in key sectors and for employment abroad

To set up measurable targets and performance indicators that will allow monitoring
of improvement in governance and delivery of good quality education services
15
projected based on PSLM Survey Reports
PSLM Survey 2007-08, Federal Bureau of Statistics, Government of Pakistan
17
ibid
16
171

To adopt a holistic approach to education for complete enrolment for completion of
studies for ten years, and provide alternative pathways
Issues
Basic and College Education is confronted with the following issues:

Deficient achievement of MDGs, GER/NER at Primary, middle and secondary
levels and removing regional and gender imbalances

Under providing appropriate skills at school level and purposeful higher education

Existing curriculum lacks relevance and pedagogical skills for enhancing scale and
quality of education in general and scientific/technical education in particular

Neglect in providing relevant infrastructure and appropriate teachers for all the
institutions

Inadequate resource base for education through increased allocations. There is need
for enhanced management/administrative capacities at various levels, encouraging
public-private participation and enhanced private sector investment

Need for governance reforms- Adopting regulatory/ structural improvement in the
system
Strategies
To meet these challenges education sector strategies shall include the following:

Generating an educational environment which encourages the thinking process
(‘learning how to learn’)

Establishing standardized curriculum and standardized examination system under
state responsibility; Provision of research based education having institutional
linkages with industry and workplace

Ensuring relevance of curricula and educational practices to meet the needs of the
society and the market

Teacher to be the centre of educational reforms, removing teacher shortages;
enhancing their salaries, status, along with pedagogical skills

Creating a set of skills and aptitudes enabling employability and productivity
simultaneously with character building

Greater investment in skill generation during and after 10 years of schooling and
social reforms to include women

Universal enrolment at primary level and completion of education for a minimum of
ten years with gender and regional parity; and raising enrolment at tertiary level of
education
172

Increase public expenditure on education to 4% of GDP by 2015; with simultaneous
enhancement in planning, management and delivery capacity of the education
administrators
Targets
Targets of the Plan (2015) are as under:
Table 3: Benchmark18 and Targets (%) in 2014-15
Year/
Level
2009-10
Male
Literacy 10+
Youth Literacy
GER Primary
GER Middle
GER Matric

73
82
101
66
65
Gender Parity Index:
2014-15
Female
46
66
88
56
47
Total
60
74
95
61
56
Male
86
92
111
95
87
Female
86
88
110
95
80
Total
86
90
110
95
84
1.00 for Primary and elementary level
0.94 for Secondary level,
Programmes
Quality Education
School environment shall be made attractive by providing missing facilities. High quality
education shall be provided to students through inter-provincial/area exchange of students in
existing cadet colleges and establishing Apna Ghar residential schools. Healthy competitions
between the schools shall be encouraged on the basis of curricular and co-curricular activities.
Arrangements shall be made that teaching vacancies are timely filled in. Policy for allocation of
teacher shall be improved to make it based on school need to provide quality education. To revive
confidence in public sector education system, national standards for education shall be developed.
School health programmes shall be initiated for improving school environment and nutritional
support for the students. Computer facilities may be used for improved teaching-learning methods
by developing relevant software and websites. Change of medium of instruction shall require
highly qualified and trained teachers and on the job training of science and mathematics teachers.
Lab assistants and supervisors shall be provided appropriate training for procuring, using and
maintaining equipment through collaborative programmes.
Shortage of proper laboratories, science equipment and adequately qualified and trained
science and mathematics teachers shall be fully met in schools and colleges. Computer education
shall continue to be introduced in schools and colleges but with proficiently trained teachers.
Policy actions of upgrading primary schools to Elementary Schools, adding Classes XI-XII to
Secondary Schools and converting Intermediate Colleges to Degree College shall require
essential provision of suitable science education facilities including infrastructure and manpower.
Curriculum shall be made student-centered and focus on outcomes rather than contents.
All stake holders shall be involved in curricular development. Use of ICT in education shall be
promoted. Life skills-based education shall be included in the curriculum. Matric Tech scheme
shall be introduced with larger scope. Assessment system shall be reviewed and improved. Co18
Based on PSLM Surveys 2004-08, Federal Bureau of Statistics, Government of Pakistan
173
curricular activities shall be organized in all institutions. Curriculum shall include themes on
community services, social protection strategies, emergencies, natural disasters and trauma
management. Guidance and counseling shall be provided to the students for further education or
adoption of a career after their passing out.
The teaching workforce shall be managed on professional basis. Higher qualification and
training standards shall be maintained while recruiting new teachers. Existing teachers shall be
encouraged to enhance their qualifications. Pay-scales of the teachers shall be linked to their
qualifications and training levels. Teachers shall be provided opportunities for professional
development and undergo relevant training before awarding promotions. Specialized training
shall be provided to ECE and literacy teachers. The change of medium of instructions of Science
and Maths as per NEP 2009, new teachers who may deliver lectures in English shall be required
and existing teachers shall have to undergo appropriate training for the purpose. Teacher training
programmes including in-service programmes shall be harmonized with the curriculum and
schemes of studies and the proposed structural changes. Programmes of capacity building of
teachers training institutions and training of teachers initiated during MTDF 2005-10 shall
continue. In view of shortage of teachers and as a result of policy changes, capacity of existing
institutions for teacher training shall further be enhanced.
Educational institutions shall provide time table arrangement for smoothly holding cocurricular and extra curricular activities. Through these activities a concept of service to the
society shall be introduced. Different Societies, Forums and Clubs in the educational institutions
shall provide students opportunities to express their outlook and put across their performances.
Activity based budget shall be provided to the institutions.
Inter-Provincial/Area exchange of students and teachers shall be encouraged to promote
cultural harmony, mutual understanding, tolerance, social integration and brotherhood. Teachers
and students exchange programmes shall be prepared for academic collaboration in quality
education and research, especially in Science and Technical Education. Students and teachers of
the provinces shall make use of facilities available in the institutions of other provinces to upgrade their teaching/learning techniques. All quality residential education institutions of the
provinces shall be used for this purpose.
Access
(a)Literacy
All out efforts shall be made to achieve 86% literacy rate as proposed in the NEP 2009.
These include sealing of addition of illiterates through achieving universal primary education and
ensuring zero drop-out rates at primary level. Community schools and National Commission for
Human Development (NCHD) with the help of volunteers shall ensure educating the drop outs of
formal system for achieving anticipated literacy rate. Existing school infrastructure wherever
feasible shall be used for literacy and non-formal education. A portion of district and provincial
budget shall be allocated for literacy and non formal education. Literacy Departments shall start
adult literacy programmes. NGOs and Allama Iqbal Open University (AIOU), with the help of
Tutors/ retired teacher, shall be encouraged to run literacy programmes for adults on need basis.
Mosques/ religious institutions shall be utilized for promotion of literacy. Post literacy/ jobrelevant materials/ Newspapers shall be developed for Neo-literates to save them from relapsing
into state of illiteracy.
174
(b) Elementary Education
Primary education provides a pro-poor intervention. All children of age-group 6-10 shall
be brought to school by the year 2015 by providing primary education facilities free and at
reachable distance. Attendance, participation, completion and preparation of students for next
stage of education shall be ensured through provision of additional facilities and strengthening the
existing facilities. NEP 2009 has proposed to initiate Student ID system. Arrangements shall be
made to provide one year Early Childhood Education (ECE) to children below the newly
proposed primary school age-group. Education Departments shall keep data on all ‘will be’
students and motivate the parents so that none misses the enrolment and completion of primary
education.
The structural changes proposed in the NEP 2009 necessitate that Primary schools be
upgraded to Elementary Schools with classes for early childhood education and classes I to VII.
Necessary human and physical resources shall be ensured. It shall be ensured that proper school
mapping exercise is carried out for planned up-grading of existing primary schools at district
level. Teachers with higher academic and professional qualifications and better pay-scales shall
be provided to the existing and new elementary schools. To overcome over-crowdedness and
provide quality education, proper infrastructure, additional classrooms and other missing facilities
shall be provided. Shortage of teachers and equipment shall be met wherever required. Resources
shall also be provided to the institutions for holding co-curricular activities. Gender and regional
balance shall be maintained in the process. No child shall drop out from primary education only
because of poverty; financial, food & health support shall be provided to stop it. Necessary audiovisual aids/ equipment shall be provided for teaching of Science and Mathematics. Enrolment
shall increase due to provision of new facilities as well as consolidation of existing facilities and
provision of missing facilities.
Preference will be given to construction of school buildings in calamity hit
areas and for the Internally Displaced Persons (IDPs).
(c) Secondary Education
Secondary education shall be restructured to consist of classes VIII to XII. Additional
facilities concomitant to the output of elementary education shall be created. Classes XI & XII
shall be gradually detached from colleges and made part of Secondary Education. In the process it
shall be ensured that quality of education does not suffer and necessary human and physical
resources are made available. Attendance, participation, completion and preparation of students
for higher education and for place of work shall be ensured through strengthening the existing
facilities and provision of additional facilities. Secondary education shall be made relevant to the
needs of labour market or prepare the students for higher studies. Those being prepared to join
labour market shall be provided job shadowing opportunities/assignments with local
entrepreneurs and institutions. At this level students shall be provided career guidance and
counseling.
(d) College Education
NEP 2009 proposes to detach classes XI-XII from the colleges and include these in
secondary schools. Higher Secondary Education shall be gradually transferred to Secondary
schools and Intermediate Colleges shall be converted to Degree colleges. Present Inter/ Degree
and post graduate colleges shall be converted into Colleges offering undergraduate and post
graduate courses at par with those of universities. However, present system of two-year BA/BSc
175
and two-year MA/MSc shall continue. Necessary human and physical resources shall be ensured.
Intake in the colleges shall be enhanced concomitant with output at the Higher Secondary level.
(e) Scholarships
Provinces/areas shall ensure universal and free primary education which may keep in
view the comprehensive definition of ‘Free’ as proposed in the NEP 2009. The term shall include
all education related costs including expenditure on stationery, school bags, transport and meals,
which are, in general, not covered at present, and shall be applied as a basis of allocating funds on
a need basis for poor children19. This shall make primary education a means for social protection
of the vulnerable children and affordable to the parents. Financial and food support shall be
provided to all the vulnerable to risks and shocks segment of the children to bring them into
school and stop their drop out at primary level. Other Social Protection Programmes shall also
help provide education to needy children. This support shall also be provided to similar students
of secondary education. National, Provincial and District Merit Programmes for students and
institutions of various levels shall continue and their coverage enhanced.
Skill generation
Share of students going for Matric Tech scheme shall be increased and the scheme shall
be introduced on larger scale. Curriculum shall be modified to introduce this scheme upto higher
Secondary level. Output of SSC shall be encouraged for going for technical and vocational
education. Vocational Training facilities, Polytechnic Institutes and Colleges of Technology shall
be established on need basis. The existing vocational and technical institutions shall be
strengthened. All agencies working for the promotion of technical education in the country
require collaboration at national level.
Libraries
Investment in school/college libraries shall be enhanced for their properly maintenance
and equipping them with modern facilities. Public libraries shall be established and their usage
shall be ensured. Libraries shall be provided in the rural area.
Private Sector
District Education Departments shall develop co-ordination with private sector and
evolve regulations for running schools and for improving quality of education so as to establish
equivalence of certificates below SSC level. The private sector is expected to adopt the structural
changes proposed in the NEP 2009. Incentives shall be provided for accommodating poor
children in quality private schools in the form of public financing for provision of qualified and
trained teachers etc as a part of public-private partnership. The private sector may help
Government efforts to improve provision of education through inputs proposed in NEP 2009
document such as School construction, transportation, food supplement and healthcare, literacy
programme, etc. It is expected that private sector shall continue to share the provision of
educational facilities at least at present level (0.5% of the GDP, 36% share in total enrolment, and
more than 50% at technical/vocational level20). National Education Census 2005 indicated that
Private Sector was contributing about Rs. 40 billion in the year 2004-05. It may be expected that
19
20
National Education Policy 2009, Ministry of Education, Government of Pakistan, (chapter 2, para 57:7)
National Education Policy 2009, Ministry of Education, Government of Pakistan, (Annex: I, para 30)
176
during 2010-15 they shall contributes an amount of Rs.400 billion for recurring and development
activities for Basic and College Education.
Inter-Sectoral Linkages
Achievements of the Plan targets for Basic and College Education shall also depend on
coordination and collaboration with other Sectors of the economy. Some Programmes/projects of
these sectors may be shaped to help boost efforts of Education Sector in smooth carrying out of
educational activities. Health and Nutrition Sectors may take up programmes relating to
improvement of health of school going population and help reduce drop out.
Labour/Manpower/Industry may help in improving the quality of technical education and help
provide education and training to the output of secondary education. Social protection
programmes may also come up to help provide incentives for education of children to help
achieve educational targets. Ministry/departments of rural development may assist in indicating
priority in location of educational facilities for the benefit of the children belonging to the less
developed areas. While cultural aspects may be covered in national curricula, Culture, Tourism
and Youth Affairs Sectors may extend facilities to educational institutions. Baitulmal, Workers
Welfare Fund, Benevolent Fund etc may contribute to the education of needy children. Projects
may be chalked out from Funds allocated to the Parliamentarians for education in the respective
constituencies. Transport and Physical Planning Sectors may help in movement of the students to
and back from educational institutions.
Governance: Efficiency, Supervision, Monitoring, and Research
The proposed structure shall require changes concerning management and administration.
NEP 2009 proposes to establish a management cadre for education, with specified training and
qualification requirements. Training shall be provided to educational planners and decision
makers in the use and analysis of educational statistics. In view of restructuring of education
system managerial and administrative arrangements shall be reformed. Personal and Financial
Management Information Systems linked with existing Educational Management and Information
System shall be developed. Decentralization shall be pursued at each level of governance to move
decision making closer to the point of implementation and shall eventually move to the school
level, which shall become the basic unit for planning, including school based budgeting. Trained
Professional Educational Planners shall be in charge of Education Departments/Directorates.
School Management Committees shall assist carry out school activities. Monitoring and
evaluation work of the programmes, projects and system shall be a regular feature with research
based character for future guidance. Activities like that of National Education Assessment System
(NEAS) may produce research based reports pinpointing deficiencies of education system and
making recommendations.
Financial Allocation and Resource Generation
Federal and Provincial Governments shall increase both development and recurring
financial allocation for Basic and College Education during the Plan period. Allocation for
development programmes in the public sector is estimated to be Rs.327.9 billion which shall be
shared between Federal (Rs.35.9 billion)and Provincial Governments (Rs.292.0 billion) in the
ratio as 11 to 89. This includes throw forward of MTDF 2005-10 of Rs. 62 billion Federal and
Provincial governments shall commit to provide the resources so that target of MDGs for
Education and Training is achieved by 2015. Federal and Provincial Governments shall draw
their own Plans of Action in the light of present deficiencies and achieving proposed national
177
targets. Sub-Sectoral details of development allocation required for activities to be undertaken
during the Plan are detailed in annexure-IV and a summary provided below:
Sub-sector
Literacy
Elementary
Secondary
College
Technical
Teacher
Scholarships/ Misc.
Total
Allocation (Billion Rs.)
Federal
Provincial
2.5
20.2
9.2
76.0
9.2
76.0
5.0
40.1
3.0
23.2
2.2
10.9
4.8
45.6
35.9
292.0
Sub-Sector Share
Total
(as % of Total)
22.7
7
85.2
26
85.2
26
45.1
14
26.2
8
13.1
4
50.4
15
327.9
100
During the Plan period it shall be ensured that recurring cost entailing completion of a
project relating to primary schools is provided, especially cost for salaries of teachers. At the
same time ways shall be explored so that private sector contributes an amount of Rs.400 billion
for recurring and development activities for Basic and College Education. Steps shall be taken to
inviting and absorbing international contributions.
178
Annexure-I
Benchmarks (%) and Estimated achievements (%) Per PSLM Surveys
Literacy 10+ Overall
Urban
Rural
GER Primary Overall
Urban
Rural
GER Middle Overall
Urban
Rural
GER Matric Overall
Urban
Rural
Male
65
78
58
94
107
89
51
64
46
53
67
46
2004-05
Female
40
62
29
77
100
68
40
63
29
35
62
22
Total
53
71
44
86
104
79
46
64
38
44
64
34
Male
73
82
67
101
110
95
66
71
61
65
74
59
2009-10
Female
46
67
36
88
108
78
56
75
42
47
69
34
Total
60
75
51
95
109
87
61
73
51
56
71
46
179
Annexure-II
REVIEW OF MTDF (2005-10), Physical Progress in Education Sector
S.No. Sub-Sector
Target
200510
Achieve%
ments
(Achievements/
2005-10 Targets)
1
2
25000
31500
30000
22500
120
71
50000
8000
5000
12200
550
3408
24
7
68
2000
339
17
8
5
63
100
34
34
50
17
34
2000
484
24
75
54
72
75
62
83
120
125
104
2.1
2.2
3
3.1
4
4.1
5
5.1
5.2
5.3
6
7
Bench
Mark
200405
Literacy: Opening of Literacy centers 10336
Elementary Education: Opening of 187575
Primary Schools
Up-gradation of Primary Schools
Mainstreaming of Madaris
Secondary Education : Up-gradation 18194
of Middle Schools to Secondary
Schools
Addition of classes XI-XII in
Secondary Schools
College Education: Establishment of 775
Cadet Colleges
Establishment of degree Colleges with
04 year stream Colleges
Technical Education: Opening of 747
Polytechnics
Introduction of Technical Stream in
existing Secondary Schools
Establishment
of
Commercial
Training Institute
Establishment of Vocational Training
Institute
Teacher Education: Strengthening of 135
existing Teacher Training Institute
Scholarship & Misc: Stipend for 12654
Girls students and scholarship for
talented students
400000 430000
108
180
Annexure-III
REVIEW OF MTDF (2005-10)
Financial Progress (Federal & Provincial) in Education Sector
S.No. Sub-Sector
1
2
3
4
5
6
7
Literacy
Elementary
Secondary
College
Technical
Teachers
Scholarships/
Miscellaneous
Total:
Bench
Mark
2004-05
0.90
2.70
1.60
1.20
2.50
0.10
0.50
9.50
Federal:
Provincial:
Actual
Allocation
2005-10
18.75
40.45
33.36
32.25
17.05
8.42
15.12
Expenditure
2005-10
9.36
34.13
29.38
18.64
9.28
3.95
11.00
MTDF
Allocation
2005-10
20.77
20.50
15.06
16.26
28.18
9.14
9.79
%
(Expend/
MTDF)
45.1
166.5
195.1
114.6
32.9
43.2
112.4
165.40
29.30
136.10
115.74
23.80
91.94
119.70
26.70
93.00
96.7
89.0
98.8
181
Annexure-IV
FINANCIAL OUTLAY FOR BASIC & COLLEGE EDUCATION (2010-15)
Sub-Sector
2010-11
National
2011-12
2012-13
2013-14
(Rs.in Billion)
2014-15
Total
Literacy
Elementary
3.0
11.0
3.5
13.5
4.7
16.0
5.5
20.0
6.0
24.7
22.7
85.2
Secondary
11.0
13.9
16.2
19.0
25.1
85.2
College
6.0
7.0
9.2
11.0
11.9
45.1
Technical
4.0
4.5
5.2
6.0
6.5
26.2
Teacher
2.0
2.4
2.7
2.9
3.1
13.1
Scholarships &
Miscellaneous
Total:
9.0
9.5
10.0
10.8
11.1
50.4
46.0
54.3
64.0
75.2
88.4
327.9
Sub-Sector
2010-11
2011-12
2013-14
2014-15
Total
Literacy
0.3
0.4
0.5
0.6
0.7
2.5
Elementary
1.6
1.7
1.8
1.9
2.2
9.2
Secondary
1.6
1.7
1.8
1.9
2.2
9.2
College
0.8
0.8
0.9
1.0
1.5
5.0
Technical
0.5
0.5
0.6
0.7
0.8
3.0
Teacher
0.4
0.4
0.5
0.5
0.5
2.2
Scholarships &
Miscellaneous
Total:
0.8
0.8
1.0
1.0
1.2
4.8
6.0
6.3
7.0
7.6
9.0
35.9
Sub-Sector
2010-11
2011-12
2013-14
2014-15
Total
Literacy
2.7
3.1
4.2
4.9
5.3
20.2
Elementary
9.4
11.8
14.2
18.1
22.5
76.0
Secondary
9.4
12.2
14.4
17.1
22.9
76.0
College
5.2
6.2
8.3
10.0
10.4
40.1
Technical
3.5
4.0
4.6
5.3
5.7
23.2
Teacher
1.6
2.0
2.2
2.4
2.6
10.9
Scholarships &
Miscellaneous
Total:
8.2
8.6
9.0
9.8
10.0
45.6
40.0
48.0
57.0
67.6
79.4
292.0
Federal
2012-13
Provincial
2012-13
182
4.3
Knowledge and Technology-based Development (Higher Education,
Skills, R&D and S&T
KNOWLEDGE AND TECHNOLOGY BASED DEVELOPMENT
1.
INTRODUCTION
The knowledge and technology based economy will provide the platform to sustain a
rapid rate of economic growth and enhance international competitiveness so as to achieve the
objectives of Vision 2030. It will also strengthen Pakistan’s capability to innovate; adapt and
create indigenous technology; and design, develop and market new products, thereby providing
the foundation for endogenously-driven growth. In addition, the knowledge and technology based
economy will complement and accelerate the change from an input-driven to a productivitydriven growth strategy, a major policy thrust initiated under the Tenth Five Year Plan (2010-15).
In this respect, the fuller recognition of the role of knowledge input will enhance the productive
capacity of the traditional factors of production as well as generate new sources of growth. This,
in turn, will expand the production possibility frontier of the Pakistan economy.
The 21st century is dominated by the knowledge and technology centric economy in
which participants sell knowledge, or products and services based on or incorporating knowledge
and technology. It is an economy which is focused on research, innovation, and other forms of
creation; distribution and utilization of knowledge and technology. Globalization and rapid
technological advancements are shaping the twenty-first century landscape. Intellectual capital
has become a prominent concept that now overshadows the physical capital, bringing the
realization that knowledge is its main ingredient and human capital is the source of it all,
including intellectual property.
The Higher and Professional education planning is increasingly important on national
agendas all over the globe. The widespread recognition that higher and professional education is a
major driver of economic competitiveness in the knowledge and technology driven economy has
made high quality higher and professional education more important than ever before. The
imperative for Pakistan is to raise higher-level employment skills, to sustain a globally
competitive research base and to improve knowledge dissemination to the benefit of society.
The leapfrogging and acquisition of knowledge and technology and their use as strategic
tools will, therefore, be an important factor in Pakistan’s future development, especially because
in an increasing globalization and independent world economy, knowledge and technology based
development has emerged as the driving force behind the structure of enhanced domestic
production, advantage in market competition, opportunities for cross border trade, etc.
The Plan shall, therefore, focus on the development of Higher Education and Science and
Technology sectors and strengthening its institutional infrastructure including human resource
development, R&D, technology development and innovation management, etc. and lay emphasis
on developing some key and cutting edge technologies to leapfrog in achieving rapid economic
growth.
183
2.
Review of MTDF 2005-10
Science & technological research are important determinants of innovation and
knowledge generation and needs to be given greater emphasis. In Pakistan, proportion of R&D
expenditure to GDP is low (0.4%) compared with some other countries in the region. S&T and
R&D efforts were partly constrained by the lack of a critical mass of scientists and engineers. The
MTDF 2006-10 emphasized on building knowledge economy by investing in human capital,
R&D and communication infrastructure in order to sustain economic growth. The Government
has allocated Rs 332.8 billion to build knowledge economy for MTDF period. Since the Higher
Education Sector has major role in developing Human Capital and R&D, Rs 95.0 billion have
been allocated to this sector alone. In addition, Rs 52.3 billion has been allocated for Science &
Technology Sector.
To achieve the targets of MTDF, a policy was chalked out to enhance access to higher
education, improve its quality and relate it to national needs. During the last five years the
primary investment has been in faculty development programs through the provision of
scholarships, infrastructure and laboratory support has also been provided to universities along
with computerization of all Institutions and the development of an IP based Education and
Research Network linking all universities and degree awarding institutions. . The enrolment at
tertiary level excluding colleges has increased from 0.508 million in 2006 to 0.72 million in 2010.
3000 foreign scholarships, 286 post doctoral fellowships were awarded and 1700 scholarships
granted against Indigenous scholarship programmes. Academic linkages between 35 Pakistani
and foreign universities were established. PERN connectivity was extended to about 50
universities. 150 faculty members were hired under Foreign Faculty Hiring Programme. 14000
faculty members and staff have been trained through different Long/Short term courses. Video
conferencing facility was provided to 35 universities.
Research environment has been provided to the faculty and students. Networking, digital
library containing more than 23,000 international journals and 40,000 E-Books, video
conferencing and central laboratories facilities are now available to researchers and university
students and teachers. Research publications have now increased by 200% compared in 2005.
Programmes like Pak-US Joint Research, Presidential young Innovators, HEC-British Council
Links, Linkages of Pakistani universities with International universities, University-Industry
linkages, Pakistan Organization of Collaboration Research have been initiated to boost research
activities. M.Sc and PhD level scholarships have been provided to students of private sector
universities and they have access to Digital library of HEC.
During 2006-10 R&D organizations got support to develop the infrastructure and upgrade
laboratories through induction of modern equipment. Emerging technologies have been given
special emphasis. Centre for Applied Molecular Biology provided diagnostic services for the
most infectious diseases like Hepatitis B, C and Tuberculosis to 40,623 patients.
For the provision of safe drinking water, 24 demonstration water filtration plants were
installed. 20 water quality labs were established and water quality monitoring of 2400 water
supply schemes was conducted. The first digital observatory along with coastal weather
observatory in Pakistan was installed in Gwadar, which is now fully operational and providing
the useful data for the monitoring of the sea level rise and global warming parameters. PCSIR
developed 130 processes; 2749 instruments calibrated under ISO 17025. Skill development
trainings were conducted. PCRWR installed 200 community level Arsenic removal units,
constructed 10 reservoirs for rain water. PCRET installed 1300 Biogas Plants and 140 Micro
hydro power plants and electrified 80 schools & mosques in Balochistan & Sindh. NIE trained
184
about 550 personnel in technologies such as Electronic System Design, Information Technology
and Industrial Automation. A project for development and fabrication of 3000 solar lights was
completed. Small scale solar labs were established.
3.
Current Position
While legacies of earlier neglect inconsistencies have no doubt taken their role, Pakistan
has emerged as threshold state and is consolidating macro economic stability, institutions, human
resource and infrastructure.
The Global Competitiveness Index (GCI) provides useful matrix of nation’s competitive
environment. GCI integrates the macro economic environment, public institutions, technology
and innovation which define the current sustainable level of economic activity, and where wealth
is actually created. Pakistan ranks 101 on GCI Index and is low compared with several other
countries (Table-1) with extremely poor ranking on major determinants of its competitiveness,
namely technology, innovation, institutions and higher education & training.
Table 1
Parameters
Technological
Readiness
Innovation
Higher
Education &
Training
Institutions
GCI INDEX
Countries
Korea Malaysia
15
37
Pakistan
104
China
79
India
83
Indonesia
88
79
118
26
61
30
66
39
69
11
16
104
101
48
29
54
49
58
54
53
19
Singapore
6
Taiwan
18
Turkey
54
24
41
8
5
6
13
69
73
43
24
1
3
37
12
96
61
Source: Global Competitiveness Index Report 2009-10 (World Economic Forum).
4.
Major Issues and Challenges
The development of Science and Technology in Pakistan is posed with many major
issues and challenges of socioeconomic development due to the low level of per capita income,
wide spread illiteracy, high population growth rate, poor health care and lack of other social
services, environment degradation, and extremism and internal security. It ranks 141st out of 182
countries in terms of the Human Development Index (Human Development Report, 2009).
Likewise, the Technology Index of Pakistan has been reported to be 87, Growth Competitiveness
Index 91, Public Institutions Index 102 and 61st position of production of Scientists and
Technologists index. Presently the investment in the R&D is reported to be 0.15 % of GNP as
against minimum 1.0 % recommended by UNESCO.
The major issues and challenges faced by technological development in the prevailing
economy may be listed as following:





Lack of knowledge based informed judgment and policy research institutions
Weak information support system for technological forecasting and assessment
Poor standard of faculty and lack of training/ capacity building
Low enrollment in higher education (4-5%)
Isolation of the S&T system from economic and development planning
185




5.
Poor appreciation of the need and involvement of the private sector in R&D
Lack of coordination between various research institutions (RIs), universities and
industry, and government
Inadequacy of research and its relationship to the technology development, innovation,
enterprise and management
Poor Governance and Management
Approach and Thrust
The Plan will give a special thrust to the sector by leveraging the strong institutional
framework including Policy research. The approach in the Plan would be to lay greater emphasis
on the development of indigenous technologies and innovation and focus on latest technologies
available elsewhere. Significant efforts will be made in those areas where Pakistan has a
competitive edge globally and where the benefits of S&T can percolate to people who have been
denied these benefits so far.
The Tenth Plan will give high priority to technologies that are oriented towards human
welfare. These include technologies that provide creative and cost-effective solutions in health
services, population management, mitigating the effects of natural hazards, conservation of land,
water and energy resources and their integrated management for sustainable development. Human
resource development in science and technology is an area of concern. Imaginative and
innovative programs would need to be undertaken to attract the students to science & technology
and enhance the number of young scientists. The culture of creativity and scientific inquiry will
be developed.
The Tenth Plan will also focus on providing support for the enhancement of export
competitiveness of Pakistan in key areas that form major sectors of the world export market such
as 1) Engineering Goods including consumer appliances, machinery, automobiles & trucks,
computers, etc., 2) Information Technology services and software and 3) Chemicals and
Pharmaceuticals. Considering the quantum of investment made in the higher education sector for
human resource development in these important areas it is important that strenuous efforts be
made to link academia to industry, enhance export competitiveness of existing industry and also
encourage the establishment of new concerns.
S&T and Higher Education concerns will be integrated into various policies and
programs covering the socioeconomic sectors. This integration will be reflected in the
identification of technological choices, investments and S&T inventions in the individual sectors.
The approach will be to make technology an essential component in the plans and programs of
development sectors. In the field of technology development well connected Concept to
Consumer institutional structure and system will be developed.
6.
Objectives
The great game in the 21st century is high technology and its application to industrial and
economic development. Although the industrial sector has made significant progress in the last 50
years, the technological capabilities have unfortunately not kept pace with industrial production.
This is largely due to the appalling state of the public sector R&D institutions in the country
which have been grossly neglected and now lack the infrastructure and the requisite trained
manpower to contribute to industrial development. The private sector industries, have therefore,
relied on foreign turn-key technology, protective industrial policies of the government and have
186
invested virtually no funds in indigenous R&D and innovative effort. As a result, the output of
industrial R&D for both public and private sector institutions is of extremely poor quality and
insufficient to meet the challenges of today and tomorrow. One way to trigger the establishment
of R&D units under the private sector would be to offer sizeable tax concessions for any
investment made in this respect.
There is an expectation that institutions will play their pivotal role in the knowledge and
technology based economic development of the country. This is a mixture of many demands,
such as: quality of teaching and learning defined in new ways including greater relevance to
learner and labour market needs; research and development feeding into business and community
development; contributing to internationalisation and international competitiveness.
Therefore, in order to set medium to long term national targets, a clear vision, therefore,
has to be created for the scientific and technological effort required for the purpose. This will
include:




Access and Equity
o Raise the enrolment in higher education of the 17-23 year age group from the present
4.7% to 10% by the end of plan period
o Significantly enhance quality of education
o Ensure equitable access to higher education
o Promote provision of quality of distance education and
o Promote role of private sector in the provision of quality higher education.
University Linkages
o Promotion of university – society links
o Promotion of university – industry linkages through research capacity buildings of
universities
o Make higher education system more globally competitive while reforming and
restructuring universities in Pakistan through international linkages
o Significantly enhance funds coming into universities through philanthropy, industry
sponsored research and other non-government sources
o Support research projects of universities related to alternative energy, National
Management, Security, Water, Poverty Reduction, Infrastructure building etc.
Quality
o Enhance the quality of education, research and university management procedures to
meet international standards
o Increase PhD faculty of universities
o Increase the number of globally ranked Pakistani Institutions
o Build a Culture of Evidence in Higher Education linking objective assessment and
performance of institutions of higher learning
o Ensure development of support services at Universities to achieve excellence in
teaching and research
Economic Development
o Promotion of harmony between university and social goals through constant dialogue
o Promotion of Research and Development activities in universities with special
emphasis on areas of economic relevance to the country
o Active involvement of university faculty in enhancing export competitiveness of
industry especially in the sectors of engineering, IT & Software, and Chemicals and
Pharmaceuticals
187
o






7.
Promotion of linkages between university and Technical and Vocational Institutions,
especially for faculty development in subjects pursued at the TEVTAs
o Establishment of Business Incubators in selected public universities
o Encouragement of research and innovation in areas of relevance for the economy and
society, particularly by promoting close and productive interaction between private
and public institutions in science and technology. Key leverage technologies such as
biotechnology, material sciences, electronics, space sciences, oceanography would be
given special importance
Employ scientific and technological knowledge in the national decision making process
to involve vigorously the private sector in research and development
to promote lifelong learning in higher education institutions by allowing faculty to
upgrade their skills at regular intervals to respond to diverse demands
to effectively leverage Information and Communication Technologies (ICT) to deliver
high quality teaching and research support in higher education both on-campus and using
distance education
to share the expertise and facilities among the universities though national and
international partnerships for supporting socio-economic regeneration and growth
to reorganize, strengthen and establish new industrial development corporations to
encourage applied R&D, innovation and technology development
Strategy
Keeping in view these broad objectives, it is essential to spell out an implementation
strategy that will enable classification of specific plans and programmes with clearly defined
tasks, approximation of necessary resources and time targets. Some of the implementation
strategy will be as follows:
7.1
Access to Higher Education
Growth in the number of public and private universities and degree awarding institutions
in the country over the previous five years is presented in the graph. This increase in the number
of institutions was also accompanied by a significant increase in the number of campuses of
public sector universities. An effort was also placed on supporting provision of distance
education in the country and enrollment of students in the two distance education universities of
the country, Allama Iqbal Open University and the Virtual University witnessed a sharp increase:
from less than 200,000 students in 2005 to about 300,000 in 2010.
Fig.1
140
127
122
129
128
115
120
P u b lic
100
P r ivate
80
65
62
60
53
70
69
57
58
70
58
T o tal
59
40
20
0
2005-06*
2006-07
2007-08
2008-09
2009-10
188
Total enrollment in higher education currently stands at 1.075 million students (445,000
in public and private universities, 290,000 distance education, and 340,000 in affiliated colleges)
representing 4.7% of the age cohort of 17-23 year old in the country. While this shows significant
increase over 2.6% in 2002, it compares dismally to more than 10% of 17-23 year old having
access to higher education in India and more than 20% having access in Malaysia. Student
enrollment is projected to grow at 15%, private university student enrollment at 18%, while
distance education is expected to grow at 11%. The rapid increase in enrolment in the higher
education sector during 2002-2009 is reflected in the attached graph (Fig.2).
1075000
803507
1100000
738373
1000000
639597
900000
521473
800000
471964
423236
700000
331545
600000
276274
500000
400000
300000
200000
100000
0
Enroll…
The following table shows student enrollment projections for 2010 – 2015.
Institutions
Public Univ
Private Univ.
Dist. Education
Colleges
Total
%age
Increase
15
18
12
8
Projected Enrollment
2010
2011
2012
2013
2014
2015
408,250 469,488 539,911 620,897 714,032
821137
106,200 125,316 147,873 174,490 205,898
242960
324,800 363,776 407,429 456,321 511,079
572408
367,200 396,576 428,302 462,566 499,572
539538
1,206,450 1,355,156 1,523,515 1,714,274 1,930,581 2,176,043
Fig.3
%a
ge
100
90
80
70
60
50
40
30
20
10
0
63.04 61.45 57.68 58.6
M…
59.2
42.32 41.4
36.96 38.55
40.8
53.6
53.753.6
46.4
46.3 46.4
189
The 1.9 million students projected for 2014/15 will constitute 7.1% of the 27.2 Million
youth aged 17-23 years projected for that year.
Enhancing equitable access to higher education will remain a key objective of the higher
education strategy. Specific emphasis will be placed on the issue of equity in access to higher
education to ensure that students from underrepresented areas as well as groups are able to
acquire higher education. Over the past years the gender gap in higher education has significantly
narrowed as shown in the graph (Fig.3).
Three additional strategic options for enhancing equity that will be pursued are: 1) the
opening of universities and university campuses in disadvantaged regions of the country; 2) the
provision of full need-based scholarships, and 3) promotion of quality distance learning.
Technology today plays an essential role in the provision of quality education to students.
It is for this reason that the platform of the Pakistan Education and Research Network (PERN)
was designed and launched. This network (PERN 2) provides high speed internet access to every
public and private university in the country, and allows universities to share their resources in an
efficient manner. This “triple play” voice, video and data network provides a research platform to
explore new technologies and pilot new services.
7.2
Academic Reforms
The basic issue of quality improvement would be addressed through the modernisation of
syllabi, increased research, networking of universities and departments and increased allocation
of funds. The University system would be expected to utilise the autonomy it enjoys for
innovations in teaching and for pursuing high quality research. Universities and institutes would
be provided with the means to interact across geographical boundaries of institutions, integration
of teaching, research and evaluation, and mutual collaboration and cooperation among
universities for optimum utilisation of available resources. The accreditation process would be
more transparent, time-bound and be progressively freed of government regulations and control
leading to a situation when the whole procedure would be based on a system of public appraisal/
acceptance.
The fee structure in the universities is abysmally low and has remained static for more
than two decades. The universities should, therefore, make efforts to rationalize the fees and
attempt greater generation of internal resources. However, utmost care needs to be taken to ensure
that the social obligation – ensuring that the poorer students are give adequate opportunity to
pursue higher education – is not lost sight of.
7.3
Technical and Management Education
The technical and management education sector has made immense contribution to the
country’s economic and industrial development. Various engineering universities/ institutes and
poly-technique colleges like TEVTA have been established in the country during the recent years.
Private sector has also contributed in the development of these technical institutes. They cover
courses/programmes in engineering, technology, management, architecture, town planning,
pharmacy, applied arts and crafts etc. There has been a corresponding increase in the enrolment
of students to meet the growing demand for quality technical/ managerial manpower. There is a
need to develop greater linkages between the engineering universities and the technical and
vocational training institutions since growth in this sector is limited by the availability of high
quality trained faculty; an area in which the engineering universities can play a key role.
190
It is important to align the university business management training to local needs with a
focus on enhancing productivity and competiveness, especially with respect to export of goods
and services. Knowledge about manufacturing practices, supply chain management, logistics,
trade laws etc. must be introduced to address immediate industry needs. The goal is the
corporatization of Pakistani industry so that they may become locally as well as internationally
competitive.
Institutions of higher learning must also provide short training, diploma and certificate
courses to the working professionals so that the latest theories and technologies are introduced
into the market place. Lifelong long learning is a concept well established in the industrialized
world, and it is important for Pakistani educational institutions to play their due role here.
7.4
Human Resource Development
Faculty is the heart and soul of a university and it is clear that no progress in access or
quality of higher education can be envisioned without the availability of qualified faculty. It is for
this reason that faculty development remained the central focus of development programs of the
HEC. However, the Social Sciences and languages (particularly English) faculty development has
lagged behind those of Science and Technology faculty. This shortage is likely to increase in the
coming years. During the period 2005-10 indigenous and foreign scholarship programs were
launched by the Commission along with various faculty hiring programs to cater to immediate
needs of the university. This was accompanied by faculty scholarship initiatives approved as a
core part of nearly all large development projects of specific universities. Currently 5 indigenous
scholarship program with nearly 4,300 awardees, 15 foreign scholarship programs with nearly
2,900 awardees and 97 university faculty development initiatives with more than 1,400 awardees
are operational for a total of 8,600 PhD scholarships. More than 250 scholars have returned after
completing their PhD degrees.
The rapid increase of Ph.D. output during the period 2003-2009 is apparent from the fact
that during the 55 year period (1947-2002) Pakistan produced only 3,281 Ph.D.s whereas in the
subsequent seven year period (2003-2009) a phenomenal increase in Ph.D. output occurred and
the number of Ph.D’s produced was 3,037 (Fig.4).
Fig.4: Ph.D. Output for Pakistan
191
In order to ensure quality the Higher Education Commission required that all Ph.D.
degrees be evaluated by eminent experts from technologically advanced countries. The high
quality of research carried out in Pakistan during the period 2002-2008 is also apparent from the
rapid increase in international citations which grew phenomenally during this period registering
an increase of about 600%. The citations for the period 2000-2008 are given in Figure 5.
Fig.5: International Citations (2000-2008) (over three year periods for each year)
Since citations accumulate over time, the citations for each of the years have been taken
over a period span of 3 years so that a meaningful comparison can be made.
The projected growth in number of students over the five year period will require a
commensurate growth in faculty required to educate these students. Just taking into consideration
the public and private universities whose student enrollment is projected to increase by 495,000
students, nearly 20,000 additional faculty members would be required just to cater to this increase
in students. Considering that less than 25% of the faculty currently have PhDs and also taking
into consideration retirement of PhD faculty over the next 5 year period, it is clear that the
substantial faculty development program initiated will not only have to be sustained, it will also
have to be significantly enhanced. The acquisition of an advanced academic degree, while a prerequisite to teaching at institutions of higher learning, is not sufficient per-se. It is also necessary
for faculty members to be exposed to developments in curriculum and instructional design,
assessment, educational technology and all other factors that ensure overall staff efficiency. For
this purpose programs for faculty pedagogical training, English language proficiency and
technology in education will be institutionalized to ensure that all faculty members are provided
an opportunity for self improvement.
7.5
Professional Development
While academic faculty represents the most important entity in the university, the
provision of university services requires efficient support staff and systems for carrying out the
myriad of tasks in a modern higher education institution. Our public institutions will have to be
provided necessary IT hardware, software for campus management, HR management, financial
management, procurement, etc. as well as training for personnel to change current systems and
introduce modern techniques. As our Institutions of higher learning grow in size it will be
especially necessary for them to implement modern office practices in the conduct of their daily
business.
192
Most public universities in the country also do not have established offices of research
dealing with research grant management, technology incubation, commercialization of research,
fund raising office, alumni office, Student Career Guidance Center, and University Statistical
Data office to facilitate decision making. The establishment of these key offices in every
university, provision of necessary equipment and software as well as training of personnel will be
vigorously pursued over the next five years. It is important for the HEC as well as the universities
to enhance the “Culture of Evidence,” whereby quantified indicators are identified to assess the
performance of all initiatives and all decision making is based on a rational assessment of this
information. This will allow efficient measurement of outcomes and demonstration of impact
through rigorous use of data and assessment.
7.6
University Leadership, Governance and Management
Improvement in the quality of education and research imparted in universities requires
the availability of professional management, well versed with modern university governance and
management principles. Universities are expected to be Community Leaders. The evolution of
our Institutions of higher learning into such community leaders will require training of the
university leadership (Vice Chancellors, Deans, Department Chairs and heads of support service
programs) as well as the availability of governance structures in these institutions facilitating this
transformation. Modern universities today operate with the paradigm of Shared Governance and
it is necessary for the Pakistani university leadership to embrace this paradigm and practice it as
well. Universities can no longer afford to operate in isolation of their community and society. The
development of linkages with schools and colleges from which they draw their students as well as
the development of linkages with business and industry that benefit from the university graduates
is essential so that outreach of Institutions of higher learning is extended. An institutional
mechanism for incorporation of feedback obtained from these stakeholders is essential to ensure
that the university is responsive to the needs of business and industrial community and also able
to cater to the requirements and needs of the schools and colleges.
7.7
Science and Technology Policy Research
As advised by the UN Advisory Committee on Science and Technology, the endogenous
scientific and technological capacity building requires to first develop the capacity of informed
judgment and decision as to what type of science and technology is needed to meet the country’s
development needs. For this, the UN commission on Science and Technology for Development
proposed for developing countries to develop necessary mechanism and institutions for Science
and Technology Policy Review. But only at a later and more advanced stage like advanced
countries, it was considered to create new knowledge and do basic research. For each capability
and its essential elements, there is also a need of institutions. Some initiative has been taken in
shape of establishment of policy institutions in a couple of universities. There is a need to
strengthen with autonomy and funding for enlargement of their scope and activity and achieving
their objectives faster. And more institutions need to be established.
7.8
Academia, Industry and Government Linkages
Government, academia and industry have long been touted as a means through which one
can address complex problems. The vision of collaboration between government, academia and
industry is one of great opportunity. Each stakeholder brings to the table talent, resources and
differentiated perspectives that, together, create a robust whole in addressing problems and
projects. For example, government often has resources that, along with academic creativity, can
be applied to real problems identified in industry contexts. A variety of linkages exist to support
193
government, academia and industry collaborations. For example, government and academic
linkages include special educational programs as well as sponsored projects and other
mechanisms by which students can learn and from which business can benefit.
The Government funding is a great attraction to both academics and industry
associations. Government is also in the position of identifying more global societal needs. An
important role for government lies in creating an “ether” within which disadvantaged groups can
be nourished and benefit given accordingly. Academia in the contexts of universities clearly has
the research capability and motivation, as well as experience, in delivering educational benefits
through courses and workshops to large segments of a population. Importantly, academia
provides a neutral environment to bring diverse people together and is able to explore concepts
that are too risky for business. Industry is the engine that creates the tax base for government
revenues and provides the general economic viability of a community, city and country. Industry
is also the basis of the problems and opportunities for application that can be the focus of
government and academic collaborations. Small and medium sized enterprises (SMEs) are a
special aspect of industry that account for the vast majority of businesses around the world.
Unfortunately, SMEs typically do not have the scarce resources (either in people or money)
necessary to explore concepts and remove uncertainties beyond day to day survival. As such, they
are prime clients for government and academic collaboration.
The academia-industry-government linkage is also being known as Triple Helix
relations. In order to promote the phenomenon of such linkage or build such relationship, it is
proposed to develop Triple Helix Centers in the Science and Technology Policy Research
Institutes/ Centers to additionally work on this aspect of technology development, as many of the
developed countries like United Kingdom have been working on this concept of tying the three
strand together to produce something tangible and common to them.
In order to promote academia and industry linkages it is important that the government
provides funding to the Higher Education Commission for the establishment of technology parks
in most public sector universities. A large number of technology parks have been established in
universities in Europe as well as in Turkey, Iran, Malaysia and some other OIC member states
which have helped in the establishment of new start-up companies and in the transformation of
university level research into industrial products and processes.
7.9
Enhancing Competitiveness
Enhancing competitiveness of the local industry and focusing on key sectors for export
growth are crucial to significant increase in GDP growth rate. It is important to improve the
ability of the local industry to compete with global products and services. The Institutions of
higher learning need to play a leadership role in the economic transformation of the country and
its realignment with global export prerogatives.
Engineering goods today constitute more than 60% of the world trade, while they
constitute a meager 4.6% of Pakistan’s exports that, as a whole, are less than 0.007% of the
world’s exports. Clearly there is excellent room for growth for Pakistan in the engineering sector.
Similarly, the Services sector (IT & Software and Financial services) and the Chemicals and
Pharmaceuticals sectors are important global economic sectors where Pakistan can enhance its
share of exports taking into account the significant investment made in human resource and
research capacity development in these areas in the past five years.
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The challenge lies in aligning the Institutions of higher learning, S&T Research
Institutions and industrial players to work synergistically towards enhancing competitiveness of
the goods and services industry and addressing all challenges that will arise in this endeavor. No
longer is it possible for the higher education, research and industrial sectors to work
independently if we are to achieve our ambitious development goals.
7.10
Role of Private Sector Universities/ Institutions
The Government has a limited pool of resources and can not shoulder the burden of
provision of higher education by itself. The private sector both inside and outside the country
must rise to meet the challenge of provision of quality higher education to a population of 170
million people with an overwhelming balance of them who are below the age of 17. These young
people are expected to seek higher education at a rapidly increasing pace, and therefore, to
achieve significant enhancement of students in Colleges and Universities it is crucial for the
Private Sector to play a leading role. However, only few institutions like LUMS, Agha Khan
University, GIK have been maintaining standards. But it is necessary to bring them to center
stage in iorder to contribute significantly to higher education.
As a matter of policy the Government has already facilitated the provision of quality
education and research by the private sector through numerous programs that do no differentiate
between the type of not-for-profit institution (public or private) that is providing the higher
educational services. These programs must be enhanced to include provision of developed land at
nominal cost, scholarships for meritorious needy students, access to competitive research
development grants, access to student loan programs, as well as other incentive mechanisms that
ensure that all public and private higher education providers meet stringent quality benchmarks.
7.11
Key and Cutting Edge Technologies
This leapfrogging into the development of cutting edge technologies for rapid economic
growth along with the key technologies necessary for overall general sustenance and development
makes a successful two-prong approach for the developing countries, specially and those with
un-sustainable scientific and technological development. The following technologies are
identified for support for their development to help economic growth.
7.11.1 Biotechnology
As agriculture is the vanguard of our economy, so it is required that we should develop
this core-competency, and for this, biotechnology can play the role of a catalyst. The grave
problems which we are facing as a nation includes health and poverty and they can be culminated
to a greater extent if the research of biotechnology is used effectively in medicine, food
production, fertilizers. Genetic Engineering is a discipline which comes inside the domain of the
biotechnology. The biotechnology as a separate degree course has been started in some of the
universities of the country during the recent past.
Strong research base, protection of intellectual property, an entrepreneurial culture,
access to infrastructure (network and clusters), and access to capital and creating industrial
opportunities are some of the key areas which need to be focused. Exploiting modern
biotechnology will lead to sustainable competitive advantage in the areas of plant biotechnology,
animal health, vaccine production, biodiagnostics, fine chemicals industry, and
pharmacogenomics.
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7.11.2 Food Technology
Food technology (or Food tech) is the application of food science to the selection,
preservation, processing, packaging, distribution, and use of safe, nutritious, and wholesome
food. The global halal food market currently stands at US$ 580 billion and is expected to reach
US$ 1 trillion by the end of 2010. Pakistani food manufacturers are seeking to increase their share
in this highly lucrative segment of global trade. At present, nearly 1965 food & beverage
companies operating in Pakistan are concentrating on processed food items to ensure value-added
exports and capitalise on the increasing demand of finished-foods in the global markets.
At present, Pakistan is not ranked as well equipped country to respond to existing and
emerging food safety and quality problems due to lack of technical and financial resources, nonexistence of effective institutional framework, unavailability of trained manpower and
insufficient information about the hazards and risks involved in the food technology.
7.11.3 Leather Goods
Leather industry being the second largest export-earning sector of Pakistan after textiles
includes leather garments, leather gloves and leather footwear. It is contributing around $800
million a year but has the potential to multiply volume of exports with the improvement of quality
and diversification in different range of products, specially garments and footwear. There are
some 600 tanneries in the formal sector and an equally large number of tanneries in the informal
sector.
7.11.4 Space Science
The use of this technology is increasingly adapted by many developed countries
governmental as well as non-governmental organizations all over the globe. Space technological
achievements for many a varied extended use in developing any country’s communication,
meteorology, defense, resource exploration, environmental protection, land management,
infrastructure development and many other fields greatly promote in turn the development of
economy, country's technological advancement and an overall progress of society.
Taking cognizance of the importance and prominent role of space technology in many
fields of socio-economic development prominent among which are telecommunications,
meteorology, R&D in exploitation of telemedicine, distance education, and disaster monitoring,
Pakistan's graduation to a power in space technology must be the next logical frontier in taking
Pakistan forward in the comity of technologically advanced nations of the world.
There is a need to promote R&D efforts to develop indigenously built satellites, double
stage solid fuelled propelled Satellite Launch Vehicles, robust Intermediate Range Ballistic
Missile (IRBMs). Facilities for Satellite Environmental Validation and Testing (EVT), Satellite
Dynamic System Testing and Satellite Assembly Integration and Test (SAINT) also need to be
developed to keep pace with the neighboring countries.
7.11.5 Materials Sciences
It has been realized that progress in the technologies critically depends on the
development of new and tailor-made materials with improved or novel properties, e.g., new
biocompatible materials for medical applications, and opto-electronic materials for computers and
communication devices. Pressure to improve and protect the environment means that recycling
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issues will affect almost all fields in which new materials are produced. Materials being the prerequisite for every technological development are the foundation on which the new products are
manufactured. Materials science plays a pivotal role in determining and improving economic
performance and the quality of life in any country.
Taking into consideration the prevailing technological trends, it is anticipated that the
future of the world lies in the development of new & advanced materials for rapid growth and
prosperity. Unfortunately Pakistan lags behind in this area and nothing promising has so far been
achieved in this regard. Pakistan, as a developing country should now develop a vision of the
future, with the field of material science and engineering being fully integrated in the national
science, engineering and technology.
Pakistan is importing iron ore to the tune of Rs. 1.2 to 1.3 billion per annum, despite of
the large reserves of ore found in the country. Large deposits of copper ore, bauxite, laterite,
chromite, lead, zinc and many other ores are found but they are not being properly used. To
promote R&D in material sciences additional grants should be provided to organizations and
mechanism of technology transfer and modern processes should be developed.
7.11.6 Ocean and Water Research
a)
Marine Resources
Pakistan has a coastline of 990 km extending from the Indian border in the east to the
Iranian border in the west. The Exclusive Economic Zone (EEZ) of Pakistan is about 250,000
sq.km. Under the “Commission on the limits of the Continental Shelf”, Pakistan stands to annex
an additional area of about 60,000 sq. km. As such, this maritime zone of Pakistan will be over
30% of the land area. The area is characterized by distinctive oceanic phenomena and features
that are capable of producing rich fisheries, mineral, oil and gas resources. Extensive survey, data
collection and research are required to understand the processes and features which have a direct
bearing on locating the living and non-living marine resources and their sustainable development,
and conservation. The marine resources of Pakistan have so far remained unexploited and
concerted oceanographic research in the country will be undertaken.
b)
Inland Resources
Pakistan’s agriculture which is the mainstay of our economy is highly dependent on
water for its production. However, in the past inharmonious planning regarding our water
resources has given rise to numerous problems which the country is still hampered with despite
huge investments. The past experience indicates that solution of these problems cannot be found
in isolation but involves detailed integrated study of all interlinked parameters and their
supplementary or complementary impacts on water resources development and management
aspects. Besides, due to constantly increasing population pressure, the existing surface water
supplies are neither adequate in quantity nor in their temporal distribution to match the present
agricultural, urban and industrial needs of the country. The agricultural productivity needs a boost
through extensive as well as intensive cultivation to meet domestic requirements and to earn
much- needed foreign exchange.
7.11.7 Electronics
Electronics is considered to be one of the world’s fastest growing industries with global
revenue worth trillions of dollars per annum. All ASEAN countries gathered their strength only
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after they developed their electronics industry, first through Foreign Direct Investment (FDI) and
Original Equipment Manufacturer (OEM) and then, accelerating their development pace by
moving towards Original Design and Manufacturing (ODM). Thus, without developing a solid
electronics industry and without properly utilizing its applications, the dream of any nation’s
development cannot be realized.
Unfortunately in Pakistan, the electronics sector is still in infancy and never became a
major revenue generating industry. Pakistan is currently struggling hard to achieve a total export
target of around US $12 billion annually, with almost negligible share from electronics industry.
The electronic industry in Pakistan mostly revolves around consumer electronics, with
activities confined to assembly of conventional TV sets, radios, cassette recorders and other allied
consumer electronic products from Complete Knock Down (CKD) or Semi Knocked Down
(SKD) kits imported mostly from China, Malaysia and Korea etc. A few companies are involved
in somewhat higher level of production/assembly of items like pay-phones, energy meters,
security systems, electronic signboards, stabilizers, uninterruptible power-supplies, inverters and
telecommunication equipment for defense through reverse engineering but using imported
components or sub-assemblies.
Despite the huge growth potential, the electronics industry in Pakistan has lagged behind
in the development of its role as a major contributor in the national economic growth. It is, thus,
imperative that a coherent strategy is put in place to develop this sector with a view to increase
the country’s growth potential as well as achieving self-sufficiency by reducing dependence on
foreign sources of products, materials, components and equipment. Pakistan should encourage
local manufacturing and curb the import of the finished electronic goods, facilitate the import of
PCB (printed circuit board) manufacturing plants, automated component stuffing and soldering
equipment.
7.11.8 Automotive Engineering
The automotive industry has become a vital element in the economy of the industrialized
countries - motor vehicle production and sales are one of the major indexes of the state of the
economy in countries like United Kingdom, United States of America, Japan, France, Italy,
Sweden, Germany and South Korea etc. Day-in, day-out around 200,000 vehicles roll off the
world’s assembly lines with car as the dominant segment of the industry. The effect of motor
vehicle manufacturing on other industries is very great. Moreover, the special requirements of
automotive mass production have had a profound influence on the design and development of
highly specialized machine tools and have stimulated technological advances in petroleum
refining, steelmaking, paint and plate-glass manufacturing, and other industrial processes.
The Automobile industry has been an active and growing field in Pakistan for a long
time, however not as much established to figure in the prominent list of the top automotive
industries of the world. The total contribution of Auto industry to GDP in 2008-09 was 2.8%
which is likely to increase up to 5.6% in the next 5 years. There are 500 auto-parts manufacturers
in the country that supply parts to original equipment manufacturers. Auto sector presently
contributes 16% to the manufacturing sector which is also expected to increase 25% in the next 7
years, as compared to 6.7% during 2001-02. Vehicles’ manufacturers directly employ over
192,000 people with a total investment of over $1.5 billion. Currently, there are around 82
vehicles’ assemblers in the industry producing passenger cars, light commercial vehicles, trucks,
buses, tractors and 2 or 3 wheelers. The auto industry sector needs to be geared up to with a quite
increased investment in the next five years.
198
A strategy that would greatly help in strengthening the automotive industry is building
gainful partnerships with the leading players in the worlds auto industry (like Germany, Japan
etc) to enable and facilitate the technology transfer to assemble plants setup in Pakistan. There is
a need to develop compatibility to shift the auto industry to use alternate fuel technologies like
Ethanol (as Brazil is using).
7.11.9 Information Technology
The inherent strength of Information Technology as an agent of change, transformation
and growth of economies around the world has made it a corner stone of futuristic vision of
countries to become dynamic, knowledge-based and highly developed competitive nations.
Information Technology includes Computer Technology, Communication Technology and
Robotics. The worldwide IT services market is growing at the rate of eight per cent in real terms
and expected to reach about US 910 billion dollars by 2010.
Nearly all major global IT companies in the world have a presence in Pakistan, and with
revenues growing by 30-40% year on year, the IT industry is probably one of the most exciting
and dynamic sector in the country today. Software developed to the tune of hundreds of millions
of US dollars, and world-class software products are being produced in Pakistan. Similarly
service providers are working in Pakistan for IT and IT enabled services sector. Currently,
Pakistan exports about $35 million worth of software a year to the entire world, as compared to
$8 billion from India, $5 billion from Ireland and $1.5 billion from Israel.
Pakistan economy is still largely based on the low-tech, low-value industries that have
long been fully mechanized and running very efficiently in developed nations and, therefore, do
not attract premier revenue from world markets. In order to put the economy on track to compete
with the growing economies of the world, Pakistan needs to quickly take steps to train and bring
its workforce to the international educational standards, incorporate new technologies and modern
management practices into its existing industries, and bring intense focus on building an
information-based economy by upgrading the technical and managerial skills of its people.
The need of the hour is to encourage development of I.T. incubators and build worldclass companies through mergers, acquisitions, joint ventures with foreign software houses, etc.;
Internet City and Knowledge Village should be established to achieve critical mass of high
technology companies.
7.11.10 Energy
The goal for the energy sector should be provision of energy to all sectors of economy.
The availability of Mega Watt (MW) is very limited for both industrial and domestic demand.
The situation was compounded due to surging oil prices and simultaneously to the increased
consumption of electricity beyond that was expected. Extensive up-gradation of the electricity
transmission and distribution system is being undertaken but the scope needs to be enlarged. In
some regions these losses are more than 40 per cent as compared to the normal 7-8 per cent in
OECD countries. Improvements will increase the available capacity significantly. Extensive
investment is required to improve the situation in this area.
UCG (Underground Coal Gasification) and IGCC (Integrated Gasification Combined
Cycle) are the upcoming technologies for electric power generation. UCG has been tested in
many different experimental tests in many countries. UCG-IGCC based power plants cost and
consequent cost of electricity will be lower (25% to 50%) than conventional power plants. In
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Pakistan there is a phenomenal growth in the demand for electricity. A steady growth rate of
around 6% per annum has been reported. In 2004, the total installed power generation capacity in
Pakistan stood at 19,552 MWe. There are 175.5 billion tones of lignite deposits spread over 9000
square kilometers of the Tharparkar Desert, Sindh whose exploration will greatly help in
production of electricity. If we produce 50,000 MW electricity per annum, it would be enough to
satisfy our energy requirements for about 500 years.
Keeping in view the current energy crisis, we need to exploit new oil/gas fields both on shore
and off shore and adopt new methods to discover new oilfields; invest in Waste to Energy and BioPower Plants and exploit the vast reserves of Coal at Thar. Wind and solar power generation, particularly
in the coastal areas of Sindh and Balochistan should be promoted. Work for the development of
renewable energy, expansion of un-tapped hydel resources and indigenous nuclear power generation
should be initiated. Special emphasis needs to be accorded to mutual cooperation with the neighbor
countries with sufficient energy reserves and experts in this field.
7.11.11 Manufacturing
Manufacturing sector is synonymous with economic development. The larger is the share
of manufacturing sector in the GDP, the more advanced is the economy. Modern manufacturing
includes design, branding, servicing and end-of-life disposal. Pakistani manufacturers have the
option of competing across the entire chain or parts of it, depending on their judgement of where
they can create value and increase returns.
Manufacturing has always been, and always will be, a crucial part of Pakistan’s economy
and that is why the Labour-led government is committed to working with the sector to further
transform it – as part of our work in growing Pakistan into a high wage, high value, innovative
and export-led economy. The sector continues to offer significant opportunities to contribute to
economic growth and achieve the objectives for economic transformation, in particular improving
the productivity and global competitiveness of Pakistani firms. There is a strong future for
manufacturers who adapt to changing technologies and new consumer demands. The future lies in
the high skilled, high value, innovative end of the market where Pakistan can compete on quality
not on price.
Manufacturing is one of the second largest sectors of the economy bears significant
importance antibates 18.4 percent contribution to GDP. The manufacturing industry in Pakistan is
heavily dependent on imported technologies, as largely based on imported raw materials and
spares with insufficient operational practices and lack of quality control and R&D. Furthermore,
Pakistan’s export items and there concerned items are in few numbers without proper programs
for technological up gradation covering materials, design, manufacturing quality, reliability,
packing etc. Pakistan needs to invest in production of better human resource, R&D, new
technologies and also improve the exports in this field. The manufacturing related programmes
should be introduced as subjects at university level.
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8.
Parameters For Measuring Knowledge & Technology Based Development
Knowledge & Technology Based Development Indicators
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
x)
xi)
9.
Rankings in the Global Competitiveness Index (GCI)
Rankings in the Technological Index (TI)
Percentage of total education and R&D expenditures to GDP
Value-added in high technology exports
Technology’s balance of payments
Investment in high technology areas
Number of international accredited laboratories
Number of R&D personnel per million population
Number of PhD in science & engineering per million population
Share of private sector in R&D expenditure
Number of publications in the international science citations
Financial Outlay
The total investment for the knowledge and technology based development has been
proposed
Rs 300.00 billion (i.e. Rs 220.0 billion for higher education and Rs 80.0 billion for
science & technology sectors). Major areas for investment are higher education, HRD and R&D
in cutting edge technologies for promoting knowledge and technology led development to
provide the path of fast track economic growth. However, the allocations have been curtailed
from Rs 300.0 billion to Rs 238.7 billion (i.e. Rs 193.5 billion and Rs 45.2 billion for higher
education and S&T sectors respectively).
The programs in these sectors will have to be prioritized and the targets and goals of the
plan would be difficult to achieve with this level of investment. Detail allocations of higher
education and S&T sectors are given at Annex-I.
10.
Conclusion
The government will continue to intensify efforts towards innovation, R&D in key areas
and knowledge based development to meet the requirements of knowledge based economy. The
private sector will need to keep pace with the technology advancements in the global world and
expand their capacity in R&D to complement the efforts of the government.
The challenges lie in developing a competitive edge at the global level. This will be
determined by our ability to create, acquire and use knowledge & technology based development
for socio-economic development. The Higher Education Commission and Ministry of Science &
Technology have to play a very important role in the transition towards a knowledge driven
development. The acquisition of high technology and its use as a strategic tool as well as the
immense transformative power of technology and innovation and the need of appropriate policy
and plans for harnessing this power which can improve all different aspects of the lives of people
and improving the environment quality and help make Pakistan more safe and secure.
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Annex-I
Knowledge & Technology based Development (2010-15)
(Financial Outlay)
(Rs Billion)
S.No.
Area/ Sector
Total
Allocation
A
Higher & Professional Education
i.
ii.
iii.
iv.
v.
vi.
B
Human Resources Development
Teaching and Learning
Research Enhancement
Infrastructure
Access to Information/ Equipment
Office Equipment & Others
57.00
Sub-Total (A) :
193.50
20.00
17.50
50.00
30.00
19.00
Science & Technology
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
xiii.
xiv.
Science and Technology Policy Research
Academia-Industry-Government Linkage
Technology Assessment & Development Organization
Biotechnology
Food Technology
Leather Goods
Space Sciences
Material Science and Nano-Technology
Marine & Water Research
Electronics
Automotive Engineering
Information Technology
Energy
Manufacturing
Sub-Total (B) :
Total
1.00
4.00
2.00
4.00
2.00
1.50
2.70
4.00
3.50
3.50
2.00
2.00
11.00
2.00
45.20
238.70
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4.4 Health and Nutrition
Situation Analysis
The nexus between malnutrition, population, ill health and poverty are well recognized
and well known. III health contributes to poverty due to the catastrophic costs of illness and
reduces learning capacity during childhood and earning capacity during adulthood. Therefore,
health holds a key position towards prosperity and reduction of poverty and contribution to
national economic growth. It is critical to move towards a system which will enable us to address
the challenges and prevent households from getting into the poverty trap. In Pakistan, health
sector investments are viewed as part of the government’s poverty alleviation endeavor.
The basic indices of health and nutrition have changed very little over the last 20 years.
A steady and significant improvement has not been observed over the years. The contribution of
malnutrition, diarrhea, acute respiratory illness (ARI) and other communicable and vaccine
preventable diseases account for two-thirds of the child mortality rate (CMR) and infant mortality
rate (IMR).
Pakistan suffers from an unacceptably high infant and maternal mortality, a double
burden of diseases, and inadequate facilities with pace of population growth. Slow progress in the
indicators of maternal health, child health and their morbidity and mortality are major concerns in
the progress towards achieving Millennium Development Goals.
In Pakistan the public health delivery system has three tiers (i) First Level Care Facilities
i.e BHUs, and RHCs, (ii) Tehsil or Taluka Headquarters Hospitals (THQ) and District
Headquarters Hospitals (DHQs), (iii) Teaching Hospitals located at provincial headquarters
attached to medical colleges and equipped for all kinds of health services. However, all tiers lack
proper referral system, whereas first care level facilities are underutilized while the secondary and
tertiary facilities are over utilized. There are Mother and Child health (MCH) Centers, and Civil
Dispensaries which provide maternal and child health and family planning services.
The level of investment in health by the government has remained static and kept lower
than the countries of the same economic level and even lowers than the SAARC countries. This
has not increased 0.7% of GDP for the last two decades which is still very low. Foreign
assistance presently is 7% of total government allocation. 275% of health financing is out-ofpocket, whereas private sector is catering to 380% of health care delivery.
After the abolition of the concurrent list and devolution Health to provinces and districts
presents the following challenges:






Capacity building of Health Sector at all levels
Control of communicable diseases
Improved child and maternal health
Prevention and control of non-communicable diseases
Control and management of accidents and trauma
Control of environment and unhealthy social habits
The plan destines a shift from focused curative to preventive and promotive care to attain
the MDGs/PRSP targets and assure provision of health care to all masses on equitable basis
through adopting the following policy measures:
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
Enhancing coverage and access of essential health services especially for the poor and
vulnerable
Measurable reduction in the burden of diseases especially among vulnerable segments of
population
Protecting the poor and under privileged population subgroups against catastrophic health
expenditures and risk factors
Improving the performance of health system focusing on resources
Strengthening stewardship functions in the sector to ensure service provision, equitable
financing and promoting accountability
Improving access to and use of health related information, evidence based policy making
and strategic planning and resource allocation for the health sector
Tackling the wider social, economic and environmental determinants of health through
intersectoral action and by promoting health in all policies






It is apparent that Pakistan’s public healthcare system needs major improvement in terms
of coverage and quality of its services delivery through appropriate resource allocations- human,
financial and technical support.
The main focus of the Public Heath Sector is envisioned as healthy population with
sound health; enjoying quality of life through practicing healthy life style, in
partnership with public and private sector including civil society for achievement of
MDGs targets, national and international commitment to reduce poverty.
Review of MTDF 2005-2010
The MTDF 2005-10 provided the fundamental guidelines to ensure progress towards a
healthy Pakistan in which all citizens benefit from a better working health care delivery system,
particularly the poorest. Following strategy was carried out to make paradigm shift from focusing
curative services to preventive, promotive and primary health care.
The Primary Health Care (PHC) were strengthened through up gradation of 1466 BHUs
and 255 RHCs. The national programs including EPI, Malaria, TB, HIV, AIDS, & MNCH
programs were continued and successfully implemented. Lady Health Workers (LHWs) Program
trained and deployed 100,000 LHW during the MTDF period.
06 New hospitals were funded in the provinces and 07 cancer treatment centers were
started.
Financial Review
Total development outlay for Health in the MTDF 2005-10 was Rs.85 billion including
Rs.53 billion through Federal Health PSDP and Rs.32.00 billion through Provincial ADPs.
Actual federal PSDP allocation for Health was Rs.77.00 billion (90%) against Rs. 52 billion. The
overall utilization of Federal Health PSDP was 87%. Total allocation and utilization are shown in
Table-I of the Annexure.
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There was a trend of gradual increase in financial allocation in the first 03 years of the
MTDF, while allocation for FY 2007-08 remained under economy cut by 30%.In the last year
Rs. 23.15 billion were allocated which has been cut down to Rs. 18.5 billion due to financial
constraints. Details regarding PSDP allocation is given at Table –II of the Annexure.
During MTDF period (2005-10), 100 new Basic Health Units (BHUs) and 25 new Rural
Health Centers (RHCs) were added, and 166 BHUs and 30 RHCs were upgraded. In addition
1200 BHUs and 200 RHCs were strengthened through provision of medicine, staff and equipment
under People’s Primary Health Care initiative (PPHI).
Other additions during this period are: 20,000 new hospital beds,17,000 Doctors,1700
Dentists,10,000 Nurses 10,000 community Midwives and 15,000 paramedics. At present,
100,000 LHWs are in place. More than 60 percent of the total population and 76 percent of
targeted population is covered by LHWs.
The National Expanded Program for Immunization (EPl) provided immunization against
the 8 vaccine preventable diseases i.e. childhood tuberculosis, poliomyelitis, diphtheria, peruses,
neonatal tetanus, measles and hepatitis B, influenza & meningitis. National and sub-national
immunization campaigns were carried out and, in every round, more than 25 million children
aged 5 years and below were given polio drops. However the Polio Program needs more focus to
achieve the targets.
Under-5 mortality rate in 2008 was 90 per 1,000 live births compared to 140 in 1990. The
ratio of maternal mortality was 276 deaths per 100,000 births is still high. The percentage of
births attended by doctors and nurses has increased from 23 percent in 2001 to 48 percent in
2006-07. lnfant Mortality Rate was 78 per 1,000 live births in 2006-07.
Baseline Health Indicators with Physical Targets & Financial Outlay set for the period
are given at Table-III, IV and V at the Annexure.
Gaps and Shortfalls
Following gaps and challenges have been identified during the review of the MTDF:






Public Health funding to GDP Ratio remained below 0.7% against the strategy to reach
2% by 2010
Non Communicable Diseases (NCDs) constitute 38% of Burden of Diseases (BOD) and
cause 54% of mortality were not addressed properly
Reduction in MMR, 0-5 years Mortality and IMR were not on track when compared to
the MDGs targets
Vaccine Security, NIH Strengthening, Public Health Laboratories System Upgradation,
Hospital Waste Management, Blood Safety and Epidemic Preparedness were identified
as continuing gaps
Hospital System was lacking effective linkages with the Zakat/PBM institutions while
social health protection was not addressed, formally
Drug and Vaccine Regulatory Capacity was not improved
205
Health Plan 2010-15
Universal coverage through Essential Health Services Package (EHSP) to protect
poor against catastrophic illnesses, through a comprehensive Social Health
Protection (SHP)
Major Issues
Following are the major issues to be addressed during the plan period:
















Inadequacies in Primary/Secondary Health Care Services
Poorly Located Health Facilities
Lack of Institutionalized Referral Systems
Poor levels of Community Participation
Lack of Integration and Decentralization of National Programs
Professional and Managerial deficiencies in District Health System
Lack of Career Structure of Doctors and other Health Care Practioners
Wide spread prevalence of communicable and Non communicable diseases
Widely prevalent Malnutrition in vulnerable segment of population
Poor Health Research Information System
Non existing Integrated Disease Surveillance and Emergency Response
Lack of Monitoring and Evaluation of Health Policy Implementation
Alternate therapies and Traditional system of Medicine
Poor Trauma / Accident and Emergency Services
Un-regulated Private Health Sector
Lack of Credible Health Statistics
The plan aims at improving the quality of health care, removing urban-rural imbalances,
providing care to vulnerable groups, minimizing drug abuse, treating persons suffering from
pulmonary tuberculosis, establishing a national school health service and effective accident and
emergency services. Maternal health and child spacing will be an integral component of primary
health care. Imbalances in health manpower will be removed; a proper drug policy and health
insurance will be introduced; and incentives provided to private professionals and management
personnel. The following Millennium Development Goals (MDGs)/ targets will be achieved
during the plan period.
Goal 4: Reduce child mortality
Target: Reduction of infant mortality by three quarters, between 1990 and 2015.
Goal 5: Improve Maternal Health
Target: Reduce by three-quarter, the maternal mortality ratio between 1990 and 2015.
Goal 6: Combat HIV/AIDS, malaria and other diseases
Target: Have halted by 2015, control the spread of HIV/ AIDS by 2015 and begin to reverse
Target: Control the incidence of Malaria and Tuberculosis by 2015.
Goal 1: Eradicate hunger and poverty
Target: To halve the prevalence of malnutrition in children under 5 year of age
206
“Nutrition” as part of Goal-I will be addressed to reduce malnutrition among women and
vulnerable groups.
Objectives
In the past two decades various strategic planning instruments meant to form vision for
overall health sector strategic and operational planning have been introduced globally and
nationally. These instruments include Millennium Development Goals, Poverty Reduction
Strategy Paper and National Health Policy 2009. The 10th Plan Chapter on Health has tried to
synergize these instruments to achieve not only sectoral targets but to fulfill our national and
international commitments of MDGs and PRSP. The plan will address the new initiatives
including Vaccine Production, Social Health Protection as part of social safety nets,
Accreditation/ standardization and of all Health facilities, medical ethics & patient safety, School
Health Services and Urban Primary Health Care. The plan aims at attainment of the following:










Save additional 700,000 lives of children
Save additional 24,000 lives of mothers
Eradicate polio
Eliminate measles and tetanus
Prevent additional 5 million children from becoming malnourished
Provide skilled birth attendance to more than 4.3 million pregnant women
Ensure provision of family planning services to additional 5 million couples
Avert 13 million of new TB cases
Immunize more than 22 million children against Hepatitis B and other vaccine
preventable diseases and
Reach 40 million poorest people of Pakistan to ensure provision of essential package of
service delivery
Strategic Priorities

Strengthening of primary health care with necessary back up support in rural areas where
all health outlets will function as focal point for family planning services. The
BHUs/RHUs will be made integral part of the Health System through LHWs

Communicable disease control: Eradication of poliomyelitis, improving immunization,
prevention and control of tuberculosis, hepatitis and HIV/AIDS, and improvement of
surveillance and the diseases early warning system will be addressed through the
different national health programs

Improvement of mother and child health through capacity building at local and referral
levels, training and placement of skilled personnel, including women Medical Officers in
BHUs/RHCs for family planning , reducing neonatal and perinatal mortality , provision
of emergency and obstetric care

Non communicable diseases: strengthening the new tripartite initiative on non
communicable diseases by the Federal Ministry of Health, WHO and World Bank,
focusing on lifestyles and nutrition
207

Functional integration of Population and Health Sectors and Integration of National
programs together through establishment of efficient Health Information, and Disease
Surveillance System

Enhanced mobilization of financial resources i.e. 2% of GDP in Public Sector

Protection of poor against catastrophic expenditure

Access of the poor to affordable quality drugs

Initiate social protection to assure provision of newly health care to the poor for
nationwide Health Care System

Social determinants of health: healthy environment, health awareness community-based
initiatives, strengthening linkages with health-related ministries, gender mainstreaming
Recommendations/Plan of Action
1. Primary Health Care (Phc)
Major requirements to strengthen PHC system are;

Decentralization of programs from Federal to Provincial and district levels

Integration of vertical programs into PHC, and make BHUs/RHCs as hub of all
programs

Functional integration of Health and population at BHUs/RHCs levels and
improved involvement of LHW

Improvement of District Health System capacity to absorb the load from first
level care facilities (FCLFS)

Evaluation of national program through third party

Nutritional intervention, food safety and availability of micro-nutrients to the
poor segment of population
In order to improve the coverage and quality of service delivery, Essential Health
Services Package at FLCF will be implemented through the review of the following thematic
areas:







Services being offered at the FLCT Level
State of the art Medical Technologies (essential drugs, equipment & supplies)
Capacity building through training is required to deliver the essential services
Costing/ Funding Options & Responsibilities
Sensitization for implementation framework of EHSP
M&E mechanism and development of appropriate indicators
Resource mobilization for implementation
Implementation and Integration of Maternal, Neonatal & Child Health:
All THQHs and DHQHs will be made functional to provide reproductive health services.
The concerned staff will be provided proper training accordingly. Community Involvement and
208
development of collaboration with NGOs/CBOs/Private Sector will be ensured for provision of
health acre at gross root level.
The following major national programmes will be continued with the partnership of the
provincial and district governments to promote PHC services;

National EPI Programme:

National AIDS Control

Hepatitis-B & C Control Programmes

National Safe Blood Transfusion Programme

Prime Minister’s Program for Family Planning and Primary Health Care

National Tuberculosis Control Programme

Roll back Malaria

Nutrition Programme
2. Human Resource Development

Setting-up a health care work force study group to analyze the situation and give proper
guidance for manpower planning, production and career management

To improve the training quality of under graduate and postgraduate doctors

District Head Quarter Hospitals will be affiliated to function as training centers to
medical colleges in public as well as in private sector

Enrollment of Nurses will be doubled, therefore, new Nursing Schools would be started
and the existing Nursing Institutions be upgraded and a separate Cadre of male Nurses be
considered for countrywide implementation in consultation with Nursing Council and
Provincial Governments

Tibia/Homoeopathy councils will be made independent administratively and financially
with their separate set up to function smoothly. Moreover, a degree course will be
promoted & the Diploma Curriculum will be improved on scientific basis

Establishment of public health schools for paramedics
3. Hospital Infrastructure and Noncommunicable Diseases

The cardiac, diabetic and other degenerative diseases will be prevented and treated
through investment in hospital infrastructure, health education and awareness

Cancer will be treated through establishment of more cancer treatment centers/hospitals
209

Accreditation/standards (for physical infrastructure, machinery/ equipment, different
specialties with number of beds required, capacity of outpatient care, human resource &
logistics requirements will be established through Pakistan Medical & Dental Council

An independent regulatory authority will be in place for regulating private sector
providing health care services

Prevention and control of non-communicable diseases will be incorporated explicitly in
the poverty reduction strategies

Establish Non Communicable Diseases and Health Promotion Unit in Federal and
Provincial Health Ministries

Tobacco use and tobacco-prevention interventions will be monitored in order to ensure
protecting people from tobacco smoke in public places and work places, help people who
stop using tobacco and warn people about dangers of tobacco

A national plan of action will be developed on food and nutrition with an emphasis on
national nutrition, priorities including control of diet related to non communicable
diseases

Autonomous status to large hosoitals
4. Establishment Of National Health Information And Integrated Disease Surveillance System
5. Mental Health

A Mental Health Coordination Unit and a Technical Advisory Committee having
representation from the provinces/ areas in order to implement, monitor and evaluate the
plan will be formed. The Committee will have experts on community care, substance
abuse, and child & adolescent mental health

The existing mental health law will be reviewed to protect rights of persons with mental
disorders (within the first two years of the plan)

A training program for medical staff at first level care facilities and community
psychiatric nurses/ other allied mental health workers will be implemented. Two medical
officers and three psychiatric nurses per 100,000 populations per year shall be trained
6. Occupational Health and Safety
National Occupational Safety and Health Council will be established to devise and ensure
implementation for welfare and health safety of the labor force.
210
7. Public Health Laboratories

Development, Organization and Management of Public Health Laboratory Network
(PHLN) at national and regional levels, through establishment of Routine, Specialized
and Reference Laboratory Services, Encourage Public Health Related Research and
impart

Training / Education & Human Resource Development
8. Vaccine Production
Vaccines can be produced in Pakistan, either by Shared Manufacture, ready to Fill
Material, Concentrate or from raw material using seed vaccine and seed viruses (Basic
Manufacture). The strategy is aimed to have the WHO verified vaccine production in the
country:

Effective and sustainable financing

Strengthening of current manpower with training and recruitment of experienced
vaccinologist and biotechnologists

Establishment of new GMP compliant vaccine manufacturing facility with latest
machinery and equipment

Increase in the range of vaccine production menu for EPI & non-EPI vaccines through
shared production (short term) and basic production (long term)

Encouragement of Public-Private Partnership with multinational vaccine producers

Establishment of R&D facilities for the development of indigenous vaccine, sera and
other biological products
9. Pharmaceutical

Investment must be made to ensure compliance of the facilities with the
international/WHO/FDA standards. This will be covered under a public private
partnership

Prices of all drugs be linked with CPI index for rationalizing the annual additional cost
effect to the manufactures on continued basis. Review prices, linking it to actual market
costs

Currently those projects/units, which export their annual production directly or indirectly,
with some conditions, are eligible for financing under the scheme of LTF (long Term
Financing). The Pharma sector will be included in the LFT for improved productions and
exports of drugs and medicines
211
10. Traditional Medicine/Alternative System Of Medicine.
Traditional medicines including Homeopathy will be given incentives to increase
production of raw material for producing homeopathy drugs under proper quality control
through the following steps;



Establishment of separate complementary and alternative system and regularization of
Medicines University in the public sector through PC-I
Establishment of National Institute for standards and specifications for medicinal
plants and other formulations
The project initiated by Ministry of food and agriculture for the promotion of
cultivation of medicinal plants should be continued and small farmers encouraged to
grow medicinal plants as an alternate crop to provide quality raw material to the
industry
11. Social Determinants And Public Health

Data collections on social determinants include incidence, burden on health and available
health services to meet the challenge of social changes.

Health promotion and behavior changes through the life span in particular as to aging
using all channels of communication. about health matters and promoting healthy
lifestyles.
12. Health Research

Health Research System in the country through Pakistan Medical Research Council.
PMRC will be strengthened to able to undertake the responsibility of stewardship role in
National Health Research System of Pakistan. The Council will be made fully
autonomous

Funding for health research will be enhanced to 2% of the national health budget and 5%
of health sector project and programs

Establishment & Strengthening of Research Institutions at the District level in all
Provinces.

Funding research programs/ activities in existing institution for training of existent &
eligible Human Resource
13. Trauma and Accidents

Establishment of a central trauma registry so that reliable data could be obtained on
trauma admission as well as their clinical outcomes

Setting up of Disaster Control Management department with communication links to
paramedic services, security agencies and all major hospitals for better macro
management and appropriate distribution of casualties

Accreditation of Trauma Centers and Critical Care Units
212

Include private hospitals in the disaster management to reduce the overwhelming load on
the public sector hospitals

Establishment of pre-hospital care and training of paramedics involved in onsite rescue.
Training of hospital staff and establishment of a triage service with appropriately trained
doctors in charge for appropriate, comprehensive and timely screening of individuals
14. Health Care Financing
The major Health Financing Models which can be implemented during the plan period are:





National Health Service System financed through general revenues covering whole
population with care provided through public providers (General revenues dominate
financing in some 106 of 191 countries).
Social Health Protection and Insurance System with publicly mandated coverage for
designated groups financed through payroll contributions, semi-autonomous
administration, care provided through own, public, or private facilities (Over 60 countries
have established SHI systems).
Community Based Health Insurance: Not-for-profit prepayment plans for health care,
financed through private voluntary contributions, with community control and voluntary
membership, care generally provided through NGO or private facilities.
Voluntary Health Insurance:- Financed through private voluntary contributions to for
and non-profit insurance organizations, care provided in private and public facilities.
User Fees: Charges to individuals for publicly provided services.
Conditional Cash Transfers (CCT): for the health coverage of the poor and
volunerables.
Pakistan will improve health-sector financial management, review the current balance
among health-sector programs, and raise domestic resources for health within their limited means.
It is feasible, on average, for low and middle-income countries to increase budgetary outlays for
health as 2 percent of GNP by 2015 compared with current levels, though this may be optimistic
given intense competing demands for scarce public resources. Public spending should be better
targeted to the poor, with priorities set on the basic epidemiological and economic evidence.
14 (b) Public Private Partnership
A set of norms and ethical principles must be the driving principles for PPP initiatives be
rooted in ‘benefit to the society’ rather than ‘mutual benefit to the partners’ and should center on
the concept of equity in health.
A legislative framework will be developed to legitimize public-private partnerships, to
lend credence to this approach, help to foster an enabling environment and provide a mandate for
the development of ethical guidelines to further direct these initiatives.
213
14 (c)
Social Health Protection
The Social Health protection and Insurance are more feasible options to provide universal
health coverage to the general public as well as vulnerable and the poor masses.
 Public Sector should concentrate on preventive health care, and share responsibility of
curative care with the private sector. The private sector should be regularized and
controlled through the existing rules of Pakistan Medical and Dental Council to check the
quality of health care on the Private Sector

Reasonable user charges i.e charges for OPD diagnostic facilities should be imposed. The
revenue will be retained by the respective hospitals and utilize it according to their
requirements for the hospitals

Vertical programmes like EPI, Malaria, and AIDs, should be integrated, and the resources
should be transferred from Federal Health Ministry to the Provincial Health Departments

Social Health Protection and Insurance will be implemented after thorough assessment
and of its feasibility
Monitoring & Evaluation

Establishment of monitoring & evaluation units at federal and provincial levels

Conduct performance audit for outcome and impact assessment of the policy, plan &
programs
214
Annexure
Table-I
Federal Health Investment Allocation & Utilization 2004-2010
S.#
Item/Component
2004-05
2005-06
2006-07
2007-08
2008-09
(PK Rs. Million)
2009-10
Total 5
Years
1.
Cost
( ) = Foreign aid.
36,833
(3,947)
57,211
(7,443)
100,523
(11,547)
95,544
(9,987)
92,724
(12,775)
111,706
(15,548)
-
2.
PSDP Allocation
( ) = Foreign aid.
6,044
(893)
9,439
(1,038)
11,010
(440)
14,272
(1,584)
19,010
23,154
(2,075)
76,885
(5,137)
3.
PSDP Utilization
5,137
7,740
9,248
12,560
17,109
20,839
67,496
4.
% Utilization
85%
82%
84%
88%
90%
*90%
(estimates)
0.87%
Source: Federal PSDP.
Table-II
Sub-Sector Wise Development/PSDP Allocation (Federal Health) 2004-2010
(Rs. Million)
Sr.#
Sub-Sector
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
1
Preventive
(National+PHC
outlet+NIH) etc .
(Prev)
Hospitals(HB)
5236.470
6641.00
7287.50
9625.30
16201.06
17876.22
649.476
2402.61
3192.50
4190.39
2581.93
4588.96
Human Resource
Development
(HRD)
Health System
Development
(HSD)
Health
Management
Information
System (HMIS)
40.000
99.50
10.00
116.00
111.52
563.06
15.000
38.00
213.00
73.00
24.00
61.00
409.00
0.53%)
30.000
179.00
121.00
48.00
21.00
51.00
420.00
(0.54%)
Health and
Maternal
Research (HSR)
Traditional
Medicine (T.M)
6.271
6.00
110.00
10.00
8.00
1.00
135.00
(0.17%)
-
-
-
5.00
5.00
10.00
20.00
(0.002%)
Nutrition (N)
67.239
73.00
76.00
205.00
57.87
1.84
413.71
(0.54%)
6044.46
(7.9%)
9439.11
(12.3%)
11010.00
(14.3%)
14272.69
(18.6%)
19010.38
(24.7%)
23153.08
(30%)
76885.26
(100%)
2
3
4
5
6
7
8
Total
Total 05
Years
(2005-10)
57631.08
(75%)
16956.39
(22%)
900.08
(1.2%)
215
Table-III
Financial outlay of Health 2010-15
S.No
Item
(PK Rs. Billion)
Total
2010-13
2010-15
A. Federal
1.
Throwforward
40.00
-
40.00
2.
3.
New Projects
Others (PAEC+Cabinet.+Narcotics etc)
1.00
64.50
5.00
64.50
6.00
4.
AJK, NA and FATA
1.00
2.00
3.00
Total (Federal)
42.00
71.50
113.50
B. Provincial
20.00
192.50
212.50
Grand Total
62.00
Source: Federal PSDP and Provincial ADPs 2005-10
264.00
326.00
Table-IV
Sub-Sector Wise Financial Outlay during 2010-15
Sr. No
Item
A.
(i)
(ii)
B.
(i)
(ii)
Total National Allocation for Health
Federal Allocation
Provincial Allocation
Federal Programs
Primary Health Care Program
Health Manpower Development
(iii)
(iv)
(v)
Traditional system of Medicines
Hospital Beds
Treatment and control of Catastrophic and
Non-Communicable Diseases
Mental Health and Drugs Abuse Prevention
Social Health Insurance/ Protection
Occupational Health & Safety
Health Management Information and Integrated
Disease Surveillance system
Vaccines & Production
Safe Blood Transfusion and Public Health
Laboratory system
Trauma and Accidents
Health system and Medical Research
Nutrition
Social Determinants of Health and School
Health Services.
Block allocation
Sub. Total Federal
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
(xiii)
(xiv)
(xv)
(xvi)
(Rs. Billion)
326.00
113.50
212.50
% of the Total
Allocation
100%
34.8%
65.2%
82.25
7.0
72%
6%
1.0
6.0
7.00
0.9%
5%
6%
1.00
1.0
0.50
1.0
0.9%
0.9%
0.45%
0.9%
1.0
1.0
0.9%
0.9%
1.0
0.50
1.0
1.00
0.9%
0.45%
0.4%
0.9%
1.50
113.50
1.3%
100%
Note: Provincial Governments would allocate the resources according to their own Health
Sector Priorities.
216
Table-V
Physical Targets (2010-15)
Sub-Sector
Targets
25
Immunization (Million Children )
ORS (Million Packets)
120
LHWs (Refresher Courses / Training )
50,000
LHWs (new)
30,000
New BHUs
300
New RHCs
100
Strengthening / Improvement of BHUs
5,000
Strengthening / Improvement of RHCs, Civil Hospitals
Mohallah ( Urban) Health Centers
500
1,000
Dispensaries (New)
1,000
Hospitals Beds
50,000
Doctors
35,000
Dentists
Nurses
7,000
50,000
Paramedics
30,000
Source: National Programmes, Provincial Health Departments & PM &DC
Table-VI
Health Indicators
S.
No
1.
2.
3.
4.
5.
ii)
7.
8.
9.
Goals
Units
Infant Mortality Rate (IMR)
Child Mortality Rate (CMR)
Immunization
(i)
Infants12- 23 months
(ii)
Measles Coverage
(iii)
T.T. Coverage of pregnant women
National Programme for Primary Health Care and
Family Planning
(i)
Lady Health
Workers(LHWs)
(ii)
Coverage of Target population
Control of HIV/Aids
Targets
Benchmark
MDG
2009-10
2015
Per 1000
Per 1000
65
77
40
52
%
%
78
90
>90
>90
%
58
>90
Nos
100,000
130,000
%
70%
85%
i)
HIV prevalence among pregnant women
%
0.01
(i)
HIV prevalence among vulnerable group
%
0.02
To be Reduced
by 50%
-do-
Per 100,000
130
45
%
80
85
%
Per 100,000
%
%
50
276
46
65
75
140
>90
100
T.B./ Malaria Control Programme
(i)
Reduce incidence of tuberculosis.
(ii)
TB cases detected and cured under DOTS.
(iii)
Population in Malaria high risk areas using
effective prevention and treatment measures
Maternal mortality ratio
Trained personnel attending deliveries
Pregnant women having at least 3 antenatal consultation
217
Table-VII
10th Plan (2010-15)
Plan of Action for Health Sector
S#
1.
Targets
To bring down
(i)
Infant Mortality
Rate to 43 per1000,
(ii)
Under 5 Child
Mortality Rate to 55
per 1000 and
(iii)
Maternal Mortality
Rate to 150 per
100,000 by 2015.
Strategy
i)
ii)
iii)
iv)
2.
(i)
(ii)
3.
Upgradation of all
BHUs/RHCs.
Provision of
Essential health
services package
(EHSP).
Control of Communicable
diseases i.e. T.B, Malaria,
HIV/AIDS and Hepatitis C.
v)
(i)
(ii)
Program
About 95 million children and i)
45 million pregnant women
will be immunized.
In addition 15 million children
will be immunized against
Hepatitis B.
Control of diarrhea and Acute
Respiratory Infection (ARI) in
children will be improved.
Malnutrition and Micronutrient
ii)
deficiencies (Vit.A, Iron and
Iodine) will be reduced.
Health Awareness campaign by
LHWs and Mass Media
through BCC-component of
the national preventive
program.
The deficient 5000 BHUs
and 500 RHCs will be
strengthened
and
renovated.
Enhancing coverage &
access of the poor to
essential health services.
Strengthen the case detection
mechanism, quick diagnosis and
prompt treatment.
Strengthen the T.B. Control
Program through implementation of
directly observed therapy short
course (DOTS) strategy.
Promotion of the safe blood
transfusion at all the DHQ Hospitals
and establishment of Screening
Centers.
Interruption of Sexually Transmitted
Diseases.
i)
ii)
iii)
The EPI project costing
Rs. 26 billion will be
continued including
Rotavirus vaccine,
provision of free ORS
and Zinc Sulphate, and
provision of iron
supplements and deworming medicines for
children.
Training and deployment
of 130,000 LHWs.
Provide
medicine,
staff and equipment.
Power
supply
/
Generator.
Renovation
of
Infrastructure.
Malaria Control program at a
cost of Rs. 658.625 million is
under implementation.
TB Programme with new
strategy of DOTS for T.B
control treatment at a cost of
Rs. 1 billion is under
implementation.
A Programme at a cost of Rs.
7.00 billion to prevent and
control AIDS at the national
and provincial levels is under
implementation.
218
S#
Targets
Strategy
Program
4.
To provide basic health i) 100,000 Lady Health Workers are
services to the underserved
already trained and deployed in
population
and
Urban
the field. During the plan period
slums.
1,30,000 LHWs will be in place
in the field.
ii)
All first level care facilities
(FLCF’s) will be upgraded and
strengthened
by
enhanced
pay/package, training of staff,
supply of drugs & equipment.
5.
Strengthening and
upgradation of Hospitals
and specialized care
facilities with a focus on
noncommunicable/catastrophic
diseases.
The secondary and tertiary hospitals
will be upgraded by providing the
specialists, diagnostic equipments,
specially for detection of NCDs,
medicines and addition of new
hospital beds.
An investment of Rs. 14
billion is proposed for adding
40,000 beds and provision of
diagnostic & medicines at all
levels of care for NCD’s.
6.
Development of health
manpower, (Training of
Doctors, Nurses and
paramedics).
Human Resource Development
Cells will be established.
An investment of Rs. 7 billion
is proposed for strengthening
of all councils and capacity
development of health care
providers.
Capacity of Pakistan Medical and
Dental Council, Pakistan Nursing
Council, College of Physicians and
Surgeons, Tibbia and Homoeopathy
Councils will be enhanced.
Number of Nurses and other
professionals will be increased.
Two to three District Headquarter
Hospitals will be attached with the
Medical Colleges both in public and
private sector for training facilities.
i)
LHW program will
be extended up to
2015 to maintain the
achievements with
estimated cost of Rs.
53 billion.
Improvement
of
existing
Nursing
Institutions
and
establishment of Nursing
colleges at 27 Divisional
Headquarters.
Vacant post of Nurses will be
filled.
Posting of qualified Nurses in DHQ
Hospitals.
7.
Functional Coordination of
all Health Workders will be
improved at BHU and
RHCs level.
Multipurpose training will be
imparted to the Health Workers
working in the BHUs/ RHUs.
A provision of Coordination
and integration will be made in
the LHWs nurses program.
8.
To promote mental health
awareness in society and to
reduce the demand for
substance abuse.
To Establish Mental Health Cell at
MoH.
Strengthening of Resource Centers
and establishment of Detoxification
centers in 60% DHQs, Prisons and
Hospitals besides training of health
manpower.
Capital investment of Rs. 2
billion is proposed for
strengthening
of
existing
mental health program.
219
S#
9.
Targets
Introduction of Social
Health Protection/
Insurance
Strategy
Program
Establishment partnership through
provision of resources, technical
expertise
or
outreach.
Such
partnerships present a mechanism
for achieving a range of desired
health outcomes by leveraging the
strengths of partners.
- A programme for Health
Protection Card/Insurance is
proposed during the plan
period on pilot basis which
will be replicated later on at
the country level. Rs. 2.00
billion are proposed as an
initial investment.
- Funds have been earmarked
in different programs for
public private partnership. The
same funds will be utilized for
consolidation
and
strengthening of philanthropy
in provision of the health
services.
To frame Legislative and Policy
Environment for active involvement
of the philanthropy in public health
program and services.
10.
To ensure availability of
Medicines/Drugs
Strengthening of Drug Regulatory
Authority and Strengthening of
Public Private partnership
An investment plan of Rs. 1.00
billion is proposed for the
strengthening of institutes of
pharmaceutical
personnel
training and other allied
facilities at all levels.
11.
To promote Health
Research at all levels.
-
Strengthening
existing
institutions related to Health
research through funding and
Human
Resource
Development.
To Co-ordinate with other
institution related indirectly
with health concerns/ issues
e.g. Narcotics, Road safety
etc for efficient sharing of
information
and
data
regarding various issues.
To
attract
Foreign
Investment
in
Health
research.
To
increase
Budget
allocation for research.
- An investment of Rs. 0.5
billion is proposed for the
purpose.
Coordination
between
various
stakeholders
of
OH&S at provincial &
federal level.
Establishment of National
OH&S council for steering
& identification of standards.
Awareness, health education.
Advocacy
An investment of Rs. 0.500
billion are proposed in the Plan
Period.
-
-
12.
To enhance capacity with in
health sector for
upgradation of occupational
Health related activities.
-
-
-
220
S#
Targets
13.
To increase the HMIS /
Disease surveillance
capacity.
Strategy
-
To strengthen the existing
HMIS at all levels.
To integrate all activities
relating to HMIS and disease
surveillance
by
establishment of central
repository at National as well
as at provincial levels.
To
strengthen/
upgrade
laboratory
facilities
at
National/ Provincial levels
for early detection/reporting
of diseases.
An investment of Rs. 2.00
billion
is
proposed
to
strengthen NHIRC at National
level and setting up of similar
facilities at Provincial level
and setting up of laboratory
facilities.
To establish a cell for tracking
activities and social determinants of
Health to coordinate with all stake
holders effectively.
An investment of Rs. 0.50
billion is proposed. MOH will
co-ordinate
with
all
stakeholders particularly WHO
for pooling of resources in this
behalf.
-
-
14.
To enhance intersectoral coordination for better health
outcomes at all levels.
15.
To establish a central apex
body to guide research
needs regulate quality
standards and registration
procedures for herbal drugs.
16.
1.
2.
3.
Rationalization of funding
as percentage of GDP.
Program
1.
Establishment
of
complementary and alternative
system
of
Medicine
University.
Establishment of National
Institute for Standards and
Specifications for Medicinal
Plants.
An investment of Rs. 1.0
Billion has been proposed.
Revival of National Commission on
Macroeconomics and pursue the
policies in the sector consistent with
international
requirements
for
allocation of funds.
To increase health expenditure
to 1% of GNP by 2012 and 2%
by 2015. An investment of Rs.
0.5 billion is proposed to
enhance the capacity of the
health personnel engaged in
programmes/ projects at all
levels for better utilization of
funds.
2.
Calculated from PSDPs 2005-10.
Health care Financing/ Health Insurance, GTZ, 2008.
DFID- 2009-10.
221
222
4.5
1.
Promoting Role of Women in Economic Development
Introduction
Women are significant contributors to economic growth, constituting 48 percent
population. To enable them to contribute their protection, well-being, development, empowerment
and participation will have to be ensured.
Pakistan has committed to meeting the MDGs and is also signatory to Convention for
Elimination of all forms of Discrimination against women. Despite that women continue to be
victims of violence, neglect, and injustice. The Plan will address these inherent problems through
Women Empowerment by looking at gender as a cross-cutting theme.
2.
Situation Analysis
Pakistan's ranking by GDP is higher compared with Human Development Index
implicating the fact that economic development effects have not trickled into human resource.
Also Gender Development Index is even lower than the human development index depicting that
half of the population does not meet the standard in access of opportunities, resources and
benefits between men and women are skewed.
The MDG - 3 for improvement in Gender Parity Index for primary, secondary and
tertiary education are on track, but progress on MDG - 2 are faltering. The Global Gender Gap
Index provides overall gender disparities in economic, political, education, health combined
together. Change in GGI trend is given in the following table:
Comparing Trends in Global Gender Index, 2005
Country
Pakistan
Bangladesh
India
Malaysia
Score
0.545
0.658
0.615
0.646
2009
132
94
114
101
2008
127
90
113
96
2007
2005
126
100
114
92
112
91
98
72
There is serious lack of data on women indices and most of information remains under or
unreported. Given these short comings the available information still indicates high maternal
mortality, malnutrition, low literacy and education, unemployment and access to economic
opportunities.
Women's Autonomy & Empowerment
Education, employment and exposure to mass media are some of the parameters which
reflect women status in the overall social context. Status and autonomy are two important aspects
of women's empowerment. The autonomy and empowerment is dependent on her participation in
household decision making, mobility, ownership of property and freedom to spend and her role in
the society. Therefore literacy, education, employment specially outside home, exposer to media,
health and access to other resources are some dominant aspects of women development.
In women of child bearing age a diet that is insufficient to meet great demand of closely
spaced pregnancies and prolonged lactation are threat to her nutritional status. Lack of decision
making power within the household, thus would lead to manifestation of food insecurity and unwanted fertility and poor health. Health indicators generally have shown improvement overtime,
but incidence of MMR, IMR, Malnutrition, among women remains unacceptably high.
223
Literacy education and skill development still remains low. Female labor participation
rate is 19.6 percent against male participation rate of 69.5. In public sphere majority of women
work as unpaid family labor in agriculture and hold low paid, low skill jobs, at lowest tier of
industrial labor force in urban area. Occupational segregation characterizes that women are
concentrated in certain sectors (i.e. agriculture, services) and within the sector hold lower
positions. Women who are counted as employed include employees, self employed, unpaid
family helpers and generally engaged in low skilled low wage economic activities. More than half
of women earned less than 60% income as compared to men. Bulk of female labor force is engaged
in informal sector are not covered under legal protection and labor welfare institutional
mechanisms. In urban informal sector 67.5% women work in diverse manufacturing mostly as
home based or casual workers on exploitative wages or employed as domestic workers on
extremely low remuneration. The women have hardly any knowledge of labor laws, are not
unionized therefore unable to exercise their rights. Unpaid female family workers rose from 53%
in 2003-04 to 65% in 2007-08.
The constitution ensures equality before law, equal protection of law equality of
employment, maternity benefits during employment and equal access to public places. However,
most constitutional rights have not been given statutory effect through special laws to protect
women. All major labor laws use the word worker, person, or employee but in all legislative text
masculine is used. Except maternity benefit rules, there are no special laws to protect rights of
women at workplace. There are no laws containing provision of (a) equal remuneration for equal
work (b) protection of women from sexual harassment at workplace (c) protection of labor rights
of domestic workers and home based workers.
Violence Against Women
Despite improving educational levels and consistent economic growth, violence against
women including female harassment, abduction, trafficking, and domestic violence has been
increasing.
Majority of women confront sexual harassment at work place due to inferior social and
economic status. Almost % of women working in different sectors (hospitals, banks, offices,
factories, brick kiln, private homes (domestic workers) faced sexual harassment.
MTDF Review
An amount of Rs.4.10 billion has been earmarked for undertaking programmes for
women's social, economic and political empowerment for direct implementation by MoWD.
Against planned allocation of Rs.902 million about 22 percent have been utilized. The low
utilization has been due to design problems and implementation of the development programs.
The major programs implemented during the MTDFare CEDAW implementation follow
up, National Plan of Action for Women and Gender Reform Action Program (GRAP) started in
2005. The achievements of these programs still remains to be assessed for further follow up
during the Plan.
224
The achievement of MTDF in terms of economic, social and political empowerment of
women are given below and project details enclosed at Annex-I:
MTDF Targets
Sub Sector
I.

II.
Percentage
Achievement
Economic Empowerment
Micro-credit advanced and skill training
116,713
96,815
83
imparted(No.
of women
beneficiaries)
Social
Empowerment
through
Protection,
39,500
27,557
70
2,100
3,034
144
Rehabilitation and Crises Management:
Medical,empowerment:
Legal aid and psycho-social
Ill.  Political

counseling
(No.
of women)
Development
Services
to elected
representatives (No. of elected women)
3. Challenges and Issues
The major challenges for women development and empowerment are:

Discriminatory laws, parallel legal system and ruling of Jirgas, Panchayats impede
realization of equal citizenship to women

Neglect of human security due to state centric approach to security

Religious extremism and potential violence against women due to patriarchal
understanding of religion and culture in conflict areas

Non-recognition of women work in rural areas and informal sector in GDP

Lack of access to resources, basic facilities and entitlements: economic, social and
political

Ineffective representation of women's issues and concerns in policy formulation and
implementation process

Exclusionary and musculatory attitude of state machineries and governance mechanism

Exclusion of gender consciousness in hard sectors

Dimensions of gender gap in education

Inadequate health and reproductive outcomes for women
4. Approach To The Tenth Five Year Plan
The Tenth Five Year Plan envisages to end the multifaceted exclusions and discriminations
faced by women and provide an enabling environment to every woman to develop her full
potential and share the benefits of economic growth, prosperity and social development. Strategies
and policies have been outlined to enable women to be partners in their own development through
participation in the plan formulation, implementation and monitoring. The roadmap for this has
already been laid in the National Policy on Women 2002 providing guidance in this regards, and
follow up CEDAW implementation.
225
The Tenth Plan recognizes that traditionally development agenda have prioritized
productivity rather than the human rights of women, security and social policies view women as
victims (of conflict) rather than empowering them as active citizens, and that the current Plan
cannot be made out of the context of emerging scenario in the recent past. Understanding that
women are not a homogenous group; they belong to diverse communities, economic groups, and
are located within a range of geographic and development zones. Consequently, some groups are
more vulnerable than others. Mapping and addressing the specific deprivations that arise from
these multiple locations is essential for the success of planned interventions. Thus apart from the
general programme interventions, special targeted interventions on the differential needs of these
groups will also be undertaken during the Tenth Plan.
The gender perspectives incorporated in the plan are the outcome of extensive
consultations with different stakeholders, including academicians, researchers, women activists,
program managers, data management experts and legal experts in public and private sectors from
each province and the federal areas. These consultations were further divided into five thematic
groups for more focused deliberations and concurrently covering all aspects of women
development and empowerment. The plan recognized women as equal citizens and agents of
economic and social growth and development. The theme of gender equity adopted in the plan
stresses that policies and interventions need to be designed across the sectors to provide the women
with (i) basic entitlement (ii) access to all amenities for their development potential (iii) protect
them against all forms of violence and discrimination; physical, economic, social, psychological (iv)
opportunity for participation in the decision making at all levels and (v) make existing institution
functional and creating new ones for inclusive policy formulation, implementation and monitoring of
impact.
A set of very focused objectives emanating from the plan approach are as under:
Objectives

Women's right to autonomy be linked to ownership of movable and immovable
property

Provide women unimpeded access to legal and labour rights and resource

Protect women's unequivocal right to equal and independent citizenship that span
across the inherent right and removal of discriminatory laws

Protect women's daily lives, mobility and livelihood generally, while specifically in
conflict! insecure areas

Urgent redressal of patriarchal customs and traditions such as honor killing and
domestic violence

Stop and prevent neo-patriarchal practices such as routine, forced coercion to
restricting women from public service and their mobility and growing vigilantism
and punishment in the name of religion

Redressal of disproportionate access to health, education and other services
Strategies

A holistic approach to formulation, implementation and dissemination of impact of
protective measures for improving daily life of women will be adopted

Legislative package to protecting women's rights in daily life covering each sphere
will be designed/documented and widely disseminated
226

Enforcement machinery made gender sensitive to improve implementation

Practices based on illegal cultural family and customary norms be disseminated and
analyzed visa-a-vis legislative package and its impact on individual, community,
country and humanity highlighted

A multidimensional strategy will be adopted to Enhance power and decision making.
It would comprise affirmative action, capacity building programs at various levels/
institutions, assessment of public programs/institutions supported with corrective
policy measures in the Judiciary, politic, executive and evolving a pragmatic
Research agenda for policy decisions

Capacity building of intuitions to integrate gender perspective in the development
process to strengthen Women's population in decision making position

A section on gender responsiveness in national budget in all sectors

Some research topics should be, studied for designing future policy:

Benefits of quota at all levels and its expansion to judiciary

Effectiveness of capacity building projects and state women machineries

Undertaking research which bridges gaps between theory and practice

Evaluation of program and institutions

Interlinking of legislative formulation with effective enforcement through
strengthening of state apparatus and capacity building of women workers through
skill training and unionizing would be effected

Legal empowerment of women will be enhancedthrough a set of policies and
measures:

Enforcement of Protective and amendment/ repeal of discriminatory laws

Providing free legal access

Full participation of women in democratic process at all levels

Awareness raising

Monitoring women specific crimes
Program Rationale
To achieve Five Year Plan objective, women issues have been discussed in the sub themes
included in the Tenth Plan on Women Development and empowered. These themes are identified
from the fact that women concerns are crosscutting in all social and development sectors of the Five
Year Plan and the recommended policies will integrate gender issues systematically for redressal.

Human Security and Conflict

Power and Decision-Making within the Household, Community and Political/Public
Sector

The Judicial System; Women's Legal Rights and Entitlements

Economy, Poverty and Livelihoods

Governance and Institutional Mechanisms
227
I.
Women, Security and Citizenship
The present major threat to the security emanates from the internal factors of poverty,
illiteracy, unemployment, disease, inequalities, environmental disasters, rising extremism and
militancy. Human security has been neglected due to state-centric approach to security. This
imbalance needs to be corrected by bringing people at the centre of the security discourse, policy
and the practices.
Conditions of human security impact men and women differently due to their unequal
socio-cultural, economic and political positioning in the society. Natural and human made disasters
and conflicts have differential impact on men and women due to difference in their roles,
responsibilities, access and control over resources and power. Women's vulnerabilities are
exacerbated in conflict situations. Therefore, special attention be paid to address women specific
security issues in the context of the state, the community, the market and the family.
Women are not a homogenous group. Their gender identities intersect with their class,
ethnicity and other social positions, therefore, all women do not have similar security situation and
issues. Inter-sectional approach to gender to be adopted to address the issue of Women, Security
and Citizenship.
Religious extremism and political violence pose greater and specific security risk to women
due to the centrality of women's bodies and sexuality in patriarchal understanding of religion and
culture. Women are targeted and attacked in conflict areas. Educational institutions for girls are
destroyed and women's mobility in public arena strictly restricted.
There are different dimensions of constraints to women security at different levels:
At state level: (i) Presence of discriminatory legislation and absence of protective laws for
women. (ii) Male domination and masculine culture of state institutions such as judiciary and law
enforcement agencies. (iii) Low financial investment on women's human development; education,
health, skill development, access to land, credit, family income, political participation and
representation in decision-making bodies. At communities level these are:
(i) Cultural violence against women such 'honor killing'. (ii) Collective decisions of community
leaders denying women to have identity cards and register as voters, and stop them to claim their
share in family wealth and inheritance. (iii) Customary laws and the informal judicial systems e.g.
jirgas.
At family level: Women are subject to various forms of domestic violence and abuse. They
are not given equal share in family wealth and property despite the legal entitlements.
At Market level women (i) working in agriculture in rural areas and (ii) home based
workers in urban areas are not protected by labor laws and are not entitled for fringe benefits. In
the globalized economy the labor has become flexible (part-time, temporary, causal) and
informal. This has marginalized women workers.
II.
Power and Decision Making Within the Household, Community & Political Public
Sector
Social and political decision-making affected by general law and order situation has led
to ineffective representation of women's issues and concerns in policy formulation and
implementation process. This has resulted in a wide gap between actual and targeted women's
rights. Enhancing women's decision making powers at all levels (household, community,
governmental) is necessary to protect women rights. Parallel legal systems such as jirgas and
privatization of religion target women and affect women's constitutional rights adversely.
228
Increased quotas in parliament, provincial assemblies and union council levels did not
yield practical benefits to women constituents due to lack of devolution of actual decision making
powers. Male politicians have not turned gender sensitized and attitudes in political parties and
councils has not changed. Patriarchal attitudes and lack of democratic norms within political
parties have suppressed the voices of women in overall political arena and party policy and
decision-making.
Political parties view women as a passive vote bank, following the dictates of men within
their families or clans. Even within their own parties, they treat them largely as followers to be
strategically used for election canvassing and public campaigns.
III.
The Judicial System; Women's Legal Rights & Entitlements
Realization of Women's full and equal citizenship rights are hindered by: (i) Retention of
discriminatory laws. (ii) Parallel legal systems such as the Federal Shariat Court and Nizam e Adl
Regulation. (iii) Rulings of jirgas for unconstitutional and illegal practice.
The non-enforcement of protective laws and regulations for women and lack of access to
justice and widespread ignorance of legal provisions hampers progress towards equal rights.
Women have right to vote and contest elections and avail reserved seats. However,
procedural impediments such as disparate electoral registration and non-issuance of identity
cards, prevents their equal participation in the democratic process.
Lack of commitment to pro-actively remove non-state judicial systems has resulted in
blatant violations of women's human rights. Under false excuses of customs, traditions and
arbitrary interpretations of religion, women's rights to impartial and constitutional legal recourse
are sacrificed. Mechanisms facilitating Alternate Dispute Resolution can become subsumed under
cultural or political pressures.
IV. Economy, Poverty and Livelihoods
Women's contribution remains unaccounted in the GDP, particularly the rural women's
work and informal sector in urban economy. In addition, females of all ages bear the burden of
unpaid, unacknowledged care work. Women's poverty is linked to their lack of access to resources
(i.e. land, credit) and deprivation of basic facilities (i.e. education, health, skills) and public goods
(i.e, information, legal rights) rooted in structural and gender inequities in society. Female labour
force participation rate is 19.6 percent, 75 percent women are employed in agriculture, livestock,
forestry and fishing (compared to 37 percent men). Women in certain sectors and employed in lowpaid, low-skill jobs at the lowest tier of urban labour market. Of women who are counted as
economically productive, 65 per cent are unpaid family workers. Those .in wage employment, earn 60
per cent of the income of men. Majority of women workers have hardly any knowledge of labour
laws and do not access labour judiciary and are not organized or unionized.
Emphasis on economic growth and development, instead of human centered development
have sharpened structural inequities including gender inequity in terms of women's access to decent
livelihoods and employment.
Agriculture is the mainstay of rural population, where women having major share.
However, due to lack of land ownership, women are not recognized as farmers, therefore, lack of
access to agricultural puts and services.
229
Lack of access to land, preference to cash crops, chemical fertilizers and patenting of seeds
- instead of subsistence farming, organic methods, and natural seeds - have rendered women
agricultural workers food insecure and poorer.
Pakistan has not ratified key ILO conventions for gender equality at work place- Workers
with Family Responsibilities Convention No. 156 (1981), Home Work Convention No. 177 (1996),
Maternity Protection Convention No. 183 (2000).
Ban on labour inspection, lack of women access to labour judiciary and violations of
labour laws have increased. Majority of women confront harassment at the work place
V.
Governance and Institutional Mechanisms
Existing state machineries and governance mechanisms are exclusionary and have
patriarchal mind-set. Policy and programmes are ineffective. Exclusion of gender consciousness in
the 'hard' sectors (such as energy, trade policy and finance) has restricted women's issues to 'soft'
sectors.
There is lack of capacity and a coherent clear mechanism to link all state machineries viz.
Ministry of Women's Development (MoWD), the National Commission on the Status of Women
(NCSW), Women Committee in the Parliament, Provincial Women's Development Departments
(WDD), and with women's non-governmental organizations. Therefore, effective linkages between
clear cut roles, functions and responsibilities cannot be assessed with reference to women's rights and
their development concerns.
Effective monitoring of the inherent rules of business of the MoWD and other
institutions does not prevail. MoWD have ineffective linkages and influence over the integration
of women specific concerns in all departments and ministries.
Implementation role and responsibility
The overall implementation of program and policies given in enclosed Matrix at
Annexure - II, however some specific program, policies and activities.
Under the Tenth Plan budgetary allocations will be made for publicity through MoWD
and monitoring by NCSW providing adequate infrastructure for effective implementation of this
legislation. The NCSW will establish adequate linkages with provinces for monitoring of
Protection of Women and Domestic Violence Act. The MoWD will ensure the review or
enactment of the bills referred in the Plan with consultation of stakeholders and concurrence of
the NCSW.
The Tenth Plan will support inter-regional networks to check trafficking of womens and
children. Very specific measures for capacity building development of training modules on
trafficking for law enforcement agencies, judiciary, and other government functionaries. More
rehabilitation homes will be established, however promoting as national program for provision
of shelter, medical and legal assistance.
The Plan will specially promote women's support to legal services through Shaheed
Benazir Women centers for victims of violence, destitute etc. Women legal awareness programs
will be carried out at provincial levels. Alternate dispute settlement mechanisms for quick and
efficacious settlement of cases at local level will be made responsive and more effective. The
Plan will also propose reforms for gradually increasing the percentage of women in legal judicial
and law enforcement services. Training on use of gender specific laws will be provided to all
members and authorities involved in the providing legal services.
230
Institutional mechanisms will carry forward the process of gender mainstreaming. The
National Commission on Status of Women (NCSW) will be strengthened for their effectively
role as autonomous organization for the protection of rights of women. The roles of all agencies
including NCSW for comprehensive implementation of women programs and providing their
more functional and financial autonomy and statutory base to strengthen their legal status.
Gender Budgeting and gender outcome assessment will be institutionalized across all
ministries and departments provincial levels. Gender Development Budgeting analysis for
differential impact of the budget and apply for more clear gender commitments in policies and
programs. Gender Budgeting Cells in all ministries and departments will be created. Data from
these cells will be collated on a regular basis and made available in the public domain. Cost
benefit assessment of programs will be pursued as part of the annual review of the sectoral
investments as development budget. At present no estimation exists on the women development
programs. The Planning Commission will take necessary arrangement to carryout such analysis
as regular exercise of the planning process.
Planning Commission will facilitate national level gender outcome assessments through
spatial mapping of gender gaps and resource gaps. They will undertake gender audits of public
expenditure, programs, and policies, and ensure the collection of standardized, gender
disaggregated data at national and provincial levels. Capacity building initiatives will be pursued
to make all national policies and programs gender sensitive and their effective incorporation in
the planning, monitoring and evaluation.
Emerging Policies & Programs
A. Policies
Intersectional approach to gender and security and transformative approaches to gender
training and gender mainstreaming to be adopted at the country level through a set of policies
and affirmative actions. The overall policy components would be: (i) Repeal of discriminatory
legislation. (ii) Legislation to improve women's access to family resources and inheritance. (iii)
Banning of anti-women cultural traditions and norms e.g. karo-kari. (iv) Dismantling of Parallel
informal judicial systems. (v) Speedy justice to survivors of violence.








Gender balance in financial allocation will be corrected to bridge the gender gap in
social sector
Review the need for expanding women quota in judiciary, legislation, statutory bodies,
advisory commissions, trusts, etc. bureaucracy etc.
Women empowered to develop their own constituencies and political power bases
A review of the effectiveness and flaws of Alternate Dispute Resolution mechanisms in
place and to ensure these are working in the true spirit of providing quick, free and
impartial justice to women and the marginalised
A systematic review and unconditional repeal of all discriminatory laws against women
and minorities
A mechanism to register informal sector workers and home-based workers should be
instituted and issuance of workers' identity cards be delegated to NADRA to feed in to
the national citizenship database
Labour inspection system is restored and strengthened. Labour judiciary is strengthened
in terms of infrastructure and human resources and made women-friendly
Strong, clear linkages, roles, relationships and functioning of all national machineries
which carry the responsibility for the advancement of women. These include, the
MoWD, the NA Standing Committees (especially those delegated on women's
231











concerns), the NCSW, WDDs. Their mutual and overlapping agendas and outcomes of
these institutions and mechanisms be evaluated streamlined. This must be financial as well
as for efficiency and effectiveness
Increased devolution of decisions and financial empowerment of women at council
levels
Peace Teams - Women's peace teams be formed to tackles specific concerns for women
IDPs
Response Teams - setup a formal channel (rather than individual MNAs or MPAs) for
constant flow of information from council levels to the women parliamentarians on
women's issues
Encourage women politicians for taking principled decisions on women's issues even
when such actions contradict the party line
Zero tolerance of harassment and violence against women in all public spaces and
occupations be applied
Change in Political Parties Act to make it mandatory for political parties to bring 33%
women in decision -making positions within the parties
All political parties need to give 33% tickets to women candidates
Land is redistributed to rural women and defined as farmers to have access to inputs and
extension services
Labour laws be amended to (i) include agricultural and informal sector workers and
allow them to form associations; (ii) ensure equal remuneration for equal work
The MoWD and all State Women Machineries (SWMs) require periodic in-house and
indepth reviews of their own mandates, roles, functions, obstacles and linkages within
and between themselves as well as in relation to other ministries, departments. These
must include measurement of qualitative understanding of members of not just their
technical roles but of women's rights and methods to promote them through policy
effectively
The MoWD should have a more dynamic role and capacity towards policy making
across all ministries and departments. This would lead to its upgrading politically, as
well as in financial and programmatic allocations
B. Programs










The existing support institutions for the survivors of violence will be strengthened and
more effective support mechanisms (Shelters, crisis centers, free legal aid, counseling,
rehabilitation support etc) are created
Information Management System (MIS) developed to collect systematically national
level data on violence against women
A section on gender responsiveness in the national budget and gender responsive
budgeting in all sectors
Capacity building of the institutions (public sector, private sector and civil society) to
integrate the gender perspective in the development process to strength women's
performance in decision making position
Developing guidelines, materials and trainings,& lobbying for women's rights
Gender sensitization workshops to be revised and implemented
Awareness on the rights of women and its protection through media
Gender awareness and gender equality be included in curriculum in schools and
universities
Leadership development programmes for women to promote confidence and teach them
to occupy power positions
Campaigns to promote awareness of existing legislation and measures that promote
232





women's rights as well as support systems and remedial measures that enable access to
legal redress
The establishment of free legal aid cells in all District & Sessions courts as well as High
Courts to provide free legal aid to women; provide waiting rooms and toilet facilities for
women in court premises. Legal aid should be made available within women's prison
premises
Skill up-gradation centers in female-dominated economic sectors (i.e. agriculture,
livestock, aqua-culture, textile and garments, light manufacturing, food processing) are
established in identified rural and urban centers and women enabled to enroll
Gender-segregated data in all sectors and categories of economic activities is
enumerated, defined and included in Pakistan Labour Survey, Pakistan Economic Survey,
Household Integrated Economic Survey and Agricultural Census 2010 onward
Institutionalization of transformative gender training at all public/private sector
institutions including codes of conduct of behavior that respect and ensure the promotion
of women's rights
Gender impact assessment in all the PC-Is
Plan Provision
Rs. 11 billion have been estimated for the following programs:
Cost (billion Rs.)
Programme
Cost (billion Rs.)
1.00
O
Gender Reforms
O
NGO support
O
O
Provincial sharing
Awareness Raising
1.5
O
Research
0.50
O
Support institutions for survivors of violence.
O
Information management system
O
Support to NCSW and other autonomous institutions.
O
Establishing disaggregated data system.
O
Gender impact assessment in all sectors.
O
Capacity Building Institutional
O
O
Skill development programs
Monitoring women specific crimes
1.00
1.00
2.00
0.50
1.00
0.20
0.05
0.25
1.50
0.50
233
234
4.6.
Labour, Employment and Skill Development
Employment & Poverty Reduction
Employment is the critical link between economic growth and reduction in poverty and
income inequality. It is now increasingly recognized, based on cross-country experiences, that the
creation of productive, remunerative and decent employment is the key mechanism through
which the benefits of growth can be distributed to the poor segment of the country. Essential to
ensuring this is a well functioning, equitable and rights based labour market. A well functioning
labour market is also essential for creating a sound and attractive investment climate by
overcoming skills shortages and ensuring a regulatory framework that provides flexibility to
employers to adjust to changing labour market demand while at the same time providing
protection and security to workers.
Employment is the outcome of the growth process. The employment goal therefore needs
to be embedded in the growth and development strategy rather than added as an adjunct later on.
It is this approach which has been adopted in the Tenth Plan (2010-15) with the employment
objective as an integral part of the 10th Plan macro, sectoral and poverty reduction strategy.
Past Trends Including MTDF 2005-10
Labour Force Participation Rate (IFPR) and Unemployment
Trends in labour force participation and unemployment rates (as shown in Figure)
indicate that post-1993 till around 1999 unemployment levels remained round 5 percent
(compared to historical trend of 3 percent) but then rose sharply reaching a peak of 8.27 percent
in 2001/02. It then fell during 2003/07. However, after reaching a low point of 5.2 percent in
2007-08 it rose again to 5.6 percent in 2008-09 as the economy slowed down.
Female suffer from higher level of unemployment than the male. The decline in the
unemployment rate since 2003-04 has been accompanied by a substantial rise in the unpaid
family helpers particularly in case of female.
Figure 1: Unemployment Rates by Sex
20
18
16
14
12
10
8
6
4
2
0
1996-97
1997-98
1999-00
2001-02
Male
2003-04
Female
2005-06
2006-07
2007-08
Both sex
235
Education Specific Unemployment Rates
In case of females, the data for 1997/06 suggest a positive association between the level
of education and the rate of unemployment, in contrast to 8% unemployment rate of the illiterate
females the matriculates and the graduate females were suffering from 14.62% and 12.5%
respectively for the year 2005/06. Similarly male graduates and post-graduates exhibited higher
levels of unemployment compared to illiterates in 2005/06. This association between levels of
education and unemployment rates is yielded by all the labour force surveys as reflected by the
table below. An inter-temporal comparison indicated a perceptible rise in the unemployment rate
of the educated male, during 1997/06. While 5% of the graduates were reported to be
unemployed in 1997/98 the corresponding proportion for 2005/06 was 7%. For the year 2005/06
the unemployment situation for the educated eased somewhat, compared to 2003/04 with a
decline in their unemployment rate as given below in the table.
Table 1: Unemployment Rates by Sex and Level of Education
Education
Level
Both
Sexes
Illiterate
5.4
Primary
5.5
Middle
7.1
Matric
7.2
Intermediate 8.1
BA & above 5.0
1997/98
2001/02
Both
Both
Male Female
Male Female
Sexes
Sexes
3.3 13.3
6.6
5.2 11.0
7.5
4.7 21.3
7.4
5.8 20.2
8.0
6.1 28.6
9.8
8.6 16.2
9.3
5.5 41.3
10.4 9.3 21.2
9.7
7.0 17.7
12.5 9.7 21.9
10.0
4.5
7.9
8.8
6.9 23.0
8.9
2003/04
Male Female
5.6
7.0
8.6
8.1
8.3
7.7
15.0
20.0
22.7
25.3
20.3
16.5
2005/06
Both
Male Female
Sexes
5.7
4.6
8.0
6.0
5.5
5.8
5.4
7.6
7.0
14.62
8.1
7.0
7.0
6.2
12.5
Source: Tabulations based on Labour Force Survey data.
There is a rise in the refined activity rates in 2007-08 compared to 1995-96. A closer
perusal is suggestive of increased participation rates of teen-agers, particularly of females. This
hardly fits with the expected rise in school enrollments.
Table 2: Refined Activity Rates
Sex
1995/96
1998/99
2001/02
Both Sexes
41.25
43.34
43.34
Male
69.10
70.48
70.32
Female
11.39
13.92
14.44
Pakistan Economic Survey and Pakistan Labour Force Survey
2003/04
43.74
70.61
15.93
2007/08
45.17
69.54
19.59
Employment Structure
The sectoral trends in employment (Table 3) suggest that the contribution of agriculture
declined from above 50 per cent in the early 1990s to the low 40s towards the end of the last
decade. Service sector activities were major contributors while manufacturing a minor
contributor in incremental employment generation. In contrast during the same period,
agriculture’s contribution to the GDP had declined from 26 per cent to 21 per cent. By the end of
the last decade, crop farming contributed under a 10 per cent of the GDP compared with 15 per
cent in the early 1990s. This implies that agriculture remained a reserve of low productivity jobs
and under-employment.
236
Table 3: Distribution of Employed Persons of 10 Years Age and Above by Major Industries
(Percent)
Years Agriculture Mining &
Construction Electricity
Transport Trade Others
Manufacturing
& Gas
Distribution
1990 51.15
12.84
6.38
0.59
4.89
11.93 12.22
1995 46.79
10.50
7.21
0.82
5.07
14.50 15.12
2000 48.42
11.55
5.78
0.70
5.03
13.50 15.02
2005 43.05
13.80
5.83
0.67
5.73
14.80 16.12
2008 44.65
13.11
6.29
0.70
5.46
14.62 15.17
Source: Federal Bureau of Statistics
Formal/Informal
The trend towards informalization and casualization of the workforce is only partly
driven by the regulatory framework in the formal sector. Agriculture remains the largest absorber
of labour – and as shown above as a “sink” for underemployment. Within agriculture there has
been a steady trend towards self-cultivation and a decline in share-tenancy. While the overall
prevalence of rural landlessness has remained steady, the decline in share cropping tenancy has
corresponded with a rise in casual labour in agriculture. The decline in landless tenancy is driven
by a combination of regulatory incentives, fragmented holdings, steady introduction of
mechanization, and the inability of the landless poor to make a transition to fixed lease rentals.
New forms of casual labour contracts in harvesting and other farm operations have emerged,
reducing livelihood and food security among the landless poor.
Informalisation and casualization also experienced a rise in the non-agriculture sectors.
Whereas the share of formal sector employment shrunk from 35 percent to 27 percent in case of
male and from 33 percent to 27 percent in case of female during 2000 to 2008. Trade and services
in urban small scale manufacturing areas acted as a labour market sponge and enhanced
informalisation of the urban labour market.
Table 4: Distribution of Workforce by formal/informal and gender
Sector
1999-2000
2007-08
Male
Agriculture
Non-Agriculture
Formal
Informal
44.43
55.56
19.01
36.55
36.87
63.12
17.15
45.97
1999-2000
Female
72.93
27.14
9.29
17.79
(Percent)
2007-08
74.98
25.07
6.86
18.22
Growth-Employment-Poverty Linkage
Important lessons and conclusions based upon the vast literature on the subject can be
summed as follows:

Pakistan’s historical growth experience clearly shows that there is no simple linear
relationship between economic growth, employment generation and poverty
alleviation. We have periods of high economic growth, as in the 1960s, with rising
237
poverty levels. We have seen periods of low economic growth, as in the 1970s,
accompanied by improvements in poverty levels. We have periods of high economic
growth, as in the 1980s, with significant poverty reduction. And we have periods of
low economic growth, as in the 1990s, accompanied by significant increases in
poverty levels.

While a number of factors interact to explain these different outcomes, five factors
clearly stand out. First, where growth has been accompanied by an improving
employment and labour market situation it has led to a decline in poverty. Second,
the terms and conditions of work are important. Where growth has resulted in
improvements or increases in real wages, poverty levels have been favorably
impacted. Third, overseas migration, mainly of skilled and semi-skilled workers and
resulting remittances has a favorable impact on domestic employment by generating
demand in labour intensive sectors and reducing poverty. Fourth, the relative
bargaining position of land-owners and tenants and between employers and workers,
impact on real wages, conditions of work and poverty. And, fifth the structure of the
economy as represented by the ownership pattern of land holdings and control over
manufacturing and financial assets has important implications for employment and
poverty outcomes. It is also important to see that it is a combination of these five
factors which explains growth, employment and poverty outcomes and it may be
misleading to see each in isolation of the others.
Ensuring equal access to decent employment opportunities is a key to ensure that the
benefits of economic growth reach everyone in society. Moreover, the right to work, rights at
work, access to social protection and social dialogue – which are the basic elements of decent
work – should be available to all. Full employment provides a pathway out of poverty and
reduction in income inequality. Empirical studies results show that redistribution of income has a
positive effect on employment and social welfare of the poor.
Income share of first quintiles for overall Pakistan has increased from 7.62 % in 2005-06
to 7.89% in 2007-08 and income share of fifth quintiles has increased from 45.03 % to 46.77%
for the same period. Share of second, third and fourth quintiles have decreased from 11.35%,
15.41%, 20.59% to 11.23%, 14.47% and 19.65% respectively for the same period. Gini21
coefficient which is widely used inequality measure has increased from 0.336 in 2005-06 to 0.345
in 2007-08, implying income distribution has worsened.
Table 5: Income Inequality Measures
Gini Coefficient
Income share (%)
First Quintile (%)
Second Quintile (%)
Third Quintile (%)
Fourth Quintile (%)
Fifth Quintile (%)
Ratio Highest to Lowest
21
22
2005-06
0.336
2007-0822
0.345
7.62
11.35
15.41
20.59
45.03
5.91
7.89
11.23
14.47
19.65
46.77
5.93
Gini Coefficient is more sensitive towards middle income groups.
The latest Household Integrated Economic Survey (HIES) is available and published in 2010.
238
Real wages as per Labour Force Survey data at the aggregate level yielded a very low
trend growth rate of 0.7 percent for 1990-2007 period. The disaggregated picture of wage
structure, however, revealed substantial diversity which further exacerbated during the period
under review. Pentile distribution of wage earners suggested that bottom three groups accounting
for 57% of total wage earners in 2006/07 experienced a straightforward real wage decline during
1990 to 2006/07 while those at the top remained immune from real wage cut. Gini index of wage
distribution worsened from 0.34 in 1993/94 to 0.39 in 2006/07. In general trend growth rats were
lower for those workers already lying at the lower rung of wage hierarchy such as agricultural and
informal sector employees.
Current Scenario of Employment and Unemployment
On the basis of estimated population of 164.64 million for the year 2009-10 and the
participation rate of 32.17 percent as per the latest Labour Force Survey 2007-08, the labour force
is estimated at 52.96 million. Of the total labour force, males constitute 41.75 million or 78.83
percent whereas females are 11.21 million or 21.17 percent. Of the total labour force, 50.21
million are employed while 2.75 million persons, who constitute 5.20 percent of the labour force,
are unemployed. Out of total unemployed persons, males are 1.80 million or 65.34 percent while
females are 0.95 million or 34.66 percent. The unemployment rate among females is higher i.e.
8.52 percent as compared to males, which stands at 4.31 percent.
Employment Projections: Tenth Plan (2005-10)
Based on projected GDP growth rate and employment elasticity (Annex-1) with respect
to GDP, it is expected that employment level in the country in the terminal year of 2014-15 would
reach to 56.71 million, compared to benchmark level for 2009-10 of 50.21 million. As regards
labour supply, based on projected average population growth and some increase in the labour
force participation rate, labor supply has been assessed to reach to 61.33 million in 2014-15,
compared to bench mark level of 52.96 million for 2009-10.
Based on the envisaged GDP growth rate of 5.5 percent and employment elasticities, the
creation of new job opportunities have been estimated at 6.5 million implying increasing
unemployment rate from 5.2 percent to 7.5 percent during the plan period. It is based on a
projected average GDP growth rate of 5.5 per cent over the five year period and an implied
employment elasticity of around 0.45. Envisaged growth rate and projected employment elasticity
would lead to employment growth of around 2.5 per cent which, being lower than the projected
growth of labor force, would result in increasing unemployment rate. Sectoral contribution to
additional job creation (Annex I) indicates that 40.20% of additional jobs will be created in the
services sector, followed by trade (16.88%), agriculture (16.30%), manufacturing (9.91%) and
construction (8.21%).
It maybe seen that unemployment is projected to rise from 5.2 percent to 7.5 percent,
which would be socially unacceptable. Every effort needs to be directed towards reducing this
level of unemployment. With the present set of policies and the pattern of growth, it would take a
growth rate of roughly 7 to 8 per cent per year to absorb the new entrants into the labour force
during the Plan. Alternatively, with the projected growth rate of GDP of 5.5 per cent during the
plan period, a drastic change in employment policy sufficient to raise the employment elasticity
would be required. A strategy to increase the capacity of the economy to absorb available
manpower by focusing on activating the potential of the labour-intensive sectors is developed for
the plan.
239
Table 6: Employment Projections
Year
Population
2009-10
(Bench
Mark)
2010-11
2011-12
2012-13
2013-14
2014-15
164.64
167.60
170.62
173.69
176.82
180.00
Labou
r
Force
52.96
53.97
55.32
57.16
59.18
61.33
Employed
Labour
Force
50.21
51.18
52.31
53.60
55.08
56.71
Unemploye Unemploym
d Labour ent Rate (%)
Force
without
policy
intervention
2.75
2.79
3.01
3.56
4.11
4.62
(Million)
Unemployme
nt rate (%)
(10th Plan)
with policy
intervention
--
5.2
5.2
5.4
6.2
6.9
7.5
----5.2
The employment strategy of the Plan will certainly reduce the employment pressure in
labour market during plan period. It is expected that 1.45 million additional jobs will be created
through labour intensive employment strategy of the 10th Plan.
Additional jobs creation will be helpful in reducing the unemployment rate during the
plan period. Overall, job generation during the plan period is estimated at 7.95 million, hence
reducing the unemployment rate from 7.5% to 5.2% in the terminal year of the Plan.
Table 7: Employment Generation
1. Employment increase associated with 5.5 percent growth in GDP
2. Additional employment generation with Plan strategy/Direct Measures
------Development of livestock
--- --Development of SME
----- Self employment promotion schemes
------Skill generation programmes
--- --Rural employment policies
----- Others including employment generation in construction and other sectors
Total
(Million)
6.50
0.15
0.3
0.2
0.3
0.2
0.3
7.95
Employment Strategy of The Tenth Plan (2010-15)
The key objectives of the employment strategy for the Tenth Plan are as follows:

Creation of more and better job opportunities for men and women

Promotion of sectors in which the country has comparative advantage and that are
employment intensive – agriculture, export industries (agro-based) small-scale
manufacturing, construction and social services

Creating an efficient and well functioning labour that reduces skill shortages and
mismatch
240

Minimum wage to be periodically adjusted and enforced

Provision of Microfinance at a wide scale to promote small and micro enterprises and
self-employment

Skill development based on public-private partnership

Striking the best possible balance between flexibility in the labor market for enabling
enterprises to adjust while providing security for workers
Although accelerating GDP growth is crucial to expanding employment opportunities but
prudent policies are required to manage demand and supply sides of labour force in order to
achieve higher levels of employment. On the demand expansion side the most potent force is
GDP growth along with the pursuit of sector specific policies aimed at the growth of labour
intensive sectors. On the demand side, macro economic policy framework must be such as to
facilitate accelerated GDP growth. The supply side interventions should be in the field of
enhancing the skill endowment of the labour force; efforts should be made to identify gaps in
skills and to provide training to make available the skills that are in short supply. The labour
market should be made more flexible to enable a shift of labour force from the informal to the
organized sector. With projected economic growth rate along with labour activation and
protection policies, the plan envisages to improve income distribution and to generate 7.95
million jobs during the plan period.
1.
Employment Expansion Policies
Employment expansion policies are based on accelerating the rate of growth of the
economy along with special emphasis on development of relatively more labour intensive sectors.
Counter-Cyclical Employment and Demand Management
The debate about demand management appears to have been settled for now in favour of
counter-cyclical intervention. This means that in periods of economic down-turn the government
should borrow and spend – on capital and current consumption – in order to boost demand and
jump-start recovery. What is required over the period of the plan is a comprehensive and
systematic counter-cycle response. An employment guarantee programme may be effective way
of addressing this concern. The underlying principle of an employment guarantee programme is
public commitment to offer work at a low wage for a specified number of days - or
unemployment support in the failure to provide work. Such programmes which are also known
as workfare have the advantage of being counter-cyclical – people withdraw themselves from the
programme as economic activity picks up. The programmes are also self-targeting, since
individuals with better remunerative opportunities elsewhere will not offer themselves for work at
low wages. It can be combined with productive projects for local infrastructure, local roads,
draining and canal cleaning, such programmes can contribute to valuable infrastructure
development as well as acting as effective income transfers.
Public Investment-Employment Linkages
There needs to be closer employment tracking of existing and proposed public
investments. Currently the mechanisms at the disposal of monitoring and audit authorities are
241
imprecise and often based on notional data. This pattern needs to be reversed within the life of
the current plan. Planning and monitoring of projects must include rigourous accounting of
employment generation. Employment generation needs to be accorded higher priority in project
selection. There needs to be a system for ranking projects that generate high levels of
employment, with additional weightage to employment generation in backward and underdeveloped districts during the plan period.
Employment Activation Policies
For diversification and raising the productivity levels, skills are absolutely necessary.
Since Pakistan intends to move towards high-tech industries and the world scenario is changing in
which export orientation will be the only viable strategy, the quality of products will have to be
improved significantly. This is possible provided there is an improvement in skill composition.
Training activities need to be improved and transformed.
Here emphasis would be given to improve the labour skills endowment in general, paying
particular attention to identifying specific skill gaps and taking effective steps to fill them. Credit
would be given to the skilled persons for starting their own business.
Sectoral Policies
Agriculture
Agriculture sector and allied industry (livestock, poultry and dairy) is employing 45 percent
of total labour force and its contribution toward GDP is 20%. It is recognized for disguised and
underemployment and most of unpaid family helper are also engaged in agriculture. However,
this sector still needs to play an important part in increasing productivity and incomes while
maintaining its labor absorptive capacity.There is need to increase the productivity for growth of
this sector to overcome underemployment and unpaid family helper problem. GDP growth
originating in agriculture is two to four time more effective in raising income of poor and
employment then GDP growth originating outside this sector.
A diversification of agriculture towards fruits, vegetable, edible oils and activities such as
livestock rearing for meat and milk products is expected to increase the employment potential in
agriculture sector. The off-farm demand for labour would also increase for maintenance of
agriculture equipment.
A number of projects have been initiated to develop water resources, such as raising the
crest of Mangla Dam and construction of Gomal Zam Dam, Mirani Dam, Subak Zai Dam, Basha
Dam and Sat Para Dam. Similarly, Thal, Rainee and Kachi canals are being constructed to take
water to the areas where huge quantities of land remained un-cultivated. These programs would
go a long way in reducing poverty and providing more jobs to rural workforce.
Manufacturing
In Large Scale Manufacturing, Textile sector is labour intensive and this can be verified
by the fact that compared to the share of textile in the manufacturing output is 25 percent, its
share in the manufacturing labour force is 46 percent. However, not all the textile sub sectors are
labour intensive. Yarn is highly capital intensive and garments is very labour intensive. Low
242
productivity and poor quality of product can be overcome through increased availability of
quality of human resources.
Leather products are labour intensive and Pakistan has a comparative advantage in this
industry. However, the industry suffers from various problems including lack of design institutes
in Pakistan. The development of leather cluster is expected to give boost to this industry during
plan period
.
Light engineering is also a labour intensive and Pakistan has a comparative advantage in
this sector. Due to high tariff on the basic raw materials, this industry has failed to grow.
Rationalization of tariff may be helpful in growing of this industry and generating employment.
The small scale manufacturing can generate at least five times more jobs with same
amount of capital than large scale enterprises. Availability of credit to improve the equipment,
upgrading of the skills, and better marketing can be helpful in growing of small scale industries.
When small units are complementary to the large units, it needs to be ensured that sub-contracting
is being promoted. Extending all the benefits to the sub-contractor available to large producers
would be quite helpful in this regard. The institutional base for planning and promotion of smallscale industry would be strengthened during the plan period. By implementation of plan strategy,
this sector is expected to create additional job and help in reducing pressure in job market.
Construction Sector
The construction sector has high employment elasticity and its demand is derived through
level of investment in the country. High level of growth requires larger investment resulting
increase in demand for construction sector. One of the main areas of construction is the housing
sector. Government intends to provide housing facilities to the poor resulting creation a lot of
employment opportunities for unemployed. A toll based programme for construction of roads
would be undertaken for employment generation during the plan period. Additional jobs are
expected in this sector by implementation of the plan strategy.
Job Creation in Social Sectors – Health and Education
Pakistan’s growth and demographic scenarios demand significant expansion in the
provision of social services such as health, education and welfare. While many emerging service
providers who offer increasing numbers of jobs to new labour market entrants – young men and
women – are in the private sector, there is great pressure too on the public sector to provide
employment. Various public-private partnership models that have worked well at the local level
need to be piloted and scaled up to sponsor a large increase in the number of jobs for young
people in the social sectors.
Services Sector
This sector all over the world absorbs most of the skilled labour. The sector has a small
organised/formal component and a large informal low productivity, low incomes, poor working
conditions -- component. The challenge is to improve productivity and incomes in the latter.
This will be done through skills upgradation and access to credit to the smaller informal units. As
the employment elasticity in this sector is also high, more resources towards skill development
are helpful for the development of the sector and generating employment opportunities for skilled
workforce. This sector includes education sector, telecom sector, information technology (IT),
housing construction, transport sector, urban transportation, domestic commerce, and tourism.
243
Government is cognizant of employment generation potential of this sector and will try to
facilitate by investing huge amount in the sector. The software industry is skill intensive and
would be helpful in providing employment to youth. In this regard, youth should be given access
to quality computer education through prudent policies initiatives.
Overseas Employment
One factor that allowed countries to reduce poverty and to improve income distribution
despite a weak growth-employment linkage is overseas employment, which has been an
important feature of Pakistan’s experience. In 2008, for example, the flow of workers abroad was
over 400,000. This amounted to around 28 per cent of the total addition in the size of the
domestic workforce between 2006-07 and 2007-08.
Using conservative assumptions about the length of stay abroad it is estimated that the
stock of Pakistani workers in non-OECD countries is around 1.6 million. The total number of
Pakistani residents in OECD countries amounted to around 575,000 individuals in 2000. Even if
one out of every three Pakistanis in the OECD countries were a worker (others being students or
non-working family members) the total number of Pakistani workers abroad would be around 1.8
million. This amounts to 3.39 per cent of the total domestic workforce and 3.58 percent to total
employed in the economy.
Government of Pakistan is making every effort to boost overseas employment to decrease
the magnitude of unemployment in the country. In this regard, MoUs have been signed with
number of labour importing countries. A separate Overseas Pakistani Division has been
established to facilitate overseas workers. Community Welfare Attaches (CWAs) have been
deputed in all the Embassies of Pakistan, located in major labour importing countries, to protect
the rights of Pakistani workers. Boosting of overseas employment may be helpful in reducing
pressure on job market during the plan period.
2.
Improving Functioning of the Labour Market
Labour Market Information / Labour Market Services
Labour market information system in Pakistan at present is in diarray and largely
dysfunctional. Neither the employer is aware of the availability of talents nor the job seekers are
aware of the openings and since the closure of the employment exchanges their hardships have
increased. Private sector employment promoting agencies will be encouraged in addition to reestablishment of employment exchanges in the public sector. Academic institutions such as
universities and colleges will be persuaded to develop the system to track their graduates in order
to assess the employability of the graduates produced achieving a close link between university
and industry. Labour market information system thus created will be equipped with all these data
and will ensure a reduction in the skill mismatch.
“Flexicurity” in Labour Markets
Pakistan needs to move towards an optimal combination of labour market flexibility and
security during the plan period. This will require a review of existing labour laws and regulation
with the view of reducing incentives for the creation of small and impenetrable formal enclaves.
At the same time there needs to be paid greater attention to labour regulation and possibilities of
collective bargaining for the vast pool of labour in agriculture and the non-agricultural informal
244
sector. A second key dimension of an optimal balance is enhanced social protection for workers
across the board, that is not linked to particular jobs. Labour policy of the government announced
on May Day 2010 improves the situation.
Box:
Labour Policy
In an effort to apply principles of social justice in the world of work, the government
announced a Labour Policy on 1st May 2010, with the following relevant features:
1.
Raising of Minimum Wages by 16% from Rs. 6000 of the previous year to Rs. 7000
per month. Payment of wages should be made through cheques/bank transfers in all
establishments registered under any law
2.
In order to monitor the implementation of labour laws pertaining to wage payments,
working environment and time, Tripartite Monitoring Committees will be set up at
district, province and federal level
3.
Labour Market Information system will be established through creation of Human
Resource Centres at different cities
4.
Contract employees within public sector will be regularized
5.
Initiation of a comprehensive social insurance scheme on self registration/voluntary
basis for all workers and self-employed in the economy for old age benefits
6.
Establishment of a Board to review the cases of workers dismissed under the
Removal from Services (Special Power) Ordinance 2000
7.
Schools run by Workers Welfare Fund (WWF) are to introduce Matric Technical
Scheme for skill development
Local Labour Arbitration
A key challenge is to open up and make the labour market more equitable to individuals
regardless of their gender, social status and prior political or social advantage. A segmented
labour market, with coercive labour arrangements at its bottom end, will perpetuate unequal
economic and social outcomes even through periods of growth and employment generation. The
linkage between skills and earnings is also dampened through the existence of personalized
labour relations. There is a dire need in Pakistan for much improved labour market information
and exchange systems, and these too can make a major contribution to labour market efficiency.
Three related proposals are made in this regard for the plan.
Labour arbitration and information systems need to be established within sectors and at
the local level. Prominent early candidates for the establishment of arbitration and information
systems are tenant farming and brick kilns, which are known, a priori, for the prevalence of
forced and bonded labour. Workers and employers representatives along with local civil society
activists should run arbitration and information systems within the prescribed legal framework.
Pilot projects can be initiated in selected districts for replication and scaling up during the plan
period, and other sectors and localities can be added.
245
Arbitrators and information system managers (representatives of workers, employers and
local civil society) need to be trained and sensitized to issues relating to social marginalization as
well as child welfare.
Centres for the registration of workers seeking employment should be set up on a pilot
basis in selected localities, and these should be linked with employment opportunities using
computerized databases. The local outreach of employment exchanges and registration centres is
needed to ensure effectiveness.
Affirmative Action for Women Workers/Entrepreneurs
Affirmative action policies for women workers and employees, as well as women
entrepreneurs need to be put in place during the plan period. Public sector investments create
employment during their construction phase and also on a recurrent basis. Along with the
tracking of employment generation there needs to be additional tracking of gender dimension of
job creation of public investment. Projects with a particularly high female employment effect
should be prioritized. In this regard, special windows may exist for women entrepreneurs in the
SME sector.
Strategic Technical Vocational Education Planning
There is a need to upgrade technical and vocational education and strategic planning for
emerging labour demands during plan period. The emerging need for young trained workers in
the social sectors (particularly health and education) has already been highlighted. There are two
important strands to the reform and upgradation of TVE in Pakistan.
First, strategic planning needs to take account of emerging sectors, industries and
locations of future economic opportunity within and outside the country. Pakistan’s natural
comparative advantage in a number of sectors will become salient through investments currently
in the pipeline. These include the coal industry and energy production, natural gas exploration
and transmission, marine fisheries, as well as a range of social sectors. The political feasibility of
a number of inward investments will be influenced by the efforts that are made to mobilize local
youth for remunerative and skilled employment in these sectors. In addition, depending on the
resolution of regional political disputes new economic opportunities with respect to neighboring
economies will need attention to mutual complementarities. All these strategic employment
considerations are in addition to the already acknowledged issue of anticipating patterns of
overseas labour demand.
The second important area of reform, particularly with respect to the skill requirements of
the SME sector is based on the insight that the traditional ustaad-shagird system combines
training with the cultivation of a personal bond. The weakness of impersonalized labour market
institutions in many growing sectors of the economy – particularly SME – implies that there is a
need to combine some of the advantages of the traditional system along with the advantages of
modern training and education
National Vocational and Technical Education Commission (NAVTEC)
National Vocational and Technical Education Commission (NAVTEC) has been
established at the Federal level with a view to overcoming the problems of lack of
standardization, skill gaps, non-availability of proper curricula, poor quality of instructional staff,
inadequate accreditation/certification and poor infrastructure. The commission will encourage
246
private sector to enhance technical education and vocational training capacity in order to bring
harmony and develop linkage between technical education and vocational training. It is hoped
that prudent policies of the Commission would be helpful in overcoming the skilling problem
during the plan period
Skill Development Councils
In order to develop skilled labour force on modern lines, five Skill Development Councils
(SDCs) have been established; one each at Islamabad, Karachi, Lahore, Peshawar and Quetta.
The SDCs assess the training needs of their geographical areas, prioritize them on the basis of
market demand and facilitate training of workers through training providers in the public and
private sectors. It is hoped that these Councils would meet the diversified training needs of the
industrial and commercial sectors during the plan period.
Credit Facility for Self Employment
The second policy option to activate the labour market is to provide credit facility for self
employment/business. Numbers of schemes are active to provide credit for self employment and
it is expected that these credit schemes will also play a due role to activate labour market during
Plan period. The plan strategy is to boost self employment for generating additional jobs during
the plan period. Presently, the following main schemes are active in this regard:
3.
Creating Decent Employment
Interventions to Slow Down Casualization in Agriculture
Going by past trends agriculture’s share of total employment is likely to decline by
around 5 percentage points over the plan period. The sector would still remain the largest single
employer. Another trend that will continue at an even faster pace is the displacement of the
landless poor from self-employment in agriculture, as the option of landless tenancy becomes less
available. There are equity and efficiency concerns with respect to this trend. Given the rigidity
in the land market, landowners with surplus land (perhaps because of their diversified or
urbanized livelihood options) make land available to tenants on fixed lease rentals from which the
poor are effectively excluded due to capital constraints.
There is an opportunity to slow down the casualization of agrarian labour, and intervene
on behalf of the poorest segments of the rural population, protecting their access to livelihoods
and food security. Agricultural tenancy regulation has led to the decline of the offer of sharetenancies to the landless poor, as landowners fear dispossession. For a more active tenancy
market – in lieu of a more efficient land sales market – tenancy regulation needs to be brought in
line with the current requirements.
The landless poor’s opportunities for access to land can be further expanded through
market-based interventions. Organizations (NGOs, RSPs, cooperatives) can be facilitated to act
as intermediaries between landlords (or state land) and the landless poor. The organizations can
sign fixed lease rentals with private landowners or the state and then sub-let smaller plots along
with extension and micro-credit service to the landless poor on a share-cropping basis.
247
Minimum Wage
The government has recently announced a raise of 16% in the minimum wages. The
extent to which this increase generates an acceptable living standard for wage earners and have
shared the growth in GDP have to be assessed, a task to be accomplished in future wage
legislation. Furthermore, the minimum wage fixation will be subjected to a tripartite deliberation
process at regular intervals to protect the living standards of the workers and wider dispersal of
growth benefits. Implementation lapses will be focused upon through streamlining the inspection
system.
Employee Protection Policies
Social protection includes labor market interventions (labor market regulations, programs
and wage setting rules), social insurance programs (such as pensions, unemployment and family
benefits, sick pay), social assistance (transfers in cash or kind, subsidies and workfare), and
programs to assist especially vulnerable groups (disabled people, orphans and vulnerable
children, etc.).
Pakistan needs to move towards an optimal combination of labour market flexibility and
security during the plan period. This will require a review of existing labour laws and regulations
with the view to balancing incentives of workers as well as employer. At the same time there
needs to be paid greater attention to labour regulation and possibilities of collective bargaining for
the vast pool of labour in agriculture and the non-agricultural informal sector. A second key
dimension of an optimal balance is enhanced social protection for workers across the board that is
not linked to particular jobs. The following are employee protection policies:

Efforts are made to put in place an efficient, equitable and rights based labour market that
provides mechanisms to allow productivity growth in the economy to result in real wage
increases for production

Minimum wage law is enforced and minimum wage is being changed according to
economic situation

Employees Old Age Benefits Institution (EOBI) and Provincial Social Security
Institutions have been providing social protections to industrial workers since long

Public Sector Benevolent Funds & Group Insurance provides “Benefits Grants”, “Group
Insurance” and “Benevolence Funds” to all the employees of Public Sector. It is financed
by the monthly deductions from the employee’s salary

Zakat fund provides a monthly subsistence allowance and a rehabilitation grants is given
to all the needy Muslims

Bait-ul-Mall fund has different projects like Individual Financial Assistance, Free Skill
Development, Food Support Programme for helping the needy people

Gender equality and empowerment of women is being promoted through Gender Reform
Action Plan Programme (GRAP) of Ministry of Women Development
248
Strengthening Tripartite Mechanism
Employers and workers organizations will be encouraged to develop a mutually
beneficial programme keeping in view the conditions of the economy. Trade unions will be
persuaded to enlist the participation of the informal sector and home-based workers. Employers
will be apprised of the efficiency gains of a happy and well-paid workers. The Tripartite
mechanism will be taken on board by the government while making labour market related
decisions.
4.
Special Interventions
Public Works Programs and Khushal Pakistan Programs
Public Works Programs and Khushal Pakistan Program (PWP/KPP) as an outcome of
enhanced Public Sector Development Program involving the Parliamentarians will influence the
job creation. Project selection will be geared towards more labour-intensive ventures such as farm
to market roads, social forestry and other labour-intensive activities. Documentation of additional
employment generation through these measures will be attempted to determine the advisability of
these projects.
Employment Generating Schemes in Less Development Areas
Special employment generation schemes for less developed regions will be undertaken.
These will contribute a comprehensive package of identification of the projects, the credit needs
as well as the training measures to upgrade the human capital development. The package will also
include the marketing of the produce of these less developed regions in order to combat the lack
of effective demand.
SME Bank
.
SME Bank is established to provide financial assistance and business support to small
and medium enterprises. Up to 31st December, 2009, SME Bank has financed 8,299 SMEs,
disbursed loans amounting to Rs.9,510 million to 40,891 beneficiaries in the country.
Micro Credit Facilities Through Khushhali Bank
The Khushhali Bank was established to provide loans up to Rs.30,000/- each to
unemployed people to set up their own business. Up to 31st December, 2009, the Khushhali Bank
(KBL) disbursed loans amounting to Rs.22,481 million to 2,038, 004 beneficiaries while the
KBL loans recovery is around 97%.
President’s Rozgar Scheme by National Bank of Pakistan (NBP)
The solution of Pakistan’s major socio-economic problems primarily lies in the
development and growth of small & micro businesses. These will not only provide employment
opportunities to ever-growing population demand but will also become the catalyst for breaking
the vicious circle of poverty. In this regard, NBP has developed a full range of products under the
President’s Rozgar Scheme with a brand name of “NBP KAROBAR”. Under this scheme, an
average loan size of Rs.100,000/- will be given for a maximum period of five years with a grace
period of three months.
249
250
Annex-1
Employment Generation (2010-15)
Sector
2009-10 (b)
2010-11
2011-12
2012-13
2013-14
2014-15
Em.G
22.42
22.62
22.83
23.07
23.29
23.48
1.06
16.30
Mining & Quarrying
0.06
0.06
0.06
0.06
0.06
0.06
0.00
0.02
Manufacturing
6.52
6.61
6.72
6.85
7.00
7.17
0.64
9.91
Electricity &Gas
0.35
0.35
0.36
0.37
0.37
0.38
0.03
0.45
Construction
3.16
3.23
3.31
3.43
3.55
3.69
0.53
8.21
Wholesale & Retail Trade
7.34
7.52
7.72
7.95
8.19
8.44
1.10
16.88
Transport & Communication
2.74
2.79
2.87
2.97
3.09
3.21
0.47
7.23
Finance and Insurance
0.71
0.72
0.73
0.74
0.75
0.76
0.05
0.82
Agriculture
Community and Services
Total
6.91
7.28
7.71
8.18
8.79
9.52
2.61
40.20
50.21
51.18
52.31
53.60
55.08
56.71
6.50
100.00
Employment Elasticities & Sectoral Growth Rates
2009-10 (b)
2010-11
2011-12
2012-13
2013-14
Employment
Sector/Year
Agriculture
Mining
Manufacturing
Elect &Gas
Construction
Retail Trade
Transport
Finance
Services
Total
Elasticity
0.24
0.20
0.30
0.34
0.60
0.60
0.58
0.25
0.90
0.45
Share
2014-15
Sectoral Growth Rate
3.9
2.1
4.7
3.2
3.8
4.1
3.4
4.6
6.1
4.3
4.0
2.4
5.5
3.9
4.4
4.5
4.5
5.5
6.5
4.9
4.1
2.6
6.5
4.8
5.6
4.8
5.9
6.2
6.8
5.5
4.1
2.9
7.4
5.9
6
5.1
7.0
6.7
8.2
6.1
4.1
3.0
8.3
6.5
7
5.4
7.3
7
9.5
6.6
251
5. Integrated Planning for Energy Development: Affordable Energy
5.1
Critical Review of the Past
Introduction
Since development of energy resources and major electricity generation technologies
have long lead times, spanning over many years, therefore, it is essential to look fifteen to twenty
years ahead for ensuring secure and affordable supply of energy, particularly electricity. The
critical need for sufficient, reliable and affordable energy supplies has been further highlighted
since May 2007, when for the first time sustained inability to meet the electricity demand started
in Pakistan. Shortages have seriously affected the economic & industrial development as well as
the social & political environment of the country. As shown in Figure 1, GDP growth has
followed the growth in supply of both energy and electricity and vice versa.
Figure 1: Pakistan’s Economic, Energy and Electricity Growth (1990-2009)
Figure 2: Planned and Actual Generation Capacity Pakistan
Planned for 2010 in 2005
(MW)
Actual as in June 2010
(MW)
Hydel
7,720
6,555
Thermal
18,420
13,691
Alternate Energy
880
6
Nuclear
400
400
27,420
20,651
Total
Source: PEPCO, KESC, PC 2005
Realizing the importance of secure supply of energy/ electricity, Government of Pakistan
prepared a national Energy Security Action Plan in 2005. This was included in the Government’s
Mid Term Development Framework (MTDF) 2005-10 document. The installed electricity
252
generation capacity as suggested for 2010 in this plan and what does actually exist in 2010 are
shown in Figure 2.
Had timely actions been taken according to the plan, the devastating shortages would not
have occurred! The energy crisis has its roots in the developments that took place or did not take
place during the last ten to fifteen years. Therefore, this plan document will also concentrate on
very essential and urgently required reforms, which must be carried out as soon as possible, to
ensure that plans made are also actually implemented.
The tenth five year plan will give consideration to the energy/ electricity situation
forecasts both domestically and internationally over the next 15 years but will focus on the next 5
years.
Review of the Past
Unlike other activities for economic development, production of energy resources and
electricity generation is measurable in tons, tons of oil equivalent (TOE) or GWhs. Hence, in
order to plan for the future, it is necessary to review the past in detail so that lessons learnt will
form the basic guide lines for actions to be taken in future. This will ensure that plans are
practical and actually implementable.
Fuel Sector
The following tables give supply of various fuels in Pakistan in the past 5 years.
Figure 10: Production and Import of Various Fuels & Energy Sources in Pakistan
(MTOE)
Energy Production
Oil
Gas
Coal
Indigenous Production
of Crude Oil
Import of Crude Oil
Import of POL
Total Consumption
Gas Production
Coal Production
Coal Imports
2003-04
200405
2005-06
2006-07
2007-08
2008-09
3.0
3.3
3.20
3.3
3.4
3.2
8.1
5.4
16.5
25
1.5
1.8
8.6
5.9
17.8
28
2
2.2
8.9
6.2
18.3
29
2.2
1.9
8.5
8.4
20.2
29
1.6
2.8
8.7
9.2
21.3
30
1.8
3.9
8.3
10.1
21.6
30
1.7
3.0
Source: Pak Energy Year Book 2009 (HDIP)
253
Figure 11: LPG Supplies in Pakistan
(Million Tons)
Source
Refineries Production
Local Production From
Field Plants
Imports
Total
2003-04
0.225
0.155
2004-05
0.219
0.193
2005-06
0.213
0.345
2006-07
0.212
0.371
2007-08
0.214
0.363
2008-09
0.196
0.311
0.035
0.415
0.040
0.453
0.0248
0.582
0.065
0.648
0.023
0.601
0.059
0.567
Source: HDIP: Pak Energy Year Book 2009, page 74
Figure 12: Quantities and Percentage of Various Fuels used in Generation of Electricity in
Pakistan
(TOE)
Fuel
2003-04
Coal
Furnace oil
Diesel oil
Gas
2004-05
0.083
2.600
0.063
9.500
0.080
3.300
0.056
10.306
200506
0.067
4.000
0.032
9.978
2006-07
0.074
6.500
0.045
8.640
2007-08
2008-09
0.073
6.740
0.168
8.493
0.050
7.210
0.174
7.830
Source: Pak Energy Year Book 2009 (HDIP)
Graphically)
% Share
0.03
47.37
1.14
51.45
(Also
Figure 13: No. of Oil & Gas Wells Drilled in Pakistan and success rate
Oil & Gas Wells Drilled
No. of Wells
Since 1868 to 2009
743
Oil & Gas Discoveries
223
Source: Global Power Review
Figure 14 : Exploration & Production Sector Achievements During Last Five Years
Year
Explorati
on
licenses
granted
Exploratory
Wells
Drilled
Appraisal /
Development
Wells
Total
Discoveries
2004-05
23
19
28
47
12
2005-06
33
33
31
64
8
2006-07
17
36
41
77
17
2007-08
12
26
54
80
11
2008-09
3
27
59
86
5
Oil
Million
Tones
(BOPD)
3.24
(66079)
3.21
(65577)
3.21
(67438)
3.43
(69954)
3.22
(65845)
Gas
Million
Tones
(MMCFD)
31.46
(3685)
32.75
(3836)
33.07
(3873)
33.9
(3973)
34.2
(4002)
Source: DG (PC)
254
The primary energy supplies has grown-up at an average rate of 3.3% during 2004-9, the
total primary energy supplies in absolute term has increased from 58.0 million tones of oil
equivalent (MTOE) during 2005-06 to 62.5 MTOE in 2008-09. Detail are as follows:
(a) Oil and Gas
The above Figures show that Pakistan has remained an energy deficient country in spite
of good geological prospects of oil and gas with a sedimentary basin of 827,268 sq. km. The
success rate of drilling for oil and gas has been as high as 30%, which is amongst the highest in
the world. Another potential area in oil and gas discoveries is the vast continental shelf in the
Arabian Sea.
Pakistan filed its claim on the vast extended continental shelf measuring about 54,000 sq.
km in April 2009. The claim which extends to 350 nautical miles into the Indian Ocean is on the
portion of the continental shelf located south of the Indus River delta. This is in addition to the
240,000 sq. km of the extended economic zone (EEZ) which is said to have high prospects of
hydrocarbons.
(b) Coal
The total coal resource potential of Pakistan is 186.0 billion tons out of which 175.5
billion tons (95%) are located in the Thar Desert. In spite of the huge resource potential, the
current coal production in the country is only 3.7 million ton per year which is mainly consumed
in the brick kiln and cement industry. At Lakhra, a 150 MW power plant based on locally mined
coal became operational in 1995-96. A small coal based power plant of 15 MW (2 x 7.5) capacity
at Quetta was commissioned in 1964 and retired in 1980’s. In order to meet the needs of specific
quality coal by the cement industry, coal is been imported.
Due to limited use of coal, the production at 3-4 million tons level per year remained
stagnant during the last 10 years. As shown in Figure 12 the current share of coal in the primary
energy mix is 7.6% whereas the installed capacity of coal based power generation is less than 1%
of the total generation capacity.
Most of the coal mining activities (about 85-90%) are undertaken by the private sector
using very primitive coal mining methods. The only public sector corporation at federal level i.e.
Pakistan Mineral Development Corporation (PMDC) is operating coal mines in Sindh (Lakhra)
and Balochistan (Sor-range, Degari and Sharig) having annual contribution of about 0.3-0.5
million tons of coal in the total production. To develop economically attractive electricity
generation capacity, a mine with a capability to produce 5 – 10 million tons of coal annually is
necessary.
(c) Thar Coal
At Thar, vast reserves of coal have been identified since 1992. According to exploration
carried out so far, it has been estimated that Thar coal field is spread over 9,000 Sq. km and
contains coal resources of 175 billion. tons including 2.7 billion tons which are measured/ proven
reserves. The area is generally arid, sand dune country with sparse population and is quite
suitable for large scale exploitation. However, no quantity of coal has actually been mined yet
from Thar! A brief historical analysis is necessary.
255
Since 1992 various companies have shown interest and carried out investigations. All
companies recommended that detailed hydrological studies are necessary before the essential
feasibility report could be completed, except the Chinese company, which after detailed studies
had proposed in 2004 to generate 600 MW electricity. However, this project, though in advanced
stages, did not materialise. Another foreign company which was allocated block 3 in 2007,
planned to apply the underground gasification process to operate a power station but had made no
substantial progress yet.
To enhance the share of coal in power generation Government of Sindh (GOS) has
notified a Thar Coal and Energy Board (TCEB) under the Chairmanship of Chief Minister of
Sindh.
On the recommendation of ADB, in 2007 a proposal to dig an “open test pit” was
approved by the CDWP. The project was to demonstrate, given the conditions at Thar, that it is
possible to reach the coal seam. However, in 2009, the Thar Coal Mining Company under the
Ministry of Petroleum and Natural Resources, which had to undertake this project, was abolished.
Six blocks have been explored through geological investigations and extensive drilling.
Since 2007, out of these 6 blocks, 4 blocks stand allocated to 4 foreign companies (including one
which is a joint venture with the GOS) to mine coal and generate electricity. One of these
companies is involved in extensive hydrological studies, and if it finds it economically
exploitable, will start actual digging for coal in the near future.
On the initiative of the Planning Commission, the Government of Sindh is implementing
a project to generate 100 MW(e) using the Underground Coal Gasification (UCG) technique with
the built-in feature of CO2 sequestration. This project is planned to be completed in 2012 and will
produce electricity at very attractive rates. If successful and if the wastage of coal in the process
of generating gas is low, this technique will bring a revolution in the energy situation of Pakistan.
(d) Oil and Gas Exploration & Discoveries
In the oil sector, no new refinery has been established since 2003-04. The up gradation
and modernization of the existing refineries has also not been undertaken which has resulted in
billions of Rupees loss to the exchequer, due to unavoidable import of finished products.
Although about ten percent deem duty was allowed to the refineries for the purpose. Moreover,
no additional oil storages were added to built up strategic reserves, in spite of suggested increase
in strategic oil reserves from 20 days to 45 days in the MTDF 2005.
In the gas sector, except for the discoveries in the Karak area, no significant new gas
production fields have been discovered in the past so many years. In order to overcome gas
shortages and meet the future demand, significant progress was made for import of the gas from
Iran and the import of the LNG.
Pakistan is one amongst the countries which has very extensive natural gas network
supplying gas to the domestic, industrial & commercial sectors and power generation plants.
However, since 2007, severe shortage of gas has not only resulted in forced closure of industries
and diversion of supply from power plants causing shortages in the electricity generation.
256
(e) Import of Natural Gas
An agreement to import natural gas from Iran was finalized and signed in 2010. It will
take at least five years to lay the gas pipeline and connect it to the SSGCL system at Nawabshah.
The agreement is to purchase, as much as one BCFD of gas, from Iran. Internationally, Import
and export of Liquefied Natural Gas (LNG) has developed into a well established trading activity,
with 200 million tons being produced/ imported by various energy deficient countries. In 2006,
the Mashal project to construct a terminal at Port Qasim near Karachi to import LNG was
launched. No ground work has yet begun. However, it is hoped that by the end of 2011, 3.5
million tons of LNG per year will be imported and supplied to the SSGCL system. The presently
planned LNG volume is good enough for generating about 3,000 MW of electricity. Both the
imported gases will cost more than the current domestic gas prices since their prices are pegged to
international oil prices references but still will be economically advantageous over using and
importing furnace oil for power generation. The existing large and extensive, well maintained gas
pipeline system will transport the imported gases.
(f) Ethanol Blending
To reduce the dependence of imported oil, a policy has been introduced for ethanol
blending with motor spirit (E10). It will help to improve urban air quality and reduce carbon
emissions.
Power Sector: Review of the Past
In view of the electricity crises the country has been facing since 2007, it is necessary to
go into details. Figure 15 shows peak demand and actual generation capability of the NTDC
system during July 2004 to December 2009. It also shows what the planned generation capacity
was in the previous five year plan.
Figure 15: Peak demand Vs available Generation Capability of NTDC Systems 2004-05 to
2008-09 (excluding export to KESC)
257
Figure 16 shows transmission and distribution losses and Figure 18 shows the typical
variation in the production of hydroelectricity from Mangla, Tarbela and Ghazi Barotha due to
natural seasonal cyclicity and the requirement of storing water for agriculture use as and when
required.
Figure 16: Transmission and Distribution Losses and Theft (2007-08)
Source:
Figure 17: Electricity Generation – Capacity factors
WAPDA / NTDC Systems
Source:
Figure 18: Seasonal variation of Hydel Generation (2007-08)
258
Figure 19: Electricity generation average cost per kWh in Pakistan (2001 to 09)
Nuclear
GENCOs
IPPs
Hydroelectric
Year
Chasnupp
(C-1)
325 (MW)
2001
2002
2003
2004
2005
2006
2007
2008
2009
Weighted
Average
Generation
Cost
Muzaffar
Garh
1350
(MW)
2.70
2.72
2.97
2.35
2.66
3.91
5.11
8.00
---
Hubco
Kapco
--1.75
1.99
2.25
2.84
3.00
3.08
2.99
4.57
Guddu
(5 -13)
1015
(MW)
1.78
1.90
2.02
1.78
1.87
2.20
2.47
2.46
---
Fauji
Kabirwala
150
(MW)
--3.76
3.35
3.90
4.10
4.40
4.17
4.24
4.70
Tarbel
1342
(MW)
--4.17
4.21
3.93
3.46
4.27
4.64
6.73
10.52
Habibullah
Coastal
126
(MW)
--3.34
3.35
3.38
3.52
3.93
4.17
3.88
4.51
3478
(MW)
0.22
0.25
0.54
0.52
0.63
0.50
0.49
0.48
---
Ghazi
Brotha
1450
(MW)
------1.57
1.31
1.31
1.36
1.44
---
1200
(MW)
--6.12
7.34
9.79
8.85
7.13
6.12
8.65
9.88
2.78
2.08
3.78
7.98*
5.34*
3.76*
4.04*
0.46
1.39
Source: PEPCO {Electricity Marketing Data – 33rd Issue; PEPCO Letter
* This includes capacity, energy and other supplemental charges. Does not include GST
Detailed analysis of Figures 15 to 19 is essential to learn lessons from the past. The
following factors which have totally affected the demand and supply balance need to be
highlighted:

The actual installed capacity, as of December 2009, in the NTDC system was 18,200
MW, short by 1,200 MW from that planned in the MTDF 2005-10 five years plan.
Similarly, in the KESC system the installed capacity was 1,955 MW short of the --------MW planned

The peak demand is cyclic on an annual basis and so is the generation capability

The peak demand has shown an increasing trend while alarmingly, since May 2006 the
generation capability has shown a decreasing trend

Figure 18 highlights the fact that hydroelectricity is cyclic and, when coupled with
shortage of gas in winter, the balance between generation and demand is severely
affected

Because of the annual cyclicity of hydroelectricity, the annual hydel capacity factor has
been in the range of 50%. Further, the eight plants of GENCO’s have also shown their
inability to generate at more then 50% capacity factor. The IPPS have hovered around
65% capacity factor and were, like the GENCOs, also affected by shortages in fuel
supply

There was a noticeable suppression of peak demand in the year 2009 over 2008 during
some months
259

The transmission and distribution losses (including theft) have been in the range of 18%
to 41% in the NTDC system and 34% in the KESC systems as compared to around 7% to
8% in the OECD countries

Figure 19 shows the comparison of the average cost of electricity generation in the period
2001-09. The combined cycle Guddu thermal power plant, though operating at 50%
capacity, has generated electricity at lowest cost among thermal power plants. This
perhaps due to low initial investment costs and due to retirement of its debt service. The
cost of generation of IPPs is quite high and the only one nuclear power plant is quite
reasonable. Similarly hydel, as expected, generates electricity at very low cost. Had the
Guddu and Muzaffargarh stations operated at 75% capacity factor the cost per unit would
have been lower
Figure 20: Sectoral electricity consumption mix in 2004 and 2010
Sector
2003-04
2008-09
Domestic
Commercial
Industrial
Agriculture
Others
45.0%
6.4%
30.2%
11.6%
6.8%
100.0%
45.9%
7.5%
27.5%
12.5%
6.7%
100.0%
As shown in Figure 20, the percentage share of domestic demand in electricity
consumption has remained at around 45%. However, the industrial demand has decreased from
31% in 2004 to 27% in 2010. Therefore, it can be generally summarized that the increase in
demand in summer is predominately due to the increased use of air conditioning systems in all
sectors. The decrease in demand could be partially attributed to increased use of captive power
plants generation. As the country develops and normal grid supplied affordable electricity supply
is assured the industrial share will become predominant and the electricity demand will become
less cyclic and the load factor will increase. This implies that more additional thermal generation
capacity will be required during winter to compensate for the inevitable reduction in hydel
generation capability.
Figure 21: Additional Electricity Generation 2005 – 2010
Thermal Hydel Power Plant Status
Installed & operational in the period 2005 –
2010
Under construction as of July 2010
Under discussion likely come on line in
2010 – 2015
NTDC Systems
No. of Plants and Total MW
18,017 MW
KESC Systems
No. of Plants and Total
MW
2,100 MW
4,290 MW
8,370 MW
?? MW
?? MW
Figure 21 shows the additional electricity generation that came online in the period July
2005 to June 2010, in the NTDC and KESC systems and the status as of May 2010.
260
Rental Power Station
As of May 2010, agreements and contracts for 16 rental power projects totaling 2,451
MW(e) have been finalized. These contracts include mobilization payments amounting to Rupees
37.7 billion. As of May 2010 only one plant was in operation generating 80 MW(e).
A per the 1994, power policy and the recommended unbundling of WAPDA, WAPDA
was mandated to invest only in large hydro power station. It was also mandated that all thermal
power plants will be established and operated by the private sector. Figure 22 shows the status of
IPPs in the NTDC system. (KESC was privatized in 2005). In 1997, NEPRA was established to
determine standards for generation, transmission and distribution systems, as well as to determine
tariff and grant license.
Figure 22: Status of IPPs
No. of IPPs plants in operation as of May 2010 15 No. 3,568 MW(e)
& total MW installed capacity
No. of IPPs for which contracts have been 11 No. & 2,474 MW(e)
signed as of in May 2010 and are likely to
come online in the period 2010 - 2015
Source: PPIB
Independent Power Producer
As of May 2010, nineteen independent power projects have been installed in the country
with a total capacity of 6589 MW. These include the 1,292 MW. Hub Power Plant and the
1,638MW Kot Addu Power Plant. All other power plants except, the Uch and Rousch Power
Plant are small sized, in the range of 110 to 360 MW capacity, and hence not very efficient in fuel
conversion and cost of generation. Six new IPPs with a total installed capacity of 1200 MW are
likely to come online by 30th June 2010.
261
5.2 The Fuel Sector
The primary energy supplies has grown-up at an average rate of 3.3% during 2004-9, the
total primary energy supplies in absolute term has increased from 58.0 million tones of oil
equivalent (MTOE) during 2005-06 to 62.5 MTOE in 2008-09. The tenth five year plan has the
following objectives:





To enhance the exploration and production activities of oil, gas and coal resources and
much greater role for offshore oil and gas exploration
To achieve greater energy self sufficiency by pursuing policies that are sustainable,
provide for energy security and conservation
To encourage the utilization of the country’s indigenous resource base and reduce
dependence on imported fuel
To create an environment conducive to the participation of the private sector
To develop the local energy scenario in the context of regional perspective
Policy and Strategy
The following policy and strategy measures are envisaged:
(a) Petroleum Exploration
To encourage oil and gas exploration in the country following policy and strategy has
been envisage:




Petroleum policy 2009 will be made flexible by giving better well head gas prices,
incentives for secondary recovery techniques including enhanced oil recovery and tight
gas
National Drilling Company (NDC) will be formed in the form of joint venture with
international drilling company to acquire initially 30 rigs to accomplish the target of 100
wells per year
Independent “National Geophysical Company” will be established with a 10-12
crews/parties with data processing facilities for better and accurate, prospects generation
Offshore petroleum exploration activities will be enhanced by setting drilling targets in
the offshore area at least 2 wells per years (public and private)
OGDCL and PPL will be given greater role for offshore exploration
(b) Natural Gas Allocation Policy and Imports
To maintain a balance in gas supplies and overcome present gas shortages s following
incentives have been envisaged:


The fuel diversification in supplying LPG, Motor Spirit or HSD to captive power and
Coal to cement instead of gas is necessary to overcome the shortages of natural gas
LPG supplies especially imports can also play a vital role
To make un-interruptable supply of LPG the existing disparity between the LPG import
and domestic LPG will be removed by improving the policy and to create enabling for
meeting potential demand in LPG
262






Continuation of the existing policy to ensure availability of domestic and imported LPG
at competitive and viable prices in far-flung areas, where supply of natural gas through
pipelines is not economically feasible
A policy for transparent and level plying field to develop for setting of LPG extraction
plants and discourage monopolistic trends
Captive power will be encouraged other than natural gas
Cement industry will encouraged to use coal as fuel instead of natural gas
To encourage the investment in gas pipelines, necessary policy incentives will be
evolved for private investment in gas pipeline system. A much comprehensive and
balance policy for CNG will be formulated to introduce mega CNG stations for supply
of CNG to buses and mini-buses viz-a-viz light transport vehicles at affordable price and
to improve urban air quality and carbon mission
Expansion of transmission and distribution infrastructure for sustainable gas supply and
economic growth of the country. LNG policy will be revised to facilitate for setting up
of terminal facilities at various parts in Pakistan
(c) Oil






To encourage the utilization of Ethanol (E-10) for mixing with the motor spirit and
introduction of bio diesel
Increase of strategic storages from 20 days to 45 days to meet the contingency demand
of the country and with incentives given to private sector keeping in view the strategic
and economic trade-offs
The existing refineries to be supported for a limited period and to upgrade and expand
Investors should be encouraged to set up only ‘Deep Conversion’ refineries and develop
valuable petrochemical products
To reduce the reliance on import of oil and increase the share of coal and alternate
energy
No second hand refineries to be allowed unless they have secondary processing facilities
in place
(d) Coal







To finalize the “National Coal Policy”
Feasibility studies for integrated coal base power generation will be conducted in
collaboration with GSP and Directorate of Mineral
Coal and Hydrocarbon Institute of Pakistan by expanding the role of HDIP to assign the
task of alternate clean coal technologies like coal gasification, extraction of fertilizer and
chemicals to promote and expand the utilization of the coal
Encouragement of large-scale utilization of indigenous coal in various industries
including power generation by the private sector
The coal gasification projects will be expedited and establishment of washeries by
private sector will be encouraged for improving quality of local coal
Encourage the use of LPG in multiple applications viz; including power production, as
Synthetic Natural Gas as a peak load shaving fuel to replace other fuels
LPG marketing companies collectively to maintain a reserve of at least two weeks worth
of stocks
263
Operational Programme and Projects
(a) Exploration and Development of Oil & Gas
A significant increase is envisaged in the number of oil and gas wells to be drilled from
average 80 wells per year during the past plan period to about 100 wells per day during the plan
period. Details are given in Table-7 below:
Figure 23: Drilling Targets of Oil and Gas Wells
(Nos.)
Description
2010-11
2011-12
2012-13
2013-14
2014-15
Exploratory
60
60
60
60
60
Appraisal / Development
40
40
40
40
40
Total
100
100
100
100
100
Exploratory
34
34
34
34
34
Appraisal / Development
20
20
20
20
20
Sub-Total
54
54
54
54
54
Exploratory
24
24
24
24
24
Appraisal / Development
20
20
20
20
20
44
44
44
44
44
Public Sector
1
1
1
1
1
Private Sector
1
1
1
1
1
Total Wells (Public + Private)
OGDCL:
PRIVATE
Sub-Total
Offshore Drilling
(b) Oil and Gas Production Targets
In view of above exploration and drilling targets following oil and gas production targets
have been envisaged during the plan period:-
264
Figure 24: Projections for Exploration and Production
Year
Exploration
Licenses
granted
Exploratory
Wells Drilled
Appraisal /
Development
Wells
Total
2010-11
12
40
60
100
2011-12
13
45
55
100
2012-13
14
50
50
100
2013-14
14
45
55
100
2014-15
15
42
58
100
Oil
MTOE
(BOPD)
Gas
MTOE
(MMCFD)
4.77
(88,726)
34.71
(4,065)
4.67
(86,889)
4.33
(80,430)
3.78
(70,167)
3.65
(67,849)
32.90
(3,853)
31.98
(3,745)
29.64
(3,741)
26.35
(3,086)
(c) Petroleum Products and Crude Logistics
Timely completion of Machike-Morgah-Taru Jabba Cross-country pipeline
(MMTJCCPL), extending to Jalalabad / Kabul is planned to bring major change in efficient
transportation of petroleum products.
MMTJCC pipeline to have spur lines to Sialkot, Mirpur, Kohat and other cities will
further decrease the Long Run Marginal Cost (LRMC) to the consumers.
Presently, functioning cross-country pipelines Karachi-Mehmoodkot-Lahore may be debottle-necked.
Karachi Port Trust (KPT) is planned to be connected to Pakistan Arab Refining Company
(PARCO) Storage at Port Qasim Authority (PQA) through a pipeline for pumping white oil
petroleum products from former to later. This project will give strategic strength to the country’s
logistics because in case the PQA closes for any reason then the import of HSD would not suffer.
At PQA, FOTCO utilization which is currently running at 100% capacity is planned to be
improved by increasing the draft to enable import of larger cargoes, and through provision of
night-time navigation. Current storage facilities and jetties of different entities viz; as Engro
Vopak and Progas at PQA are also planned to be used to handle liquid hydrocarbons in order to
alleviate this congestion. The PQA would finalize High Speed Diesel (HSD) imports at brownfield terminals of EVTL and Progas.
Refining Operations
Pakistan provides great export processing potential as it is located at the cross road of
producers and users. Deep sea ports and professional/skilled human resource provides further
strengthens the Makran Coast as a viable place to install export refineries. Energy corridor,
Gwadar port and oil city concept are to be realized during the Tenth Five Year Plan. The detail of
refining expansion plan is given at Table-9 below.
265
Figure 25: Planned Refining Capacity
(Million Ton per annum)
YEAR
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
ARL
1.92
1.92
2.79
2.79
3.67
3.67
Bosicor-I
1.50
1.50
2.45
2.45
2.45
2.45
Bosicor-II
0.00
0.00
5.63
5.63
5.63
5.63
Dhodak
0.11
0.11
0.11
0.11
0.11
0.11
ENAR Petrotech Refinery
0.11
0.11
0.11
0.11
0.11
0.11
NRL
2.71
2.71
3.18
3.18
3.18
3.18
PARCO
4.50
4.50
4.90
4.90
4.90
4.90
PRL
2.10
2.10
3.18
3.18
3.18
3.18
Existing Refineries Total (A)
Khalifa Coastal Refinery (KCRExport)
Gwadar I (export)
12.95
12.95
22.35
22.35
23.23
23.23
14.69
14.69
19.59
Gwadar II (export)
Export Total (B)
0.00
0.00
0.00
0.00
14.69
34.28
Refineries Capacity
12.95
12.95
22.35
22.35
37.92
57.51
The demand of POL products during 2009-10 is expected to be 23.10 million tonnes against the
production from refineries estimated to be 10.10 million tonnes leaving a gap of 13 million
tonnes. The demand / production targets for POL products are planned to be as detailed in the
table-10 below:
Figure 26: Demand / Production Projections of POL
YEAR
Refineries Capacity
Total Demand-Oil (Tone)
Indigenous Supply
200910
12.95
201011
12.95
201112
22.35
201213
22.35
201314
37.92
201415
57.51
201920
81.99
202425
81.99
202930
81.99
20.24
23.18
24.28
24.44
24.04
23.31
24.09
24.59
25.83
3.47
4.34
4.25
3.93
3.43
3.32
1.58
0.65
0.22
LPG Supplies
0.4
0.6
0.6
0.6
0.6
0.6
0.6
0.6
0.6
Imported Crude Oil
9.48
8.61
18.1
18.42
34.49
54.19
80.41
81.34
81.77
Imported of Products to
meet the Demand
6.89
9.63
1.33
1.49
0
0
0
0
0
Export of Oil Products
0
0
0
0
14.48
34.8
58.5
58
56.76
266
(d) Gas Operations
Natural Gas (NG) grid is to be planned made efficient to reduce line losses by 5% and extended
to cater for the needs of the growing demand by increasing domestic supplies, LNG imports and
import of gas from Iran. Total line losses to be reduced to a maximum of 5%. The expansion plan
for SNGPL & SSGCL during the Plan period is as follows:Figure 27: Transmission Plan for SNGLP and SSGCL
Transmission Plan of SNGPL
Pipeline length
Km
Cost (Rs. Million)
42" dia
201
13142
36" dia
318
17408
18" dia
47
842
16" dia
61
908
Compression Cost
26448
Total
58748
Transmission and Distribution Plan of SSGC
Pipeline length
Import of Gas
Distribution
Distribution Sindh New
Towns / Villages
Distribution Balochistan New
Towns / Villages
Km
343
5305
Cost (Rs. Million)
21542
621
6396
842
1288
Total
4517
27522
The projected demand and supply is given below in table-11:
Figure 28: Projected Natural Gas Demand and Supply Targets (MMCFD)
Year
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2019-20
2024-25
2029-30
4070
4108
4412
4739
5185
5367
6884
8768
11991
Gas Supply (Committed)
4070
4065
3853
3745
3471
3086
1659
619
348
Gas Supply (Anticipated)
0
909
1037
1037
1016
1037
817
484
55
Iran-Pak Pipeline
0
0
0
0
0
0
1500
2500
2500
LNG Import-I
0
0
0
500
500
500
500
500
1000
Bulk LNG
0
0
0
0
0
0
2407
4664
8088
Total Imported Gas
0
0
0
500
500
500
4407
7664
11588
Gap- Without Anticipated
0
-43
-559
-494
-1213
-1781
-817
-484
-55
Gap- With Anticipated
0
866
477
543
-198
-743
0
0
0
Total Demand- Gas
Supplies:
Domestic
Import
267
(e) Liquefied Natural Gas (LNG) Imports
To meet the shortages of gas in Karachi and other places of the country, the Private
Sector would be encouraged to import LNG if it is economically a viable option; there will be no
contribution/guarantee from the Federal Government except for providing/facilitating necessary
infrastructure e.g. proper berth handling facilities at Port Qasim. It is planned to import 3.5
million tonnes of LNG during the plan period in order to meet the shortage of gas in the country.
For Liquefied Natural Gas (LNG) imports, three brown field terminals (FOTCO, EVTL,
Progas) at PQA are planned to be made operational in the plan period. It is planned that
facilitates for import of LPG for Synthetic Natural Gas (SNG) at one of the brown field terminals
would be developed.
(f) Compressed Natural Gas (CNG)
Compressed Natural Gas (CNG) sector has been developed at a very rapid pace due to
cheaper fuel in transport which resulted into shortage of gas. However, this fuel should be
continued in public transport by making affordable and green. Further our masses depend on
buses and mini-buses and therefore it is prudent to convert these into cheaper fuel viz HSD;
which is going to be very expensive during the Plan period and beyond. It may be seen that
Pakistan is the largest user of CNG in the world as the annual growth of last 10 years is shown
below;
Growth of CNG Industry
3000
CNG Stations
CNG Vehicles
2.4
CNG Stations
2500
2000
2
CNG Vehicles
1.6
Growth Rate 49.1% per year
1500
1.2
1000
0.8
500
0.4
0
1 Jul
1999
1 Jul 1 Jul
2000 2001
1 Jul
2002
1 Jul 1 Jul 1 Jul
2003 2004 2005
1 Jul 1 Jul 1 Jul 1 Jul
2006 2007 2008 2009
Pakistan is the largest CNG using country in the world.
It has become very essential that a much comprehensive and balance policy for CNG may
be formulated to set a balance between for those vehicle replacing HOBC/MS viz-a-viz for those
for vehicles replacing HSD including necessary incentive to encourage local manufacturing.
268
0
The detail of conversion of diesel buses to CNG/LPG is as follows:
Figure 30: Conversion of Diesel Buses to CNG/LPG
(Nos.)
2010-11
2011-12
2012-13
2013-14
2014-15
2,000
2,000
2,500
1,500
1,500
0
1,500
1,500
1,500
1,500
1000
1,200
1,500
2,000
2,500
Buses on CNG
Heavy
Buses/Transport and
up-hills on LPG
Mini-buses on CNG
It is planned that the use of CNG would be expanded as about 100,000 cars and 10,000
buses would be added every year to the existing stock of the country. A programme would be
undertaken which will start initially in federal and provincial capitals where dedicated CNG citybuses will be put on road. The programme will then be extended to cover other urban centres on
transport pollution basis. The programme will also include infrastructure development and
manufacturing of dedicated CNG buses.
(g) Liquefied Petroleum Gas (LPG)
Presently, only 22% of Pakistanis have access to natural gas; of course 100% cannot be
given to natural gas due to high cost of piping, therefore LPG can play better role. LPG will
become available through better managed outlets managed by LPG marketing companies. OGRA
to strictly enforce rules on LPG marketing companies outlets. The outlets shall resemble the
gasoline outlets in safety, measurement and quality of service. Company Owned and Company
Operated (COCO) LPG stations will be established. The purposed targets are given below in
Figure – 31:
Figure 31: Company Owned and Company Operated (COCO-LPG Stations)
2010-11
2011-12
2012-13
2013-14
2014-15
Cylinder Dispensing
(Nos.)
200
1000
2000
4,500
9,500
Automotive (Nos.)
100
300
500
600
700
The LPG potential and unconstrained demand worked out by OGRA will be met through
domestic resources and proposed new refinery and deficit of domestic production will be met
through imports as per Table -14 given below:
Figure 32: Company Owned and Company Operated (COCO-LPG Stations)
Sector
Table -14 : LPG DEMAND PROJECTIONS BY OGRA
2011-12
2012-13
2013-14
2009-10 2010-11
2014-15
Potential Demand
894,000
965,000
1,008,000
1,051,000
1,107,000
1,164,000
Domestic Production
528,908
551,389
574,825
599,257
624,728
651,281
Imports
365,092
413,611
433,175
451,743
482,272
512,719
269
Coal
The coal resource of Pakistan is 186 billion tons including Thar Coal which contributes
175 billion tons. Out of this 186 billion tons coal resource, the proven reserves for coal are about
4 billion tons. The utilization/exploitation is only 4 million tons per year which comes to 0.1% of
proven reserves. Therefore, more efforts may be put on its exploitation then exploration of coal,
to overcome present energy crisis in constrained economic position of the country.
The projected demand and supply is given below in table-11:
Figure 33: Demand and Supply Gap of Coal (M. Tone)
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2019-20
2024-25
2029-30
4.15
4.41
4.63
5.82
8.14
12.47
37.09
39.09
83.9
5.85
6.26
6.88
7.61
8.46
9.44
21.76
29.2
38.76
10
10.67
11.51
13.42
16.6
21.91
58.86
68.29
122.65
Supplies
Domestic Coal Production
General
IndustryLocal
4.05
4.26
Power
GenerationLocal
0.1
0.16
DomesticTotal
4.15
4.41
4.47
4.67
5.04
5.54
7.4
9.55
12.31
0.16
1.15
3.1
6.93
29.69
29.53
71.59
4.63
5.82
8.14
12.47
37.09
39.09
83.9
Year
Demand of
Coal- Local
Demand of
CoalImported
Total
DemandCoal
Imported
General
Industry Imported
Power
Generation Imported
ImportedTotal
GAP
5.85
6.26
6.88
7.61
8.46
9.44
15.31
22.75
32.3
0
0
0
0
0
0
6.46
6.46
6.46
5.85
6.26
6.88
7.61
8.46
9.44
21.76
29.2
38.76
0
0
0
0
0
0
0
0
0
The programme for utilization of indigenous coal includes:

The Thar Coalfield being a major find will be given priority where TCEB, Government
of Sindh has already given six blocks for power generation and coal gasification as
detailed below: The block-II has been assigned to Sindh Engro Coal Mining Company for generation
of 600-1000 MW. The project is expected to completed in 2015-16
 The block-III has been awarded to M/s. Couger Energy Company to conduct
feasibility for underground coal gasification technology for establishment 400 MW
power plant
 The block-IV has been awarded to M/s. Bin Dean Group, UAE to conduct feasibility
for coal mining power generation plant of 1000 MW
270








The block-V has been awarded to Under Ground Coal Gasification Project being
undertaken by Planning Commission
The block-VI has been awarded to Sindh Carbon Energy Limited to undertake
feasibility study for 300 MW power generation project
Further, TCEB Government of Sindh has already completed the detailed appraisal
and evaluation of two additional blocks for which award process is in progress
Adopt measures to develop human resource for large-scale mining operations at Thar and
Lakhra coalfields. Provincial governments to augment present facilities and establish new
ones based on latest technologies
Facilitate establishment of coal briquette plants on coal
The utilization of lignite (brown coal) in Sindh; would be made in power generation,
gasification, fuel and chemicals extraction, briquetting and through quality improvements
in processing industry besides exploration for coal bed methane
The hard coal of Punjab, Balochistan and NWFP; its utilization will be enhanced in brick
kiln, cement industries and in town gasification by enhancing coal production from the
mines through improvements in mining techniques. Efforts will be made to mechanize
the operational coalmines
To enhance the exploration and evaluation activities, Directorate of Mineral, Ministry of
Petroleum & Natural Resources in collaboration with Geological Survey of Pakistan
(GSP) would undertake feasibility studies in each area for integrated coal power
generation from 150-300 MW in various coalfields in Baluchistan, NWFP and Azad
Jammu and Kashmir (AJ&K) during the plan period. At least two feasibility studies in
each of the above area will be completed for power generation
Research and Human Resource Development
Research and development activities will be carried out to enhance sector
Competitiveness and efficiency. For mechanized coalmines, training of staff and workers on new
scientific ways and means will be carried out.
Regional Co-operation and Energy Trade
It is planned to undertake the import of natural gas from the neighboring countries to
supplement the local supplies and replacement of imported oil with imported gas. Two options
namely (a) Iran-Pakistan-India Gas Pipeline, and (b) Qatar-Pakistan Gas Pipeline, are being
explored. The import of gas from Iran (1059 MMCFD) is expected by the end plan period.
Environment
It is well understood that more use of oil, gas and coal will add to the CO2 stocks but
Renewable and alternate energy as a full replacement exchange is unfortunately a distant reality.
Pakistan is an expanding and growing economy and need energy to fuel the engines of prosperity
and improved quality of life indices soonest. Therefore, oil, gas and coal are prudent objective
solution. Pakistan is far far below its threshold of energy consumption, CO2 and Methane
emissions and environmental pollution; therefore there is still a large room for it to use fossil
fuels as prime movers. Now it is for other countries to constrain themselves in use of fossil fuel.
Needless to say, pollution control equipment will have to be used by power plants and
industrial concerns. Ultra clean technologies to be deployed in coal mining and power production.
271
Also, the Plan envisages major induction of NG therefore, HDIP through private sector would be
taking quantum steps to induct CNG/LPG in mass transport and captive gen-sets to reduce HSD
usage and CO2 emissions.
Resource Requirements
A total investment of Rs. 23.8 billion is earmarked through PSDP for Fuel Sector during
the plan period. Details are in Annex- 2 whereas; the balance would be met through the private
sector.
272
273
5.3 The Power Sector
As shown in the previous sections, the energy crisis would not have occurred had the
GENCOs plants operated as per international standards, sufficient fuel been available and the
transmission and distribution losses had been reasonable.
The Power Supply & Demand Balance
The actual peak electricity demand in NTDC system, during 2008-09 was 17,325 MW in
June 2009. Assuming an average GDP growth rate of 5.5% per annum23 and using elasticity of
electricity demand as 1.1, peak demand has been projected to be 24,700 MW in 2015 and 34,050
MW in 2020. Based on the current (as of May 2010) installed generation capacity and
considering the projects under construction only, electricity demand – supply position for 2010 –
2015 and 2010 - 2020 have been shown in Figures 31 and 32, respectively. The generation
capabilities of the existing hydel and thermal units have been worked out based on performance
of these units during the last four years (2005-6 to 2008-9). However, for the future units, the
generation capability have been projected based on auxiliary consumption of 3.5%, forced
outages of 6% and annual scheduled maintenance of 8% on the average.
Figure 35: Project Peak Demand, Installed Capacity and Generation Capability of
NTDC System, as of May 2010 (2010-2015)
Source: Based on information received from PEPCO/NTDC
1. Including under construction 425 MW Nandipur, & 750 MW Guddu units of PEPCO, 10 IPPs of
2,150 MW and Jinnah, Gomal Zam, Khan Khwar, Allai Khwar and Duber Khwar Hydel projects
of 436 MW and 340 MW C-2.
2. The gap between Peak demand and capability is about 8,000 MW in June 2015.
3. Based on Average GDP Growth rate of 5.5% during 10 th Five Year Plan and elasticity of 1.1 for
electricity demand.
23
The GDP growth rates as finalized by the Chief Economist, Planning Commission have been used
for projection of electricity demand. These GDP growth rates are: 4.4%, 4.9%, 5.5%, 6.1% and 6.6% for
the 10th Five Year Plan period 2011-2015.
274
Figure 35 shows the cyclic nature of peak demand due to seasonal variation in electricity
requirements and a similar cyclic nature of generation capability due to seasonal variation of
hydel capacity. It also shows that considering only the currently under construction projects, the
generation capability of NTDC remains short of meeting the peak demand by about 7,000 MW.
However, if we also consider the other projects in the pipeline as per current plans of PEPCO/
NTDC, WAPDA and PPIB, including the rental power projects and other IPPs (not yet firmly
committed), the planned capacity will be able to meet the peak requirements starting July 2013. It
may be mentioned here that implementation of the currently planned generation capacity is
uncertain and that most of these units are small in size (ranging from 50 MW to 250 MW unit
sizes), which are neither fuel efficient nor economically competitive. It is, therefore, necessary to
immediately initiate work on large sized base-load combined cycle thermal power projects (like
750 MW unit planned at Guddu by PEPCO/NTDC), large sized imported coal based projects and
additional nuclear power projects.
Figure 36: Projected Peak Demand, Installed Capacity and Generation Capability
of NTDC System, as of May 2010 (2010 – 2020)
Source: Based on information received from PEPCO/NTDC
1. Including under construction 425 MW Nandipur, & 750 MW Guddu units of PEPCO, 10
IPPs of 2,150 MW and Jinnah, Gomal Zam, Khan Khwar, Allai Khwar and Duber Khwar
Hydel projects of 436 MW and 340 MW C-2.
2. The gap between Peak demand and capability is about 8,000 MW in June 2015.
3. Based on Average GDP Growth rate of 5.5% during 10th Five Year Plan and elasticity of
1.1 for electricity demand.
Figure 36 further highlights the increasing shortfall jn the generation capability of the
installed capacity available during 2011 – 2020. Considering only the currently under
construction projects, the shortfall in capability rises to the level of about 17,000 MW in 2020. As
a new combined cycle project takes at least 4 years from initiating the proposal till
commissioning, therefore, work should immediately be started for construction of large sized
base-load thermal power projects to be available for commissioning by mid-2014 when the rental
power plants will start retiring after completing their committed periods of 3 -5 years. Moreover,
work should also be started on large sized imported coal-fired projects, initially, and similar
275
projects based on the domestic Thar coal. Work on new nuclear power projects should also be
initiated in addition to those already planned.
It is, therefore, necessary to start work, during the tenth five year plan, on seven
additional units of 750 MW combined cycle projects (last one to come online in 2016), 8 large
sized, 1200 MW coal-fired projects (initially based on imported coal and later on using Thar coal,
last one to come online in 2017) and six 340 MW nuclear power projects (last one to come online
in 2021), as detailed in Figure 37.
Figure 37: Investment requirements for Large-sized Base-load Power Projects Required
During Tenth Five Year Plan
Project Name
Total
Investmen
t during
10th FY
Plan (US$
Million)
Installed
Capacit
y (MW)
Total
Investmen
t Cost
(US$
Million)
201011
201112
201213
750
750
187.5
450.0
112.5
750
750.0
187.5
450.0
112.5
750.0
750
750
187.5
450.0
112.5
750.0
750
750
187.5
450.0
112.5
750.0
750
750
187.5
450.0
112.5
750.0
750
750
187.5
450.0
637.5
187.5
450.0
637.5
Combined Cycle Unit
2
Combined Cycle Unit
3
Combined Cycle Unit
4
Combined Cycle Unit
5
Combined Cycle Unit
6
Combined Cycle Unit
7
Combined Cycle Unit
8
Coal-fired Unit 1
750
750
1200
2,500
Coal-fired Unit 2
1200
2,500
Coal-fired Unit 3
1200
Coal-fired Unit 4
Coal-fired Unit 5
201415
750
1000.0
625.0
375.0
500.0
1000.0
625.0
375.0
2500.0
2,500
500.0
1000.0
625.0
2125.0
1200
2,500
500.0
1000.0
625.0
2125.0
1200
2,500
500.0
1000.0
1500.0
Coal-fired Unit 6
1200
2,500
500.0
1000.0
1500.0
Coal-fired Unit 7
1200
2,500
500.0
500.0
Coal-fired Unit 8
1200
2,500
500.0
500.0
Nuclear Unit 3 (C-3)
340
3,000
Nuclear Unit 4 (C-4)
340
3,000
Nuclear Unit 5
340
3,000
Nuclear Unit 6
340
3,000
Nuclear Unit 7
340
3,000
Nuclear Unit 8
340
3,000
582.3
582.3
16,890
43,250
8756.4
26720.6
Grand Total
500.0
201314
582.3
497.2
576.6
465.4
302.7
2424.2
582.3
497.2
576.6
465.4
2121.4
576.6
1158.9
0.0
582.3
582.3
582.3
582.3
582.3
1269.8
2500.0
3404.5
5668.6
7621.4
To install the additional capacity, to be online by 2015, will require an investment of
about $ 8.0 billion over the Tenth Five Year Plan period (2010-15). Additional investment of
276
about US$ 17 billion, during the tenth five year plan period, will also be required to meet the
financial requirements of the projects to be commissioned during the 11th Five Year Plan period,
and beyond. Investments will also be required for the currently ongoing projects like DiamerBasha, Chashma Nuclear Power Project Unit-2, etc., in addition to the financial requirements
mentioned above. And crucially incur investments for sustained supply of fuel for the thermal
power plants.
Although, measures to ensure early implementation of energy conservation and
efficiency improvement options, rehabilitation of the existing installed capacity of GENCOs,
wind power projects etc. should also be pursued on war-footing basis, they will only serve as
reserve margin to serve for emergency situations and spinning reserves etc., provision for which
has not been made in the future electricity demand projections presented above due to the energy
crisis situation at present.
The Way Forward
All power plants and the transmission and distribution network in Pakistan have
equipment and systems that are exactly similar to those in any developed country. These should,
therefore, be equally reliable and efficient. The only difference is that of the management system
of the organizations involved. These therefore, need to be improved immediately if sustained
supply of affordable electricity is to be ensured.
To come out of the energy crisis and to establish systems which will provide sufficient
and affordable electricity the following actions are planned:
Improve Affordability
In the next five years, in addition to sufficiency and reliability, the stress will be on
affordability of electricity supplied to the consumer since it has a direct role in the economic
development of the country and in the exportability of manufactured goods. Figure 34 shows
electricity tariffs for the industrial and domestic sectors in various developed countries which
encourages industrial activity in Pakistan, the tariff structure is not to the advantage of the
industry.
Figure 34 Industrial and domestic electricity tariffs in developed countries (2008)
Industrial
Tariff
Germany*
10.9
Japan*
11.6
Korea
6.0
UK
14.6
USA
7.0
* Data for 2007 Source:
Domestic
Tariff
26.3
17.6
8.9
23.1
11.4
(a) Install Base load power stations
277
To generate and supply affordable electricity action requires to be takes as of nearly all
the fronts. But the following two action not hither to practice in Pakistan need to introduced to
ensure affordable electricity.
As of the year 2010, 129 units of thermal power plants totaling 11,217 MW were
installed in the NTDC system. The maximum size of a unit is 365 MW. The maximum size of a
unit at KESC is ------- MW. This fact along with the low generation capacity factor is the main
contributor to high cost of the generation and hence the resultant problem of circular debt.
The advantages and need of large sized combined cycle power plants are obvious. The
combined cycle 750 MW(e) Guddu power station, work on which will begin in 2011 will be the
first to convert fuel into affordable electricity. The IPPs under negotiation or under construction
are not large sized units. The Pakistani grid is now of sufficient capacity to absorb large sized
base load power generation plants with the obvious advantage of higher efficiency and lower
power per MW installed cost. It is planned that, with a few exceptions, all future power plants
installed in Pakistan, other than small hydel projects will be multi unit plants with each unit larger
then 500 MW.
(b) Determine of the Real cost of Generation
For any power generating unit the cost of electricity generated is dependent on the
following factors:








Total investment cost per MW installed, including debt servicing etc. etc.
The efficiency of fuel conversion into electricity
The fuel cost as delivered at the plant and its volatility in the international market
The operation and maintenance cost
The annual capacity factor
The predictable cyclicity of generation
The unpredictable of cyclicity of generation
The transmission cost to the consumer or the national grid
Therefore, in order to make electricity affordable, the above eight factors will be
considered while planning for the future electricity mix and, more importantly, determine the
tariff of the plant.
(c) Create Independent Financial Unit
Generation and transmission of electricity is a value added activity. A power plant
purchases fuel and converts it into electricity and then sells it to the National Transmission and
Dispatch Company (NTDC) which then sells it to various DISCOs for ultimate sale to consumers.
It is therefore, planned that each of the units and organizations involved in electricity generation
and handling business be converted into independent financial units and will be required to
maintain their profit and loss accounts for previous twelve months on monthly basis.
Get More from What We Already Have and Will Have
As of May 2010 more than 2,650 MW of installed capacity existed in the country out of
which 57% is in the public sector. As shown in Figure 15 & 16, there is a lot of scope to get more
from what we have, since it will give us results in much less time than it takes to install additional
278
generation’s capacity. The following will be pursued during the plan period. Some of these
activities has already been launched.
(a) Reduce Transmission & Distribution Losses
Massive up-gradation and renovation program is already being carried out in these
systems all over the country. However, a system needs to be evolved, to ensure generating
enough funds annually, for proper, regular and sustained maintenance, up-gradation and
expansion, as per international practice, to attain and maintain optimum efficient level of
operation. In addition to creation of independent financed units (describe in 28.5.1.2 above), all
employees involved will be suitably motivated by financial incentives for reducing losses & theft
and maintaining them at optimum level.
While social economic factors will eventually reduce theft, modern methods like smart
meters etc will be increased. Since most consumers billing is already computerized and displayed
on the internet a system will be introduced which will allow neighbors to check each others
electricity bills.
(b) Rehabilitate existing Thermal and Hydel Power Plants
All older power generating units (Hydel and Thermal) are in need of extensive rehabilited
to operate at optimum designed capacity and efficiency. PEPCO was already launched a
programme to carry out this long overdue rehabilitation programme. Henceforth the annual
budget of these power plants will include sufficient funds for regular maintenance, replacement,
up-gradation and purchase of spare parts required for the plant. The monthly salary of all the
employees will include a special allowance which will be linked to the amount of electricity
generated and profit earned.
(c) Upgrade Technical Training Centers
The man power training centers belonging to WAPDA and PEPCO, including some fo
those that were shut down, will be modernized to ensure that all technical man power involved in
operation and maintenance of power plants and transmission and distribution systems are
provided training and certification according to international standards. NEPRA will ensure that
only properly trained and certified man power at these modernized training centers, is assigned
appropriate duties. The training centers will charge sufficient fee to cover its own annual
budgetary requirements.
(d) Create Power Plant Design and Development Division
In order to ensure safe, reliable and efficient generation, transmission and distribution of
electricity, a technically strong and effective design and development division needs to be
established. The technical man power of this division will be involved in technical oversight of all
activities at plants and at sites for proper operation and maintenance of the systems.
It will constantly review and up-grade the technical manuals and will develop ability and
tools to analyze all technical problems as and when they occur in the systems. It will also develop
the capability to design and / or specify replacement equipment and bring changes in the
operation and maintenance procedures. As an independent financial unit it will charge for
activities carried out.
279
(e) Introduce and Enforce Energy Efficiency and Conservation
The greatest incentive for the practice of conservation and efficiency improvement is
when it becomes too costly to waste energy! To overcome shortages to tide over the current
shortage of electricity one action that can immediately taken is that of denying the consumers the
use of electricity by load sheding or by dictating time and period of utilization. Such actions have
their negative impact. In the long term it is essential that we take actions that help us to utilize
energy and electricity more efficiently and with as little wastage as possible. Therefore, it is
necessary that all standard efficiency improvement and conservation measures are enforced not
only on the supply side but also on the demand side. These measures are well known. However, it
requires proper dissipation and easy availability of technology and materials so that necessary
behavioral changes take place in the consumer. Enforcement both subtle and legal needs to be
ensured. It has been estimated by the Asian Development Bank (ADB) that wide spread measures
could be taken over the next ten years to reduce electricity and energy demand by as much as 1.5
million TOE of fuels or save 3,000 MW of electricity generation capacity. The improvement can
be carried out nearly in all activities including industrial, domestic and commercial activity.
Necessary legislation to ensure energy efficiency standards and conservation, on the lines of the
Environmental Protection Act, will be introduced and enforced in all types of activities involving
but not limited to industry, transportation, domestic, commercial, residential etc.
(f) Improve Management System
The existing management system in generation, transmission and distribution is not at all
suitable for value addition activities that they are involved in. Improvement in the management
systems for increased value addition is crucial for the economy growth of the country. The
proposed management system will ensure the following:

Technical posting and promotion will be based on merit only. However, provincial quotas
will be followed at the entrance level

The heads of all technical organizations will be technical persons with appropriate hands
on experience

Career development and development of technical specialization of all technical
manpower will be ensured by proper HRD practices

Technicians play an important role in proper and efficient operation and maintenance of
technical equipment. The current policy limiting promotion to a certain level of pay
scales will be reviewed and the technically deserving technicians will be allowed
promotion to foremen and / or higher levels of pay scales
Strengthen Nepra
The scope of this important and crucial regulator will be expanded to not only determine
tariff but also play an intrusive role to ensure that the all power plants convert fuel or energy most
280
efficiently. Similarly, it will enforce best practices in transmission and distribution of electricity.
This requires proper maintenanced operation of equipment and management according to
international standards. It also requires proper training of manpower in training centers equipped
with all the tools necessary to impart proper training according to international standards.
NEPRA will have the authority to enforce adherence to standard technical and safety practices.
NEPRA will also have the authority to ensure that only suitably trained technical manpower is
assigned to technical work.
Increase Indigenization
Inspite of signification demand of new power stations and requirement of replacement
parts, indigenization has, with the exception of some good examples, not been as is expected.
Workshops with the capacity and capability to fabricate much of power plant equipment and
structures already exist both in the public and private sectors. Incentives to indigenize, wherever
provided, have not been very effective. Manufacture of all types of equipment requires certain
amount of development and hence manufacture of equipment in small quantities is not generally
attractive. To encourage indigenization and as elaborated in Para 28.4.1.1 it is planned that the
most of the investment in future thermal power plants will be on standardized and similar
multiple units. This decision will encourage foreign power plant suppliers to invest in and exploit
the indigenous capability extensively.
Strengthen the Planning Commission
The planning commission is the mandated authority to plan for the future. Had its plans
to have an installed capacity of 27,420 MW by the end of the MTDF plan 2005-10 been
implemented actually and had sufficient fuel supply been ensured, the energy crisis since May
2007 would not have occurred. It is therefore planned to mandate the Planning Commission to
monitor the international and national energy scenario constantly and upgrade plans so that they
are practically implementable and economically viable. It would also be mandated to
continuously review and analyze the economic and industrial developments in the country and
frequently forecast demand and supply situation and ensure and enforce appropriate actions to be
taken by the implementing agencies. Therefore, the Planning Commission will be authorized to
carry out intrusive assessment of developments taking place in the implementing agencies.
To achieve these goals and effectiveness, the Planning Commission’s Energy Wing will
be expanded to have technical manpower with hands on experience in various areas of energy
specialization ranging from exploration of fuels to the delivery of electricity to the consumer.
Revisit the Unbundling of Wapda
In the past, WAPDA used to be an efficient and well organized utility known for
supplying reliable and affordable electricity. The then prevailing career structure of its employees
was such that it could attract the best technical manpower for management, operation and
maintenance. In the year 1997, it was decided to unbundle WAPDA into smaller organizations
such as GENCOs, NTDC and DISCOs. This decision has neither been fully implemented nor has
WAPDA been left intact. Moreover, the tariff decided by NEPRA and notified by the
Government does not generate enough revenue to ensure timely maintenance and proper
operation necessary for sustainability and growth of the unbundled entities.
There is a need, therefore, to revisit the unbundling process and to reassess the obvious
advantages of a large multifaceted organization with ample opportunities for employees to move
281
upwards by regular promotions and the inspiration to eventually rise to the top. Also, there are
advantages of not only sharing technical expertise but sharing and ensuring maximum utilization
of common facilities such as training centers, technical development organization etc. etc. A
committee of technical experts with specialization in all the areas involved will be formed to
reassess the situation and recommend necessary action with regard to the unbundling within six
months
Encourage Captive Power Plants
This term usually refers to small sized power plants located within the industry such as
sugar mills or installed collectively within an industrial area. Captive power has one great
advantage and that is there is hardly any transmission and distribution losses and no thefts. In
most cases, inspite of the smallness of size the cost of generated and delivered electricity is
reliable and affordable by the end user. It is also reliable. These plants also have the advantage of
comparatively short time to procure install and operate. These will therefore be encouraged since
they can play a crucial role in maintaining industrial activity until the planned base load large
sized power plants come on line. Wherever additional electricity generation capacity will be
available from there, captive power plants they will be connected to the national grid and if found
practical, the system of netmetring will be introduced. Captive power, in particular, that generated
by plants based on baggasse (and coal during off season) will be encouraged. Similarly, captive
power plants based on municipal waste, cotton twigs, bio fuels etc. Like all small sized plants,
captive power plants are not as efficient in conversion of fuel as large sized base load stations to
those that use renewable fuels. It is estimated that in the next five years, captive power plant of
3000 MW capacity could be installed in the country.
Attract Projects through PPIB
Three power plants with a combined capacity of 600 MWs are likely to come online
between 1st July to 30th September 2010. PPIB is handling about fifteen more projects which are
in various stages of development and are likely to come online before the financial year 2014-15.
Most of the project under construction or planned are of small size and are dependent on oil or
gas as fuel. Therefore, sufficient fuel supply will be ensured before the contracts are finalized.
Further the plan to construct a Jetty and establish at least two power plant complex of 1200 MW
each and based on imported coal will be expedited.
Accelerate Development of New Hydel Plants
According to estimates the mountainous region of north Pakistan and its river systems
down to the sea have a potential to generate as much as 60,000 MW electricity. Storage of water
for sustained agriculture application is also a requirement. Therefore, hydro electricity tends to be
cheaper per MW installed then thermal power plants and has the advantage of not being affected
by the volatility of international fuel prices. During the plan period, the work on the Diamir
Bhasha dam (4,500 MW) will begin. However, none of these power projects will come online
before June 2015. Five smaller dams with a capacity of 436 MW will be completed in 2010-15.
Due to the seasonal effects, hydro electricity is annually cyclical. As shown in Figure 17
the generation capacity of the three dams is 5,928 MW in summer and reduces to around 2,000
MW in winter.
Encourage Small & Micro Hydel, Small Solar & Other Renewables
282
The vast network of canals and rivers downstream of the mountain region offer ample
opportunities to construct small dams and generate electricity. Many sites exists where run of the
canal and run of the river small size Hydel power station can be install. Similarly, in the
mountainous and hilly region small streams offer opportunity to setup more and more micro
Hydel power station. Remote areas and application where transmission and distribution cost are
high offer opportunities to setup solar power station. Bio fuels can be use very expensively as a
source of fuels and also in large installation as a source of electricity generation. City based
electricity power generation are quite common and have the added advantage of vast disposal. All
these activities which can be applied at thousands of sites across the country will be encouraged.
A PCRET which has under taken a project to manufactured solar panel by using raw silicon will
be encourage to increase its production capacity of solar panel, bio fuel and micro Hydel plants.
Introduce Alternate Energy
Wind and solar energy have a significant role in the future overall electricity generation
scenarios. With time and as its popularity grows it is predicted that it will become comparatively
economical to establish. Wind power has one serious draw back and that is it is stochastic in
nature and the world over has an average annual capacity factor of around 25%. This implies that
to meet electricity demand on assured round the clock basis, additional generation capacity has to
be established for the period wind power is not being generated. However, when sufficient base
load generation capacity to meet the entire demand becomes available, wind and solar generated
electricity will play a role as fuel savers. As the cost of construction of these powers generating
unit reduces with time, they will also become economically attractive. However, in remote
isolated locations where grid supplied electricity will involve high costs of transmission, wind
and solar can be economically attractive. In order to gain experience, it is planned to install atleast
200 MW capacity of wind power plants connected to the grid by 2015.
Import of Electricity
Unlike fuels, electricity can not be stored. Therefore, strategic considerations demand that
we develop the capability to generate electricity to meet all our requirements. However, under
certain circumstances import of electricity is necessary to meet the immediate demand and to take
advantage of imports provided it is less costly to use as compared to local production and other
related charges ad detailed in Para 28.4.1.1(b). Import and export of electricity to meet peak
demand i.e peak demand sharing can be advantages for two neighboring countries.
Utilize local & Imported Coal in Electricity Generation
In continuation to 28.3.1.(b) and (c), the importance coal as a source of electricity
generation needs to be highlighted. The world coal prices are not as volatile as fuel prices.
Therefore, investment in coal based electricity generation will be encouraged. In the short term
imported based power station operating as based load power station each of at least 1200 MW
capacity with large size modern efficient units need to be establish along the coast. The
international interest in these plants will be recognized and encourage. It may be noted that as
shown in Figure 8 the CO2 emissions per capita are very low as compared to develop and other
developing countries.
Public and Private Mixed Load Generation
Figure 7 Indicates the role of government in generation of electricity in different
countries in the world. In most developing countries the government has taken up the role to
283
install and generate electricity in competition with the private entities. A mix of fifty-fifty percent
public and private generation capacity is planned to be installed in the future.
Nuclear
In view of the good experience with the Chasma Nuclear Power Plant (C1) and the
second unit under construction, more Nuclear Power Parks located at suitable sites along the
river Indus will be installed. These similar nuclear power units will act as base load stations
providing reliable electricity. Their will be savings because of repetition of the same design, not
only in manufacture and construction but also in operation and maintenance. Indigenization will
also be encouraged. These plants will also not be affected by the volatility of fossil fuel costs.
Alternate Energy
Wind and solar energy have a significant role in the future over all electricity generation
scenarios. With time, it is predicted that it will become comparatively economical to establish.
Wind power has one serious draw back and that is it is stochastic in nature and the world over has
the average annual capacity factor of around 25%. This implies that to meet electricity demand on
assured round the clock basis, additional generation capacity has to be established. However,
when sufficient base load generation capacity to meet the entire demand is available, wind and
solar generated electricity will play a significant role as fuel savers. As the cost of construction of
these powers generating unit reduces with time, they will become very attractive. However, in
remote isolated location where grid supplied electricity will involve high costs, wind and solar are
the obvious choice. In order to gain experience it is planned to install 200 MW capacity of wind
power plants in the connected to the grid by 2015.
284
Annexure
THE WORLD ENERGY SCENARIO
In order to develop future energy projections a review of the global trends in energy
demand and supply is necessary. Following Figures 3 to 9 show the energy scenario in Pakistan
and in other countries worldwide.
Figure 3: World Market Energy Consumption. 1980 – 2030
Source: Energy Information Administration (EIA). International Energy Annual 2006
(June - December 2008). Website: www.eia.doe.gov/iea. Projections: EIA.
World Energy Projections Plus (2009)
Figure 4: Global Energy and Electricity Demand Projections
Energy Demand
Electricity Capacity Electricity Generation
Year
Billion TOE
2007
12.013
2015
13.488
2020
14.450
2025
15.611
2030
16.790
World Energy Outlook 2010. IEA. OECD. April 2010
GW
TWh
4,509
5,728
6,284
7,026
7,821
1,9756
2,4352
2,7232
3,0670
3,4292
285
Figure 5: Pattern of Utilization of Energy Sources in Selected Countries
Fuel
Pakistan
India
China
Oil
32.1%
0.8%
18.7%
Gas
48.3%
10.0%
3.8%
Coal
7.6%
52.4%
68.7%
Electricity
12.1%
36.8%
8.8%
Source: Energy Information Administration (EIA)
Malaysia
S. Korea
38.9%
49.2%
8.9%
3.0%
3.6%
17.9%
41.4%
37.1%
Japan
49.0%
14.0%
20.0%
17.0%
Figure 6: Public Vs Private Electricity Generation Capacity Mix Worldwide
Countries
Govt. owned capacity
Total installed
Share of Government
(GW)
capacity (GW)
owned capacity (%)
Brazil
55.492
101.944
54.4%
China
400.065
684.127
58.5%
Germany
13.964
131.904
10.6%
India
114.305
152.980
74.7%
Indonesia
22.490
36.917
60.9%
Iran
46.874
55.212
84.9%
South Africa
42.602
44.064
96.7%
South Korea
63.220
75.916
83.3%
Thailand
20.286
34.007
59.7%
Turkey
22.334
40.206
55.5%
USA
170.836
1,053.487
16.2%
Pakistan
11.907
20.889
57.0%
Source: Based on PLATTS UDI World Electric Power Plants Database 2009
Figure 7: Electricity prices for different sectors worldwide
Cents/kWh
Industrial Tariff
Domestic Tariff
Germany*
10.9
26.3
Japan*
11.6
17.6
Korea
6.0
8.9
14.6
23.1
UK
USA
7.0
Source: IEA Energy Prices and Taxes – 2009
* Data for 2007
11.4
286
Figure 8: World Electricity Generation Mix and CO2 Emissions (2006)
Figure 9: Historical Comparison of International Fossil Fuel Prices
Source: Statistical Review of World Energy 2009, British Petroleum PLC
287
6.
Infrastructure Development through Public-Private Partnership
6.1
Water Resources
1.
Introduction
The Tenth Plan (2010-2015) for the water sector highlights it both development as well
as a management issue. It will serve as useful connect between various on-going plans, not yet
fully realized, and the goals set in Vision 2030. Water is vital for sustainable development; eight
out of the ten Millennium Development Goals (MDGs) are water-related. Numerous sectors
including health, agriculture, energy and biodiversity are all linked to water. It is a key
requirement for generating rural livelihoods, growing food, strengthening industry, promoting
service sector growth, and ensuring the integrity of ecosystems. Pakistan is seriously water
stressed and fast becoming a water-scarce country with significant gaps between water
requirements and available resources. There is a strong possibility that the water economy will
run dry leading to severe water crises. However, there are countries with even less water than
Pakistan, but much stronger water economies. To be able to avert this situation, Pakistan needs to
readjust investment priorities and realign strategies to optimize its water productivity.
Tenth Plan (2010-15) emphasizes the importance of institutional infrastructure in the
water sector i.e. policies, governance, institutional strengthening, capacity building, and
knowledge based management, to make the investment in physical infrastructure more efficient
and sustainable. The outlook and the structures of water related institutions based on water
affluence, have to undergo a drastic change to be able to manage water scarcity. Since the water
sector is highly complex its management vision' cannot be based solely on medium-term plans; it
has to be long-term, projected onwards after every decade. However, for convenience in
implementation and monitoring, the long-term plan has to be split into five-year development
plans. Hence this chapter primarily focuses on the period from 2010 to 2015 but, to ensure
sustainability, it deliberately includes provisions far beyond this timeframe. Lastly but most
importantly, the entire approach to water management must change during the plan period as it is
too serious an issue to be left to the traditional bodies only; the whole nation and its institutions
will have to join in harmony to be able to cope with the water stress in a scientific manner.
2.
Objectives
The Tenth Plan (2010-15) sets out the following objectives for the water sector:

Tackle water scarcity through both augmentation and conservation i.e. by
constructing medium and large dams without further loss of time, making more
efficient and sustainable use of water and existing irrigated areas and further
expanding these where possible

Pursue the principles of Integrated Water Resources Management (IWRM)

Reduce the impact of water logging, salinity and floods

Manage (in terms of both quantity and quality) drainage, municipal and industrial
effluent in an environmentally safe manner for its reuse after treatment

Improve ground water management (in quantitative and qualitative terms) through
aquifer monitoring and management, ground water modeling and other relevant
techniques and prevent aquifer pollution

Enhance the performance and capacity of water sector institutions; establish
288
effective organization and management mechanisms through institutional reforms
and private sector participation

Develop knowledge-based water resource management in an integrated manner

Implement policies for sustainable and productive use of water

Enhance public sector investment including Public-Private Partnerships (PPP) for
construction of small and medium size dams, lining of irrigation channels and water
courses, rehabilitation of irrigation infrastructure, construction of surface and subsurface drainage systems, protection of infrastructure and high efficiency irrigation

Making sustainable investments in the water sector

Developing Institutions capacity for trans-boundary water management

Maximize water conservation and begin a process of rationalization of water
allowances with the help of all the stakeholders
3. Situation Analysis
3.1 Water Resources
Pakistan’s water resources comprise surface water and ground water.
a) Surface Water – The Indus River System receives an annual influx of about 154.88
Million Acre Feet (MAF) of water, mostly derived from snow and glacial melting. Pakistan
receives snowfall only in the Gilgit-Baltistan during winter. Rainfall is markedly erratic in
magnitude, time of occurrence and aerial distribution. The mean annual precipitation ranges from
less than 100 mm in parts of the Lower Indus Plain to over 750 mm near the foothills in the
Upper Indus Plain.
Pakistan is dependent on the three western rivers of the Indus (including Kabul, Jhelum
and Chenab). Post-Tarbela (1976-2008) flows (Indus at Kalabagh, Jhelum at Mangla and Chenab
at Marala) were 146.64 MAF. The three eastern tributaries of the Indus – Ravi, Sutlej and Beas –
were allocated to India for its exclusive use. Currently about 4.60 MAF of water flows from
India to Pakistan through these eastern rivers, with an additional 3.33 MAF of run-off generated
in their catchments within Pakistan. Also included in Pakistan’s total surface water is 21 MAF
from the Kabul River.
b) Ground Water – Pakistan is extracting 50 MAF from the aquifers and has already
crossed the sustainable limit of safe yield. This over-mining and pollution of aquifers has
resulted in secondary salinization and the presence of fluorides and arsenic in water, which in turn
is degrading the quality of agricultural lands.
The Indus Waters Treaty led to the construction of multiple hydraulic structures. These
enabled Pakistan to enhance water availability at canal head works to about 104.0 MAF.
However, this has now started decreasing because of the lack of surface water development since
construction of Tarbela dam and the significant loss of on-line storage capacity through
sedimentation. Of the 104.0 MAF of annual canal diversion, only 58.3 MAF reaches the farmgate, with the remaining 46.7 MAF reaches the ground water.
289
3.2
Water Requirements
Pakistan's population is projected to reach 221 million by the year 2025. Population rise,
rapid urbanization and better socio-economic conditions, will bring about increasing pressure on
water resources.
a) Agriculture - The total area of the country is 79.61 Million hectares (Mha) of which
23 Mha is designated as cultivated area. About 19.6 Mha cultivated land is served by irrigated
water, while the remaining 3.4 Mha is rain fed. Almost 90 percent of water resources are being
used to meet crop water demand. Increases in agricultural production to meet the needs of a rising
population, will require additional water. Based on population growth projections, by 2025 an
estimated additional 20 MAF will be needed at the farm gate (assuming a 50 percent increase in
crop yields from non-water inputs) and 37 MAF at the canal head. Simply to meet the shortfall up
to 2010-2011 the additional irrigation water requirement at the farm gate has been estimated at
12.61 MAF, which is about 23 MAF at the canal head.
b) Municipal Use – The current total water use for domestic and municipal purposes in
both urban and rural areas, is estimated at 4.5 MAF. By 2025 requirements for water supply, rural
potable water and sanitation requirements are estimated to be 10.5 MAF resulting in shortfall of 6
MAF. Even the shortfall by 2010-11 has been estimated to be 3.2 MAF..
c) Industry - There are over half a million large and small industrial units in the country,
of which nearly 120,000 are engaged in textile, chemical, fertilizer, tanneries and other
manufacturing and processing activities. The current water use by all industries and mines is
estimated to be 3.5 MAF. This is expected to rise to 4.8 MAF by 2025, i.e. an additional
requirement of 1.3 MAF. The additional industrial water requirement by 2010-11 has been
estimated to be 0.39 MAF.
d) Environment - In order to ensure adequate water throughout Pakistan for wetlands,
environmental protection and increased irrigated forestry, about 1.7 MAF water will be required
by the year 2025. The equivalent additional water requirement for 2010-11 would be about 1.5
MAF.
3.3
Supply Gap
Water
Box-1 WATER SCARCITY INDICATORS
availability in Pakistan
(Falkenmark Indicators)
is
1,038 m3
per
Water Scarcity Rare
>1700 m3/ Capita
capita/year (2010); this
Country faces seasoned or regular water stressed
is already well below <1700 m3/ Capita
conditions
3
the
1,700
m per
Water shortages hamper the health and wellcapita/year threshold for <1000 m3/Capita
being of the human beings.
water
stressed
3
conditions.
Thus <500 m /Capita
Shortages and severe constraints to human life.
Pakistan is already fast
Water Scarcity Indicators: 1700 m3/person is the threshold value.
moving into a condition Definition: A water resource system is considered stressed if it is unable to
of 'water scarcity'. This deliver the necessary water for environmental, social and economic purposes.
situation is likely to
deteriorate in future as the gap between supply and demand widens (see Box 1).
290
By 2025 water availability is expected to fall to 500 m3 per capita/year. Water available
for future development is 35 MAF of river flow, including 6.4 MAF from groundwater and 3
MAF from rainfall harvesting. However the gross additional water demand (at the farm gate) for
all sectors will be about 28 MAF (20 MAF for agriculture and 8 MAF for municipal water
supply, rural potable and sanitation, industry and the environment). The corresponding
requirement at the canal head (including provision for system losses where applicable) would be
nearly 45 MAF. This represents a shortfall of about 10 MAF of water by the year 2025. Unless
improvements are made, this will limit the development potential in various sectors.
4.
Issues- Development and Management
The water sector in Pakistan faces issues both in relation to physical infrastructure (or
development) and social infrastructure (management). These need to be addressed with equal priority.
General measures are listed below.
General






4.1
Enhancement of water availability (keeping in view the reduction in water reservoir
capacity)
Promotion of new irrigation techniques for more sustainable agriculture production
Linkages between Research and Development
Affirmative action for the water sector with respect to
 Water legislation
 Community participatory development
 Good governance
 Environment
 Institutional strengthening
 Public Private Partnerships
 International water agreements, laws and protocols
Efficient implementation of water sector projects with proper implementation and
monitoring
Proper, timely and transparent financial allocation
Surface Water
Surface water includes waters from the Eastern Rivers not captured by India. Water flows
from India to Pakistan through the Eastern Rivers currently amounts of 4.6 MAF. In addition 3.33
MAF of run-off is generated in the Eastern Rivers within Pakistan. Also included in Pakistan's
total surface water is 21 MAF from the Kabul River. However, future development of the Kabul
River up-stream could reduce the availability of surface water in Pakistan.
4.2
Ground Water
Pakistan is extracting 50MAF of groundwater. The over-mining of aquifers has resulted
in secondary salinization and the presence of fluorides and arsenic in water, which in turn is
degrading the quality of agricultural lands. This most valuable resource needs careful use and
continuous replenishment.
291
4.3
Season-wise and Annual Canal Head Withdrawals
The Indus Waters Treaty led to the construction of multiple hydraulic structures. These
enabled Pakistan to enhance water availability at canal head works from 90 MAF to 104 MAF,
with a marked increase in the Rabi season from 28 MAF to 37 MAF. However the country is
rapidly losing its storage capacity due to sedimentation caused by improper watershed
management. This is adversely affecting the seasonal transfer of water, with a widening gap
between water availability and crop water requirements (see Box-3).
4.4
Growing Demand
Pakistan's population is expected to reach 221 million by around 2025, i.e. an additional
60 million people requiring nine additional cities, each equivalent in population to that of Lahore,
as well as additional food and clean water. At the same time canal diversion, which increased
substantially due to storage dams, is drastically reducing as a result of sedimentation (Box-3).
This would negatively impact agriculture productivity. Per capita water availability is anticipated
to fall to 500 cubic meters, impacting economic activities and leading to internal migration (water
refugees). Mostly from rural to urban centers, such migration could place an additional burden on
already stressed urban services such as water supply, sanitation, health and environment.
4.5
Reservoir Sedimentation
Prior to construction of storage dams at Mangla and Chashma, the country's water
availability in the Rabi and Kharif seasons was 12 percent and 88 percent respectively. Following
their construction, the percentage carry-over from Kharif to Rabi increased from 12 percent to 16
percent and, after construction of Tarbela Reservoir, rose further to 21 percent. This makes
available about 13 MAF of water from storages reservoirs. However, because of sedimentation,
the carry-over capacity has fallen to 19 percent (see Table 1).
RESERVIORS
Table-1: Reservoir Sedimentation (MAF)
Original live
Live storage capacity Live storage Storage loss by
Storage capacity
of 2004
2010
capacity by
(Projected)
2010
(Projected)
Tarbela(1976)
9.68
7.16
Mangla(1967)
5.34
4.53
Chashma(1971)
0.87
0.44
Total
15.89
12.13
Loss due to higher operating levels of Tarbela=
0.511 MAF
Rate of loss at Tarbela=
103,000 Acre Feet per Year
Rate of loss at Mangla=
32,000 Acre Feet per Year
Rate of loss at Chashma=
22,000 Acre Feet per Year
6.77
4.33
0.22
11.31
2.91 (30%)
1.01 (19%)
0.65 (75%)
4.56 (29%)
292
4.6
Annual Salt Inflow/Outflow
Another severe challenge
Box-2 Annual Salt Inflow/Outflow in Indus Basin
facing the Indus Basin is the Total Salt deposited in Indus Basin
24.0 M. Tons
deposit of salts in irrigated land. On System
Total brought into the System
33.0 M. Tons
average the Indus transports some
9.0 M. Tons
33 million tons of salt annually; out Washed out of System
13.6 M. Tons
of this only 9 million tons is flushed Salt deposited in Punjab
out while the remaining 24 million tons is deposited each year in the Basin. 13.6 million tons are
deposited in Punjab and 10.4 million tons in Sindh. The fate of this 24 million tons of salt, and
the ingress of saline water into over-pumped fresh water aquifers, remains a major threat which is
so far only marginally understood and appreciated
(see Box-2). This needs a comprehensive
strategy for salinity.
4.7
Un-captured Water
Over the past thirty years 1,017 MAF of water has gone into the sea unutilized,
equivalent to 10 years' of canal withdrawals. Excluding the water required for protecting the
ecosystem below kotri, rest represents a direct economic loss. In monetary terms, after deducting
300 MAF required for environmental purposes, the value of unutilized water was US$ 149
billion. For better water management, storage capacity should be equivalent to at least 40 percent
of total water availability but Pakistan's live storage capacity of 9 MAF is just about 7 percent.
Even this is being cut by sedimentation. Pakistan needs to create a minimum of 65 MAF of
storage for effective resource management.
4.8
Percentage of Total Water used for Irrigation
In developed countries, by and large less than 60 percent of water is used in irrigation,
compared to a global average of 67 percent. [This is in addition to their natural advantage of higher
rainfall.] In developing economies, between 80-90 percent of water is used in agriculture Pakistan
is one of the highest users of water in agriculture (see Table-2).
Table-2 Percentage of Total Water used for Irrigation
India
Pakistan
China
Egypt
Italy
Japan
93%
90%
87%
85%
59%
50%
Korea
USA
Germany
France
UK
46%
42%
20%
15%
3%
More rational and economic use of water, particularly in the agriculture sector, is
therefore a pre-requisite to get better value for water. Future additional seasonal demands will
also have to be taken into account for Integrated Water Resource Management (IWRM).
293
4.9
Carry-over Capacity
Pakistan's extremely low carry-over capacity resulting from its lack of storage will, if not
remedied, pose extreme and even unmanageable water challenges in future. Such challenges
could be further aggravated by possible climate change and global warming. Flash floods and
prolonged droughts are the most challenging cycles that the world in general and developing
countries like Pakistan in particular, could be facing in future. It is imperative therefore to
seriously reconsider some of the thematic dimensions of the water sector.
4.10
Per Capita Storage
Pakistan's storage capacity is only 132 m3/person compared to Australia's of 5,000 m3/
person and the USA's of 6,150 m3/person. Furthermore it is continuously being reduced because
of sedimentation, and is negatively impacted by global warming and high levels of evaporation.
4.11
Productivity per Unit of Land
Pakistan's productivity per unit of land
Box-3 Productivity Per Unit of Land
is one of the lowest in the world (see Box-3).
France
7.60 T/ha
This is despite the reasonably good potential
Egypt
5.99 T/ha
that exists in Pakistan to enhance productivity.
Saudi Arabia
5.36 T/ha
Progressive farmers in Pakistan have obtained Punjab (India)
4.80 T/ha
yields of close to 60 mounds/acre compared to Punjab (Pak)
2.30 T/ha
8 mounds/acre by small farmers. Knowledge- Pakistan (Ave.)
2.24 T/ha
based interventions and continuous support to
small farmers are needed to enhance productivity. Given the global food shortage and high prices,
Pakistan must improve its average productivity per unit of land, particularly for small farmers.
4.12
Productivity per unit of Water
As with land, so is Pakistan's productivity per unit of water, is one of the lowest in the
world. Pakistan uses more than 90 percent of its water for agriculture which contributes less than
24 percent to GDP. This shows how wastefully the scarce water resource is being used.
Knowledge-based interventions would be required to conserve water and get more crops, more
value and more jobs, per unit of water.
4.13
GDP Contribution per Unit of Water
The global average contribution of water to GDP is US$ 8.6/cubic meter of water. In the
case developed economies such as the USA, Germany, France and Japan, the contribution of one
cubic meter of water to GDP ranges from US$ 30-40. Even in some of the well-managed
economies of Asia such as Malaysia, Hong Kong and South Korea, it is US$ 10-15 i.e. well
above the global average. But in Pakistan each cubic meter of water contributes just 34 cents to
GDP. While this yardstick may seem too generalized, it does highlight the need to focus on the
quantity of water used per unit and to obtain higher productivity per unit.
294
5. Review of MTDF (2010-15)
MTDF 2005-10 was reviewed to assess its implementation status and identify any
corrections in direction needed to achieve overall water sector development objectives. The
findings are summarized below:
5.1
Performance
a) Financial Performance - The MTDF envisaged a total financial outlay of Rs. 218.0 billion
against which Rs. 245.23 billion were committed in the plan period. However, expenditure was
less than the budgeted amount. Out of the allocated amount of Rs. 245.23 billion, actual
expenditure amounted to Rs. 214.28 billion.
b) Physical Performance - Though the financial targets set out for the MTDF were achieved but
overall performance was not satisfactory. Once again no mega dam could be built to increase
storage or hydropower, though a number of smaller projects were taken up. The targets achieved,
in brief are as follows:
5.2

Water Vision was operationalized

Three mega-canals - Kachhi Canal in Baluchistan, Rainy Canal in Sindh and Greater
Thal Canal in Punjab - were partially completed to irrigate an additional 2.864
million acres of land

Mangla Raising was substantially completed, but the process of resettlement of
affectees has not been completed as yet. Filling the reservoir to its new operating
level will provide 2.9 MAF of additional storage and lead to additional power
generation of 120 MW

Mirani Dam in Balochistan was completed to provide perennial irrigation water to
some 33,200 acres of land

Sabakzai Dam, again in Balochistan, was completed irrigating 6,875 acres of land

Satpara Dam in Skardu is expected to be completed in September, 2010 to irrigate
15,636 acres of land and generate 15.8 MW of power

RBOD-I, and III Projects are expected to be completed in June 2010 to provide
drainage relief and reclaim 4.90 million acres of irrigated land in Sindh

Detailed design and preparation of tender documents for the mega Diamer-Basha
Dam were completed

The National Programme for Watercourses Improvement renovated 68,000 water
courses

The project for micro-irrigation was initiated to cover 297,000 acres of agriculture
land and for the construction of 32 small/medium dams was initiated by proposing
high efficiency irrigation (drip and sprinkler) systems in the command area
Key Lessons and Recommendations
Highlighting the water issues that still need to be addressed, the key lessons to emerge
from the review of MTDF progress include the need for:
295









Institutional improvement in water sector
Increased focus on knowledge-based decision-making
Economically viable infrastructure investment
Encouraging indigenous consulting houses and construction companies
Timely release of funds
Accelerated process of land acquisition
Proper staff assignment
Putting in place effective monitoring and evaluation mechanisms
Ensuring transparency, accountability and governance
The review strongly recommended the inclusion of climate change as an integral part of
development and management plans. To meet the heavy financial outlays required for future
investment, the review suggested more investment should come from the Provinces. It also
proposed creating an enabling environment for greater private sector participation in the water
sector, as well as increased involvement of communities in the rehabilitation of water courses and
land preparation.
6.
Strategies
While there have been huge financial outlays in the past Development Plans, and these
have led to some achievements, on the whole water issues seem to have multiplied and become
more complex with time. The tenth Plan (2010-15) focuses on water as a major driver for
development and draws on the lessons learned from critical review of previous plans.
The Plan is based on the premise that water issues must be addressed promptly and in
conjunction with specific strategies for other sectors such as agriculture, energy, industries, water
supply, sanitation and environment. Furthermore, a long-term vision must be adopted taking into
consideration factors such as climate change, the demographic transition, sectoral constraints,
food security, poverty, health, environment, the water economy and the need for sustainable
development. Hence the proposed Plan does not only emphasize water development and
management actions to be taken over a limited time span; it seeks to develop a holistic dynamic
framework that will encourage better planning and decision-making on a continuous basis.
The general priority areas emphasized in the Plan will be completion of on-going
projects and initiation of projects vitally important in enhancing water supply and productivity.
Specific focus areas and strategies adopted are: improved water storage, hydropower generation,
conservation, improved agricultural and other practices to promote efficient and effective use of
water, improvements in physical and institutional infrastructure, creation of an enabling
environment, development of sound management instruments, and increased efforts to tackle
trans-boundary issues.
296
7. Programmes & Projects
(10th Five Year Plan)
7.1
Water Storage
In order to meet future water
requirements, it will be necessary to create
large storage dams on the Indus River. The
Federal Government through WAPDA has
launched comprehensive integrated water
resource and hydropower development.
Under
this
Programme
water
storage/reservoir sites of about 65 MAF
total capacity, and sites with a power
potential of 35,000 MW, have been
identified in the whole of Pakistan
(including Gilgit Balitistan and AJK). To
date implementation of various projects
different dams have either already been
taken up or will be, in the future. The
following dam projects are at different
stages of completion, development or
engineering studies.
Box-4 Dams
Raised Mangla Dam (AJK) project will provide
additional 2.88 MAF with an increase 12 % of
power generation capacity. Gomal Zam Dam
Project (Khyber Pukhtunkhuwa) is planned to
irrigate about 163,000 acres (660 km2) of land.
Subakzai Dam (Balochistan) will irrigate 10, 000
acres of land would irrigate by the dam. Akhori
Dam Project (Punjab) will store about 8.6 billion
cubic meters of surplus Indus River water, Munda
Dam Project (Khyber Pukhtunkhawa) will enable
the project area to utilize 70% of its water for
uplift of people. The construction of Kurram Tangi
Dam Project (Khyber Pukhtunkhawa), Winder
Dam Project (Balochistan), Naulong Dam Project
(Balochistan), Sukleji Dam Project (Balochistan),
Hingol Dam Project (Balochistan), Nai Gaj Dam
Project (Sindh) are being initiated under the Prime
Minister’s program.
Basha-Diamer is the flagship
multipurpose mega dam on which work has already been initiated and it will provide additional
storage capacity of 6.4 MAF and generate 4500 MW of hydroelectric power.
7.2
a)
Water Conservation
Lining of Canals/Distributaries
Water conservation and its rational management is the central theme of the 10th Plan This is to be
achieved through lining of canals and distributaries in saline ground water zones. Properly
designed and constructed lined channels can help save substantial quantities of precious water
and ensure better command, equitable distribution of water and allow for increased channel
capacities. The Lower Jhelum canal carries clean water from Mangla Lake but generally runs
through lands underlain by saline ground water. Lining of this canal is being considered as a part
of pilot programme for water conservation besides new proposals for lining of the three main
canals in Sindh, i.e. Rohri Canal, Rice Canal and Dadu Canal of Sukkur Barrage.
b)
Utilization of Flood Water/Hill Torrents
The active flood plains of the Indus River and its major tributaries total some five million acres,
while the flood flow of all rivers and hill torrents of Balochistan alone has been estimated to be
about 10 million.. This largely goes waste; it also causes damage to persons and land.
Techniques have been developed over time to conserve and use such water. The 10th Plan will
promote properly prepared and well thought-out projects, based on international best practices, to
enable this flood water to be stored or diverted for use in agriculture development and other
purposes.
297
7.3
On Farm Water Management
a) Improvement of Water Courses
Most water loss in Pakistan takes place at the farm level - principally as seepage from
watercourse beds and sides and as deep percolation from fields below the root zone. A significant
amount of irrigation water (20-25 percent) is lost during application because of uneven fields and
poor farm design. Improvement of watercourses is taking place under the On-Farm Management
Program. This is also implementing measures to reduce field losses and should improve the
availability of water at the farm gate.
b) High efficiency Irrigation
Agricultural practices such as zero tillage, furrow-bed-irrigation systems and high
efficiency irrigation (including sprinkler and drip irrigation), would go a long way to increasing
conservation and water productivity. Precision land leveling is being carried out under the OnFarm Management Program. The 10th Plan will also promote Laser Land Leveling Services
(LLLS) and high efficiency irrigation through Public-Private Partnerships (PPP). The Water
Conservation and Productivity Enhancement through High Efficiency (Pressurized) Irrigation
Systems Project aims to promote better agricultural practice by installing sprinkler/drip irrigation
systems on 291,249 acres. The Federal Government is allocating Rs.18 billion for this project.
Under the 10th Plan this strategy will be continued, and its scope expanded and also includes
command areas of recently taken up small and medium dams in the four provinces of Pakistan.
c) Water Storage Tanks
Water storage tanks can conserve water by increasing the volumetric flow through
intermittent and timely releases. At farm level, this enhances the flexibility of irrigation volume
and timing and facilitates high efficiency irrigation. Water from such storage tanks can be
conveyed to the point of use either through lined watercourses or through small diameter pipes.
The 10th Plan will promote use of storage tanks on pilot basis as an important upstream linkage
with high efficiency irrigation.
7.4
Development of Saline Agriculture/Bio-saline Alternative
Saline agriculture compliments engineering and reclamation approaches. It represents a
local solution to saline land and saline irrigation water on a sustained basis under controlled
conditions. In addition, saline agro-forestry adds organic matter to soil. This increases the
permeability of soil which helps leaching of salts. Given these advantages, saline agriculture with
drainage is being considered for adoption on a larger scale.
7.5
Treatment of Drainage Water/Effluent
Saline effluent from Sindh and Baluchistan is disposed of through canals and rivers into
the sea. It is estimated that some of this water and about half of the groundwater can be used to
supplement shortfalls in canal water supplies for crop production by adopting appropriate
management practices or by treatment. This has to be adopted carefully to avoid secondary
salinization. Efforts will be made by the Provinces and WAPDA on a more extensive basis to
convert this water into an economic resource.
298
Drainage water treatment is mainly concerned with the removal of toxic elements from
water. It could therefore be re-used, particularly by the municipal services and industry. To
reinforce the supply side, a new culture/program will be promoted for reuse of such water.
7.6
Improvements in Physical Infrastructure
To meet national sustainable development goals and tackle specific water challenges,
Pakistan needs to make higher investments in water infrastructure, treatment plants, irrigation
systems, hydropower plants, storage enhancement, drainage and reuse/recycling of nonconsumptive water, and other related areas.
In the 10th Plan (2010-15) efforts to enhance surface storage, including construction of
small, medium and large dams, will be intensified by the Federal and Provincial Governments.
Assets protection - including from further depreciation - will be facilitated by addressing on a
priority basis, the deferred maintenance of existing infrastructure.
7.7
Improvements in Institutional Infrastructure
a) Organizational Framework
Institutional reforms and effective coordination linkages among all water-related subsectors will be established. An organizational framework for the water sector will be created
consistent with international best practice, to undertake developmental and regulatory functions in
an effective manner.
b) Institutional Strengthening
Institutional audit and capacity building will be promoted, with particular reference to
human resource development and knowledge management. The governance of water resources as
well as efficient functioning of services related to the sector will be made more effective with
open social structures and better stakeholder participation.
WAPDA, as executing agency in the water sector and hydropower development, will be
assisted to undertake these on a fast-track basis. WAPDA will also be helped to strengthen its
institutional capacity to take knowledge-based decisions and improve its internal Knowledge
Management Framework.
7.8
Enabling Environment
The 10th Plan will promote an enabling environment through policies, the legislative
framework, and financing and incentive structures.
a) Policies
Policies will aim at (a) setting goals for water use, protection and conservation, and
(b) addressing the serious management challenges faced, and modernizing and upgrading
institutional structures to meet these effectively. The National Water Policy will be adopted on a
priority basis. This will facilitate the formulation of an appropriate legislative framework.
b) Legislative Framework
A special committee comprising of water sector experts, legal experts and other
specialists will be constituted to review the existing laws and make recommendations for possible
improvements. In case of any shortcomings in existing legislation, the committee will recommend
new water laws for better management of the resource. In a number of cases secondary legislation
299
is either not available or has been rendered ineffective. In such cases the rules will be revised to
achieve the policy objectives and the goals.
c) Financing and incentive structures
Financial resources will be allocated to meet water needs in a transparent and sustainable
manner.
7.9
Management
a) National Water Policy and Management Plans
A consensus based water sector policy (national Water Policy) would be formulated.
Preparation of National and Provincial Water Management Plans (NWMP and PWMP) would
also be undertaken, addressing the overall resource management issues in the country and will be
executed by different stakeholders/ agencies.
b) Management Instruments
The 10th Plan will promote the following management instruments:

Water resources assessment to understand resources and needs

Plans for Integrated Water Resource Management (IWRM) combining development
options, resource use and human interaction

Demand management to use water more efficiently

Social change instruments to promote a motivated and sensitized civil society

Conflict resolution to manage disputes and ensure equitable and fair sharing of water

Economic instruments - using value and prices for efficiency and equity

Information management and exchange to improve knowledge for better water
management
Specific measures to be taken include:

An Indus Basin operational mathematical model will be prepared for efficient
management of water resources, taking into account the factor of climate change

Efficient and effective hydro-meteorological data dissemination systems will be put in
place

Nationwide surveys will be undertaken for assessment of ground water including its
quality, quantity, withdrawal and recharge potential
c)
Revenue and Demand Management
The 10th Plan will focus on reducing the quantum of Unaccounted Water (UAW) and
Non-Revenue Water (NRW). It will also place emphasis on allocative efficiency i.e. the
efficiency with which water and related resources are allocated for sustainable social and
300
economic development. This will be reinforced with technical efficiency to address demand
management i.e. enhanced user and supply efficiency.
d)
Regulation
Regulatory policies and instruments will be formulated to support:

reducing wastages and overuse





checking pollution of fresh water storages, ponds and lakes
regulating groundwater extraction
conserving water in all sub-sectors
reducing non-revenue water in these sub-sectors
assessing accurately the availability of surface water, rain water and groundwater and its
most economic and optimal use


initiating detailed geo-physical surveys to assess the quality and quantity of groundwater
economizing and enhancing surface storage and regulating ground water recharge
7.10
Improved Practices
IWRM being a holistic approach, improved practices such as following have to adopted
and vigorously pursued.

Drought tolerant varieties of crops will be introduced and local communities will be
trained in their use

Productivity of existing irrigated land will be enhanced by making knowledge-based
interventions

More effective agricultural advisory services, covering water availability, crops, soil
analysis and other issues, will be provided to farmers


Drought adaptation plans will be prepared to promote awareness among stakeholders
Multiple uses of water/land will be introduced to enhance the income of small farmers

Productivity in rain-fed areas will be enhanced by introducing dry and hard varieties of
seeds and disseminating knowledge among farming communities
Projects for reuse of non-consumptive water will be initiated countrywide


Private sector investment and participation will be encouraged to reduce non-revenue
water in all sub-sectors

Social forestry and Watershed Management will be promoted to enhance green coverage
and enrich catchments areas

Water conservation and ground recharge techniques will be introduced along with high
efficiency irrigation

Salt tolerant varieties of crops will be introduced in coastal areas to bring waste land into
productive use.


Urban local councils will be encouraged to recycle/reuse city effluents
To address climate change issues, model farms will be established in all agricultural
zones to develop drought tolerant varieties of crops and educate communities in their use

Hardy livestock will be introduced in drought-prone areas
301



7.11
Coastal areas and the sea will be protected from pollution
The clean drinking water programme for all will be continued
Issues of urban and rural sanitation will be addressed to minimize the contamination of
underground water
Trans-Boundary Issues

Necessary measures will be intensified for resolving the trans-boundary water issues and
for implementation of the 1960 Indus Waters Treaty in its letter and spirit, including
capacity building of institutions

Consultations on other trans-boundary issues will be initiated (such as pollution untreated effluent being passed down to Pakistan from India)

Since the Indus Waters Treaty India has developed numerous storage projects on the
three Eastern Rivers of Ravi, Sutlej and Beas, with the result that during the dry season
there is almost zero flow in these rivers. Minimal environmental flows are required to
protect river biodiversity. The national capacity will be enhanced on this subject

India is over-mining the aquifer with the result that groundwater in Western Punjab is
also being affected. This concern will also be pursued and more authentic data will be
collected on this account

The Kabul River brings water annually into the Indus Basin. Construction of projects on
the Kabul River and its tributaries can have a negative impact on Pakistan's already
scarce water resources, and violate its historic/lower riparian water rights. Deliberation
will be made to preempt/protect these inflows

Capacity building process of the related institutions will be undertaken
address the transboundary waters
to effectively
8. Financing
Both traditional and innovative modes of financing are required to meet the large deficit
in the form of deferred maintenance and capital investment, as well as the higher investments
necessary for future programmes. The share of water in the PSDP has increased considerably
over the years. Since water related infrastructure is one of the primary responsibilities of the
federal and provincial governments, the total allocations for this will be increased from Rs 214.28
billion in the 9th plan to Rs 369.00 billion in the 10th Plan (2010-15). Suitable projects will be
prepared to be offered to for private investment through mechanisms such as BOT, BOO, BOOT.
Direct investment in the form of loans as well as equity will be promoted and establishment of
Special Purpose Vehicles will be encouraged to attract financing through bonds/debentures. Since
water is an important sector, it is also hoped that additional funds will be made available by the
multilateral banks and other international development agencies, as well as bilateral donors.
Levying of additional charges on consumers to repay capital investment, on the pattern of the
Neelum-Jehlum Hydropower project, will be replicated in other projects. Innovative financing
options will be explored for the Basha-Diamer Dam and other similar projects. Public-private
sector partnerships will be pursued as preferred mode of financing .Given at Annex -A, is the
public sector financing scenario during the plan period.
302
Annexure-A
S.#
1.
2.
3.
10TH FIVE YEAR DEVELOPMENT PLAN (WATER SECTOR PROGRAMME)
Investment Plan (Million Rs.)
Name of the Project
2010-11
2011-12
2012-13
2013-14
2014-15
Dams (Small, Medium & Large)
15,000
18,370
26,000
29,000
35,000
Canals (New & Existing)
5,000
7,000
8,920
10,000
13,000
Drainage & Reclamation Projects
3,000
6,000
6,000
7,000
8000
500
600
800
1,000
1,200
System Rehabilitation & Improvement
2,000
3,000
3,000
4,000
6,000
Lining (Canals & Distrys)
5,000
7,000
8,000
10,000
12,000
Water Conservation (Sprinkler, Drip & Raised Bed)
2,000
3,000
4,000
6,000
7,000
On Farm Water Management
1,900
4,000
6,000
8,000
9,000
9.
Flood
1,000
1,000
1,800
2,500
3,000
18,00
0
42,00
0
22,00
0
28,90
0
9,300
10.
Hill Torrents
500
1,000
1,000
1,500
1,000
5,000
11.
Inland Navigation
100
500
600
750
800
2,750
12.
Rain water Harvesting
950
1,000
1,500
1,500
1,500
6,450
13.
Ground water Recharge
920
1,000
1,500
2,000
1,500
6,920
4.
5.
6.
7.
8.
General Investigation Schemes
Total
123,3
70
43,92
0
30,00
0
4,100
Knowledge Management
14.
Water use efficiency plans
50
50
50
60
63
273
15.
Water management Policy
30
30
30
40
45
175
16.
Transboundary waters
30
30
30
40
43
173
17.
Review Existing water laws
30
30
30
40
44
174
18.
Hydro-meteorological data system
30
30
30
40
43
173
19.
Indus Basin Operational mathematical model
30
30
30
40
30
160
20.
Rainfed Areas & Partial Irrigation
30
30
30
40
30
160
21.
Drought Adaptation Plan
30
30
30
40
30
160
22.
Multiple use of water
30
30
30
40
30
160
23.
Groundwater Surreys
30
30
30
40
47
177
24.
Water & sanitation plan
30
30
30
40
47
177
25.
District & village water security plans
30
30
30
40
48
178
26.
Research, Training & Education
100
200
200
400
500
1400
Institutional Strengthing (Public Sector, Private
Sector, Professional Bodies, Think Tanks etc.)
Water Engineering Services (Consultancy &
Construction Industry)
Water Engineering Industry (Sprinkler, Drip, Turbine
& Pumps)
Total (Federal)
100
200
300
450
500
1550
50
250
500
800
1000
2,600
500
500
500
600
500
2,600
39,000
55,000
71,000
86,000
102,000
Total (Provincial)
30,100
35,100
40,900
47,400
52,900
Total (National)
69,100
90,100
111,900
133,400
154,900
353,0
00
206,4
00
559,4
00
27.
28.
29.
303
6.2
Transport and Logistics
1.
Introduction
The 10th Plan (2010-2015) proposes a thematic change to the traditional definition of
‘Transport Sector’. Firstly, it will not be confined to physical infrastructure such as rails, roads,
road transport, sea trade and related freight alone, but will also include services such as
packaging, delivery, and storage and trade logistics. Secondly, factors like high freight,
insurance, longer delivery times and renewal costs, will be considered as important additional
costs which need careful review. Thirdly, the aggregate transport and logistics costs - including
opportunity cost, service standards and trade facilitation - ultimately determine the efficiency of
the Transport and Logistics Sector and also represent the cost of doing business in Pakistan.
Hence, these will feature prominently in reform efforts, and effective programms will be
developed for the sector looking at all such dimensions. This will help make the country more
competitive - which is the central theme of the 10th Plan.
Sustainable economic development is dependent on a robust and low cost transport and
logistics sector. Enhanced export competitiveness is also contingent upon the efficient
performance of the sector. In spite of the recent economic slowdown, the sector has maintained
positive growth trends. Signs of economic recovery are already visible and GDP growth rates are
likely to attain levels of around 5.5 percent during the 10th Plan period (2010-15). In line with the
country’s expanding economic activity, the current level of inland traffic by road and rail estimated at 328 billion passenger–km (BP km) and 205 billion ton-km (BT km) respectively, is
likely to increase by 500 BP km and 310 BT km by 2015 (Annex-I). At present, the sector
provides approximately 2.93 million jobs; this is expected to increase to about 3.37 million
during in the corresponding period.
The Government is committed to implementing a comprehensive National Trade
Corridor (NTC) initiative and modernizing the transport and logistics sector through a continuous
process of reform supported by focused investments in all of its sub-sectors. The transport and
logistic sector claims 17 to 20 percent share of the annual public sector development program
(PSDP) but this level of investment is not enough to meet the growing needs of the country.
Approximately two to three times more investment is required to enable the sector to perform in
harmony with the expanding economic activities. Concerted effort would therefore be made to
promote PPPs and leverage higher investment from the private sector.
2.
Major Issues
Diverse in composition, the transport and logistics sector comprises of railways, roads,
road transport, ports, shipping, aviation and logistics services. Roads and road transport
dominate the mix and carry over 95 percent of all passenger and freight traffic in the country.
Once much cheaper and effective, railways have lost their competitiveness to road transport, and
now handle only 5 percent of freight traffic. This modal imbalance is not only over-burdening
road systems and causing congestion, pollution and road damages, but also contributes towards
the high cost of transportation due to soaring prices of imported fuel. It is estimated that 35
percent of fuel energy is consumed by the transport sector. The declining freight business of
railways coupled with subsidized passenger traffic has affected its financial health and the sector
is running into constant losses.
304
The bulk of imports and exports (95 percent) are handled through two ports; Karachi Port
and Port Qasim, with Karachi Port handling three-quarters of the total volume. Because of
limited infrastructure development, the ports are congested and lack the capacity to handle
growing traffic. Ship handling charges though brought down recently, are still on the higher side
for want of more efficiency/infrastructure. There are fourty three airports (42 airports are owned
by CAA and one airport is being operated by private sector at Sialkot), including ten international
airports. Ten airports are closed due to technical reasons and less traffic. The national airline
carries most of the passenger and freight traffic (87 percent). Two private airlines handle the
remaining traffic. While the economy has been expanding, the passenger as well as freight traffic
by air has registered a nominal increase. It appears that the airlines could not avail the benefits of
economic growth for lack of highly competitive commercial orientation. Not only is freight
traffic by air low, but cargo facilities at airports are also inadequate. Customs procedures are
cumbersome despite some reform initiatives. The local logistics industry is under-developed and
does not provide integrated logistics services; the gap is being filled by a few international
companies. The country has an elaborate canal system based on its five major rivers, but inland
water transport is almost non-existent.
While the prices of transport and logistic services are decreasing worldwide due to global
competition, the charges in Pakistan are generally higher than in the region due to numerous
inadequacies briefly discussed above. High transport costs are affecting the export
competitiveness of the country. This in turn has a negative impact on investment, in the exportoriented industries. Private sector participation being limited to some sub-sectors only, the
transport and logistics sector puts heavy pressure on public sector funds. A large number of
schemes with limited allocations are often included in the PSDP leading to a large throw-forward
that slows down the pace of implementation.
3.
Review of MTDF (2005-10)
During 2005-2010, most of the on-going schemes were completed and new projects were
launched that were largely focused at up-gradation of the existing infrastructure. Both Federal
and Provincial governments made considerable progress in the road sector. The following major
projects were completed: i) Islamabad-Peshawar Motorway (M-1); ii) 653 km long Makran
Coastal Road;
iii) Dera Allah Yar–Nutal–Sibi–Dhadar Road (N-65); iv) Islamabad–
Muzaffarabad Dual Carriageway (43 km); v) Lowari Tunnel; vi) rehabilitation and improvement
of 950 km of N-5; vii) improvement of 340 km of N-25; viii) reconstruction of earthquake
damaged roads; and ix) substantial progress on construction of Gwadar links including M-8 and
N-85.
The physical progress achieved during the MTDF period in the Provinces and Special
Areas is as follows: i) 685 km of existing roads were improved and 45 km new roads were
constructed in Punjab; ii) 2,940 km of existing roads were improved / rehabilitated and 4,990 km
new roads were constructed in Sindh; iii) 2,600 km of existing roads were improved in Khyber
Pakhtunkhwa ; iv) 4,400 km of existing roads were blacktopped and 1,100 km roads were
improved, reconditioned and rehabilitated in addition to work undertaken on major bridges and
allied structures in Balochistan. In special areas 440 km of roads were constructed and 806 km
existing roads improved / rehabilitated. This includes construction of 239 km new roads and
improvement of 600 km existing roads in AJK and construction of 201 km of roads and
improvement / rehabilitation of 206 km of existing roads in addition to construction of 10
bridges, in the Gilgit-Baltistan (GB) area.
305
Pakistan Railways undertook around 300 km of track rehabilitation and procurement and
manufacturing of 69 D.E. locomotives, as well as induction of 175 additional passenger coaches
and 1,800 high capacity freight wagons. Considerable procurement of machinery and civil works
was undertaken both by Karachi Port Trust (KPT) and Port Qasim Authority (PQA) through selffinancing schemes. The Gwadar Port was partially completed during the MTDF Plan period.
Through private sector financing, the PQA established new terminals for grain and fertilizer, coal
and cement, gas/LNG and second oil terminals. The Civil Aviation Authority undertook work on
the construction of Benazir Bhutto International Airport (BBIA), up-gradation of Multan Airport
and expansion of terminal building of Peshawar airport during the MTDF Plan period.
During the Plan period overall expenditure of Rs.492.2 billion was incurred for the above
development projects, including Rs.222.8 billion under the PSDP, Rs.164.1 billion under the selffinanced/corporate sector programme, and Rs.105.4 billion under the private sector financing
program (Annex-II). However, due to financial constraints, work on some of the projects
envisioned by the MTDF could not progress well. This has led to the accumulation of a large
throw-forward amounting to Rs. 285 billion, which will have to be catered for in the 10 th Plan to
enable completion of the lagging /delayed projects.
4.
10th Five Year Plan 2010-2015
4.1
Objectives
In meeting the national goal of
sustainable economic growth and
global export competitiveness under
the framework of National Trade
Corridor Improvement Programme,
the objectives of the Government in
the Transport and Logistics Sector
during the 10th Plan are to:

Develop
an
integrated
intermodal transport and
logistic sector that efficiently
meets the requirements of the
growing
population
and
expanding economic activities

Modernize management of
the sector to ensure harmony
and coordination amongst
different transport systems
and reduce costs to the
economy

Make a sustained effort to
achieve world class transport
infrastructure and logistic
services
that
facilitate
domestic and international
trade through private sector
National Trade Corridor Improvement Programme
(NTCIP)
A composite transport-system of ports, rail, road and airways
aligned between Karachi and Peshawar along which bulk of
local and foreign trade of the country moves is known as the
National Trade Corridor. To achieve a coherent performance of
the system the Government of Pakistan, has launched the
National Trade Corridor Improvement Programme (NTCIP).
The initiative aims to;
 Modernize transport infrastructure and streamline policies,
procedures and practices and promote international trade;
 Improve port handling capacities, reduce charges and
reform port management;
 Bring delivery of rail services to international standards
and privatiz commercial operations of the Pakistan
Railways;
 Modernize the trucking industry and reduce the cost of
transportation, highway damages and environmental
pollution;
 Develop a sustainable, efficient, safe and reliable system
of Highways;
 Ensure safe, secure, economical and efficient operations of
the civil aviation;
 Enhance export of perishables through a modern cool
chain system on PPP arrangements;
 Develop trade and transport facilities along NTC to
support industrialization and business development;
 Re-establish Inland Water Transport in rivers and canals.
 Develop and strengthen the process of institutional
capacity building and sector efficiency
306
participation

4.2
Support research and development in the sector for its sustainable progress
Strategies
Recognizing the importance of transport to economy and besides making large
investments to improve road, rail, air and ports infrastructure, the government has planned to
focus on supporting trade and logistics services with the establishment of a world class “National
Trade Corridor”. This is why it will invest heavily in improving transport infrastructure (road,
rail, air and ports) – thereby facilitating trade.
It will also place increased stress on the improvement of trade and logistics services,
bringing these to international standards through the NTC. The initiative is aiming at
development of both physical and supporting institutional infrastructure in transport and logistics.
The development works along the corridor will be implemented through National Trade
Corridor Improvement Programme (NTCIP). The investment programme is being co-financed by
the international development partners like World Bank, Asian Development Bank and
governments of Japan and China etc. Equivalent to about US$ 9.0 billion would be utilized under
the NTCIP to improve major highways, railways, ports, and airports to enhance country's
connectivity with the neighbouring countries especially the Central Asian States and China. Out
of this investment, US$ 5.0 billion would be utilized to improve national highways and US$ 1.5
billion to modernize Pakistan Railways and the rest would be incurred on improving ports,
airports and providing other trade and transport facilities.
The framework of the reforms takes a holistic and integrated approach to reduce the cost
of doing business in Pakistan by improving the trade and transport logistics chain and bringing it
up to key international standards. Several studies are being undertaken to examin how to carry
out reforms and to make the transport sector more competitive. Effort will also be made to
prepare long term development plan for Integrated Transport System Policy with balanced share
of each transport mode to minimize total transport cost in the economy.
New expressways and inter Provincial roads will be launched. The NTC Strategy Study
(NTCSS) is another reform initiative taken up by the Government of Pakistan. It aims to upgrade
systems and procedures for the development of business and trade, and to promote industrial
diversification – focusing on a number of select sectors. Comprehensive multi-sector reforms,
supplemented by private sector investment, will help ensure the expansion of the targeted
industries along the Corridor. The NTCSS will provide support in the select sectors, both in
undertaking reforms and in leveraging internal and external investment.
To provide intellectual leadership and overall policy guidance on the NTCIP, a Task
Force has been set up in the Planning Commission.
307
4.3
Sub- Sector Strategies & Programmes
4.3.1
Ports & Shipping
Issues
The two main ports of the country i.e. (KPT) and the (PQA) handle 95 percent of trade.
Gwadar Deep Water Port is the third port of the country which recently started operations. The
traffic at these ports has been growing at an annual rate of over 6 percent. By type, it is
containerized traffic which is expanding at a much higher rate (15 percent per year) compared to
bulk and general cargo. With increasing traffic and inadequate cargo handling capacity, the ports
are becoming congested; the dwell time for containers ranges is still on the higher side. The pace
of work on infrastructure improvements, including access channel conditions, design depths at
berths and better equipment, is slow and the ports are becoming increasingly unsuited to
receiving larger carriers.
While the nature of traffic has changed to containerized cargo, the ports tariffs have not
been fully restructured. The tariffs are high for container cargo and relatively low for
bulk/general cargo. Physical improvements at the ports being carried out to meet the
requirements of increasing containerized traffic are generally inadequate. Dedicated container
terminals have only recently been created at the ports. The major container terminals are:
Pakistan International Container Terminal (PICT), Qasim International Container Terminal
(QICT) and Karachi International Container Terminal (KICT). However, in spite of these steps
the dearth of container berths at ports still persists. Ports are becoming commercial in
management, but at a slow pace. Port Qasim has been operating as a landlord port but Karachi
Port Trust (KPT) is yet to make significant progress in this direction.
The shipping industry in Pakistan has not flourished. Once a large fleet of vessels is now
reduced to eleven. Almost the entire trade of the country is dependent on foreign ships. The
recent changes brought in the regulatory framework for shipping have not significantly improved
the prevalent situation. The Pakistan National Shipping Corporation (PNSC), a state-owned
enterprise, has a fleet of eleven national flag-bearing vessels and enjoys a monopoly, especially
in the transportation of crude oil. Due to financial constraints it has not been able to take any
major initiative to acquire vessels to capture dry cargo and containerized trade.
Strategy
Making Ports Attractive: The sector strategy would aim at maximizing the support of the ports
to external trade by reducing ports and ship handling charges, and developing port facilities that
allow all types of ships to call at the country’s ports. The investment would focus on the
improvement of physical infrastructure at the three ports, improvement of ship-building and
repair facilities, procurement of additional ships by the PNSC and the private sector. Private
sector investment would be encouraged.
Reforms & Programmes
The reforms and programmes in the port sector, as laid out in the NTCIP, have made
some useful progress. For example the following reforms have been completed: i) establishment
of performance monitoring indicators; ii) navigation available 24 hours a day and 7 days a week;
iii) some reduction in port dwell time, and iv) reduction in port charges by 30 percent. Other
reforms to be implemented during the 10th Plan pertain to: i) continuation of land lord port
308
strategy; ii) corporatization of ports; iii) preparation of ports business plans and their
implementation; iv) preparation of ports master Plan; v) full application of paperless transactions
for ports and customs procedures; vi) complete outsourcing of port services , vii) contracting out
dredging and using performance-based contracts for capital and maintenance works; viii)
resolving draught issues to accommodate larger ships; ix) increase containerization to enhance
port operations, and x) promoting PPPs.
The reforms envisioned under the NTCIP comprehensively tackle the impediments that
have stalled progress in the shipping sector. These reforms include: i) improvement in legislation
by incorporating modifications in the existing Merchant Shipping Ordinance 2001; ii) finalizing
recommendations to revamp port facilities; iii) procurement of ships in the private sector and
reduced dependence on foreign ships; iv) deepening of navigational channels at all ports up to
16.5 meters; v) development of private terminals, ship building, ship repair, container
manufacture and repair, etc; vi) initiation of pilot project for inland waterways; vii) revamping of
Karachi Shipyard and Engineering Works; viii) facilitation of direct foreign investment, PPP and
commercial financing; and ix) tapping of network resources in Pakistan’s maritime exclusive
economic zone. With the implementation of these reforms during the 10th Plan, it is expected that
the country’s shipping situation would substantially improve.
The following programmes are envisaged for the sector during the 10th Plan:
Karachi Port Trust: Major planned projects includ: i) construction of Pakistan Deep Water
Container Port east of Keamari Groyne; ii) port bridge cum Karachi Harbour Crossing; iii)
reconstruction of Berths 10-17A; iv) construction of Cargo Village in the Western Back Waters
and deepening of navigation channels; and v) reconstruction of old jetties/facilities and
procurement of additional floating craft.
Port Qasim Authority: Principal planned projects being executed are: i) second container
terminal; ii) grain fertilizer terminal; iii) coal/clinker and cement terminal; iv) LNG terminal on
BOT basis/private sector projects and vi) deepening and widening of navigation channels and
night navigation, to be undertaken on a self-financing basis; and vii) capital dredging to increase
channel depth to accommodate large ships.
Gwadar Port Authority: The major projects envisaged are: i) construction of the main port
access; ii) East Bay Expressway; iii) Mullaband land for development of port facilities and a
civic centre. In addition the GPA plans to; i) upgrade and pave back-up areas; ii) further equip
the multipurpose berths with modern craft and equipment; iii) develop the Free Zone area for
warehousing and other port facilities, and iv) construction of additional container terminals.
Shipping: Programmes to be given priority in the 10th Plan are: i) expansion of PNSC’s shipping
fleet and ii) promotion of private ships operating under Pakistan’s Flag.
4.3.2
Trade Facilitation and Logistic Services
Issues
A number of steps have been taken by the Government to help reduce long and
cumbersome customs clearance procedures. These include procedural obstacles e.g.: “up to 36
signatures and 62 controlled steps required for clearance and 100 percent physical inspection of
containers”. Some improvements have been witnessed in trade facilitation targets, such as: i) port
309
dwell time reduced from 11 days to 6 days; ii) customs clearance time reduced from 4 days to 2
days; iii) ports storage period reduced from 9 days to 5 days; and iv) adoption of the National
Trade Facilitation Strategy 2008. However, these reforms are not enough and the country is still
far away from meeting the regional averages.
The local freight-forwarding industry is predominantly undeveloped. It is not capable of
providing integrated and value-added services, which are features of any advanced and modern
logistics industry. These services include “tracking and tracing, cross-docking, vendor managed
inventory, global door-to-door delivery etc”. Integrated logistic services are being provided by a
few international chains that have opened local branches in the country.
Strategy
Development of Modern and Efficient Trade Facilitation & Logistics Services: The focus of
the 10th Plan will be to facilitate efficient distribution of production in domestic and international
markets. This will be achieved by streamlining and modernizing procedures, practices and
policies relating to the transport and logistic sector and development of logistics sector facilities
for intermodal transfer interface. Development of logistic hubs in the private sector, integrated
into existing industrial estates, industrial parks, export processing zones etc. will be carried out
on a pilot basis in all provinces.
Reforms & Programmes
Two major reforms have been partially accomplished to set in motion a process of
improvements in trade facilitation namely: i) the preparation of a Trade Facilitation Strategy; and
ii) Development of the Pakistan Automated Custom Systems. During the Tenth Plan these
reforms will be further spread across the country at ports, dry ports and border terminals.
Additionally, the implementation on the other reforms during the Plan, such as the following
would further improve the existing standards; i)
Logistic Hubs
finalization of the Trade Facilitation Strategy; ii)
implementation of important international These are centers that facilitate freight mobility
treaties and conventions, particularly accession by optimally utilizing different modes of
to TIR (International Road Transit); iii) transport and cutting down on costs and time of
upcountry licensing/registration of freight transportation. A pilot project for establishing a
forwarders; iv) adoption of transparent pricing logistic hub at Sundar Industrial Estate, Lahore
has been recommended by ADB’s study
and reduced private sector port charges; vi)
regarding preparation of NTC – Highway
implementation of a Pakistan electronic trading Business Plan 2010. To be developed on PPP
platform; vii) streamlined role of commercial modality the proposed logistic hub shall provide
banks in trade facilitation; viii) establishment of following facilities over an area of 100 acres:
a modern multi-agency transit station at Jamrud;
Warehousing, Cold Storage, Trucking
x) development of border terminals of
Zone, Value Added Services, Container
Yards and Infrastructure and Amenities
international standards at Taftan, Chaman and
Wagha
for
composite
facilities;
xi)
establishment of a training institute for freight On successful operation and development of the
forwarders and xii) development of “logistic pilot project similar logistic hubs would be
developed at other industrial estates all over the
hubs” .
th
country during the 10 Plan.
Pakistan Customs is in the process of developing an integrated web based and paperless
system namely “Web based one customs system”. It will be first tested at Karachi and
subsequently rolled out to all other stations in the country, during the 10th FYP. The system will
be operated in public sector and will try to provide one stop shop for all commercial, industrial
310
and other transactional requirements of various stakeholders. The end users will include
importers, exporters, regulatory authorities, tax collectors, logistics service providers, carriers,
terminal operators and banks etc. The system is expected to lead to significant reduction in the
custom clearance time from currently two days to few hours and add immense efficiency to
facilitate trade.
4.3.3
Cold Chain System (CCS)
Issues
Post-harvest losses in Pakistan of perishable produce, i.e. fruits, vegetables and meat and
dairy products, are estimated to be very high (about 35 percent). One important reason is the
absence of appropriate transport logistics, comprising pack houses, cold storage facilities, reefer
containers and reefer yards for marketing perishable produce domestically and internationally.
The Pakistan Horticulture Development and Export Corporation (PHDEC) have been assigned
the task of developing CCS infrastructure using PPP modalities, so as to realize the enormous
potential of the horticulture sector in the international market. Similar arrangements are also
underway in the case of dairy, meat and fisheries products by the Livestock and Dairy
Development Board (LDDB). However progress in this regard is not substantial.
Strategy, Reforms & Programmes
Development of a well-integrated cold chain system will be an important logistic service
that will be developed to enhance the export volume of perishable goods. A comprehensive
feasibility study is planned in the 10th Plan for the development of the CCS using PPP modalities
and, to launch a chain of initiatives such as pack houses, cold storages, reefer containers, reefer
yards and testing labs in the country. The private sector will be responsible for creating assets
through dedicated businesses and delivery of services. The public sector will create an enabling
environment through supportive policies and regulations.
4.3.4
Roads
Issues
The national road
network comprises of
260,000 kilometers of
roads, of which 68.4
percent is of high-type.
Network expansion has
been rather modest; at a
rate of about 2,211 km
per year (1996-09). The
focus had been on
consolidation
of
the
existing network and upgradation of low-type
roads to high-type. The
road spread - which
facilitates
economic
activity in many ways - is
rather low; at 0.33 km of
Box-1
i) construction of a high-level bridge over the Chenab River at Head
Muhammad Wala; ii) construction of a new bridge over the River Sutlej at
Emanwala; iii) Hassanabdal–Abbottabad–Mansehra Expressway (97 km);
iv) up-gradation of KaraKuram Highway (KKH) for Bhasha Diamer Dam
project
(Mansehra
to
the
proposed
dam
site);
v)
rehabilitation/improvement/widening of KKH (Raikot-Khunjerab Section,
335 km); vi) construction of Jhalkhad-Chillas Road (66 km); vii)
construction of Lowari Tunnel (tunnel excavated); viii) construction of
additional carriageway of Indus Highway (N-55) - Sehwan–Khairpur
Nathan Shah–Ratodero Section (200 km approx); ix) bridge over River
Indus at Larkana with approaches (bridge portion completed);
x)
construction of Surab-Basima-Nag-Panjgur-Hoshab Road (454 km) N-85;
xi) widening and improvement of Kararo-Wad Section (96 km) N-25; xii)
National Highway Development Sector Project envisaging improvement,
rehabilitation and up-gradation of 687 km along the National Highway road
network; xiii) Kalat-Quetta-Chaman Section of N-25 (247 km); xiv)
Gwadar-Turbat-Hoshab Section (200 km) of 650 km Gwadar-Ratodero
Road (M-8); xv) construction of road from Gharo to Ketti Bunder (90 km)
N-110 ; xvi) construction of Karachi- Hyderabad Motorway (136 km) M-9;
and xvii) construction of Lyari Express way.
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road length per sq km of land area. It is relatively high in Punjab (0.51) and Sindh (0.57), but
low in Balochistan (0.12) and Khyber Pakhtunkhwa (0.30). In neighboring countries the road
spread ranges from 2.1 km/km2 in Bangladesh to and 1.1 km/ km2 in India. In order to up grade
the road density to 0.50 km/km2 it is estimated that approximately 138,000 km road length (based
on surface area of 796,096 sq km) will have to be added to the network, which appears
unattainable through the public sector investment alone and a concerted effort is required to
leverage private sector funding.
The National Highway Authority (NHA) is the agency that looks after the construction
and maintenance of the national highways system linking the centers of population and economic
activity, to ports and neighboring countries.
The highways system extends over 12,000 km and handles 80 percent of inter provincial
passenger and freight traffic in the country. The remaining road network is maintained by
provincial and local governments. For development works NHA receives funds through the
federal PSDP, on average about Rs. 30-36 billion annually, which are often short of their annual
requirements. Maintenance costs are primarily met through toll receipts which are low (Rs. 11
billion per year), as compared to annual requirements (Rs. 16 billion per year).
Strategy
Achieving Faster & Reliable National Highways: During the 10th Plan, efforts will be made to
improve the country’s export competitiveness by developing highway infrastructure which,
would be capable of providing faster and more reliable transportation facility for passengers and
freight. The focus in this regard will be to preserve and up-grade the existing urban and rural
network of Roads and increase investment through PPPs.
Reforms & Programmes
The national highways will
receive the main focus being the
primary component of the National
Trade Corridor (NTC).
The major reforms include: i)
preparation of the NHA Business Plan;
ii) establishment of performance
monitoring indicators and benchmarks;
iii) an implementation Plan for limited
access expressways; iv) improve the
process of land acquisition and
resettlement plan; v) termination of
interventions/check posts on highways;
vi) restructuring of the NHA Board; vii)
conversion of NHA’s existing debts into
equity and restructuring of future
financing;
viii)
recruitment
of
professionals on market-based packages;
ix) reduction in fatal accidents by 50
percent by enforcement of traffic
regulations through strengthening of
Box-2
New Projects: i) Faisalabad-Lodhran expressways ii)
construction/improvement of Hyderabad-MirpurkhasUmarkot-Khokhropar Road proposed as N-130 (222 km);
iii) construction of bridges over the River Indus at Qazi
Amri, Kandhkot–Ghotki, Jherruck-Mulla Katyar, Nishtar
Ghat and Khushhal Garh for provision of east-west links
between N-5 & N-55; iv) construction of a bridge over
River Chenab linking Shorkot and Garh Maharaja; v)
construction of a bridge at Chak Nizam on the River
Jhelum (downstream of Victoria Bridge); vi) Reallingment of M-2 Salt Range; vii) Construction of
Peshawar Northern Bypass (32 km); viii) Malakand
Tunnel with approaches; ix) Peshawar-Torkham Road; x)
2nd Kohat Tunnel ; xi) Rakhi Gaj Bewata (N-70) east–
west (34 km); xii) Construction of Kolpur Bypass; and
xiii) Construction of Basima Khuzdar Road.
Projects on PPP Basis: i) Tarnol Interchange at
Rawalpindi; ii) Rawalpindi Bypass Expressway; iii)
Shahdara Flyover; and iv) Multan - D.G. Khan Motorway
(M-5).
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National Highway and Motorway Police; x) reduction in travel time by 50 percent; xi) reduction
in transport costs by 10 percent; xii) establishment of Intelligent Transportation System (ITS),
xiii) provision of Axle load control facilities through installation of automatic weigh-in-motion;
xiv) enhanced toll receipts; and xv) develop Mass Transit Transportation System to reduce
congestion and improve urban environment.
Some of the major on-going projects to be completed during the 10th Plan are given in
Box-1 and new projects to be financed through PSDP and to be undertaken using PPP modalities
are given in Box-2.
Under the provincial program during the 10th Plan (2010-15), besides construction of new
roads, 9,610 km of existing roads would be rehabilitated / improved. This includes 3,500 km
(projected figures) in Punjab, 750 km in Sindh, 4,260 km in Khyber Pakhtunkhwa and 1,100 km
in Balochistan alongwith allied facilities.
Under the Special Areas during the 10th Plan (2010-15), 630 km of new roads would be
constructed and 1,410 km of existing roads would be improved / rehabilitated. This includes
construction of 480 km & 150 km of new roads and improvement / rehabilitation of 1,200 km &
210 km of existing roads in AJ&K and Gilgit – Baltistan respectively alongwith allied facilities.
4.3.5
Trucking Industry
Issues
The expanding economy requires a fast and reliable road freight industry, which the
country’s trucking industry in its current state cannot provide. The trucks manufactured locally
are open-type, of small capacity and under-powered. These trucks are not compatible with
containerized traffic arriving at the ports. The containers have to be unpacked and cargo stuffed
into open trucks that lead to wastages and delays. It is important to replace these old models with
large-capacity international standard trucks.
Due to high competition within the local market, tariffs are low. To enhance their
revenue, transporters resort to overloading which reduces the truck’s speed and leads to frequent
vehicle breakdowns. The delivery of freight becomes uncertain and is usually delayed. A 2005
survey revealed that there were thirty-five checkpoints maintained by various
organizations/agencies on N-5 between Karachi and Lahore; these are sources of interruptions
and delays in the smooth flow of traffic.
Strategy, Reforms & Programmes
Modernizing Trucking Industry: The principal objective in this regard will be to reduce the
external cost of the existing trucking sector to the economy, by modernizing the trucking industry
and organizing it to offer integrated road transport and logistics services of international
standards.
The principal reform initiated in the sub-sector has been the preparation and approval of
the Trucking Policy 2008. Its fullscale implementation is planned in the 10 th Plan. The
implementation of some of the reforms is already underway under the NTCIP. These reforms are
in conformity with the Trucking Policy and their implementation will continue in the 10 th Plan.
These reforms include: i) establishment of performance monitoring indicators and benchmarks;
ii) reduction in overloading of trucks to below 15 percent (currently at 43 percent); iv) 25 percent
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of the truck fleet to be modernized (currently less than 5 percent); v) diesel with lower sulphur
contents to be made available in the market to enable usage of Euro-specs Turbo Diesel engines;
vi) provision of trucking facilities along the National Highways; vii) further rationalization of
truck import tariffs to increase availability of prime-mover trailer combination in long-haul
freight by 50 percent;, viii) revamping of Motor Vehicle (MV) registration and examination
systems; ix) enforcement of axle load control plan; x) launching of truck financing schemes; xi)
establishment of truck driver training facilities; xii) capacity building of truckers associations;
xiii) increase in number of formal truck operators by 25 percent; xiv) de-linking and
"corporatization" of National Logistics Cell's trucking units to lead trucking modernization; xv)
revision of national truck specifications for two-, three- and multi-axle prime movers; xvi) and
establishment of trucking terminals. Trucking sector has already been declared as “Industry”.
4.3.6
Railways
Issues
Pakistan Railways (PR) is the sole government agency responsible for rail transport in
the country. It has a network of 7,791 route km, but two-thirds of this is of non-commercial value
and consists of branch and strategic lines. The remaining one-third of the network carries most
trains and handles the bulk of rail-based passenger and freight traffic (85 percent). In comparison
with road-based freight traffic, the rail network has gradually lost its competitiveness. It has
become a passenger-handling network and carries only 5 percent of the total freight traffic in the
country. Comparatively more revenue earned by freight traffic is often used to subsidize
passenger tariffs rather than to improve infrastructure for freight transportation.
The financial health of Pakistan Railways has deteriorated with the gradual decline in
rail-based freight traffic. This has incapacitated it from making any substantial investment in
tracks and rolling stock which has become old and requires replacement. Freight is increasingly
becoming containerized, but the railway has inadequate infrastructure and capacity to handle it.
Its organization lacks commercial orientation, innovative marketing and effective coordination
with other modes of transport.
Strategy
Promoting Commercial Railways: The principal objective in this regard will be to restore the
historic role of Pakistan Railways as an economical and quality service provider both for
passenger and freight traffic in the country. The strategy adopted for this will be to restructure the
Railways management and its operations on commercial lines, and enable it to function as a
dedicated freight railway rather than solely as passenger railway. Available infrastructure would
be further strengthened and resources increased. Programmes to achieve this will include: upgradation and doubling of selected tracks, procurement of new rolling stock, improvement of
signaling system, privatization of railways operations with particular reference to track access
and improvement in its systems and processes.
Reforms & Programmes
A number of institutional reforms and capacity building programs have been identified
which will be vigorously implemented for the revitalization of PR under the NTCIP. A few are
already in the process of being completed, including: i) business plan for PR; ii) track access
314
policy; and iii) linking of private freight forwarders and truckers for door-to-door services
(Karachi, Lahore, Multan and Faisalabad).
Several other reforms are in progress and will be completed during the Plan period.
These include: i) establishment of performance monitoring indicators and benchmarks (freight
business); ii) rail restructuring Plan including provision for an autonomous board; iii)
corporatization of PR and appointment of a professional Chief Executive Officers; iv) financial
restructuring; v) introduction of corporate accounts specifically for freight and passenger
services; vi) commercialization of railway land; vii) establishment of a separate holding company
for non-core activities and land assets; viii) introduction of private sector management and
investment in the freight sector; ix) procurement of more locomotives and flat beds wagons; x)
closure of loss-making lines and trains (strategic exceptions to be made after carrying out
studies); xi) PR’s to deliver 20 percent of all long-haul freight (currently delivers 5 percent); xii)
increase of line capacity through provision of safety facilities with modern communication /
signaling system to enhance safer and faster operations resulting in generation of additional
revenues; and xiii) promotion of PPPs.
In support of the reforms outlined above, the following major projects will be completed
in the 10th Plan: i) rehabilitation and improvement of tracks on PR’s from Landhi to Khanpur
main line; ii) procurement of 300 high capacity oil tank ,and freight wagons; and 69 Diesel
Electric Locomotives (DEL); rehabilitation/upgrading of 400 passenger coaches;
procurement/manufacture of 830 high capacity wagons; and procurement/manufacture of 202
passenger coaches; iii) special repairs of 36 General Motor Universal (GMU-30) type DELs;
iv) strengthening/rehabilitation of 159 bridges; v) rehabilitation/up-gradation of additional 400
passenger coaches; vi) doubling of track from Khanewal to Raiwind with allied facilities; vii)
repair of damage caused to railway assets during demonstrations in December 2007; viii)
replacement of old signaling system on main line between Lodhran and Shahdara with new
computerized signaling system; and ix) feasibility studies for provision of rail links from Gwadar
to Taftan and from Badin to Thar coalfields.
Additional schemes which will be initiated during the Plan period include: i) upgradation and improvement of existing track between Khanpur and Lodhran (Phase-II) and
Shahdara–Lalamusa (Phase-III); ii) up-gradation of track between Quetta–Taftan section; iii)
doubling of track over the remaining section of Khanewal-Raiwind from Chichawatni to upcountry areas; iv) continuous replacement/up-gradation of rolling stock; v) development of rail
links between Peshawar- Jalaladad (Afghanistan), Gawader – Quetta , Quetta- Zhob-DI KhanKohat- Peshawar and from Islamabad/Havelian to Khungrab to connect China; and vi)
promotion of PPP projects.
4.3.7
Civil Aviation
Issues
While the economy has expanded, the aviation sector has not been able to capture the
benefits of economic growth. Growth of international passenger traffic, for example, between
2001 and 2005 has been only about 9 percent. The growth of passenger as well as freight traffic
by air is slow; less than 2 percent per year during 2001-2005. The volume of cargo is also
modest; and has been fluctuating at a level of 400 to 425 million tons per km over the last five
years. As compared to traffic by other modes, it is about 4 percent of the freight traffic by rail and
0.2 percent of by road. The financial status of Pakistan International Airlines Corporations
315
(PIAC) is not strong; it is not earning enough to sustain itself.
The administration of aviation sector is with the Civil Aviation Authority (CAA). It is
responsible for air traffic control and the development and maintenance of airports. The CAA’s
major income comes from the charges it recovers from the airlines that use its airports and
facilities. Its financial status is sound, and it is constructing a few airports from its own resources,
including Benazir Bhutto International Airport at Islamabad. Users charges at the airports need
rationalizing being a principal factor that determines airlines usage of airports for both transit use
and as a destination for services.
Strategy
Developing Air Cargo Infrastructure: The principal objective will be to enhance the role of the
aviation sector in building up trade competitiveness in various sectors of the economy
(particularly perishable items). This will be done by developing cargo infrastructure such as
cargo villages, cold storages, and pack houses at the important international airports. The
development programs in this regard will include; i) development of a new international airport
at Islamabad; ii) improvement of facilities at other international airports; and iii) procurement of
additional aircraft.
Reforms & Programmes
The reforms and programmes
National Trade Corridor Strategy
envisaged for the safe and efficient
A focus on Private Sector Development
performance of the sub-sector include; i)
It is a study to formulate National Trade Corridor
introduction of a New Aviation Policy; ii)
Strategy with the objective of unlocking trade and
industrial potential of the country especially along the
preparation of a Business Plan to increase
National Trade Corridor. The principal outcome of the
the aviation business in Pakistan and
study is a business development agenda over the short,
encourage international airlines; iii)
medium and long term with reference to which
preparation of performance indicators and
investment and reforms may be structured by involving
benchmarks; iv) computerization of
private sector (through PPPs) for attaining sustainable
airworthiness, flight standards, licensing
economic development and enhancing export
and examination to improve surveillance /
competitiveness of the country. The NTCS would also
monitoring
(currently 70 percent
focus on private sector development which is one of the
complete); v) development of in-house
principal constraining factors to economic growth.
expertise on airworthiness matters to
Extending over following 5-phases the study is expected
to complete in this year and would be implemented
reduce reliance on foreign consultants and
during the 10th Plan.
to enable export of expertise to other
 Assessing the situation
countries; vi) up-gradation of existing
 Setting growth priorities
communication and surveillance systems;
 Critical enablers and alignment to National Trade
vii) human resource development by
Corridor
developing facilities at Civil Aviation

Syndication and stakeholder management
Training Institute (CATI) at Hyderabad to
 Implementation, Planning and institutionalization
enhance the quality of training; viii)
As a part of phase 5 ‘Implementation Plan’, the study
establishment of the New Islamabad
would produce pilot initiatives around a specific sector of
International Airport (Benazir Bhutto
the economy which will be used for replication in
Shaheed International Airport); ix)
othersectors as well.
development of four cargo villages/transshipment hubs to increase cargo handling
capacity; x) establishment of business centers, IT, logistic and retailing centers at airports; xi)
establishment of the New International Gwadar Airport; xii) development of cold storage
316
facilities at Karachi, Lahore and Multan airports; xiii) up-gradation of radars system; and xiv)
support for PPP.
The major projects envisaged under the 10th Plan are: i) construction of an aviation tower
at Islamabad (after 2014) ; ii) up-gradation of Multan airport; iii) up-gradation of Peshawar
airport; iv) rehabilitation of airside pavements at Allama Iqbal International Airport (AIIAP),
Lahore as well as Quetta and Faisalabad International Airports; v) expansion of the terminal
building at AIIAP; vi) reconstruction of the main runway, a new apron and satellite terminal
(satellite terminal is a building detached from other airport buildings, so that aircraft can park
around its entire circumference) at Jinnah International Airport, Karachi (JIAP) (after 2014); vii)
establishment of a co-generation power system at JIAP; viii) construction of an additional
boarding bridge at JIAP (after 2014); ix) construction of a new control tower at Jinnah Terminal
Complex, Jinnah International Airport; x) Up-gradation of air traffic control and navigation
systems at Giligit, Sakardu and Quetta airports; and xi) Up-gradation of security, surveillance and
screen in systems at all major airports.
The commercial projects include: i) construction of airport cities at Karachi, Lahore and
Islamabad; ii) development of a 4-5 star hotel at AIIAP Lahore; and iii) development of flight
kitchens at Karachi, Lahore and Islamabad airports.
The commercial projects include: i) construction of airport cities at Karachi, Lahore and
Islamabad; ii) development of a 4-5 star hotel at AIIAP Lahore; iii) development of flight
kitchens at Karachi, Lahore and Islamabad airports.
4.3.8
Public Private Partnership
Significant investment is required in transport and logistics infrastructure; far more than
the limited fiscal space available under the PSDP. This necessitates the involvement of the
private sector. However, infrastructure projects in the transport and logistics sector often require
large amounts of funds. Given the inadequate incentives on investment and the poor security
environment, such projects have not elicited interest amongst foreign investors. Local enterprises
suffer from lack of capacity to fund and manage mega-projects.
Supporting Private Sector Development
The strategy in this regard will be to create an enabling environment for private sector in
the development in the country for its full participation in infrastructure projects/programmes
under the NTCIP. A national taskforce has been established to formulate a “Strategy for the
Private Sector Development”, which is likely to accomplish its task by the end of 2010.
The following reforms will be implemented in phased manner during the 10 th Plan: i)
capacity building of public sector institutions to develop feasible and attractive PPP projects; ii)
capacity enhancement of IPDF to become a more effective institution, guiding other institutions
and facilitating implementation of PPP projects; iii) introduction of legal, administrative,
financial and regulatory measures to facilitate private sector development; and iv) creation of an
enabling framework within which public and private sectors may perform effectively in harmony
with each other.
317
4.3.9
Inland Water Transport
Re-establishment of Inland Water Transport: There is a 30,000 km long network of rivers and
perennial canals in the country, which offers an excellent opportunity to establish an economical
water transport system. Fuel consumption for inland water transport could be just 10 percent of
that for road transport and 25 percent of that for rail transport. But it is only recently that a fullscale Inland Water Transport Project, based on link-canals in Punjab and Sindh provinces as well
as some sections of the Indus River, has been given serious consideration and is in the process of
being studied.
Following a detailed feasibility study, a pilot project is planned during the 10 th Plan in
the first year, to test the technical, commercial and environmental viability of moving
commercial cargo on canals in Punjab and Sindh and along the Indus River. If successful, the
pilot project will be replicated in other feasible waterways in the country.
4.3.10
National Transport Research Center
Supporting Research and Development: The emphasis in this regard would be to revamp and
restructure the existing National Transport Research Center (NTRC) under the Ministry of
Communications and make it a premier national research and development center in the transport
sector. The principal seat of research and development in the country will be financially
supported and its research faculty will be appropriately expanded. The center will not only be
tasked to lead research studies that could culminate in comprehensive national transport policies
but would also develop policy guidelines with reference to which provinces may formulate
provincial policies and programs. The Center will continuously engage itself in carrying out
objective research in the sector that will provide authentic information and analytical
underpinnings to national and provincial policies and reforms. It will also be developed into a
center of excellence innovating best practices and piloting model projects.
4.4
Financing
The expected resource requirement for the transport and logistics sector in the 10 th Plan
is Rs.865 billion. Approximately Rs.430 billion will be made available through PSDP and the
remaining funds will be arranged by each sub-sector on a self financing basis or through mixed
funding arrangements (BOOT, BOT, BOO) (Annex-III).
318
Annexure-I
Traffic Forecast (2010-15)
Sub-Sector
Units
2009-10
1
2
3
Targets
2010-11
2011-12
2012-13
2013-14
2014-15
ACGR
%
4
5
6
7
8
9
Railways Traffic
(a)
Passenger
B P Km
25.50
26.50
27.80
29.20
30.60
32.16
3.95
(b)
Freight
B T Km
8.40
10.70
13.20
15.30
18.10
21.80
17.26
Roads Traffic
(a)
Passenger
B P Km
302.00
349.00
375.17
403.31
433.56
466.08
7.50
(b)
Freight
B T Km
197.00
223.44
237.97
253.43
269.91
287.45
6.50
Port & Shipping Traffic
Karachi Port Trust (KPT)
(a)
General and
Containerized
Cargo
M.T.
16.93
20.09
21.88
23.83
25.96
28.24
8.92
(b)
Liquid Cargo
M.T.
11.81
12.71
13.19
13.68
14.19
14.72
3.74
(c)
Dry Bulk Cargo
M.T.
12.96
16.70
18.96
21.52
24.43
27.69
13.51
Total Cargo
M.T.
41.71
49.51
54.03
59.04
64.58
70.65
9.20
Containers
(TEUs)
Nos. (000)
1338
1620
1782
1960
2157
2370
10.02
(d)
Port Qasim Authority (PQA)
(a)
General Cargo
and
Containerized
Cargo
Million Tons
9.98
11.37
12.13
12.95
13.82
14.74
6.73
(b)
Liquid Cargo
Million Tons
11.17
13.04
14.10
15.23
16.46
17.77
8.06
(c)
Dry Bulk Cargo
Million Tons
4.80
6.73
7.97
9.43
11.17
13.20
18.40
Total Cargo
Million Tons
25.95
31.14
34.20
37.62
41.45
45.71
9.92
Containers
(TEUs)
Nos. (000)
790
866
907
949
994
1040
4.70
(a)
General Cargo
and
Containerized
Cargo
M.T.
0.00
0.00
0.25
0.77
1.36
2.40
75.99
(b)
Liquid Cargo
M.T.
0.00
0.00
0.00
0.05
0.06
0.06
6.26
Dry Bulk Cargo
M.T.
1.43
1.68
1.82
1.97
2.13
2.30
8.28
Total Cargo
M.T.
1.43
1.68
2.07
2.79
3.55
4.76
22.25
Containers
(TEUs)
Nos. (000)
0.00
0.00
0.00
100
170
222
30.42
69.09
82.32
90.29
99.44
109.58
121.12
9.83
(d)
Gwadar Deep Sea Port
(c)
(d)
Total All Ports
A
Total Cargo
M.T.
319
B
2011-12
2012-13
2013-14
2014-15
ACGR
%
3
4
5
6
7
8
9
2128
2485
2688
3010
3321
3632
9.34
Units
2009-10
1
2
Total
Containers
Nos. (000)
Sub-Sector
Units
Targets
2010-11
Sub-Sector
Targets
1
2
2009-10
ACGR %
2010-11
2011-12
2012-13
2013-14
2014-15
3
4
5
6
7
8
9
Air Transport Traffic
Passenger
(a)
Domestic
M. Nos.
6.33
6.46
6.65
6.97
7.34
7.78
4.21
(b)
Int’l
M. Nos.
7.85
8.01
8.25
8.58
9.01
9.55
4.00
Total
M. Nos.
14.18
14.46
14.89
15.49
16.26
17.24
3.99
(a)
Domestic
M. Tons.
0.08
0.08
0.08
0.082
0.085
0.090
2.38
(b)
Int’l
M. Tons.
0.22
0.23
0.24
0.251
0.265
0.280
4.94
Total
M. Tons.
0.30
0.31
0.32
0.333
0.350
0.370
4.28
Freight
Inland Traffic
Passenger
(a)
Railway
B.P.Km.
25.50
26.50
27.80
29.20
30.60
32.16
3.95
(b)
Road
B.P.Km.
302.00
349.00
375.17
403.31
433.56
466.08
7.52
Total Passenger
B.P.Km.
327.50
375.50
402.97
432.51
464.16
498.24
7.26
8%
7%
7%
7%
7%
6%
92%
93%
93%
93%
93%
94%
Modal Split for Passenger
Railway Share
Road Share
Freight
(a)
Railway
B.T.Km
8.40
10.70
13.20
15.30
18.10
21.80
17.26
(b)
Road
B.T.Km
197.00
223.44
237.97
253.43
269.91
287.45
6.51
Total (Freight)
B.T.Km
205.40
234.14
251.17
268.73
288.01
309.25
7.07
4%
5%
5%
6%
6%
7%
96%
95%
95%
94%
94%
93%
Modal Split for Freight
Railway Share
Road Share
320
Annexure-II
Expenditure during 2005-10
(Rs. Million)
Expenditure during (2005-10)
Sr. No
1
1
1
2
3
4
5
6
Sub-Sector
2
FEDERAL
Communication
National Highways Authority (NHA)
National Logistic Cell (NLC)
National Transport Research Centre
(NTRC)
Construction Machinery Training
Institute (CMTI)
National Highway & Motorway
Police (NH&MP)
Pakistan Post Office (PPO)
Total Communications
Total Communications
2
3
1
2
3
4
4
1
2
3
4
5
5
6
Railways
Total Railways
Ports and Shipping
Gwadar Deep Water Port
Port Qasim Authority (PQA)
Karachi Port Trust (KPT)
Pakistan
National
Shipping
Corporation (PNSC)
Total P&S
Total P&S
Others
Civil Aviation Authority (CAA)
Pakistan Meteorological Department
(PMD)
Airport Security Force (ASF)
Pakistan Int'l Airlines (PIA)
Pvt. Airlines Operators
Total Others
Total Others
Others etc.
Total Others etc.
Total Federal Programme
Total Federal Programme
Provincial Road Programme
Total Provinces
Total Provinces
Total T&C (National)
Total T&C (National)
Budgetary
Self Financing/
Corporation
Public-Private /
Pvt. Financing
Total
3
4
5
6
155,000
250
0
0
30,800
0
185,800
250
25
0
0
25
387
0
0
387
400
0
0
400
0
550
156,062
156,062
45,456
45456
550
31,350
0
0
0
550
30,800
0
0
187,412
187,412
45,456
45456
15,550
0
0
0
3000
14500
0
13000
55000
15,550
16000
69500
0
10245
0
10245
68,000
111,295
111,295
15,550
15,550
27,745
95,745
0
15,550
0
15,550
875
0
0
875
0
0
6,600
6600
335
120250
6,600
143,610
143610
4500
4500
492,273
492,273
335
0
0
1210
1,210
4,500
4,500
222,778
222,778
0
120,250
0
135,800
142,400
0
0
164,095
269,495
99,900
99,900
322,678
322,678
0
0
164,095
269,495
0
0
105,400
0
0
105,400
99,900
99,900
592,173
592,173
321
Annexure-III
(Rs. Million)
Five Year Allocation (2010-15)
Sr.
No
Budgetary
Self
Financing /
Corporation
PublicPrivate /
Pvt.
Financing
Total
3
4
5
6
Sub-Sector
1
2
A
FEDERAL
1
Railways
2
Communications
a
National Highways Authority (NHA)
b
109,000
0
35,000
144,000
313,000
1,000
9,500
323,500
Policy Reforms under NTCIP
250
100
0
350
c
National Highway & Motorway Police (NH&MP)
145
0
0
145
d
National Transport Research Centre (NTRC)
70
0
0
70
e
Const. Technical Training Centre (CTTI)
90
0
0
90
313,555
1,100
9,500
324,155
90
250
0
340
90
650
250
19,883
0
0
340
20,533
170
5,000
0
5,170
45
215
0
5,000
7,500
7,500
7,545
12,715
5,373
2,303
0
7,676
Total M/o Communications
3
Postal Services
a
Postal Services
4
5
a
Ports & Shipping
Others
Karachi Shipyard & Egg. Works
b
Const. of New Shipyards
Total M/o PS
Total Others
6
a
Others
New Gwadar Int'l Airport (NGIA
b
Pakistan Meteorological Department (PMD)
125
0
50
175
c
Airport Security Force (ASF)
125
0
50
175
d
Maritime Security Agency (MSA)
125
0
0
125
e
Civil Aviation Authority (CAA)
0
86,545
0
86,545
f
Pakistan Int'l Airlines Corp. (PIAC)
0
175,000
0
175,000
5,748
263,848
100
269,696
7
8
Inland Water Transport
Others i/c logistics & Urban Transport
225
194
300
861
Total Others
Total Federal Programme
B
C
a
b
75
667
430,000
290,081
52,519
772,600
Total Provinces
90,900
0
0
90,900
Total Special Areas
1,000
500
1,500
0
0
0
0
0
0
1,000
500
1,500
Total T&C (A+B+C)
522,400
290,081
52,519
865,000
Provincial Road Programme
Special Areas
Azad Jammu & Kashmir
Gilgit Baltistan
322
323
6.3
Urban Development
1. Introduction
The process of urbanization and economic development in Pakistan has been mutually
interdependent. In 1950, when the economy was predominately rural-based, only 18 percent of
the country was urbanized. As urban-based economic activities expanded, a proportion of the
rural population found an incentive to shift
City’s Population & Economic Activities
Grew in Harmony (1950s to 2000s)
towards towns and cities. During the 1970s, the
urban population increased to 25 percent and
the contribution of the urban-economy rose to
65 percent of the Gross Domestic Product
(GDP). The current urban population is
estimated at 57.3 million, representing 35.3
percent of the total population (Economic
Survey
2008-09).
The
shift
towards
urbanization is a global phenomenon. The
United Nations (UN) estimates that by 2030,
about 60 percent of the World population would
be urbanized while the level of urbanization in Source: UN – World Urbanization Prospects 2007& Pakistan Economic Social Review
Pakistan would be 50 percent.
90%
80%
70%
72%
60%
78%
75%
65%
60%
50%
52%
40%
30%
35%
31%
28%
20%
18%
22%
25%
10%
Urban Population
0%
1950s
1960s
1970s
1980s
Contribution to GDP
1990s
2000s
Presently, the contribution of the urban-based economy to Pakistan’s GDP is more than
78 percent and cities have become the engine of growth. In general, better and remunerative jobs
in urban areas have helped to increase the overall level of prosperity in the country. The average
per capita income has now risen to US $ 1,046; this amount is even higher in cities. The rising
income level has also contributed to the expansion of the middle class in towns and cities, and in
the increasing supply of goods and services. However, the
increase in prosperity is at a cost as the incidence of poverty
Urbanization tends to concentrate
in two major cities (1998)
has also risen. This is due in part to the fact that not every
migrant is able to find a good job or a reasonable abode. It is
estimated that 13 to 15 percent of the population of towns
and cities fall in the category of the urban poor and reside in
Karachi
slums and katchi abadis.
21.90%
The spatial pattern of urbanization has been
haphazard. About 50 percent of the urban population is
concentrated in eight major cities; Karachi, Quetta,
Hyderabad, Multan, Lahore, Faisalabad, Rawalpindi and
Peshawar. This has relegated a large number of other urban
centers to a status of under development. The towns and
cities in 32 out of a 101 districts in the country are
categorized as “less developed”.
Others (500
tow ns)
49.30%
Lahore
11.90%
Faisalabad,
Raw alpindi,
Multan,
Gujranw ala,
Peshaw ar,
Quetta
17.18%
Source: Census 1998
The positive contribution of urbanization has often been constrained by the inability of
towns and cities to manage their expansion as well as the high population growth. In particular,
the development of infrastructure has not kept pace with urbanization. As a result, a there is a
huge deficit in all sub-sectors including housing, water and sanitation, transport, utilities and road
networks, which is adversely affecting living conditions and economic progress.
Urban development is primarily dealt by the provincial governments. In the context of the
FYP, the role of the federal government is to create consensus amongst provincial governments
324
and to produce a national policy framework for urban development. Federal government interest
is also rooted in supporting provincial and local governments to prepare and implement city
specific development strategies to cope with growing urban problems.
2. Urban Development Issues
2.1 Urban Planning and Management
The inadequacy of urban and regional planning in the country has contributed to the
deteriorating conditions in towns and cities. To begin with, Pakistan lacks a national spatial
framework, that may address national issues such as; i) channelizing urbanization and economic
development in a balanced manner; ii) attaining a productive national land use plan that enables
all parts of the country to contribute their full potential to the national economic development;
and iii) developing a trunk infrastructure plan that supports the development of towns and cities
and enables them to become the nucleuses of growth. Traditionally, urban planning has been a
laborious and time-consuming process of preparing Master Plans of towns and cities. The
foundation of these plans lies in attaining an efficient land use pattern and road and utility
network. Other equally important aspects relating to improving living standards, accelerating
economic development, enhancing financial resources, and upgrading management capacities
often receive lesser attention. On account of lack of comprehensiveness, these master plans had in
the past evoked little public interest and hence remained mostly un-implemented. Successive
local governments laws also failed to put in place effective institutional structures to implement
the city master plans.
While urban and regional issues tend to become more intricate and require a new set of
knowledge and skills to understand and respond to them, the capacity to carry out research and
develop urban policies with sound analytical underpinnings has not developed in a corresponding
way. As a result, the urban policies and plans usually lack insight of urban issues and tend to be
arbitrary.
2.2 Infrastructure Deficit
Municipal infrastructure is continuing to deplete in quality and coverage. Not only is the
deficiency of infrastructure a problem, but the management of service delivery is also a big issue.
An important deficiency in this regard has been the lack of capacity of local governments to
generate sufficient funds through user’s charges even for the operation and maintenance of
existing networks. Often, there are no incentives for improved O&M and assets tend to
deteriorate much earlier than their usual life. For major projects, the local governments are
dependent on the assistance of provincial and federal governments. Public sector investment in
the sector is very low, at 0.25 percent of the GDP. In spite of the government’s encouragement of
the private sector, the latter’s participation has been nominal. In cities, there remains the chronic
issue of lack of water supply and poor sanitation. The present level of water and sanitation
coverage in urban areas is 85 percent and 65 percent, respectively. Only 5 percent of households
have proper access to the municipal garbage collection system. Another issue with regard to
water is that its sources (river, canal, lakes and groundwater) are threatened with pollution. Water
treatment, as a popular practice, has only been recently introduced through two countrywide
drinking water projects.
325
2.3 Housing Deficit
The current estimate of the housing
Urban Housing Indicators (1998)
shortage in the country is about 7 million housing
19.2
units, of which 2.7 to 3 million are in urban areas Total Housing Units
Million
(House Building Finance Corporation 2008). Urban Housing Units
6.0
Pakistan is thus confronted with the challenge of Million
constructing 1 million housing units every year; Person Per Housing Units
7.2
about 600,000 units in rural areas and 400,000 in Persons per room
3.2
urban areas, to clear the backlog and meet annual
& T wo rooms Housing Units
62 percent
incremental demand. The supply side is extremely One
Pucca Housing Units (pucca roofs)
65 percent
weak, meeting about one-third of the requirements. Owned Housing Units
78 percent
Most of these houses are being built by the private
Housing Units having electricity
93 percent
sector, who tend to exclude the coverage of low- Housing units having piped water
65 percent
income groups. Public sector housing schemes are Housing units using gas for cooking 58 percent
units with separate kitchen
45 percent
few and take very long to develop. In addition, the Housing
Housing units with separate latrine
51 percent
quality of housing is generally poor. 30 percent of Housing units with separate bath
49 percent
the housing units are old, without permanent roofs
and need replacement and improvements. The room Source: Census Organization
occupancy is 3.2 persons (Census 1998), which is twice more congested than the limits prescribed
by the UN.
The National Housing Policy 2001 prescribed the role of the government as a facilitator
in the housing sector. Since the early eighties, the federal and provincial governments have
stopped financing the construction of houses for their employees, and instead have been
promoting housing schemes on an ownership basis. The autonomous institutions such as the
Federal and Provincial Government Employees Housing Foundations have been established to
develop residential plots in major cities for allotment to the government employees at cost price.
The proportion of rental housing in urban areas was around 22 percent in 1998 (census
1998). It is estimated that demand for rental housing is increasing at a rate of 8 percent per year.
To respond to such a huge demand, there are a few rental housing projects launched and that too,
in large cities like Karachi. The tenant-favoring Rent Restriction Laws are a major hurdle in the
growth of the rental housing projects.
McKinsey (2009) has estimated that Pakistan’s housing finance level is as low as 1
percent of GDP as compared to 10 to 15 percent in other developing countries. The traditional
source of housing finance has mainly been the House Building Finance Corporation (HBFC): it
disbursed around Rs. 42 million during 2007, which is meager as compared to an annual demand
of approximately Rs. 8 billon. Meanwhile, the private banks have expanded their involvement in
housing finance in recent years, and have captured about 67 percent share of the total disbursed
amount but they are serving only the needs of middle or higher income groups. Weak land
markets, vague land titles, unclear property tax and other related laws, lack of transparency in
allotment of land in public sector schemes and un-regulated activities of private housing societies
/ developers are other factors contributing towards increasing housing shortage.
.
2.4 Urban Public Transport
Cities are expanding, both in terms of population and area. For example, the city of
Karachi has seen a 35-fold population increase and an almost 16-fold increase in its geographical
extent, since the emergence of Pakistan (LU 2007). The demand for motorized urban transport
facilities has thus increased manifold in all expanding cities. The provision of public transport in
326
cities had initially been the responsibility of the provincial governments. Gradually this
responsibility has been passed on to the private sector. With a few exceptions, the present public
transport comprises of low quality buses, mini busses, wagons and vans owned by individual
operators.
The rail based transport system has not
been viewed favorably by successive national Use of Private Motorized Transport on Urban Roads
(2002)
transport policies. The Karachi Circular
Railway (KCR) after operating successfully in
Lahore
60%
Karachi for 15 years was abandoned. The
Karachi
54%
emphasis shifted in favour of bus-based public
transport. For lack of quality public transport,
Dehli
31%
the use of private motorized transport is
Mumbai
23%
increasing on urban roads. Another important
segment of urban transport, which received no
Kolkata
6%
attention in urban development policies, is the
0%
10%
20%
30%
40%
50%
60%
70%
intra-city goods transport. On urban roads, they
Source:
World
Bank
2002
constitute 14-18 percent of the traffic volume
(TEPA Lahore – 2003) but are poorly managed
by small operators and remain a largely unregulated activity.
2.5 Traffic Management
The urban road network has not expanded in relation to the increase in urban traffic
causing traffic congestions and general disorder on the roads. It is estimated that the traffic in
large cities, for instance in Karachi & Lahore, is increasing at 12 percent per annum as compared
to the national average of 8 percent per annum. One of the reasons is the rapid rise in the number
of motorized vehicles in urban areas. Car ownership has increased from 6 cars per thousand
persons in 1998 to about 13 in 2009. In addition to incapacitated road networks, the cities also
lack robust mass transit systems. Little attention has been paid to establish a comprehensive road
system of primary, secondary and local arteries. The mixed pattern of traffic on urban roads is a
principal source of road damage, traffic congestion, pollution and accidents. Very few cities have
professionally manned traffic management units to address traffic issues. The solutions to most
traffic ills are often found in building costly roads and road structures rather than resorting to far
more convenient and affordable management measures.
2.6 Urban Poverty
Urban poverty, estimated between 8 to 10 million people, is one of the major challenges
for sustainable urban development. The urban poor are often uneducated, unskilled, and work in
the informal sector where there is constant uncertainty of employment. They do not have access
to decent living conditions and reside mostly in slums and Katchi Abadis. Poverty has almost
always been perceived as rural based. Therefore, there have been limited poverty alleviation
interventions for the urban areas. The majority of the poor has not benefited from economic
growth alone and requires direct income support and relevant training programs for employment.
327
2.7 Urban Finance
The growing population and expanding economic activities in towns and cities has generated
an ever increasing demand for basic urban services, infrastructure facilities and housing. On the
other hand, the financial health of most urban areas is deteriorating. Local Governments have a
limited income of their own and rely heavily on provincial and federal government grants and
contributions. The performance of the local government to mobilize additional resources has been
weak. The banking sector has also not been particularly active in offering loans to fund even the
bankable municipal projects. Recently, some helpful measures to improve financial conditions of
municipalities have been initiated. These include; a shift from direct funding of existing costs to a
formula based transfer of funds to local authorities, direct sharing of GST revenues in grants and
reduced reliance on transfers as a source of payment of utility bills. The implementation of these
steps is a positive step towards improving the financial status of the local governments (World
Bank 2005) but clearly far more needs to be done for sustainable urban development. The
National Finance Commission (NFC) Award has now apportioned a large part of the national
resources to the provinces in recognition of their needs, since primarily the provinces are assigned
with the task of basic urban services like health, education, water supply and sanitation. This
enhanced provincial share should now appropriately be channeled to the local government for
improving their financial status.
2.8 Urban Governance
The present unplanned and haphazard development pattern in most of our cities is
continuing unabated and undermining national development goals. Cities are severely
handicapped by lack of urban management capacity. Even the relatively better-equipped
development authorities in the major cities i.e. Karachi, Lahore, Multan, Rawalpindi, Faisalabad,
Peshawar do not have expertise in some important fields of urban finance and management of
municipal services. The devolved local government system has resulted in multiplicity of
agencies e.g. TMA, City District Government, PHED, WASA etc sometimes with overlapping
functions, leading to mismanagement particularly in the service delivery. Moreover, there are
large gaps in cost recovery effecting adequate provision and management of infrastructure
systems and assets.
2.9 Urban Environment
Lack of investment and changing trends in lifestyle has made our cities more vulnerable to
environmental degradation. Cities are consuming substantially more energy. The growth of cities
and increased industrialization means that productive agricultural land is being taken over for
other uses and green belts are being curtailed, even though they have always been the traditional
source of food supplies. Urban development projects often do not take into account the adverse
impacts of development and tend to degrade the urban environment.
3. Review of Medium Term Development Framework (MTDF) 2005-10
Lessons Learnt
i) Balanced urban and rural development, housing for all and the achievement of the
millennium development goals in respect of improvement of Katchi Abadis and the coverage of
safe drinking water and sanitation, were the major areas of focus in the MTDF. The approach and
strategies were constructive but did not develop into holistic policies and programs. What
subsequently followed was largely a reflection of traditional policies of former five year plans,
328
which aimed at tackling only a few urban issues and failed to cover all dimensions of urban
development and make cities livable as well as prosperous, competitive and well governed.
ii) Urban development is primarily a provincial subject. The role of the federal
government in such cases is provision of a policy framework with the consent and of the
provinces as well as to achieve consensus amongst them regarding the outcomes of the Plan. The
MTDF however, did not fully align its proposals with the provincial institutions and the Devolved
Local Government System. As a consequence, a large number of local governments, through their
respective provincial governments or even directly, brought a large number of municipal projects
to the federal and provincial Public Sector Development Programmes (PSDPs). Out of over 500
projects in the PSDP 2009-10, more than two thirds are of a small size municipal nature.
iii) The MTDF provided for an overall PSDP outlay of Rs.100 billion for Physical
Planning & Housing (PP&H) Sector activities. The role of the private sector was envisioned as
pivotal. It was presumed that Rs. 980 billion would be invested by the private sector. However,
for lack of both public and private investment, only 50 percent of the MTDF targets were
achieved (Annual Plan 2009-10).
iv) A large number of schemes relating to urban development are being carried out
through PSDP funding. These schemes are mostly focused on water & sanitation and road
construction: very few relate to the construction of government buildings and housing.
An overwhelming number of these schemes, i.e. 75 percent, form part of the federal PSDP.
Notwithstanding their
PSDP 2009-10 Schemes under PP&H Sector
Rs. Billion
relative merits, these
No. of Schemes
Total Cost
Expenditure 2009
Throw forward
projects would be an
Federal
346
130.6
42.9
87.7
Punjab
49
209.8
29.5
280.3
integral part of the
Sindh
12
28.2
5.9
22.3
future Plan. Over the
NWFP
19
14.1
3.2
10.9
past
years,
these
Balochistan
31
6.0
2.3
3.7
Others
3
16.3
6.0
10.1
projects
have
Total
460
405.0
83.4
315.7
accumulated a large
amount of throw forward of Rs. 315 billion, or about 77 percent of their total cost, which has to
be catered for as a liability of the 10th Five Year Plan (FYP).
4. Tenth Five Year Plan (2010-15)
4.1 Objectives
The overarching vision is to develop strong cities as the building blocks of a prosperous Pakistan.
The aim of the urban development sector is to support cities in their historic role of generating
growth. By directing its focus on the following objectives, the 10 th FYP will be able to make
substantial progress in achieving this national goal.





To manage urbanization and enable urban areas to contribute their full potential
To pursue sustainable urban development making cities strong and functional in all
dimensions i.e., physical, economical, social and administrative
To develop synergies amongst national policies, provincial programs and local activities
and to promote a coherent urban development pattern in the country
To develop national infrastructure that supports urban development
To create new knowledge for understanding and resolving intricate urban and regional
development issues
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
To enable local governments to financially and administratively manage towns and cities
out of their own resources
4.2 Strategies
4.2.1 Managing Urbanization
Urbanization has been capitalized to support economic development in various countries.
The majority of developed countries are highly urbanized as well. The present haphazard pattern
of urbanization in Pakistan is not conducive for making towns and cities the engines of growth,.
The approach in the 10th FYP would be directed at preparing a “National Spatial Strategy”. The
strategy would develop such policies as; National Urbanization Policy, National Settlement
Pattern, National Land Use Policy, National Infrastructure (Trunk) Plan, National Trade
Corridor/Logistic Hubs and also integrate features of National Environmental Policy in its fold.
4.2.2 Creating knowledge
To address the research gap and produce new knowledge in the field of urban and
regional planning that could offer a strong underpinning to the quality of policy formulation and
decision making in the urban development sector, an “Urban Policy Research Centre” would be
established in the Planning Commission. The Centre, besides undertaking analytical research,
would also support in building up an information and knowledge bank, where all information on
towns and cities of Pakistan would be stored and the world’s best practices analyzed, adapted and
applied within the context of local situation. The Center would also coordinate with national
universities for expanding their faculties to address the shortage of research in town planning and
architecture, and help revise the curricula to enable their students to be better equipped with the
new knowledge that is needed to address complicated urban issues.
4.2.3 Pursuing Sustainable Urban Development
The urban challenges, especially the growing infrastructure deficit, would be addressed
holistically. Improving upon the typical master planning approach of the past, the local
governments would be encouraged to prepare “City Development Strategies” and “Business
Plans”. These strategies would be city specific and aimed at addressing various additional
dimensions of urban development i.e. living conditions, economy, financing, and governance.
4.2.4 Supporting Local Governments
Local Governments would be supported in acquiring appropriate skill sets to enable them
preparing “City Development Strategies” and Business Plans. Similarly, to financially support the
local governments and fund their projects prepared under the city development strategies, a
separate dedicated fund of Rs. 500 billion will be established over the Plan period. The federal
PSDP space, currently occupied by the municipal projects, would be gradually rationalized to
encourage trunk infrastructure projects (water, power, highways, railways, ports, information and
computer technologies etc), capacity building and improved governance that promote sustainable
urban development. To enhance credit worthiness of the local governments and to enable them
accessing capital markets and borrowing funds for their projects, the feasibility of establishing a
special fund in the Province would also be considered during the 10th FYP.
330
4.2.5 Addressing Housing Shortages
About one million housing units, including about 400,000 in the urban areas, need to be
constructed every year during the 10th FYP to overcome housing shortages in the country by fifty
percent. The National Housing Policy has, within its ambit, included both the public and private
sector to address this issue. In the 10th FYP, the public sector would be restricting itself to address
housing shortages for low paid government employees and the urban poor. In addition, it will
enable the facilitation of the private sector to procure land, access housing finance and seek such
remedies as, streamlining property records, transfer procedures and building regulations.
4.2.6 Coherent Urban development
In order to achieve coordination amongst urban development activities at the provincial
and local levels and to assist them in matters relating to urban development, an institutional
arrangement at the federal level can be evolved in consultation with the provincial governments.
At present, urban development activities are being looked after by a Physical Planning & Housing
Section in the Planning Commission, with a rather limited mandate to scrutinize a large number
of Federal and Provincial construction projects in the PP&H sector.
4.2.7 Promoting Public Private Partnerships
The Government has offered several incentives to attract the private sector in
infrastructure projects. However, as mentioned above, private sector participation has been
modest and has concentrated more on the energy and telecom sectors. The government in the 10th
FYP would further improve an enabling environment for greater participation of the private
sector in infrastructure.
4.3 Urban Development Programs and Initiatives
4.3.1
National Spatial Strategy
In order to organize urbanization in a planned and productive manner, a National Spatial
Strategy (NSS) would be prepared in consultation with provincial governments during the 10th
FYP to achieve the following objectives:





To resolve disparities in the level of economic, social and physical development
across the regions
To channelize urbanization in accordance with the endowment, economic potential
and projected growth pattern of different urban areas / regions and in the process, to
identify additional growth centers around small and medium sized towns
To evolve a sustainable land use pattern that improves the quality of land including
its environmental value, for enhanced productivity
To formulate a long term national infrastructure plan that supports development of
cities and enables them to become strong nodes of economic growth and
To set out broad guidelines for the preparation of Provincial and District Spatial
Plans
A comprehensive study will be carried out for the preparation of the NSS, the outcome of
which would underpin various national policies relating to urbanization, hierarchy of settlement,
land-use, environmental assets, trade and transport networks and trunk water, energy and
331
communication infrastructure. The outcome of the study will provide a spatial frame of reference
for sectors to draw up policies and program keeping in view the spatial advantages.
4.3.2
Provincial and District Spatial Development Plans
In light of the policies of the NSS, the provincial and district governments would be
encouraged to prepare spatial plans in their jurisdictions. These plans will focus on the following:





Development of growth centers around large cities, along transport corridors and
within regional conglomerations such as the Lahore–Gujranwala–Faisalabad triangle
Developing additional growth centers around small and medium sized town and
cities, based on their potential (e.g. social and physical infrastructure, job
opportunities), especially along the National Trade Corridor
Development of trunk infrastructure, linking settlements together within provinces
and districts
Reinforcing rural-urban socio economic complementarities
Helping balanced economic and social development of all regions
Like the National Spatial Strategy, these spatial plans shall provide guidelines to sector
departments in creating spatial consideration for sector plans and programs.
4.3.3
National Urban Policy Research Center
To address the shortage of research and objective analysis in the field of urban and
regional planning, an “Urban Policy Research Centre” will be established within the Planning
Commission during the 10th FYP. The Center would be an autonomous structure and would have
the support of the federal and provincial governments. For the initial ten years, it will be
supported by PSDP funding, after which it will be gradually made a partly self-financing
institution. The Centre, in collaboration with other similar centers around the world, will focus
research on:







Linkages between macro-economic and urban-economic policies towards
improving economic efficiencies of the cities
Improving conditions of less developed regions by addressing lagging economic,
social and physical development
Poverty alleviation in urban areas
Reviewing / formulating guidelines for the preparation of city development
strategies and business plans
Identifying reforms to involve private sector in urban development projects and,
Devising mechanisms for improving the financial health of cities and
Developing urban indicators to help determine priority areas for future urban
actions
An information and knowledge bank will be created within the Urban Policy Research
Centre to make up the deficiency of authentic data for effective policy / decision making. The
Center would also establish a depository of the international best practices in urban development,
and develop suitable models to be applied within the local context.
332
4.3.4
City Development Strategies (CDSs)
Sustainability of urban development lies in its integrated and holistic development. The
cities should be habitable, financially viable, and well managed. This would entail improving the
existing urban planning practices and techniques. In the 10th FYP, cities would be encouraged to
prepare “City Development Strategies” and “City Business Plans”.
The preparation of a City
Business Plan would be an important
China Best Practices of Human Settlement Improvement
component of CDSs. The preparation of
the City Business Plan involves In recent years, China is experiencing the process of population transfer
featured by the migration of millions of farmers into the coastal cities that
analysis of the city’s prospects for are economically developed. The city of Zhangjiagang has a population of
economic development, identification 1.48 million, of which 40 percent are those who have migrated from rural
in the last decade. Through such measures as listed below, the city is
of priorities, investment and assistance areas
far more prosperous and livable than in 2000. The city holds top honor
required for the implementation of the amongst cities in China.
1. “Scheme on Booming Private Business” helped full
CDSs. Improved living conditions,
employment and increase in per capita income at the rate of 12
especially of those residing in slums
percent per year.
would be assigned a foremost priority.
2. City restructured through 30 detailed plans, inclusive of
activities such as industrial development, public transport,
The CDSs would focus on meeting
education, public hygiene, gardens and greenery and water
housing shortages, deficit in water,
systems.
3. City schools are now opened to migrants’ children – 43,700
sanitation and solid waste management,
children enrolled.
improving public transport, pursuing
4. City government invested US$ 1.09 million in free training of
traffic management, increasing urban
28,876 persons, mostly migrant that helped 85 percent of
trainees to secure industrial jobs.
land availability, improving education,
5. Built 600,000 m2 of affordable housing for 5,000 low-income
health and other social services and
families and 1,817 free of charge lodge spots for over 390,000
alleviation of urban poverty. The
migrants.
6. Spent about US$ 400 millio to improve roads, water &
competitiveness of cities will be
sanitation and other utility services in the country-side within
achieved through improved living
city limits to bring them at par with the rest of the city.
7. 200,000 m2 of newly built houses have fulfilled the goal of
conditions and achieving the right kind
saving 50 percent energy.
of economic development which is
8. There are 144 public libraries/reading rooms, 19 movie theatres
linked to their potential / endowment.
and 22 story telling centers in the city.
9. More than 1,400 overseas enterprises have invested US$ 15
Similarly, the financial health of cities
billion in the city.
would be improved through local
10. The local financial revenue of the city reached US$ 1.08 billion
(2007)
governments mobilizing their own
resources, improving collection of
Source: UN Habitat - Best Practices
user’s charges and bringing tariff
reforms, attracting private sector investment and promoting public private partnerships instead of
solely relying on grants and transfers from federal and provincial governments. To prepare and
implement the city development strategies and effectively manage delivery of services, the
capacity of local institutions would be strengthened. Cities would be encouraged to replicate
alternate approaches to place provision of municipal services on commercial and self-financing
basis; like in the case of on going Sindh Cities Improvement Program.
4.3.5
Water & Sanitation
In the case of water and sanitation, the strategy of the 10th FYP would be to implement the
two national policies on the sector, namely i) The National Drinking Water Policy 2009 and ii)
The National Sanitation Policy 2007 and to realize their following objectives:

to ensure access to safe and drinkable water supply to the entire population by 2020,
and
333

to facilitate access of all citizens to a basic level of sanitation services (latrines) in each
house, school, bus station and important public place
Both of these policies lay emphasis on: i) conservation of water resources and recycling
and reuse of waste, ii) equitable coverage of all segments of population, iii) improving the quality
of delivery services, iv) increasing the role of the private sector in the development of
infrastructure, v) greater participation of communities in designing, implementation and operation
of water and sanitation projects and vi) enhancing the financial status of local bodies and
reducing their dependence on provincial and local governments. The two on- going national
projects, “Clean Drinking Water for All Project” and Clean Drinking Water Initiative Project
would also be completed during the 10th FYP.
4.3.6
Urban Transport
In the case of urban transport, the objective of the Plan is to promote the use of low cost
public transport, which can be used efficiently on narrow roads in highly dense towns and cities.
This also implies less focus on the continuous re-construction of roads and more on developing
an appropriate public transport system.
Urban
of Public Transport in Major Cities
transport
is “Traffic congestion is nowDevelopment
unmanageable in Lahore and constrains its economic growth- curtailing
already in the investment and reducing its competitiveness” (ADB 2008).
hands of the Three initiatives of the Government are underway to improve public transport in major cities;
– Public Partnership Based Environment Friendly Public Transport System for Major Urban
private
sector 1. Private
Centers of Pakistan. Under this project the private sector bus investors would purchase on bank’s
and
this
lease, 8000 CNG busses for operation in 10 major cities of Pakistan (Karachi, Lahore,
Rawalpindi/Islamabad, Faisalabad, Multan, Quetta, Hyderabad, Peshawar, Gujranwala & Sukkur).
arrangement has
On each bus purchased under the scheme the Government would pay an amount of Rs. 677,181/per
evolved
after
bus as subsidy towards payment of interest. The project has been approved by ECNEC in January
2010.
attempting
of Karachi Circular Railway as a Modern Commuter System. The project envisages revival
several mixed 2. Revival
of the existing Karachi Circular Railways by upgrading and dualizing of 43.12 km of existing track at
funding options
a cost of US$ 128.6 billion. The project will be funded through PSDP with co-financing of JICA.
in the country. 3. Lahore Rapid Mass Transit System (LRMTS). The rail based LRMTS consists of an integrated
network of 4 lines of about 82 km length across Lahore city. In the first phase 27 km line, will be
The
constructed, of which 11.6 km would be underground and constructed on PPP arrangements. It is
arrangement
estimated that the lines would carry about 250,000 to 300,000 passengers per day. The Government
of Punjab is planning to reengage with ADB for possible support for this initiative, after meeting
will
continue
some bench marks in development of LRMT.
with a focus on
better
quality
transport. The public sector will act as a facilitator and regulator with strong Provincial Transport
Departments supervising as well as encouraging better performance and effective service delivery
by the private sector. The federal government has also launched a project of a supporting subsidy
of Rs. 5 billion to private owners for operating 8,000 CNG buses in the ten major cities of
Pakistan. Alongside CNG buses, the revival of the Karachi Circular Railway and development of
a metro based Lahore Rapid Mass Transit System would mean that the urban mass transit would
make encouraging progress during the 10th Plan. These two projects would set a trend in
introducing a rail based mass transit system in other urban areas. In addition, the main railway
network of the country passes through almost all the major cities of the country, which could be
expanded to serve as mass transit systems in other major cities.
334
4.3.7
Alleviation of Urban Poverty
Widespread poverty in urban areas will be alleviated by supporting the income of the
poor and improving their access to better living conditions. As mentioned earlier, they are mostly
either self-employed or work in the informal sector and often live in slums and Katchi Abadis.
The following strategies are set out to address poverty in urban areas:
 To increase the proportion of plots and
houses for the poor in the public and private
Benazir Income Support Programme is a main
sector housing schemes
Social Safety Net Programme
 To promote micro-financing facilities for “Launched in 2008, the Programme would serve as
small businesses and home improvements
a platform to provide cash transfers to the
 To integrate the programs relating to vulnerable identified on the basis of poverty
scorecards and would be backed by an exit
improvement of Katchi Abadis and strategy. This strategy includes imparting training
elevation of economic status of their to one member of each vulnerable family to sustain
itself. BISP intends to cover 3.4 million families in
dwellers to be mutually complementary
the current year. In the next two years, the
 To support informal economic activities in government intends to cover 7 million families”
the clusters of urban poor
Source: Pakistan Economic Survey 2008-09
 To improve education and impart suitable
skills
 To continue with the on-going Benazir Income Support Program to directly support
the urban poor
4.3.8 Urban Environment
The 10th Plan will encourage the following measures to protect the urban environment
from degradation. These will be imbedded in the building regulations of urban areas making their
implementation mandatory.






Making buildings more energy efficient by reducing the use of air-conditioners in the
summer and promoting solar water heaters in the winter
Putting in place CNG buses and mass transit systems in major cities to meet the
mobility needs of the public and to reduce pollution caused by private vehicles
Promoting compact, high density, mixed land use urban pattern, which is less
automobile dependant, less expensive to serve with infrastructure and puts less
pressure on surrounding green areas
Green City Initiative
and other natural assets
Islamabad, the capital city of Pakistan, has been declared
Creating
urban
eco-system
by as a “Green City” in pursuance to UN backed Urban
following practices such as the Environmental Accord. There are 100 other such cities in
the World which have acquired such a status. The accord
promotion of kitchen gardens, reuse emphasizes the need for action as a majority of the
and recycling of waste and creating world’s population now, resides in cities and consumes 75
livelihood close to residents, rain percent of the world’s natural resources.
harvesting, protection of gardens, Several measures are being taken to promote the Green
parks, open spaces and green areas and City’s objectives such as; improvement of air and water
addition of greenery through intensive plantation,
the creation of proper pathways for quality,
conversion of vehicles to CNG, introduction of green
pedestrians and cyclists etc.
busses, promotion of energy efficient buildings, water
and promotion of recycling and reuse of waste
Preparation
of
environment harvesting
etc.
management plan of towns and cities
(covering DRR concerns)
Mandatory environment impact assessment of all urban development projects
335

4.3.9
Pursuing objectives of the “Green City” initiative of Ministry of Environment as part
of the UN Green Cities Declaration and Urban Environment Accord 2006
Urban Housing
The aim of the 10th FYP in developing the housing sector would be two fold: (i) to
address the housing deficit and improve livability standard in towns and cities, and (ii) to seek
economic recovery as the sector possesses a great potential for generating employment
opportunities and expanding industry and trade activities. The Housing Policy 2001 has
prescribed a lead role for the private sector in meeting the housing shortages with the public
sector supporting and facilitating its endeavours. The 10th FYP shall promote the objectives and
implement the strategies of the Housing Policy 2001 and, would lay particular emphasis on
making substantial progress on the following recent initiatives launched under the Prime
Minister’s Program:




Integration and Development of Katchi Abadies/ Urban Slums
Prime Minister’s Special Initiative for Housing for the Poor
Development of Six Low Income Housing Schemes
Prime Minister’s Special Initiative for Housing for Government Servants
These housing initiatives would be expanded to build nearly 500,000 housing units, in
different urban areas for the target groups during the next five years 2010-15. These schemes
would be self financed involving funding by the banks and construction through a well-accredited
consortium of developers. Nevertheless, the seed money in both the projects will be provided by
the public sector. The self financing housing schemes on ownership basis for the government
employees, through housing foundations of the respective federal and provincial governments,
would separately be providing employees developed sites for housing, at cost prices.
The problem of accommodating large number of tenants, especially in the urban areas,
has not been taken into account in the National Housing Policy. It is now high time that the role
of rental housing be accepted as an effective way of creating decent accommodation, especially
for low-income groups. The only possible vehicle for increasing the supply of cheap rental
housing is the private (household) sector. The conditions, which had made possible public sector
interventions in rental housing in Hong Kong and Singapore, do not exist in Pakistan.
Several reforms as envisioned under the National Housing Policy would be implemented
to support and facilitate the private sector. It is expected that implementation of these reforms
would lead to construction of over 1.5 million housing units during the 10th FYP by the private
sector in urban areas. The intended reforms include:
a) Land Supply
Land supply has a critical role in supporting housing and other activities such as
commercial, institutional, industrial, recreational, and road and utility networks and facilities. The
following measures would be encouraged to increase land supply in the urban areas:



Creating urban land through urban renewal and land banking techniques
Promoting high density, compact urban development pattern to save precious urban
land
Ban conversion of sites planned for community use in towns and cities
336

Promoting land sharing in procurement of vacant land in place of compulsory
acquisition
Measures to stop land speculation through disposal of land on market basis
Improving procedures for land transfers and registration and developing
comprehensive land information systems
Improving public access to land information



b) Housing Finance
The principal measures in this regard would be;
 Enabling HBFC for bulk financing of housing schemes
 Mobilization of additional resourses by encouraging commercial banks and
institutions maintaining insurance funds, provident funds, EQBI funds, Zakat
funds and arranging micro financing
 Introduction of foreclosure laws to ensure loan recoveries
 Attracting private sector investments through incentives to investors, builders and
house owners
c) Integration and Upgrading of Katchi Abadies
The measures as stated in the guidelines issued by Ministry of Local Government and
Rural Development dated January 15, 2001 would be implemented. These measures interalia,
include:




The pre 1985 process of regularization and up gradation of Katchi Abadies would
continue
Formulation of new Katchi Abadies would be prevented
Evictions, where ever necessary, would be subject to resettlement plans
Government sponsored housing schemes would be initiated to cater for sufficient
quota of plots for allotment to low-income groups
d) Technology Based Housing
The measures in this regard would include:
 Use of affordable, energy saving and indigenous building materials
 Standardization of building components
 Industrialized construction systems/ techniques
 Promoting research and development
e) Regulatory Framework for Private Sector Housing
The principal measure in this regard would include the establishment of a regulatory
authority, while keeping the regulatory framework simple, transparent, and enforceable.
4.3.10 Economic development of Cities
In planning for their economic development, each city and town shall search for its own
solutions, based on its historic economic advantage and the type of products the market demands
from it. The cities and towns then become the main markets of specialized products which enable
them to reach international markets leading to economic advancement of the individual cities. In
337
the 10th Plan, economic development strategies of towns and cities will be planned and
implemented through their CDSs. In developing economic strategies the CDSs would incorporate
proposals that fulfill the following requirements:






Rapid growth of overall city GDP
Economic development strategies would expand employment opportunities
Specialized economic activities in the right/competitive sectors
Jobs created would absorb the local population
Type of goods and services produced and their quality is market compatible
The productivity meets national environmental quality standards
4.3.11 Public Private Partnership (PPP)
As highlighted earlier, the Government has offered several incentives to attract private
sector participation in urban infrastructure projects. However, private sector participation has
been quite minimal and has been concentrated in the energy and telecom sector. Despite the
disinterest of the private sector, the government in the 10th FYP will continue with its efforts to
further improve an enabling environment to attract greater private sector participation.
The Infrastructure Project Development Facility (IPDF) has issued detailed Project
Inception Guidelines. These guidelines provide a framework for public bodies / institutions to
develop PPP projects from inception to procurement. The Government of Punjab has
promulgated “Punjab Public-Private Partnership for Infrastructure Ordinance 2009” and provided
a legal framework within which public and private sectors may operate. However, a weaker link,
which will be improved during the 10th Plan, will be capacity building in public sector
institutions, especially the local councils to develop feasible and attractive PPP projects. In this
regard, the capacity of IPDF would also be enhanced to make it a premiere institution guiding
others and facilitating PPP projects.
4.3.12
Public Community Participation
Public Community Partnerships (PCP) are different from PPPs and are considered to play
an important role, especially in such schemes as the improvement of Katchi Abadis. In the case of
PPPs, the private sector secure participation of public institutions for gains whereas, in the case of
PCP the communities are made in charge of implementation of the schemes and subsequently for
recovering users’ charges. The PCP arrangement has often led to substantial reduction in the cost
of the projects. The Orangi Pilot Project, for example, was one successful accomplishment under
this approach. In the 10th Plan, the local governments would be encouraged to attempt projects,
especially relating to Katchi Abadis Upgradation and Slum Improvement, on the basis of PCP.
4.3.13
Integrated Development of Strategic Metropolitan Areas
The major cities of Lahore and Karachi in particular, as well as others are no longer
contained within their city boundaries and have spilled over to large metropolitan regions around
them. For example, the metropolitan region prescribed under CDA Ordinance 1960 around
Islamabad capital city extends over an area that is about five times larger than the city size. The
1960 Ordinance provided for the preparation of a regional development plan for the metropolitan
region with a view to reduce the rate of migration into the National Capital as well as to develop
the region in harmony with and at par with the development level of the capital city. The plan
however, was not prepared like in many other cities.
338
The 10th Plan will encourage major cities to extend their municipal limits to include
surrounding urban / metropolitan regions and to develop integrated development strategies for
their respective regions, encompassing various aspects to bring cities and regions in harmony. As
the metropolitan region would be made up of several other towns and cities, an overarching plan
would be required to coordinate their development in a homogenous manner. Such an integrated
metropolitan plan would ensure the balanced and coordinated development of the main cities and
their regions.
4.3.14 Urban Financing
While CDSs would focus their attention to reform and improve their accounting and
financial systems, these reforms may not produce substantial financial relief to cities. The poverty
of the municipalities shall have to be addressed directly. In the 10th FYP therefore, the following
two programmes would be initiated to improve the financial health of cities. Under the Urban
Development Fund (UDF) scheme, a federal fund would be established which would provide
partial finance for the projects emanating from the CDSs. The purpose of the Urban Finance
Fund (UFF) scheme would be to establish a pooled fund to support credit worthiness of the cities
to access market borrowings.
a)
Urban Development Fund
CDSs would offer reforms packages and prepare projects that would relate to areas such
as water supply, sanitation, road network, urban transport, urban renewal and improvement of
Katchi Abadis. The UDF would fund the reforms and partially the projects that would be
produced under the CDSs of the cities.
The Federal PSDP reflecting ongoing municipal projects with the size of throw forward
amounting to Rs. 315 billion will be rationalized and also be brought under the financial purview
of the UDF. A provision of Rs. 500 billion will be made for the 10th FYP on an incremental basis.
The eligibility for securing funds would be linked to the projects that form part of the CDSs as
well as on the explicit recommendation of the provincial governments that these projects would
be instrumental in bringing a change in the city.
b)
Urban Finance Fund (UFF)
The purpose of setting up the UFF is to improve credit worthiness of selected cities and
enable them to access financial markets through the UFF financing mechanism. This can reduce
the cost of borrowing for local governments and facilitate them in raising funds for the bankable
infrastructure and land development projects. A sum of Rs.100 billion would be earmarked,
where funds will be pooled jointly by the Federal, Provincial and local Governments in an agreed
proportion. In this regard a detailed feasibility study will be carried out during the 10th FYP to
establish such a fund which will be located within the provinces.
4.3.15 Urban Governance
Urban governance is under a new phase of transformation, and there will therefore be an
opportunity for the CDSs to contribute to both urban governance (exercise of powers) and
management (delivery of services) aspects. This is necessary as the CDSs would place
increasingly large demands on better governance and management of towns and cities. A review
should generate recommendations regarding the following aspects of urban governance:
339







Reforms to enable local governments to prepare and implement CDSs and business
plans and effectively manage delivery of municipal services
Capacity to mobilize resources and structure capital market instruments (bonds)
Coordination mechanism with informal urban sectors
Regulatory framework for service delivery progressively shifting the responsibilities
of service delivery on PPPs
Improvements in the quality of human resource
Mechanisms for independent review of local government performance and
Public consultation in budget and decision making
There is no ownership in the federal government to facilitate, regulate and monitor
development to help the urban sector. During the 10th FYP the institutional gap will be filled, by
creation of an appropriate institutional structure at the federal level after consultation with the
provinces and relevant federal ministries.
Summing up
Summing up the initiatives envisaged in the 10th FYPP, the federal government
would play the role of a facilitator helping in improved governance, better capacity, upgraded
infrastructure, and sustainable development of the cities. In the longer run, the provincial and the
local governments are expected to make the cities better, more independent and self-financing.
PSDP Allocation for Urban Development in the
10th Five Year Plan 2010-15 (Federal and Provincial including Private Sector)
Rs. Billion
No.
Name of the Scheme / Program
Cost
0.30
1
Preparation of National Spatial Strategy
2
Establishment of National Urban (& Regional) Policy Research Center
0.50
(NUPRC) and its Research and Development Projects
3
2.00
Preparation of Provincial and District Spatial Plans.
4
Preparation of City Development Strategies and Business Plans of major cities
1.00
by the Provincial Government
5
Establishment of Urban Development Fund for Implementation of City
Development Strategies and Business Plan by the respective Local
Governments
Ongoing Schemes = 315
New Schemes = 185
Total = 500
500.00
6
Feasibility Study to establish Urban Finance Fund (UFF) to support Credit
0.10
worthiness of Local Governments for the Implementation of City
Development Strategies
7
1.00
Capacity Building Urban Planning & Development Institutions
8
20.00
Low Cost Housing Programs
9
Construction of Government Buildings including Development of Federal
10.00
Capital Territory.
534.90
TOTAL
340
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7.
Establish Social Safety Nets, Reduce Poverty and Achieve MDGs
7.1.
Poverty Alleviation and Achieving the Millennium Development Goal
(MDGs)
(Poverty Reduction Strategy and Human Resource Development)
Poverty has many dimensions. The poor have not only low incomes but they also lack
access to basic needs such as education, health, clean drinking water and proper sanitation, which
undermines their capabilities, limits their opportunities to secure employment and exposes them
to exogenous shocks.
Characteristics of Poverty
The characteristics of the poor include their low education and literacy level, larger than
average household size, few physical assets, and a disproportionate reliance on informal sector
employment opportunities. There is a strong correlation between illiteracy, or the level of
education, and the incidence of poverty. Large households are more likely to be poor than small
ones. The poor usually lack both income and assets. There is a significant and large difference in
the amount of land per capita owned by poor and non-poor households. Similar differences exist
in the ownership of livestock, housing, and other assets. In terms of sector of employment,
construction, transport and storage are sectors in which the proportion of workers belonging to
poor households is significantly high, particularly in urban areas. Finally, with regard to
employment status, incidence of poverty is high among the self-employed, which includes street
vendors in urban areas, and sharecroppers in the rural areas. The households dependant on
women's labour for survival are more prone to poverty due to the low economic value of female
labour because of relatively lower skills base of women generally, and their restricted mobility, as
a result of which they find it difficult to compete for access to social and productive assets on an
equal footing with men.
Severity of Poverty
To analyze the severity of poverty, population is divided into poverty bands as under:

Extremely poor consuming less than 50% of poverty line

Ultra poor consuming more than 50% of poverty line but less than 75% poverty line

Poor consuming more that 75% of poverty line but less than 100% of poverty line

Vulnerable consuming more than 100% of poverty line but less than 125% of poverty
line

Quasi non-poor consuming more than 125% of poverty line but less than 200% of
poverty line and

Non-poor consuming more than 200% of poverty line
The following table presents a comparative position of population in 2000-01, 2004-05
and 2005-06 for the six groups mentioned above.
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Table 23.1: Population under Various Poverty Bands
(% of Population)
Band
2000-01
2004-05
2005-06
Extremely poor
1.1
1.0
0.5
Ultra poor
10.8
6.5
5.4
Poor
22.5
16.4
16.4
Vulnerable
22.5
20.5
20.5
Quasi non-poor
30.1
35.0
36.3
Non-poor
13.0
20.5
20.9
Source: Pakistan Economic Survey 2007-08
After reviewing the poverty situation during the Medium Term Development Framework
(MTDF) (2005-10) and identification of issues to be addressed, objectives and strategy of the
Tenth Plan (2010-15) are discussed. Various programmes and new initiatives to be undertaken to
exit from poverty and implement the social safety net also forms part of this chapter.
Review of MTDF (2005-10)
Poverty declined from 34.5% in 2000-01 to 22.3% in 2005-06. However, due to slow
growth, high food & energy prices, power shortage and war on terror, the incidence of poverty
seems to have increased in recent years. However, other social indicators show improvement.
Annex 23.2 shows selected human development indicators.
The overall literacy rate of the population with age of 10 years and above has increased
from 53% in 2004-05 to 60% in 2009-10. Gross enrolment rate at primary level has increased
from 86% in 2004-05 to 95% in 2009-10. The health indicators also show improvement as the
infant mortality has decreased from 70 in 2005-06 to 65 in 2009-10. Immunization of children of
12-23 months has increased from 71% in 2005-06 to 78% in 2009-10. Maternal mortality rate per
100,000 has also decreased from 380 in 2005-06 to 276 in 2009-10.
Clean drinking water supply and sanitation play an important role in preventing the poor
population from illness. Sick persons not only become unemployed but have to incur expenditure
on treatment as well. The sustainable access to safe water has increased from 66% in 2005-06 to
76% in 2009-10. Similarly access to sanitation has also increased from 60% in 2005-06 to 70% in
2009-10. In spite of some improvement in social indicators, serious gaps still exist that impede
progress toward exit from poverty.
The Benazir Income Support Programme (BISP) was launched in 2008-09 with an initial
allocation of Rs 34 billion to protect the poorest families from the negative effects of economic
shocks and inflation. The programme envisages cash grants of Rs 1,000 every month to the
females of each qualifying household having a monthly income of less than Rs 6,000 through
banks/post offices. The Programme covered 2.6 million families in the financial year 2008-2009.
The allocation for the year 2009-10 was increased to Rs 70 billion to cover five million families,
15% of the entire population.
343
BISP is being implemented in all four provinces including Federally Administered Tribal
Areas (FATA), Gilgit–Baltistan, Azad Jammu and Kashmir (AJK) and Islamabad Capital
Territory (ICT). The issue of targeting the needy in its entirety is still to be resolved.
As an exit strategy, Waseela-e-Haq has been started as one of the BISP initiative. This is
a targeted scheme to provide interest free loan amounting up to Rs 300,000 to the randomly
selected beneficiary families currently receiving the cash transfers under BISP to be validated
through the programme eligibility criteria. Waseela-e-Haq is purely meant to promote selfemployment among women beneficiaries or their nominees to improve their livelihood.
To combat poverty, besides BISP, the social safety net, the Federal Government had also
initiated a large number of programmes such as PPAF, SMEs/Micro-Finance, People Works
Programme and Pakistan Bait-ul-Mal. Further to this, Government of Punjab had also launched
Food Stamp, Tractor Subsidy and Sasti Roti Schemes to widen the scope of social safety net in
the country.
The Government has also increased pro-poor expenditures. The poverty related
expenditures have increased from Rs 316 billion (4.8% of GDP) in 2004-05 to Rs 860 billion
(5.8% of GDP) in 2009-10.
Vision and Objective
The Tenth Five Plan (2010-15) outlines a new direction in development planning which
is people centric. It makes a serious attempt to exit from poverty towards sustainable and
inclusive growth. Inclusive growth caters needs of the poor, marginalized and minorities for
moving towards a just society. Adequate access to basic and essential public services is critical
for the survival and welfare of majority of population. Human resource development also
supports the growth process itself in the long run by enhancing income generating potential of the
people. It also attempts to remove inter and intra provincial and regional disparities.
Poverty reduction and human resource development aims at making a sharp decline in
poverty and to move as close as possible to MDGs target of 13% to be achieved by 2015. Gender
empowerment focus is an important part of the poverty reduction strategy. MDGs are to be
achieved by increasing resources and putting in place supporting policies to bridge the gaps in
social indicators.
Strategic Thrust
The Poverty Alleviation Strategy of the Tenth Plan 2010-15 has been prepared around the
lessons leant from implementation of MTDF (2005-10), PRSP (2009-11), global financial crisis
and structural imbalances lingering on since 2006-07. The strategy has been devised in the
backdrop of the strong commitment to the human resource development by investing in people
and recent initiative of Benazir Income Support Programme (BISP) to provide relief to the poor
segment of the society against rising inflation, unemployment, ill health, illiteracy, poor housing
and sanitation and lack of drinking water facilities.
Overcoming poverty and sustained growth can be achieved by establishing an
institutional framework for the provision of productive assets, both physical and human to the
poor. In this way, the poor by engaging in the process of investment, innovation and productivity
increase, could become the active subjects of economic growth rather than merely recipients of
344
“trickle down” effect. For this end in view, the design to achieve the objectives of poverty
reduction includes:

Provision of productive assets inclusive of micro finance

Enhancement of capacity of the people through human development programmes, such
as education, health, population welfare and skills development. Access to clean water &
sanitation and gender mainstreaming are also to be addressed to enhance human capacity
and ability to contribute their best to the society and economy

Provision of social safety net to protect the vulnerable

Provision of adequate resources for financing the poverty reduction programmes

Reforming and strengthening institutions for better delivery of public services to
people
Provision of Productive Assets
Due to highly skewed land distribution, 5 per cent of agricultural households own 64
percent of farmland. Over 80 percent of farmers own less than 5 acres of land and women‘s share
of ownership of land is less than 2 per cent. Increasing landlessness has led to an increase in
bonded labour. For accelerated agricultural growth and to improve yield, state land will be
provided to the landless. Provision of funds for the needy to buy land and institutional changes
in the land market are also envisaged.
An institutional framework will be established to provide productive assets to the poor.
Small Corporations to be established which will be owned by the poor and managed by
professionals under the concept of public-private partnership. These institutions serving small
farmer will be established by Provincial Governments in collaboration with District/Local
Governments to facilitate them to increase agricultural productivity. All farmers, owner cum
tenant farmers and pure tenant farmers operating less than 25 acres of land will be offered equity
stakes in the institution. Potential areas for stimulating GDP growth and reducing poverty are
milk and milk products, livestock, production of meat/ meat products and marine fisheries.
Concerted efforts will be made to boost these activities by provision of needed infrastructure and
credit.
The overwhelming numbers of jobs are available in SMEs. However, these activities
suffered from difficulty in access to finance, technology, market and labour skills and in many
cases producing low value added items like steel shutters or car exhaust pipes resulting in low
profitability, low savings and slow growth. Increased investment in this sector would result in
higher GDP growth as well as higher employment generation. Overcoming the constraints would
involve providing institutional support in terms of credit, quality control management, skill
training and marketing. Setting up of Common Facilities Centres to promote forging and heat
treatment, fabrication activities and ensuring quality standards could provide an opportunity for
rapid growth to these small enterprises. And where possible, small clusters of the SMEs having
similar type of economic activities will be developed.
Through participatory development process and social mobilization involving the poor
at the village/mohalla levels, human, natural and economic resource base to breaking out of the
poverty, is to be built. Through social mobilization, institutions of the poor will also be
constituted to organize communities making demands upon the system for improved service
345
delivery and accountability. Provision of workfare through small public works and development
schemes under a social mobilization programme will have an immediate impact on poverty
reduction. Economic power is to be devolved to the poor and they are to be made part of the
process of growth.
Micro Finance
To specifically target the poor and landless in rural areas, micro-credit has proven to be a
powerful empowering instrument particularly for women. Combined with education, micro-credit
empowers the poor to improve their livelihood. Microfinance helps the poor with very small
loans to help them engage in productive activities or grow their tiny business. Over time,
microfinance has come to include a broader range of services like credit, savings, insurance, as
we have come to realize that the poor and the very poor that lack access to traditional formal
financial institutions require a variety of financial products. Experience shows that microfinance
can help the poor to increase income, build viable businesses, and reduce their vulnerability to
external shocks.
Micro finance net work comprises host of institutions. They have currently 2 million
borrowers who have received Rs 29 billion during 2009-10. The number of active borrowers will
be increased to 6 million in 2014-15 thus extending the outreach to a significant number of
beneficiaries of micro credit facility.
Pakistan Poverty Alleviation Fund (PPAF) and Rural Support Programmes (RSPs) are
important pro-poor institutions. PPAF operations are integrated with a network of civil society
partner organizations and RSP framework of the country. It focuses on credit and enterprise
development, water, infrastructure, health and education, livelihood, social mobilization, social
protection and empowerment as well as capacity building, training and skill enhancement
especially of the underserved and less developed regions of the country.
The existing micro-credit institutions will be strengthened to enhance women’s access to
credit. SME Bank and ZTBL will resurrect their microfinance facility for women and make their
schemes cost effective with a vastly expanded network. Microfinance footprint will be expanded
both vertically and horizontally to strengthen the legal framework of financial services and to
reduce the leakage of collateral benefits and transaction costs. Microfinance rates of interest also
to be rationalized by devising mechanisms that leads to reduction in transaction costs thereby
making the whole operation potentially profitable.
Microfinance providers need to recognize that growth in outreach could be achieved in
parallel with institutional strengthening aimed at financial sustainability, improved productivity
and efficiency, establishment of strong governance practices, designing internal control systems,
and putting in place a human resource management structure that recruits competent individuals.
Need is to measure and track poverty levels of clients through Poverty Scorecard and ensure
sustainability to meet non-agriculture demand for financial services. Priorities are to be
established for an effective extension of rural credit. The following priority areas are seen to be
most relevant.

Direct and heavier emphasis on the establishment of agro-based industries in order to
improve rural employment, reduce post-harvest losses of agricultural products so that
possibilities of export expansion increase
346

Efficiency based extension of rural credit to non-traditional crops (both field and tree
crops) will be given due emphasis to improve land productivity and technical efficiency

Visible and heavier focus on the neglected marine fisheries and animal fattening activities

Rapid increase in population and lack of employment leads to increased poverty of nonagricultural population in the rural areas. An increase in labour productivity in agriculture
releases surplus labour which aggravates the situation. An extension of rural credit
through non-agricultural investment enterprises to encourage and promote selfemployment outside agriculture in rural areas would help in redressing rural income
disparities and poverty
Human Resource Development
Demographic Transition and Dividend
Reaping the benefits of the demographic dividend depends on many factors including
education, employment and sound socio-economic policies. Fertility decline is the foremost
condition that needs to be met. The current phase of demographic transition offers an incredible
opportunity to lift the economy out of poverty and onto sharper productivity and greater
economic growth. So there will be demographic transition encompassing nature of youth bulge.
There is a need to address the future employment and training requirements of the emerging
youth bulge.
Aligning with Millennium Development Goals (MDGs)
Pakistan’s commitment to the MDGs is fully reflected in the overall development
strategy of Tenth Plan (2010-15). Goals and indicators under MDGs for the period 1990-2015 are
presented in Annex-23.1. The indicators are to be achieved through higher development
allocation and by adopting pro-poor growth strategy.
Human Development Indicators (HDIs)
Poverty reduction has backward and forward linkages with the performance of human
development indicators and social development indicators. HDIs for 2004-05, benchmark (200910) and targets (2014-15) are presented in Annex 23.2.
Education
In recent years though the net enrollment rate at primary level has increased, but it is still
significantly below the standards of other South Asian countries. The gender gap of literacy rate
also continues to remain high. These numbers become more alarming when the situation is
assessed in terms of achieving the MDG goal of 100% primary level enrolment by 2015.
Achieving a hundred percent literacy rate over the next five years would mean not only achieving
full coverage of school age children but also adult literacy programmes. The national
development outlay during the tenth plan period on education would be Rs 521.4 billion.
To reach universal primary education by 2015, approximately 7.5 million boys and 8.9
million girls aged 5-9 years need to be brought into school, including those who have already
missed schooling since 2005-06. Girls schooling will require a much greater stimulus with the
challenge of mobility and the lack of female teachers compounding this effort for girls. Therefore,
347
primary level enrollment must be doubled, especially for rural females, to achieve education for
all and gender equality objectives by 2015.
To respond challenges faced by the education sector, a new National Education Policy
has been formulated for guiding education sector development in the country. This policy
articulates two overarching priorities; (i) improving access to education for all to help Pakistan
come closer to achieving the MDG targets and to achieve Education For All (EFA) goals of
universal primary enrolment, including removing urban-rural and gender imbalances; and (ii)
enhancing the quality of education and student learning at all levels (including higher education).
The policy recognizes that improvements in governance and management underpin any
improvements in the sector.
Attaining gender and regional parity in terms of opportunities for education and
employment is a major challenge due to large regional variations and low female enrolment and
retention that needs to be addressed. The instruments for a change will be dissemination of wideranging education, skills up-gradation and training of the workforce to enhance its employability,
productivity and competitiveness. Educated and trained manpower will address the challenges of
changing workplace, changing demand for skills and challenges hindering movement towards
population planning, gender and regional parity.
Decline in fertility rate if matched with an emphasis on increased enrolment, the target of
universal primary education will be attained by 2015, with a proportionate increase in secondary
and consequently in higher educational enrolment and attainment. An attempt will be made in the
Tenth Plan (2010-15) that under 25 age group have an average of 10 years of education while
tertiary enrolment also grows accordingly. Additional personnel, equipment, physical
infrastructure and other financial flows need to be arranged, with higher management and
delivery capacity to achieve the goal of universal education for age cohort of 5-14 years of
population. The issue of access and affordability will also be addressed by not only providing
more female schools and increasing facilities in the existing schools but also enhancing coverage
by PPP through Education Foundations. Further, greater thrust of the education to its relevance
and quality in both rural and urban areas will be a major aim of the Plan. This will reduce drop
out rates. Details of education planning are presented in the chapter on Education, whereas only
main elements of the strategy are presented here. These include:

Teacher to be the centre of educational reforms, removing teacher shortages, enhancing
their salaries, status, and skills

Devolve administrative and financial powers to the District Education, Authority (DEA),
Union Councils and School Management Committees in order to achieve universal
primary education and to establish and maintain high standards of teaching

Universal enrolment at primary level and completion of education for a minimum of ten
years with gender and regional parity; and raising enrolment at tertiary level of education

Increase public expenditure on education to 4 per cent of GDP by 2015, with
simultaneous enhancement in planning, management and delivery capacity of the
education administrators
348
Health
The health sector goals in Pakistan have been aligned with the MDGs. Health problems
needing attention are identified as inadequate health coverage and affordability, inadequate
sanitation, unsafe water and high burden of communicable diseases. Inadequate coverage and
poor quality of health care in Pakistan are attributed to insufficient public sector expenditure and
above all inability of non- translating financial allocations into concrete outcomes. Poor health
indicators are reflecting long standing health problems in Pakistan.
The thrust of the health strategy of the Tenth Plan is to pursue the ideal of “health for
all”. To address the health challenges, the recently formulated Health Policy 2009 delineates six
objectives to be achieved in the Tenth Plan (2010-15). These are:

providing and delivering a basic package of quality essential health care services

developing and managing competent and committed health care providers

generating reliable health information to manage and evaluate health services

adopting of appropriate health technology to deliver quality services

financing the costs of providing basic health care to all Pakistanis and

reforming the health administration to make it accountable to the public
With health equity forming the base of the strategy, all segments of society would have
equal access to and reap the benefits of health enhancing interventions. The current public health
expenditure of less than one per cent of GDP on health will be raised to two per cent of the GDP
by the year 2015. Main policies and programmes to be initiated are briefly outlined here whereas
detail of strategic thrust and physical and financial targets for Tenth Plan (2010-15) are discussed
in the chapter on Health.

Reduce burden on tertiary health care system and overcoming inadequacies in the
primary and secondary health care services

Bring down infant mortality rate, child mortality rate and maternal mortality rate

Foster health education and preventive measures to avoid disease

Provide health insurance aimed especially at the poor. Poor families often find it hard to
pay premiums, so the planned health insurance system will be complemented by taxbased funding of health care provision

Provide basic health services to rural areas and urban slums

Upgrade all Basic Health Units / Rural Health Centres

Control of communicable and non-communicable diseases

Public private partnership to ensure equitable health delivery
349
The Following major programmes are visualized to improve the nutritional status of
population and especially improving the health and nutritional condition of the poor masses.

Food and nutritional security

School nutrition programme

Control of malnutrition among infants and children

Policy planning, coordination and monitoring

Micronutrient deficiency country programme

Nutritional awareness
The national development outlay on health & nutrition during the tenth plan period would
be Rs 326 billion.
Water and Sanitation
Better availability of water and sanitation facilities is beset with a large number of
problems emerging due to population growth, contamination of water bodies, extensive system
losses due to weak operation and maintenance and poor sanitary conditions with unhygienic
disposable of water and solid wastes. The development of water supply and sanitation has
linkages not with growth but also with the quality of life of the people. Various measures to be
taken during the Tenth Plan period to achieve the drinking water and sanitation related MDG
targets and reducing poverty are outlined below:





Adopt differentiated and targeted approach to accelerate access to sanitation and water
for disadvantaged and hitherto excluded group of people and geographical regions
Invest in the development of technology, practices and delivery mechanism for
application in the areas prone to natural disaster
Involve non-state players, private sector and NGOs in provision of management for
execution of water projects in urban and rural areas
Link and integrate sanitation programme with city and regional planning policy, health,
environment, housing and education
Increase mass awareness and community mobilization through behavioral change, policy
change and institutional development on use of clean drinking water and better sanitation
facilities
The national development outlay on physical planning & housing including water &
sanitation would be Rs 390.6 billion.
Gender Mainstreaming
Poverty in Pakistan is more feministic in nature. Illiteracy, social insecurity,
unemployment, malnutrition, discrimination and lack of participation in decision making are
more common amongst women. Social and cultural restrictions limit women’s chance to compete
for resources. They face difficulties in acquiring skills and employment in the market and hardly
find jobs and skills in non-traditional areas. Male dominance is relatively stronger in the rural and
tribal settings. The overall objective during the Tenth Plan is to resolve these problems so that
women role is acknowledged and they become fully productive members of the society.
350
Majority of women (75%) are informally employed as home based workers in
agriculture, livestock, forestry and fishing compared to 37% of men. 1.7 million live under debt
bondage and, women are the worst sufferers in bonded labour. Women’s share of land ownership
is 2% only. There is a need of greater access of assets and resources for women through joint
deeds in the name of male and female heads of household. Similarly women ownership of
officially distributed land to the landless distribution schemes and provision of jointly owned
homestead land to landless will also be ensured.
Women lack knowledge of ownership of assets therefore there is need to building
capacity, impart skills and create opportunities to make them productive. Addressing issues of
health and education and acknowledgment within household could make them part of the system.
Improvement in the quality of Primary Health Centres will be made so that women are not to
travel long distances from home to avail health services.
Tenth Plan contemplates strengthening of social protection institutions and mechanisms
to counter the increasing feminization of poverty. The Benazir Income Support Programme
(BISP) targeting only female headed families will further be improved in regards to coverage,
targeting and its sustainability.
During the Tenth Plan, the development and empowerment of women in social,
economic, political and legal fields would be made visible as we move towards a gender balance
and equity based society. Accordingly, gender mainstreaming would provide guidance for taking
into account gender specific approach to all policy planning, decision-making and monitoring
processes. The national development outlay on women development (excluding BISP) during the
tenth plan period would be Rs 6.4 billion.
Since a larger proportion of the non-domestic functions and economic activities of
women is not accounted for, the issue of women empowerment is to be addressed through greater
and effective access to capital and microfinance, and assisting women through skills development
schemes. Further all informal workers including home based workers will be registered at local
level enabling them to access social security, old –age benefits and health facilities from existing
duly strengthened state labour welfare mechanism. Greater detail of gender mainstreaming and
emancipation of women in economic activities is presented in a chapter on Promoting Role of
Women in Economic Development.
Skills Development
At present the quality and coverage of education and vocational training do not provide
the necessary skilled base for sustainable high growth in the country. A basic objective of the
Tenth Plan would be to move the country out of the low quality of education; low skill, low
productivity and low expectations trap which permeates mostly in all spheres of national activity.
The national development outlay on manpower & employment during the tenth plan period
would be Rs.7 billion.
A new initiative under the Tenth Plan “Human Development for the 21st Century” for a
large scale district based national skills development has been formulated. This HRD programme
envisages a social transformation through new skills provision, and up-gradation of the skills of
the existing trained work force with the aim of enhancing the employability, productivity and
competitiveness of the middle classes and the poor. The initiative is expected to provide a trained
human resource base for placing the economy on the path of a diversified, broad based and
sustainable economic growth.
351
The district level organizational structure for this initiative will be quickly established
with a small but highly professional, motivated and appropriately incentivized team to implement
this programme. The programme is also designed to reap the demographic dividend, as 60 million
additional people enter the productive age group over the next two decades.
The Vision for the National Skills Strategy, 2008 – 12 of NAVTEC will be continued
during the Tenth Plan period to build upon existing strengths and opportunities, and to reflect
both international best practices and indigenous knowledge. It attempts to offer practical
proposals for reform, which includes providing relevant need based skills for industrial and
economic development and improving access, equity and employability.
Technology Up-gradation and Skill Development Company (TUSDEC), Technical
Education and Vocational Training (TEVTA) and Skilled Development Council (SDC) will be
geared to bring change in moving out of the traditional sectors and occupations by imparting
demand driven skills, creating skills development opportunities and raising skill to current and
future job markets. The chapter on “Labor Employment and Skills Development” provides detail
of policies and programmes to faster skills development in the country.
Social Protection Strategy
The Tenth Plan recognizes social protection as a means of strengthening capabilities of
the poor to mitigate and manage risk and vulnerability. Social Protection includes straight
transfers and social insurance for risk mitigation regardless of prior or future contribution. The
following table 23.1 reflects the broad contours of vulnerable and less vulnerable characteristics
of poor and non-poor sections of the society.
Table 23.1 Poverty and Vulnerability in Pakistan
Most vulnerable
Poor
Non-poor
Casual labour
Mid rank formal sector
workers/pensioners on fixed incomes
Low-capital-self-employed
Low-rank formal sector
workers/pensioners on fixed
incomes
Women
Children
Women
Children
Those without
family/community support
Urban workers
Those Without family/
community support
Less vulnerable
Small farmers
Medium capital self-employed
Medium/large farmers
Mid-upper rank formal sector
workers/pensioners on fixed incomes
352
During the Tenth Plan (2010-15) period a well targeted, sustainable, comprehensive and
integrated social protection strategy for wellbeing of poor and vulnerable will be pursued.
Elements of the strategy are outlined as under.

Improve and expand well targeted BISP and Punjab Food Support Programme (FSP)

Direct interventions to protect women and children – introduction of comprehensive
child-centered nutritional programmes, and public health interventions (Lady Health
Workers) for women

Counter-cyclical support programmes – Employment Guarantee Schemes targeted to
casual labourers

Non-budgetary social protection measures such as residential security for the poor in
rural and urban areas

Simplifying and achieving full coverage of the existing social security system so as to
make social transfers to the poor both guaranteed and predictable

Creating new and strengthening existing institutional structures (Zakat, Pakistan Bait-ulMal, Employees Old-age Benefit Institutions (EOBI) for the provision of micro finance
to ensure that it reaches the poor and socially excluded with adequate coverage of the
target population

Health insurance to provide access to the poor and vulnerable to preventive and curative
health care

Improved access and coverage over high quality education and training for the poor and
the vulnerable sections of society

Institutional change to provide residential land security for the marginalized in rural areas
and security of tenant in urban areas

Eradication of forced and bonded labour

Area development schemes to provide sustainable livelihoods, health, education and
transportation infrastructure in those backward areas which have a high poverty
concentration. This needs to be done on the basis of a geographical poverty mapping of
the country

Building women’s agencies and opportunities and providing them with security against
violence
Financing Poverty Reduction
Poverty reduction cuts across sectoral dimensions and include both current and
development expenditure. Pro-poor expenditures cover 17 related heads^ and are also analyzed in
respective sectoral chapters. Based on historical trend it is expected that poverty related
expenditures will reach to Rs 2258 billion in 2014-15 from Rs 860 billion in 2009-10.
^
including roads, highways & bridges, water supply & sanitation, education, health, population planning,
agriculture, land reclamation, rural development, subsidies, social security & welfare (including BISP),
food support programme, Pakistan Bait-ul-Mal, peoples' works programme, natural calamities, low cost
housing, administration of justice, and law & order
353
Expenditure behaviour of education, health and social safety net during the plan period is
presented in following chart.
.
*
Figures from 2009-10 to 2012-13 are from PRSP-II Projections for 2013-14 and 2014-15 are
based on trend growth of three years (2010-11 to 2012-13)
** Includes BISP, Food Support Programme & Pakistan Bait-ul-Mal
A paradigm shift from the previous sole emphasis on overall macro and sectoral growth
towards increasing emphasis on Inter and Intra-Provincial development priorities is envisaged in
Tenth Plan. The 7th NFC Award envisions larger flow of funds from Federal to Provincial
Governments and these would provide more fiscal space to provinces to play an important role in
addressing intra-provincial disparities. In anticipation of increased share of Provinces under NFC
award in the coming years, the projects related to social sectors would be covered by the
Provinces. Consequently, the Federal Government would allocate more chunk of budget to
projects related to development of Infrastructure and quality improvement of social sector in the
country. Further development priorities at the national level and allocation of the Federal PSDP,
to be based on close consultations with the Provinces. A consensus also needs to be developed in
the selection and development of mega infrastructure projects (Water, T&C and Energy) directly
impacting on the economy of the province. It is also to be ensured that each investment project
and/or programme is to be evaluated in terms of its impact on regional growth before designing
fiscal/monetary policy incentives and institutional support.
Promoting Good Governance and Strengthening Institutions
For achieving MDGs, reducing poverty and enhancing coverage of social protection nets
besides provision of physical assets, development of human resources and economic governance
also needs to be improved. The promotion of good governance requires strengthening institutions,
administrative and service reforms and improving monitoring and evaluation system.
Accordingly, the Tenth Plan (2010-15) lays emphasis on the following.

Examine the most effective ways of delivering public services that reduce poverty
354

Review of Devolution Plan 2001 to ensure effective decentralization of administrative
and financial powers and functions of government for successful local development and
strengthening local communities. This will enhance the delivery of critical public services

Consider participatory approaches and governance in the design and implementation of
policies, programmes and projects, with capacity building of agencies involved

Federal Bureau of Statistics (FBS), the data providing institution will be strengthened for
better collection of data, needed for poverty estimation and MDGs monitoring. Capacity
of the FBS, Centre for Poverty Reduction and Social Policy Development (CPRSPD) of
Planning Commission and PRSP Wing of Finance Division will also be enhanced for
poverty estimation, analysis, policy, strategy and programme formulation and monitoring
& execution

Address problematic areas of public sector management and resolve systemic problems
undermining the efficiency of legal, judicial and law enforcement institutions

Reduce corruption by introducing transparent, open and accountable financial and
administrative mechanism in all fields
Conclusion
During MTDF 2005-10, economic growth after reaching a peak of 6.8% in 2006-07
dropped to 2% in 2008-09. In 2009-10 the terminal year of the MTDF, signs of economic revival
are visible. GDP is expected to grow a little more than 3%, inflation to be 12% and fiscal and
current account deficits will remain within manageable limits. Supply and prices of food and
other commodities are expected to remain largely stable. All these would auger well at start of the
Tenth Plan (2010-15). During this Plan, economic growth is envisaged to be 5.5-6%. Agriculture
and manufacturing growth at 4 and 7% respectively would exert positive impact on employment
and inflation and thus on reduction of poverty. Further, greater emphasis on investing in people
where expenditures, 7% of GDP on health and education would not only enhance capacity of the
economy for sustained high growth but would also support government efforts to exit from the
poverty. Success of the poverty reduction programmes largely depends on efficiency and
effectiveness of the institutions delivering public services. Efforts will be made to improve
overall economic governance and strengthen pro-poor institutions that would result in better
implementation of poverty reduction strategies and eventually improving HRD, governance and
poverty indicators.
355
Annexure-I
Millennium Development Goals 1990-2015
Goals and Indicators


Eradicate Poverty and Hunger
 Overall Poverty level (% of
Population)


Literacy (Age 10 years +)
Literacy Rate of 15-24 years
old
Gross Enrolment
Net Primary enrolment
Promote Gender Equality and
Empower Women
 Ratio of literate females to
males of 15-24 years (%)
 Proportion of Seats held by
women in the Parliament:
1. National Assembly (%)
ii.



2000-01
2005-06
2009-10
Benchmark
2014-15
(Targets)
26.1
34.5
22.3
-
13
35
49
45
58
54
59.5
60
74
86
90
73
46
87
42
104
56
95
77
107
100
0.51
0.65
0.74
0.8
1.00
2/217=
0.92
1/87
=1.15
-
73/342
=21
17/100
=17
102
77
70
65
40
75
53
71
78
90
140
105
96
77
52
n/a
181
181
130
45
n/a
0.03
<0.01
0.01
0.005
n/a
n/a
0.03
n/a
n/a
25
53
69
66
76
93
30
45
60
70
90
Achieve Universal Primary
Education (%)



1990-91
Senate (%)
Reduce Child Mortality (%)
 Infant Mortality Rate
 Proportion of fully
immunized children 12-23
months
 Under five mortality rate
Combat HIV/AIDS, Malaria
and other Diseases
a) Incidence of TB/100,000
b) HIV prevalence among
pregnant women (15-24
years old)
c) HIV prevalence among
vulnerable group
d) Proportion of population in
malaria risk
Ensure Environment
Sustainability
 Sustainable access to safe
water (%)
 Population with access to
sanitation (%)
0.02
50
-do-
75
Source: Federal Bureau of Statistics & Planning Commission
356
Annexure-II
Achievements and Targets in Education,
Health and Water Supply & Sanitation
Indicator
2004-05
2007-08
Benchmark
2009-10
2014-15
Boys
94
97
101
111
Girls
77
83
88
102
Total
86
91
95
107
Male
65
69
73
86
Female
40
44
48
86
Total
53
56
60
86
50
55
74
90
77
73
78
>90
73
69
65
100
80
77
350-400
250
276
140
66
NA
76
93
60
NA
70
90
Targets
Education
Gross Enrolment Ratio (Age 5–9) (%)
Literacy rate (15-24 years) (%)
Literacy rate (Age 15+) (%)
Health
Immunization (Children 12-23 months) Based on
Recall and Record %
Infant Mortality Rate per 1000
Child Mortality Rate per 1000
Maternal Mortality Rate per 100,000
40
52
Water Supply & Sanitation
Sustainable access to safe water (%)
Population with access to sanitation (%)
Source: Federal Bureau of Statistics and Planning Commission.
357
7.2
Social Protection
1. Concept and Background
1.1
Concept and Definition of Social Protection
Social protection is viewed as a key investment in human capital and in breaking intergenerational poverty traps. Pakistan’s Constitution (1973) ensures SP through Article 38, (subsections a-d), that holds the state responsible for the “well-being of people”, for “social security
by compulsory social insurance”, the provision of “basic necessities of life” to the indigent, the
disadvantaged, and the socially excluded. These rights are further supplemented by Pakistan’s
international commitments as Pakistan is a signatory to and has ratified a number of international
conventions and agreements24.
The term SP is often used interchangeably with social security and social safety nets
though these are a subset of social protection. The concept of social protection uses a broader
rights-based approach25 and pertains to a basket of a wide range of arenas. SP is a life cycle
continuum investment for social justice, poverty reduction and development.
Vision
“To develop and design a well integrated and comprehensive Social Protection System to
give coverage to the entire population with focus on the poorest and the most vulnerable.”
Objectives
Main objectives of Social Protection for the 10th Five Year Plan are:


To support chronically poor
households/people living below
poverty line and protect them
against
destitution,
food
insecurity, exploitation and
social exclusion
To protect the poor and
vulnerable households from the
impacts of adverse shocks to
their consumption and well
The Plan will bring about major changes in the
traditional Social Protection System to make it more
creative, progressive, sustainable and impact oriented.
Main thrust of the plan is on empowerment of women
which are over 50% of the population. This will be
achieved through BISP which focuses on women as head
of the household.
The Government has initially provided Rs 35.00
billion on the launching of the BISP which has now been
doubled. However, further tremendous increase has been
committed for future allocation of funds for this program.
24
UN Convention on the Rights of Persons with Disabilities (CRPD); UN Convention on the Rights of the
Child (UNCRC); ILO Convention concerning Equal Remuneration for Men and Women Workers for Work
of Equal Value; Universal Declaration of Human Rights; UN Convention on the Elimination of All Forms
of Discrimination Against Women (CEDAW); ILO Convention on the Abolition of Forced Labour; UN
International Covenant on Economic, Social and Cultural Rights (ICESCR); ILO Convention on
Discrimination in Employment and Occupation; ILO Convention on Minimum Wage; ILO Convention on
the Worst Forms of Child Labour
25
“Social protection includes labor market interventions (labor market regulations, programs and wage
setting rules), social insurance programs (such as pensions, unemployment and family benefits, sick pay),
social assistance (transfers in cash or kind, subsidies and workfare), and programs to assist especially
vulnerable groups (disabled people, orphans and vulnerable children, etc.). The core conjecture is that welldesigned and cost-effective Social Protection is crucial for the achievement of all MDGs”; in “The
Contribution of Social Protection to the Millennium Development Goals” page 3; World Bank
358




1.2
being which, if not mitigated, would push non-poor households into poverty, and poor
households into deeper poverty and
To promote investment in human and physical assets, including health, nutrition, and
education, for poor households capable of ensuring their resilience in the medium run and
of interrupting the intergenerational cycle of poverty
To reduce human deprivations and eliminate vulnerabilities
To strengthen the existing Social Protection programs for their effective implementation
and targeting to ensure that the benefits and services efficiently reach the intended
beneficiaries
To develop well coordinated institutional mechanism for social protection at various
levels
Background and History
Moving from the initial stages when social work and charitable welfare services were
provided through indigenous philanthropy, social groups, and civil society, professional social
work, social assistance and social welfare activities were introduced through public financed
programmes. During the 1970s, social security programs for the workers in the formal sector
were launched and the concept of social safety nets, however, emerged widely in late 1980s in the
wake of economic adjustment policies.
A concerted effort to improve the lot of its people in Pakistan was initiated through the
enunciation of the National Policy on Water Supply and Sanitation at the end of the decade of the
'80s. This led to the multi-donor supported Social Action Programme in 1993/94. It was aimed
at improving the nation’s Human Development Index. Concurrently provision of social welfare
was included as a state responsibility and made a part of Ministry of Health & Local Bodies. In
1994, a separate Ministry of Social Welfare was created which developed the first National Social
Welfare Policy that focused on the vulnerable groups. Over the two decades several task forces
and commissions have been formed to address different aspects of social protection:








Commission on Social Security 1993
Task Force on Social Security 1994
Task Force on Pensions 1996
Task Force on Labour Welfare Levies 2000
Donor Assisted Studies and Consultations 2002/03 Onwards
Social Protection Strategy 2007 prepared by CRPRID
Cabinet Committee for Social Sector Coordination
Committee on Social Protection Policy Review 2009
Efforts to address deprivation, largely poverty, have since then been of an ad-hoc nature,
but were again consolidated through an economic reforms package, expressed through the
Pakistan Poverty Reduction Strategy Paper (PRSP) initiated in 2001 and finalised in 2003. The
Strategy was designed to increase economic growth and reduce poverty through pro-poor policies
and programmes. Under its rubric it attempted to consolidate and coordinate the dispersed
poverty reduction actions and projects. Some improvements were observed, but whether these
were the result of an overall improvement in the availability of public funds or through an
improvement in the efficiency and effectiveness remain to be answered. The second generation
PRSP is now under implementation. The Draft Social Protection Strategy was also developed in
the light of this. Both, however, address the issues in a broad framework without emphasising
issues of gender. Emphasis should be on labour protection, including the provision of minimum
wage, and removal of economic and social discrimination against women and excluded groups.
359
2.
The Current Situation
A significant number of Pakistanis face poverty, deprivation and exclusion. While there
have been peaks and troughs in poverty data, the overall trend has been an increase. While the
official estimates of poverty and those by academia, private research institutes and NGOs have
been at variance over the years, the variance has not been beyond a few percentage points. Of
late, however, the differential in these estimates have widened. According to the Economic
Survey 26 the level of poverty according to various exogenous sources ranges “from 22.3 percent
of the population in 2005-06 to between 30-35 percent in 2008-09”27.
Deprivation and exclusion measured in terms of the disabled persons, widows, orphans
and child labour are also disheartening.
Information on the number of disabled persons is available from the 1998 Census of
Population indicates that 3.3 million persons or 2.48 percent are disabled, of whom about a third
are children.
Some of the other groups of the population which are at risk are the widows, the
divorcees, female headed households and the orphans of the poorest of the poor families. Data on
such families is not available. The 1998 Population Census provides an aggregate figure of
widows (5.4 percent) and of divorcees (0.34 percent) from the female population cohorts aged 15
and over.
Children of the poorest segments of the population are deprived of access to education
and formal skill training. Owing to economic pressures a very large proportion of these are
employed as informal apprentices and trainees by the informal sector craftsmen, workshops and
factories and as domestic servants (particularly girls). Another significant proportion end up as
street children or as beggars. Data on child labour aged 10 to 18 years is available from the
Censuses of Population. In 1998, the Census counted a total of 4.2 million children aged 10 to 19
years who were either actively employed in paid work, were looking for work or had been laid
off. Owing to the growth in population, economic downturn and a decline in real incomes now
being faced by Pakistan this number would have increased substantially to approximately 10
million. And this is not counting those who are employed from among the younger age cohort of
5 to 9 years of age.
3.
Review of Existing Public Sector Social Protection Programmes
Both the provincial and federal governments have been engaged in some form of support
activity through various plans, programmes and projects which are a mix of various types of
assistance which encompass the basket of possible interventions, such as the following:





Income Support :
Employment :
Education :
Skill Development :
cash transfers, food subsidy, food stamps
income generation, public works, micro-credit
free primary education, scholarships
technical and vocational education and training
Basic Healthcare :
disease
prevention,
26
“The CPRSPD estimated a sharp decline in the headcount poverty ratio for 2007-08. However, these findings appear
to contradict other assessments conducted subsequently, and which better reflect global and domestic price
developments after June 2008. (Economic Survey 2008-09 page 196
27
ibid; page 197
360



Empowerment :
nutrition supplement, maternal and child health,
school health and school nutrition
Sustainable Livelihood :
integrated area
development, land tenure, shelter, environmental
upgrading
gender, child rights, access to justice
Social Welfare:insurance schemes, pensions,
old-age benefits, social security, disaster relief.
The government has divided the target population of the poor into several bands the most
critical of which are the extremely and the ultra-poor households.28 This disaggregation among
the basket of vulnerable and socially excluded segment of the population helps in targeting the
“poorest-of-the-poor” more effectively. As resources permit, the target groups would be
extended to the next higher segment of the vulnerable and excluded population.
Intervention towards providing Social Protection under the umbrella of the public sector
is limited, in terms of both financial outlay and the people it reaches. Each is designed for poverty
reduction generally, or is meant to be directed largely for the benefit of women and women
headed households. Some of these are based on one particular stage of the “life-cycle” approach
to mitigate the impact of both endogenous and exogenous factors.
While government intervention for Social Protection, both in terms of financial outlay
and in terms of the people it reaches, appears to be limited there has, however, been an implicit
prioritisation for this purpose: income support, targeted subsidies, alongside with general
subsidies, and focus on women and the socially excluded. Less than 0.6 percent of the GDP was
earmarked for Social Protection spending for all federal government programmes as recently as
2007-08. In terms of direct transfers from Zakat and Bait-ul-Mal, the two largest government
programs, only 4 million people of the estimated 50 million below the poverty-line, had received
some form of assistance in 2007-08. Moreover, some of the main components of this Social
Protection package, such as the amount collected as Zakat, show a markedly falling trend and are
likely to be even smaller in 2010 and beyond. In the second category of Social Protection
instruments, those related to workers, 169,000 had received assistance under the Workers Welfare
Fund, and 273,000 from EOBI in 2007-08. In other programs, such as the food subsidy scheme,
the numbers of beneficiaries is equally low. In each category of the potential target population,
these are minuscule proportions. Clearly, Pakistan’s Social Protection programmes reach out to
only a fraction of those who by the definitions of the program, should be entitled to benefits.
Microfinance and the Peoples Works Programs have benefited a greater percentage of the poor,
although the former – microfinance – targets those who are somewhat above the poverty line, and
the Peoples Works Programmes (in their various genres) are shorter-term, non-recurring,
activities, but are based largely on the contract-out mechanism, which does not necessarily help
the poorest of the poor.
28
Poverty Category
Extremely poor
Ultra poor
Poor
Vulnerable
Quasi-Non-poor
Income Level
50% of poverty line or less
50% - 75%
75% - 100%
100% - 125%
125% - 200%
361
The mix of projects and programmes is summarised in Table 1. A more detailed analysis
which also includes targets and financial outlays is presented in Annex 1.
Table 1 : Basket of Social Protection Interventions
Programme
Financing
Type of Benefit
Target Group
Social Assistance
Benazir Income Support Public Funds
Cash as income Ever
married
females
Programme (BISP)
support
belonging to ultra poor
households.
Waseela-e-Haq
Public Funds
Cash as grant for Subset of BISP
establishing
business
Microfinance
Donor Funded
Cash as loan for Poor people (Men &
establishing
Women)
business
Pakistan Bait-ul-Mal
Public Funds
Cash as income Disabled persons, invalids,
support; grant for widows,
orphans
and
daughters’
household living below the
weddings;
poverty line.
Food supplement
in
education;
education for child
labour
People’s
Work Public Funds
Cash-for-Work
Rural unemployed/landless
Programme
haris
People’s Rozgar Scheme
Commercial
Bank Financed
Financing
for Unemployed educated (Men
selected
& Women)
29
businesses
National
Internship Public Funds
Cash-for-Works
Unemployed educated (Men
Programme
& Women)
Punjab Food Support Public Funds
Cash as income General Public (Men &
Programme
supplement
Women)
Subsidy on Wheat, Sugar Public Funds
In kind as social General
Public
and
and Fertiliser
welfare
cultivators (Men & Women)
Utility Stores
Public Funds
In kind as social General Public (Men &
welfare
Women)
Zakat /Ushr
Special levy on Cash
“Deserving/ Needy” among
bank balances
Muslims (Men & Women).
and agricultural
output
Child protection
Public Funds
Protection survival Vulnerable children facing
development and abuse and exploitation (Men
rehabilitation
& Women).
services
Youth protection
Public Funds
Protection,
Vulnerable youth facing
29
Community Transport, Community Utility Stores, Community Mobile Utility Stores, and PCO/Telecentres with a maximum of Rs. 200,000; three new products including Commercial Vehicle, Shopkeeper
and Primary Healthcare Equipments to Medical Graduates, Science Graduates and B-Pharmacy qualified
individuals. The maximum limit ranges from Rs. 500,000 to Rs. 700,000.
362
Women Protection
Public Funds
Child Labour & children Public Funds
in bondage
Bonded labour
Public Funds
Older persons
Public Funds
Health Protection
Public Funds
Disabled Persons
Public Funds
Social welfare
Public Funds
Social Health Insurance Contributory
(SHI)
(Individuals)
Workers
Profit Contributory
Participation
Fund (Employers)
(WPPF)
Workers’
Children’s
Education Cess (WCEC)
Workers Welfare Fund
(WWF)
Social Insurance
Employees’
Old-Age
Benefit Scheme (EOBS)
Provincial
Employees’
Social Security Scheme
(ESSS)
Contributory
(Employers)
Contributory
(Employers)
Contributory
(Employers)
Contributory
(Employers)
development, skill
enhancement,
employment and
rehabilitation
services
Protection
and
rehabilitation
services
Protection,
survival,
development,
withdrawal
&
rehabilitation
services.
Withdrawal
/
release
&
rehabilitation
services.
Protection,
survival
and
rehabilitation
services
Health
related
services
Protection,
survival,
development, skill
enhancement,
employment and
rehabilitation
Social
services,
activities
and
programs
Cash
abuse, exploitation (Men &
Women).
Poor & vulnerable women
facing abuse, violence &
exploitation.
Vulnerable children facing
abuse
and
exploitative
situation (Men & Women).
Men and women
oppression.
facing
Older men & women facing
socio-economic problems
5 to 10% of the population
(Men & Women).
Persons
with
various
disabilities
(Men
&
Women).
General
population
(Children, youth, men &
women).
(Yet to start)
In kind access to Formal sector workers
facilities
and
services
Cash
for
scholarships
Education
Formal sector workers
Housing, Schools, Formal sector workers
health facilities
Cash
Formal sector workers
Cash and in-kind Formal sector workers
benefits
363

Other Provincial Programmes
Outside these transfer, supplement, employment generation and welfare activities the
Provincial Governments invest into children through the provision of very poor quality schooling
ranging from the early childhood centres (very thin on the ground) to primary (with a large
component of ghost schools and high absenteeism of teachers) to tertiary level universities,
colleges and professional institutes. While the government advocates the completion of secondary
school, and the Constitution of Pakistan in the statements on the Principles of Policy (Article 37)
states: remove illiteracy and provide free and compulsory secondary education within minimum
possible period. There appears to be no firm commitment to fulfill this policy. The number of
seats offered in the public schools in the transition from primary to secondary and higher
secondary classes drops at each stage. Thus the child, unable to get admission to the next level of
schooling, is deprived by political will and dictat of a chance to achieve his/her potential. In the
health arena government continues to provide free basic and preventive health care, and
subsidised secondary and tertiary in-bed and ambulatory hospital services. Potable water supply
and sanitation schemes are part of the annual development programme. These are implemented
on the basis of community partnerships in the rural areas and on a cost-recovery basis in the
urban areas. However, owing to inefficiencies in the system, a substantial subsidy is involved
each year.
Apart from the programmes/projects mentioned earlier, the provincial governments are
engaged in the construction and operation of specialised facilities, such as those for training and
rehabilitating disabled persons, homes for old/aged persons, community centres, child care
centres, shelter homes for women, camps for displaced persons, mother and child homes,
specialised training centres for the vulnerable and deprived persons, particularly children, and
child labour to meet immediate demands.
4.
Gaps and Constraints
4.1 Data
To measure the gap data for each of the facets of social protection would have to be
available. Unfortunately, the quantitative data is available only for the various measures of
poverty and some measures of deprivation and vulnerability through the HIES, PLSMS and
MICS to name a few. The former two are conducted by the federal governments and the last by
the provincial governments and are not miscible. Data on some of the other aspects is not
collected, but the delay between collection and availability after analysis is sometimes so large
that these numbers cannot be used to influence policies. Moreover a large number of the facets of
social protection require dynamic qualitative data inter-temporally at the micro-level (households
and individuals), at the meso-level (community, neighbourhood and village level), and at the
macro-level, (society- and economy-wide).
It is, therefore, not possible to measure the gap on social protection in totality. To do this
a number of surveys would have to be modified, for instance, but not limited to, the Labour Force
Survey would have to be expanded to the rural areas, and the MICS would have to be coordinated
with the HIES/PLSMS to ensure miscible overlaps. These should be part of the strategy proposed
to strengthen social protection in Pakistan.
364
4.2 Contraints/Restrictions
The constraints faced in delivering social protection include, but are not limited to:
Absence of Prioritisation. Priorities and sequencing of policy, development and
implementation are not set to progressively achieve a basic social protection package that is
equitable and accessible to all those in need.
Resource constraint. Currently the needs for skilled, sensitised and trained personnel are
largely unmet as the quantum of financial resources available is inadequate to meet needs.
Additionally, actual expenditures are substantially lower than the allocations made in the budgets.
The slippage ranges from 15 to 30 percent of funds budgeted. The latter indicates a mismatch
between resource availability and utilisation arising from either lack of capacity to utilise the
allocations or a flaw in the release of funds. The general impression is that in the majority of
cases it is both.
Further, Pakistan is currently faced with a resource constraint largely driven by the need
to service the debt burden and the rapidly increasing need for defence and policing expenditures.
These latter have been due to terrorism and the resultant law and order situation. The latest award
for the sharing of resources between and across tiers of government announced by the National
Finance Commission has imposed substantial restriction on the availability of funds for the
federal government, but has transferred substantial resources to the provinces. There are fears that
this imbalance may result in a splurge of improperly planned programmes in SP and may,
therefore, be counterproductive, on the one hand, and on the other could further exacerbate the
absorption and utilisation of allocations in the budgets for years to come.
This thus fortifies the need to develop institutional capacity and the capacity of the
politicians and bureaucrats to allocate and use funds efficiently, judiciously and with fiscal
prudence.
Lack of institutional capacity. Institutional and administrative capacity refers to a set of
characteristics of public organisations related to the performance and the success of public
policies. Examined within the framework of research, studies examination by several agencies
have clearly emphasised the need for reform so that the institutions can respond effectively and
efficiently to the demands of the sectors they represent. The core of constraints in institutional
capacity are the ossified systems and procedures that are used for implementation and the
mismatch between skills demanded and made available.
Lack of co-ordination at all levels. Delivery of elements of social protection are scattered
across various departments throughout the governments. In addition, there are vertical
programmes which impinge on the responsibilities of the provincial and local governments. As
mechanisms for co-ordination are weak at both inter- and intra- departmental levels, situations
occur where overlaps, duplication and exclusion of aspects of social protection are evident.
While such relationships are common within a federating milieu, the need for coordination and
for recognising that each tier of government must work harmoniously to achieve the overall goals
and objectives of the framework for each programme is essential. Many federating countries
have these coordinated, arrangements in existence. A best example of such coordinated delivery
in an efficient, transparent and accountable framework across several tiers of government ranging
from the Centre to the village is the Mahatama Gandhi National Rural Employment Guarantee
(NREGA) Programme which guarantees 100 days of paid employment annually on public works
365
to all households in rural India. This is delivered through a transparent manner by each tier of
government. The accountability of public officials is monitored through a process of Social
Accounting and by the beneficiaries themselves. All records and information is pro-actively
available publicly on web-sites Absence of balance and synergies between social transfers and
social services. The link between social transfers and social services appears to be substantially
more than inadequate. For instance, worldwide commitment to spending 4 percent of the GDP
through public resources on education is nowhere near to achievement in Pakistan because of a
lack of prioritisation. A fairly large proportion of the 1.5 percent to 2.5 percent of the GDP that is
allocated remains unutilised each year. This is necessary to ensure the reach, effectiveness and
impact of social protection.
Lack of governance in the sectors. There is no transparency in the mechanisms used to
identify the target population or in distribution of benefits. Moreover accountability, through
public disclosure of events, expenditures and achievement, is conspicuous by its absence.
Internal control mechanisms are weak and third party validation of projects and programmes are
by and large not used or encouraged by the departments concerned.
5.
Social Protection Framework
The social protection framework should be all encompassing and should be based on the
following parameters of policy:
Parameter 1: All plans, programmes and projects should be developed on evidence-based
information and statistics. Where information is lacking, studies, research and
surveys shall be conducted, first by amending existing instruments, second by
cohesion of sources, and third by supplementing activities
Parameter 2: A basic level of social protection shall be provided by the government which
shall include social security, safety nets and social welfare within one coordinated
and monitored basket of delivery systems through a reformed and empowered
institutional milieu centred around each tier of government, more specifically the
provincial and district governments, as appropriate
Parameter 3: A plan to build the capacities of politicians, administration and communities to
understand and implement the rights and responsibilities of each type of stakeholder
in inclusive social protection shall be prepared and implemented
Parameter 4: Earmarked resource generation coupled with private sector and effective
community participation should be designed and implemented and
Parameter 5: Better governance, transparency, and accountability should be the cornerstone of
operations based on both internal monitoring and third party validation for each
strand or programme of SP.
6.
Strategies for the 10th Five-Year Plan
Within the Framework of the Five Parameters, the strategy should address several issues
of a technical nature up front. Unless resolved social protection will remain as a status quo
situation. However, it will have a more substantial outlay of resources which would not be
effectively employed.
366
Pakistan is not unlike a number of countries around the world. Its problems in providing
social protection are replicated around the world. Most countries in the developing world are
characterized by settlements that have no electricity, lack safe drinking water, and are cut off
from gas supplies. Furthermore, gaps in service delivery affect other public goods, such as social,
educational, and health services. Breaks in service delivery coupled with persistently high
unemployment rates in some countries have in turn contributed to weak social cohesion.
Innovative approaches have been used to address SP. One example cited earlier was the NREGA
programme in India. Within the region, the intervention of NGOs in Bangladesh is a
commendable effort to supplement interventions by the government. The cited example of social
enterprises suggests that the private sector, not necessarily limited to the large formal
organisations, can play a significant role in addressing issues of deprivation and social exclusion.
The issues that need to be addressed are:

Targeting
BISP has uses a scientific poverty scorecard methodology using Proxy Means Testing
(PMT) to identify the ultra poor households or the BISP beneficiaries. The endeavour to minimise
the incidence of mis-targeting in the form of exclusion or inclusion errors will take the shape of a
national roll out of the poverty scorecard, and a robust MIS data base to maintain the data
collected. This information repository offers an opportunity to create a central data registry under
BISP that could feed the targeting and monitoring requirements of all provincial and federal
social protection programmes. However, designating a common data registry would require
agreement between federal and provincial governments on information sharing modalities and
protocols.
Additionally, the criteria used for inclusion, a minimum threshold score on the poverty
card, could well result in the exclusion of families who are chronically poor and unable to move
out of the poverty trap30. While there is considerable evidence to the positive correlation between
asset ownership and poverty, it is not perfect. The mere ownership of a particular asset does not
necessarily mean that the family is not part of the most vulnerable part of society. Moreover, the
exclusion error is more likely to be higher among the transient and land-less population, those
who move around in search of work either during the lean periods in agriculture or move
continuously in search of work. Perhaps the largest contributor to the exclusion error is the first
mandatory condition for eligibility: “possession of CNIC by female applicant/recipient31. Since
the programme is targeted for support to the poorest-of-the-poor, these are the very people who
are most likely not able to access the provision of the CNIC by the authorities concerned.
Strengthening transparency in the use of the score card should be the order of the day, and a
simple grievance redressal system should be part of the process. Since the scorecard is the
internationally recognised best practice, one principal objective of the BISP should be to improve
the targeting and not introduce an alternate.
10
for this very reason BISP is setting up a grievance redressal mechanism down to tehsil levels with the
maximu being solved locally. As for transient and landless population the use of smart cards will enable
them withdraw cash at any point. While this may be the objective, the likelihood of its success will be a
low proportion of complainants: beneficiaries
31
The World Bank states that the results from a recent survey indicates that the CNIC registration in the
pilot survey districts has gone up. 32% of the population did not have CNICs.26% applied immediately
after the PSC survey, of which 2/3 were women. Further this is not permanent. In fact eligible applicants
w/o CNICs are notified by BISP to apply for a CNIC in order to access cash benefits. As NADRA is a
partner in the cash transfers, it is taking extra measures to get the eligible beneficiaries registered
367

Rationalisation of Other Social Protection Programmes
It is important to rationalise existing social protection Programmes such as Zakat, Baitul-Mal and Workers’ Welfare Fund to minimise duplication and efficiently use limited resources
allocated to social protection. One of the issues with existing Programs is lack of an appropriate
targeting mechanism. Additionally, both Zakat and Bait-ul-Mal have several sub-Programs that
are, respectively, “of limited value and outreach” and “fall outside their core mandate and for
which they have little comparative advantage”32. Possibility of merging programs and/or
introduction of appropriate targeting will have to be addressed in the NSPP.
The former two are largely “cash transfer” programmes which, by-and-large, have had a
limited impact in mitigating poverty. The use of conditional cash transfer (CCT) mechanism is
being explored currently through the Child Support Programme (CSP), which targets a sub-set of
children through the existing Food Support Programme (FSP).. The advantage of this approach is
that it increases targeting efficiency and the outcomes and impacts are readily verifiable through
administrative means.
Similarly, the Utility Stores provide un-targeted subsidy on basic food items. This may
enhance social wage at times of high food inflation but at the same time the universal subsidy
creates other forms of market distortions. However, by re-introducing the concept of rationing,
the Utility Stores can become an important conduit for the provision of a food subsidy.
One of the mechanisms of protection of workers is through social insurance schemes that
are offered by organisations such as EOBI, WWF and ESSIs. On one hand, these schemes
exclude workers in the informal labour markets, and on the other, their coverage is limited –
EOBI and ESSIs cover only nine per cent of the non-agricultural labour force. The effectiveness
of EOBI has also been limited because of governance and design issues. As workers do not
contribute, their ownership and hence rights are limited. For example, there is no basis for the
payment of a lump sum amount in lieu of pension rights.

Fiscal Re-distribution of Resources
Linked to the issue of rationalisation of social protection programmes is the fiscal
redistribution of resources. To make federal vertical programmes (e.g. BISP, CCTs, etc) effective,
incentives should be devised for provinces to play their due role in achieving the federal social
protection agenda and also linking it to provincial priorities (e.g. health, education, nutrition, etc).
To this end questions on financial contribution (or resource pooling) and other forms of
administrative support and cooperation from the provincial governments need to be delved into.
One mechanism could be the use of matching grants or Conditional Fiscal Transfers linked to the
resource generation effort. However, such transfers from the federation to the provinces would
not be possible in any meaningful amounts during the period of the National Finance Commission
Award 2009. Since a large additional chunk of resources have been transferred to the provinces,
the provinces should take the initiative of undertaking SP as part of their commitment to their
populations and transfer resources to the local council units and through them to the grass-root
levels.
32
(NSPS 2007, pg. 33-34)
368

Institutional Coordination and Harmonisation with and among different
tiers of Government
Provincial governments have their own social welfare ministries each of which operate
one or more elements of social protection programmes. The issues that warrant serious thought in
the NSPP formulation process are whether provincial governments will be agreeable to reorient
present and future programmes on appropriate targeting mechanisms; and concede to mechanisms
and coordination required to minimise resource duplication that occurs as a result of overlap
between vertically administered federal programmes and provincial programmes.
As planning and implementation of social programmes require inclusion of all three tiers
of the government, the design of the next generation social protection programmes leads to the
question of establishing an umbrella body. The role of this institution should be limited to fill the
current void in coordination of social protection programmes and facilitate intra-government
harmonisation. The existing arrangements and the level of responsibility between the various tiers
of government should revert to the original concept of federation, where national policy and intergovernmental coordination and harmonisation should be the exclusive domain of the federal
government, the financial wherewithal should be the joint responsibility (where required) of both
the federal and the provincial governments, and finally, the responsibility of delivery should be
the joint responsibility of ALL tiers of government, ranging from the village to the federal levels
with in-built effective transparency, accountability and rapid grievance redressal mechanisms for
each programme, project, or activity.

Presence on the ground
For effective and transparent implementation, presence on the ground is needed. There
are a number of questions about the design of such an institutional arrangement. One of the
questions is where should it be based/headquartered? One option is to create an institution at the
federal government level; the other is to beef up the capacity of BISP to handle this task which is
both complementary and supplementary to its activities. The intention would be to create a
facilitating agency with the ability to provide technical assistance and access to a data base which
is both transparent and verifiable. Linkages with provincial and province-specific initiatives
cannot be overemphasised, as the implementation mechanism of many social protection
programmes are with the provinces. An efficient grievance redressal system is also needed to
enhance programmes’ effectiveness and transparency.

Transparency and Accountability
Transparency in the provision of information on government interventions and
programmes is conspicuous by its absence. Accountability during the implementation and
delivery phases is through a system of peer review, financial and performance audits, social
accounting is also either weak or asymptotic to zero. The former is largely because of a lack of
communication with all stakeholders (the community, the beneficiaries, members of staff,
potential donors, elected officials, etc.) as openly, honestly, and fully about operations as is
practical and legal to do so. This mistrust could be the result of a number of factors, which
include, but are not limited to: incomplete planning; flaws in implementation and delivery; the
mind-set of politicians and administrators; fear of the implications33 of transparency and
33
These include, but are not limited to: the loss of the ability for indulging in patronage and cronyism;
competititive bidding processes; the indiscriminate use of discretionary powers; access by the public for
369
accountability. The latter is currently built largely around obsolescence of and inappropriate
systems and procedures and the security of jobs within framework of the public sector rules and
regulations governing employment by governments. This lack of accountability is further
strengthened by a lack of political will to change the system.
Achieving public sector transparency has always been a goal of enormous complexity. It
includes institution building, introducing (and maintaining) good practices and proper processes,
overcoming political challenges, technological limitations and financial constraints. This shall be
addressed through revamping Ministries and Departments concerned and matching skill needs
with adequately trained staff. Wherever necessary, such capacity building will be through on-thejob training (OJT) techniques.
7.
From Strategies to Actions
Converting the enabling strategies contained in the former section, would require a
number of actions. These are largely in the form of changes in institutional structures and
rationalizing systems and procedures to improves efficiency and effectiveness across the plethora
of different agencies involved in assuring SP. A phased approach would minimize the impact of
a sytem wide approach to reforms, acceptance and sustainability of the change by all stakeholders
and maximize impact and benefits.
Issues
Major Actions
Required
Corollary Actions
Required
RATIONALISING INSTITUTIONAL FRAMEWORK
SHORT-TERM
Institutional
Undertake Institutional Develop
Reform to
reform and
recommendations and
achieve better
governance studies
Action Plans
harmonisation
and coordination;
to reduce gaps
and overlaps; to
increase
efficiency and
effectiveness; and
to provide the
enabling
environment
Responsible Agency
and Mandate
Planning Commission,
Cabinet Division with
Provincial
Departments of
Planning and
Development, and of
General
Administration to
undertake the studies,
develop
recommendations and
oversight the process
of integration to reduce
gaps and overlaps,
increase efficiency and
effectiveness and to
provide the enabling
environment for the
creation of a National
Policy Formulation
redressal of grievances; monitoring of performance, outputs and outcomes; social accounting; social
audits.
370
Issues
Enunciate
National Social
Protection Policy
Enunciation of
National Social
Protection
Strategies
Develop Nation
Social Protection
Action Plan
Implementing
Reformed
Institutional
Framework
Major Actions
Required
Corollary Actions
Required
Hold consultations
Undertake dissemination
with relevant
programme to build a
stakeholders including national consensus
civil society and
policy makers to help
in developing and
stating the National
Social Protection
Policy
MEDIUM-TERM
Develop an
Integrate all existing
overarching
strategies from each of
framework of
the strands and sectors
strategies
LONG TERM
Consult with relevant
Hold National
government agencies
Conference and
to develop draft action Workshop to finalise
plan
Action Plan and have this
approved from relevant
government fora
Merge all relevant
Develop systems and
Ministries (Education, procedures,
Health, Special
organisational structures,
Education, Women
reporting and
Development, Youth
coordination
Affairs, Social
mechanisms, develop
Welfare, Population
oversight and M&E
Welfare)
frameworks, develop and
projects/programmes
enact enabling legislation
(PPAF, PRSP, BISP,
RSPs, etc) and
agencies (Bait-ulMaal, Zakat and Ushr,
etc)
Responsible Agency
and Mandate
Body and
Coordinating agency –
propose the
establishment of a
Ministry of Social
development and
corollary wings in the
Provincial Planning
and development
Departments
Planning Commission
Planning Commission
Planning Commission
Planning Commission,
Ministry of Social
Development,
Management Services
Division,
Establishment Division
and relevant line
agencies in the
provinces
371
TARGETING
Lack of an
appropriate
targeting
mechanism
SHORT-TERM
Design, test and
Overarching agreements
implement an
within and across all tiers
accessible (to all),
of government and
credible and interagencies on information
active data base to be
sharing modalities and
housed at a central
protocols
location on house-hold
level information on
indicators for
eligibility to various
SP and related
programmes and
projects
Establishment of a
Agreement between
robust MIS data base
federal and provincial
governments
Minimise the
incidence of mistargeting in the
form of exclusion
or inclusion
errors.
RATIONALISING SOCIAL PROTECTION PROGRAMMES
SHORT-TERM
Introduce more
programmes which
use these mechanisms
MEDIUM TERM
Untargeted food
Re-introduce rationing Consider the resubsidies through using the centralised
introduction of the Ration
the Utility Stores poverty and exclusion Shop in both urban and
Corporation
data base for issuing
rural areas to improve
ration cards to eligible coverage
households
LONG-TERM
Extension of
Change legislation and Develop a data base to
EOBI, ESSI and
develop mechanisms
include all employed
WWF to cover all
persons
employees
Commutation of
Change legislation and
payment of
develop mechanisms
pensions and
retirement
benefits
CCT versus CT
Planning Commission
for development of
data base. National
Data Registration
Authority for
warehousing. Ministry
of Social Development
to ensure on-line
access, monitoring and
quality control
Federal Ministry of
Social Development
and relevant provincial
departments
All existing SP
projects and
programmes
Federal Ministry of
Food and Provincial
Departments of Food
and the USC
Federal Ministry of
Social Development
working through the
Ministry of Labour
Federal Ministry of
Social Development
working through the
Ministry of Labour and
the State Life
Insurance Corporation
372
FISCAL RE-DISTRIBUTION OF RESOURCES
MEDIUM TERM AT THE PROVINCIAL LEVEL AND LONG-TERM AT LOWER
TIERS
Improve ownDevelop Matching
Incentives be devised for Ministry of Social
revenue resource Grants Schemes
provinces to play their
Development in
generation by
due role in achieving the
collaboration with the
lower tiers of
federal SP agenda and
Ministry of Finance
government
also linking it to
and the National
provincial priorities.
Finance Commission
Financial contribution (or
resource pooling) and
other forms of
administrative support
and cooperation from the
provincial governments
need to be delved into
Extend this to the Local
Provincial
Government level as the
Departments of
NFC 2010 potentially
Finance
provides substantive
additional resources to
the provinces
PRESENCE ON THE GROUND
MEDIUM TO LONG TERM
Effective and
transparent
implementation
on the ground
Undertake an
institutional reforms
and governance study
to establish what the
form should be
Compare the benefits of
strengthening BISP
through integration into
mainstream government
with recurring budget
financing to ensure that
this is not a victim of
political change
TRANSPARENCY AND ACCOUNTABILITY
Planning Commission
working with the
Ministry of Finance
SHORT-TERM
Transparency in
the provision of
information on
government
interventions and
programmes is
conspicuous by
its absence
Introduce third-party
monitoring and
evaluation with all
reports being made
public within 72 hours
of completion and
submission
Develop and legislate to
ensure compliance
Proposed Ministry of
Social Development
373
8.
Plan Components
8.1 Federal Development Programme
From the existing basket of federally funded programmes, the only strands which will be
continued to be financed are those which form the core SP basket of components. In effect these
will exclude the specialised line departments, such as, the mainstream health-care and education
programmes even though these form part of the overall rubric of SP. These are:
a. Benazir Income Support Programme
The BISP is expected to be the flagship of the Federal Government’s SP programmes and
will include the sub-programmes of Waseela-e-Haq (seed capital for micro-enterprise
development by women) and the Health Insurance Programme. The target is to reach out to 10
million beneficiaries, by the end of 2015, who are expected to belong to the extremely and ultrapoor categories. This constraint is imposed by the current estimates of resources available.
Should this improve, the net of beneficiaries will increase proportionately. Targeting and
selection will be through an improved administration of the poverty score card and distribution
through a smart card. This is expected to increase the transparency in, and accountability by the
programme.
b. Pakistan Bait-ul-Maal
The PBM is expected to carry on functioning as at present, but will rely on using the data
base of the BISP to improve its targeting. By the end of the Plan the PBM is expected to have
expanded its outreach to some 8 million families not supported by the BISP. The Child Support
Programme of the PBM will be scaled up to extend coverage to all primary school going children
in the country. This will be delivered by all tiers of government and will be financed through
both donor assistance and an increasing share over the years by both federal and provincial
governments.
c. Child Protection, Child Labour
Child Protection and Child Labour shall continue to be the joint responsibilities of the
Federal and Provincial governments. During the Plan period the National Child Protection Policy
will be enunciated and notified and a National Child Protection Programme (NCPP) will be
initiated in 35 districts and then scaled up as resources permit. The NCPP will be delivered
jointly by the federal, provincial and sub-national governments. The programme shall reach out
to the abused children, the children on the streets and the drop-outs from schools and help
rehabilitate them. Of major concerns will be the employment of children in both the informal
sector (industry, trade, entertainment and domestic) and as children in bondage and their
rehabilitation through schooling and skill development. Legislation will be strengthened to ensure
effective implementation in collaboration with the law enforcement agencies, civil society
organisations and employers’ federations.
d. Youth Protection
The Youth Policy defines youth as those falling within the age cohorts of 15 to 29 years.
However, Pakistan has signed and ratified agreements and conventions with international
agencies which define children as those aged between 0 and 18 years. This dichotomy will be
resolved during the plan period. During the Plan period, projects will be initiated which shall
374
address the issues of the educated unemployed youth through the creation of additional positions
as internees with public and private sector organisations and to attract the uneducated into skill
development programmes through artisanal and crafts schools.
e. Women’s Development
Women play an integral part in the social, cultural and economic spheres of a country’s
development. However, in Pakistan they are faced with discrimination, exclusion, and
deprivation and are also vulnerable to violence, sexual abuse, harassment and a more severe
impact of economic shocks. The existing basket of programmes for women will be strengthened
and expanded. These will be delivered by all stakeholder organisations ranging from the federal
government at the apex to the community organisations at the grass-root level. As required
legislation will be enacted to protect the rights of women and to empower them to demand these
rights.
f.
Social Welfare and Special Education
The rubric of social welfare includes a basket of services designed to provide various
aspects of SP to a wide range of the population suffering from exclusion and deprivation and
those who are vulnerable to economic shocks and natural disasters. The basket includes, but is
not limited to, educating the physically challenged and disadvantaged, the development and
empowerment of communities, the welfare of patients and prisoners, the operation of shelters for
the homeless, for the victims of violence and/or social prejudice, rehabilitation programmes and
rights awareness campaigns. The programmes and projects for mitigating the impact of these
factors will be delivered through the joint efforts of all tiers of government, civil society
organisations and private philanthropic institutions within an overall framework. The framework
will be developed through stakeholder participation and coordinated through a nucleus cited
within the Planning Commission.
Rs. in Billion
Summary of Proposed Allocations for Social Protection Programs
During 2010-15
Women Development
6.40
Manpower & Employment
7.00
Culture, Sports, Tourism & Youth
41.50
Social Welfare & Special Education
91.10
Total:
146.00
375
Annex 1
Social Protection Programs in Pakistan
Programme
Financing
Social Assistance
Benazir
Income
Support
Public
Programme
Funds
(BISP)
Waseela-eHaq
Public
Funds
Microfinance
Donorfunded
Type of
Benefit
Cash as
income
support
Cash as grant
for
establishing
business
Cash as loan
for
establishing
business
Cash as
income
support; grant
for
daughters’
weddings
Food
supplement
in education
Target
Group
Geographical
Coverage
Managed by
Target
Reached
during
2008-09
Target to be
Reached
during
2010-15
2.30 (M)
against
3.5 (M)
additionally
(3,965
IDPs)
10.00 (M)
(Ultra poor
20% of the
below
poverty line)
Ever
married
females
belonging to
ultra poor
households.
Nationwide
Federal
Government
Subset of
BISP
Nationwide
Federal
Government
25,000
women
0.125 (M)
Nationwide
RSPs/MFIs
1.60 (M)
8.00 (M)
Nationwide
Federal
Government
2.00 (M)
10.00 (M)
Nationwide
Federal
Government
Rs 5 (B)
MNAs +
Rs 3 (B)
PM=8 (B)
40.00 (B)
Nationwide
National Bank of
Pakistan
48,351
persons
0.250 (M)
Disabled
persons,
invalids,
widows,
orphans and
household
living below
the poverty
line.
Pakistan
Bait-ul-Mal
Public
Funds
People’s
Work
Programme
Public
Funds
Cash-forWork
Commercial
Bank
Financed
Financing for
selected
businesses34
Public
Funds
Cash as
income
supplement
Province
specific
Provincial
Governments of
Punjab, Sindh
and NWFP
---------
25.00 (M)
average
Public
Funds
In kind as
social welfare
Nationwide
Federal
Government
---------
50.00 (M)
average
Public
Funds
Special levy
on bank
balances and
agricultural
output
In kind as
social welfare
Nationwide
Federal
Government
---------
30.00 (M)
average
Nationwide
Federal
Government/Zila
Zakat & Ushr
Committees
4,000,000
20.00 (M)
Vulnerable
children
facing abuse
and
exploitation.
Nationwide
Federal &
Provincial
Government,
FATA, NA &
GB
30% of the
population
30% of the
population
Vulnerable
youth facing
Nationwide
Federal &
Provincial
40% of the
population
40s% of the
population
People’s
Rozgar
Scheme
Provincial
Food
Support
Programmes
Subsidy on
Wheat,
Sugar and
Fertiliser
Utility Stores
Zakat /Ushr
Child
protection
(1-14) years
Public
Funds
Youth
protection
Public
Funds
Cash
Protection
survival
development
and
rehabilitation
services
Protection,
development,
Unemployed
educated
persons
“Deserving/
Needy”
among
Muslims
34
Community Transport, Community Utility Stores, Community Mobile Utility Stores, and PCO/Telecentres with a maximum of Rs. 200,000; three new products including Commercial Vehicle, Shopkeeper
and Primary Healthcare Equipments to Medical Graduates, Science Graduates and B-Pharmacy qualified
individuals. The maximum limit ranges from Rs. 500,000 to Rs. 700,000.
376
Programme
Financing
(15-29)
years
Type of
Benefit
Target
Group
skill
enhancement,
employment
and
rehabilitation
services
abuse,
exploitation
Geographical
Coverage
Public
Funds
Poor &
vulnerable
women
facing
abuse,
violence &
exploitation.
Child Labour
& Children
in bondage
Public
Funds
Protection
survival
development
and
rehabilitation
services
Working
children
facing abuse
&
exploitation
Bonded
labour
Public
Funds
Withdrawal /
release &
rehabilitation.
Men and
women
facing
oppression.
Nationwide
Older
persons
Public
Funds
Protection,
survival and
rehabilitation
services
Older men
& women
facing socioeconomic
problems
Nationwide
Health
Protection
Public
Funds
Health
related
services
Entire
population
Nationwide
Public
Funds
Protection,
survival,
development,
skill
enhancement,
employment
and
rehabilitation
Person of
various
disabilities
Public
Funds
Social
services,
activities and
programs
Disabled
Persons
Social
welfare
Social Insurance
Employees’
Old-Age
Contributory
Benefit
(Employers)
Scheme
(EOBS)
Provincial
Employees’
Social
Contributory
Security
(Employers)
Scheme
(ESSS)
Social Health
Contributory
Insurance
(Individuals)
(SHI)
Workers
Contributory
Profit
(Employers)
Participation
Target
Reached
during
2008-09
Target to be
Reached
during
2010-15
Government,
FATA, NA &
GB
Protection
and
rehabilitation
services
Women
Protection
Managed by
Nationwide
Federal &
Provincial
Government,
FATA, NA &
GB
50% of the
population
50% of the
population
Nationwide
Federal &
Provincial
Government,
FATA, NA &
GB
5.00 (M)
6.50 (M)
1.50 (M)
2.00 (M)
15 % of the
population
15 % of the
population
---
5-10% of
thepopulation
Nationwide
Federal &
Provincial
Government,
FATA, NA &
GB
3 % of the
population
3.5% of the
population
General
population.
Nationwide
Federal &
Provincial
Government,
FATA, NA &
GB
General
Population
General
population
Cash
Formal
sector
employees
Nationwide
Federal
Government
273,000
persons
0.423 (M)
Cash and inkind benefits
Formal
sector
employees
Provincial
Provincial
Governments
56,895
persons
4.50 (M)
Nationwide
Federal
Government
Yet to
commence
1.00 (M)
Nationwide
Federal
Government
Rs. 4,526
bln in
2003/04
5.00 (M)
Cash
In kind
access to
facilities and
Formal
sector
employees
Federal &
Provincial
Government,
FATA, NA &
GB
Federal &
Provincial
Government,
FATA, NA &
GB
Federal &
Provincial
Government,
FATA, NA &
GB
377
Programme
Financing
Fund
(WPPF)
Type of
Benefit
Target
Group
Geographical
Coverage
Managed by
Target
Reached
during
2008-09
Target to be
Reached
during
2010-15
services
Cash for
scholarships
Workers’
Children’s
Education
Cess
(WCEC)
Contributory
(Employers)
Education
Formal
sector
employees
Nationwide
Federal
Government
Workers
Welfare
Fund (WWF)
Contributory
(Employers)
Housing,
Schools,
health
facilities
Formal
sector
employees
Nationwide
Federal
Government
0.150 (M)
0.650 (M)
1.00 (M)
378
379
8.
Deepening and Diversifying the Financial Sector
8.1 Capital Market Development
Development of financial sector of a country requires a smooth functioning of both the
banks and non-bank financial institutions. In Pakistan, like other countries, banks have
overwhelmingly shared the financial needs of the country. Underdevelopment of capital market
deprives a developing economy of availability of attractive and multiple sources of financing.
Viewed from the supply side, the level of development of capital market is an important
determinant of a country’s level of savings, efficiency of investment and ultimately of its rate of
growth.
Development, integration and deepening of financial markets therefore, should be a
major goal of long term economic planning. Their development is also necessary in ensuring
proper and full transmission of the measures taken by the monetary policy. A fair, efficient and
transparent capital and bond market contributes in financial sector development through
mobilization of savings, providing attractive investment opportunities facilitating corporate
governance and growth, an attractive funding source for government’s development activities and
finally acting as a barometer of country’s economic stability and growth.
The Securities and Exchange Commission of Pakistan (SECP) being the apex regulator of
the capital markets is entrusted with the mandate of regulation and supervision of the corporate
sector, insurance companies, non-banking finance companies and private pensions. As the
securities markets in Pakistan are still evolving, the SECP has been actively pursuing its mandate
for developing a progressive, equitable, transparent and efficient capital market that employs best
practices, safeguards the interests of investors and promotes inculcation of good corporate
governance at the stock exchanges and within the corporate sector. The SECP has in recent years,
launched a number of reforms with a view to developing a fair, efficient and transparent
regulatory framework, aimed at fostering growth of a robust corporate sector and broad-based
capital markets in Pakistan. Substantive reforms in the areas of risk management, governance and
transparency, market development, and investor protection have been implemented. However,
despite all of these reforms, there is a lot more that needs to be done to ensure that capital markets
in Pakistan are integrated with the rest of the economy and provide much easier access for issuers
and investors both for equity and debt and serve as true venues of capital formation.
10th Five Year Plan (2010-2015)
Capital markets in Pakistan have not been able to serve as an institution meant for raising
finance as they have been mostly used as a trading place. There is indeed a great room for
improvement. The aim of next Plan is to deepen and diversify the capital and bond market. Main
objectives in this regard may be as follows:



To enhance accessibility of capital markets with high quality products, traded in a
professional marketplace under fair and transparent rules by professionally
qualified and financially secure market participants, for improved investor
protection
To promote efficiency, transparency, integrity and reliability of market
mechanisms
To provide the necessary infrastructure to enhance market competitiveness in the
international arena
380
In order to achieve these objectives action will focus on the following main areas:
Revitalizing the regulatory environment for
Initial Public Offerings (IPOs)
With the increased interdependence of financial markets both locally and globally and in
view of the recent global financial crisis, it has become increasingly essential to develop an IPO
environment that is both attractive to investors and is disclosure based.
Greater efforts are required to encourage listings from large private companies and
unlisted public companies to decrease reliance of the stock exchanges on new listings mainly
through privatization sources and considering that limited listed capital has been available from
non-privatization sources in the recent past.
It is equally important to provide tax incentives/ benefits to both large and small listed
companies based on their free float and paid-up capital which would serve as an effective
measure to encourage new listings and stimulate companies to become active participants of the
capital market. Initially a differential tax treatment for the listed and unlisted companies can be
introduced which would not only promote better disclosure of profits by the listed companies but
may also offset the revenue loss, if any, due to growth of corporate tax as a result of the reduced
tax rates. The proposed reduction in tax rates may also encourage listing of new companies on the
stock exchanges, which would resultantly enhance revenue collection in the form of capital value
tax (CVT) and withholding tax (WHT). At a later stage, linking corporate tax rates with slabs
based on free float of a company may serve as an easier route to expanding the existing investor
base, encouraging trading activity and enhancing transparency within the corporate sector.
A comprehensive review of the existing laws and procedures, including the following, is
required to be undertaken to facilitate listing of securities and eliminate any superfluous
provisions that impose unnecessarily stringent requirements on the issuers:





Companies (Issue of Capital) Rules 1996 (CI Rules)
Ballotters, the Transfer Agents and Underwriters Rules, 2001
Regulation for Debenture Trustees
Introduction of the concept of Treasury Shares
Standardization and simplification of the contents of the Prospectus
Development of Debt Market
An active corporate debt market is essential for development of income and money
market mutual funds. Following measures are envisaged in this regard.
The first issue of National Saving Bonds (NSBs) having maturity period of three, five
and ten years is now available for secondary trading subsequent to its listing on stock exchanges
in March 2010. In terms of Rule 12 of the National Saving Bonds Rules, 2009 these bonds are
issued to individuals, mutual funds, provident, pension, gratuity funds and trusts excluding body
corporate and banks which are restricted from participating in the initial offer. It is therefore
desirable that similar restriction is imposed on body corporate and banks from investment in
NSBs through the secondary market.
381
In order to develop the secondary market for debt securities, CVT may not be collected
on debt instruments. At present, the listed debt securities are not actively traded and CVT
collection hinders the growth of the secondary market for debt securities. Some additional
measures would be:



Reduction in the rate of stamp duty on the issuance and transfer of commercial papers
and corporate bonds
Introduction of the concept of listing and issuance of debentures to Qualified Institutional
Buyers (QIB) and green field equity projects to Sophisticated Investors (SI) including the
QIBs - and introduction of concept of appointment of Market Maker for all issues made
to QIBs and SIs and
Review of the existing regulatory framework of Credit Rating Agencies
Development and Growth of Mutual Fund Industry,
Private Pensions, REITS and Insurance Industry
Mutual Fund Industry
Pakistan’s mutual fund industry has witnessed decent growth. However, it is still at a
nascent stage and holds significant potential for growth. The following measures may assist in
expediting the growth of this sector and to provide a stable avenue for investment:

Creating a level playing field and an enabling environment: Currently public sector
enterprises (PSEs) are not permitted to place / invest their short term funds in mutual
funds, which should be allowed, given that money market schemes are as liquid and
secure as deposits placed with commercial banks. Greater efforts are required for
enabling PSEs and local/autonomous bodies to invest their surplus funds in money
market mutual funds

Fostering the development of an investor base: The growth of the mutual funds industry
is primarily driven by institutional investors and the SECP has realized the need for
developing a retail investor base and is considering taking measures to increase the retail
base. Measures such as improving Asset Management Companies’ (AMC) distribution
network, inculcating good corporate governance and investor education are some of the
steps that will be undertaken
Pensions
Private Pension Funds are passing through an introductory phase and are new to the
Pakistani market. Taking into consideration worldwide statistics that suggest vast untapped
potential of growth, SECP while realizing the significance of pensions and savings for the market
and the society, aims to continue bringing improvements in the operations of pension and
terminal saving schemes. In addition, there is need for:

Reforming the Occupational Saving Schemes (OSS) which include provident funds and
gratuity funds as well as occupational retirement schemes (superannuation funds) which
are not being properly regulated by any regulatory body in Pakistan. The SECP
understands that reforming such schemes, which have huge funds at their disposal, would
add to the social and financial stability of the country. There is a need for coordination
among the Ministry of Labour, Ministry of Finance, Federal Board of Revenue and SECP
382
for proposing requisite reforms and amendment of relevant laws i.e. labour law and the
Income Tax Ordinance

Reforming the Government (Pay-as-you-go) Pension Scheme: The current scheme
offered by the government to its employees is a ‘Defined Benefit’ scheme based on last
drawn pay and running on PAYGO basis. The government bears the inflation, salary and
longevity risks under this scheme, and spent more than Rs. 87 billion to meet its pension
obligations during the year 2008-2009. As estimated by the Aries Group, ( a U.S.
consulting firm specializing in global capital markets and financial sector development;
privatization of state-owned enterprises; investment advisory services; and global
strategic management for financial sector institutions) total implicit debt of the
government is Rs. 2.92 trillion as on June 30, 2006 and is rising year by year

To check the increasing financial burden arising from its pension obligations, the
government can shift from pay-as-you-go scheme for its employees to a defined
contribution scheme. Under this scheme, the government as well as the employee shall
contribute a certain percentage of employee’s salary into an individual pension account of
the employee. This new scheme can be restricted to new employees with the option to old
employees to join the defined contribution scheme. Voluntary Pension System (VPS)
introduced by the SECP in year 2007 provides a comprehensive platform for such
reforms

Tax rationalization / alignment needs to be considered for encouraging investments in
private pension funds e.g., amount received by a person under an approved Income
Payment Plan or annuity under VPS Rules not to be taxable, limit for tax credit at the
contribution stage to be enhanced and increase in taxable income limit of senior citizens,
employee contribution in the Recognized Provident Fund – up to 1/10th of salary may be
exempted from tax
Real Estate Investment Trusts (REITs)
.
A comprehensive regulatory framework for REITs was introduced in 2008 to incubate
REITs in the most investor friendly environment. SECP envisages new brands to emerge in both
financial and real estate markets which would add value for both investors and consumers. The
launch of REIT schemes is believed to usher into an era of organized real estate development in
the formal economy, generate employment, reduce the housing deficit and diversify the investor
base in Pakistan. SECP will review, revise and improve the regulatory framework to enhance
public participation in REITs as well as to facilitate investors and fund managers.
Following objectives can be achieved by introducing REITs in the government sector:





Developmental/construction activities lead to job creation
Unlocking the wealth of different government entities
Deficit of government entities can be addressed by introducing REITs through utilizing
their surplus properties/land
Shortage of houses can be addressed by introducing low cost housing projects under
REITs
Additional source of income for government in the form of management fee
383
The Government may encourage REITs industry under following options:



Form a REIT Management Company (RMC) itself
Enter into a Joint Venture with private sector to form RMC (Public Private Partnership
model) and
Sell land to an existing RMC against cash or investment in units of REITs scheme
Tax rationalization / alignment is a necessary prerequisite to encourage investments in
REIT schemes such as rationalization of taxation on all rental income, exemption of CVT in order
to kick start the REIT business in the country, extension of relaxation of tax on REIT profit and
gain up to 2015, exemption to unit holder of REIT from withholding tax on dividend and
exemption for REIT from tax on rental income from property.
Insurance Industry
SECP aims to increase the insurance penetration in Pakistan and is working towards
creating an enabling environment which is conducive to the rapid growth of the sector. Major
policy reforms in the regulatory framework are required to promote the development of the
industry which includes compulsory motor third party insurance, crop insurance, micro insurance,
health insurance, setting up of a separate Fund by insurance companies in order to protect the
policyholders in the event of the company’s failure, encourage privatization of state owned
enterprises e.g. State Life Insurance Corporation of Pakistan, National Insurance Corporation, etc.
Introduction/exploration of new products

Consolidation of existing Islamic institutions and development of innovative Shariah
compliant institutions, products and services in order to deepen the capital market and
attract both national and international pool of resources – Islamic Index already
introduced to promote listing of shariah-compliant companies on the Pakistani stock
market and encouragement of international and local players to list and trade their
shariah-based shares/instruments on an Islamic index

To broaden the scope of trading activity at the bourses introduction of new derivative
products such as Index Options and Stock Options for trading on stock exchanges.

Provision of a robust regulatory environment that enables the development of new
products including Exchange Traded Funds (ETFs) and concept of market making

Introduce Securities Borrowing and Lending in line with international best practices for
managing delivery failures, enhancing settlement efficiency, facilitating market
participants in short sales and profitably utilizing dormant securities

Liquidity in trading is an essential requirement of any vibrant stock market. Margin
financing being a world-wide, well-established financial instrument of equities markets
needs to be introduced in the Pakistani capital market to provide a forum for the retail
investors for financing against shares

For improved risk management, investor protection and enhanced level of efficiency in
clearing and settlement of securities transactions, a mechanism/system is envisaged
384
whereby securities move directly from the sellers account to buyers account and viceversa at the Central Depository Company (CDC), instead of being routed through the
brokers’ main account

In order to allow better price discovery through increased flexibility and to provide easier
exit to investors in line with international best practices - gradually widening of scrip
(share) level circuit breakers and introduction of index based market wide coordinated
trading halts
Strengthening of Consolidated Registration, Licensing and Capital
Adequacy Requirements for Capital Market Intermediaries
Steps should be taken for revamping the existing regulatory regime for brokers to bring it
in line with international best practices and standards and in compliance with the relevant IOSCO
(International Organization of Securities Commissions’) principles for market intermediaries.
This will include a comprehensive review of the existing regulatory framework in order to
provide for minimum entry standards and a proper criteria for sponsors/ directors/employees;
revised risk based capital adequacy, regular audit of financial position of the broker by
independent auditors, requirement for limiting the aggregate liabilities, maximum exposure to a
single person or group, assets under custody, code of conduct, KYC (know your client)
requirement and customer due diligence, in line with international best practices. Ideally a regime
consolidating requirements covered under the various separate sets of legislation/ regulation
should be devised for simplifying and solidifying the procedures that may be involved in the
registration, licensing and ongoing supervision and enforcement of market intermediaries.
Major Structural Realignment of the Stock Exchanges
Demutualization of Stock Exchanges
Demutualization is the process of converting a non-profit, mutually owned organization
to a for-profit entity owned by the shareholders. The process involves not only corporatization,
which is conversion of a stock exchange limited by guarantee into one limited by shares but also
segregates ownership and trading rights. Hence demutualization brings balance among interests
of different stakeholders in the corporate and governance structure of a stock exchange.
Demutualization is a well established global trend which was necessitated due to the need
for efficient decision making structures and large amounts of funds for investment in
technological infrastructure in light of the increased competitiveness of both conventional
exchanges and alternative trading systems. The mutual structure of the exchanges has been an
obstacle in both the decision making and access to capital, thus causing a wave of
demutualization the world over.
Apart from attracting capital from international strategic partners, a demutualized/
corporatized entity would result in improvement in the governance structure, segregation of
regulatory functions from commercial functions and separation of trading rights and ownership
rights. Therefore, keeping a close eye on emerging trends and future outlook of the region, SECP
is committed towards accomplishing the process of corporatization and demutualization as early
as possible.
The Stock Exchanges (Corporatization, Demutualization and Integration) Act, 2009
which specifies timelines - commencing from its promulgation - for completion of various
385
steps/milestone has been approved by the National Assembly and is soon expected to be
promulgated by the Senate. It is pertinent to mention that in addition to the measures required to
be undertaken in accordance with the timelines provided in the Act, the demutualization/
corporatization of the stock exchanges as an ongoing, medium to long-term exercise would entail
continuous regulatory and structural reforms. The major post-demutualization steps would
include clear segregation of commercial and regulatory functions of the stock exchanges,
restructuring of the Board of Directors for restricting representation of Trading Right Entitlement
(TRE) certificate holders, proactive preparation by the SECP for acting as frontline regulator in
case of self-listing of a stock exchange on itself or on any other exchange, regulating the stake of
strategic investors and financial institutions in the demutualized environment and the respective
roles envisaged to be played by the shareholders and TRE certificate holders, etc.
Measures to Support Growth and Development of Futures Trading in Commodities –
National Commodity Exchange Limited
Existence of a vibrant, active, and liquid commodity market is normally considered as a
healthy sign of development of a country’s economy. It is therefore important to have active
commodity markets functioning in the country. Futures market, as observed from the crosscountry experience of active commodity futures markets, helps in efficient price discovery of the
respective commodities and does not impair the long-run equilibrium price of commodities.
Presently, the commodity market in Pakistan is at a nascent stage. Efforts are underway
by the SECP to deploy a regulatory regime that facilitates the growth and development of the
commodity market. The SECP has been supporting the expansion of the National Commodity
Exchange Limited (NCEL) which is Pakistan’s first electronic commodities futures exchange.
Since its inception, NCEL’s product portfolio has been expanded to cater for the hedging and
speculative needs of various target groups by providing a range of alternative commodity
contracts with varying contract specifications/ denominations.
The following measures may further assist in the growth and development of this sector:


Clarification of tax laws and rationalization of tax regime including withholding tax
import/export duties/taxes when transactions/deliveries through NCEL and
Large financial institutions including banks to be encouraged to participate in exchange
traded futures at NCEL as these provide a better risk management infrastructure along
with cleaner price discovery and minimal credit exposures
A fair, efficient and transparent capital and bond market contributes in financial sector
development through mobilization of savings, providing attractive investment opportunities
facilitating, corporate growth, providing an attractive funding source for government’s
development activities and finally acting as a barometer of country’s economic stability and
growth. Development, integration and deepening of financial markets therefore, is a major goal of
long term economic planning. Their development is also necessary in ensuring proper and full
transmission of the measures taken under monetary policy.
In order to develop a fair, efficient and transparent capital market and a modern corporate
sector, it is essential that a sound regulatory framework based on international standards and best
practices be in place in order to protect the interests of the investors as well as ensure ‘market
efficiency’. In Pakistan this regulatory and supervisory function has been entrusted to the
Securities and Exchange Commission of Pakistan (SECP) being the apex regulator of the capital
markets is entrusted with the mandate of regulation and supervision of the corporate sector,
386
insurance companies, non-banking finance companies and private pensions. As the securities
markets in Pakistan are still evolving, the SECP has been actively pursuing its mandate for
developing a progressive, equitable, transparent and efficient capital market that employs best
practices, safeguards the interests of investors and promotes inculcation of good corporate
governance at the stock exchanges and within the corporate sector. The SECP has in recent years,
launched a number of reforms with a view to developing a fair, efficient and transparent
regulatory framework, aimed at fostering growth of a robust corporate sector and broad-based
capital markets in Pakistan. Substantive reforms in the areas of risk management, governance and
transparency, market development, and investor protection have been implemented. However,
despite all of these reforms, there is a lot more that needs to be done to ensure that capital markets
in Pakistan are integrated with the rest of the economy and provide much easier access for issuers
and investors both for equity and debt and serve as true venues of capital formation.
387
9.
Administrative Reforms and Plan Implementation: Consolidation,
Specialization and Development
9.1
Governance
Introduction
Governance refers to the exercise of political, economic, and administrative authority to
manage a nation's affairs. It comprises of complex mechanisms, processes, and institutions
through which citizens and groups articulate their interests, exercise their legal rights and
obligations, and mediate their differences. In basic terms, it denotes the interplay of state
institutions, markets and civil society and a set of processes that deliver entitlements, services,
and rights to citizens.
The notion ‘good governance’ guarantees the existence of pluralistic frameworks which
ensure that responsibility is jointly shared by players in the public sector, the corporate private
sector, and civil society by addressing the issues of accountability, transparency, participation,
openness, rule of law, and predictability. Improved governance contributes to economic growth
and poverty reduction. As growth generates income, good governance ensures that the citizens,
especially the poor, share the benefits of the economic progress in an inclusive and equitable
manner. A key responsibility of the state is to create a conducive political, legal and regulatory
environment for building individual capabilities and encourage private initiatives. Furthermore,
effective political and administrative structures and a robust civil society are essential to promote
democratic governance as these institutions facilitate peoples’ participation in economic, social,
and political activities.
Review of MTDF 2005-10
The government has undertaken a number of initiatives in line with the priorities set in
the Medium Term Development Framework (MTDF) 2005-10. An amount of Rs. 65 billion was
allocated for the Governance sector during 2005-10 against which Rs. 49 billion is expected to be
spent. Some of the major initiatives undertaken during 2005-10 are discussed as under:
Public Sector Management Efficiency
Tax Administration Reforms
A number of initiatives were launched to improve public sector management efficiency.
Initiatives under the “Tax Administration Reforms” focused on promoting voluntary tax
compliance through enhanced taxpayers’ facilitation and provision of incentive packages to FBR
employees. Consequently, these measures have enhanced tax generation. In the long-run, these
administrative reforms will enable tax administrators to set up an effective system of audit. The
project is being implemented at a cost of Rs. 9.5 billion including foreign aid of Rs. 7.2 billion for
infrastructure development, end-to-end automation of business processes, and human resource
development.
Tax sector reforms in the following areas have helped in enhancing tax collection:

Reorganization of FBR and its field offices on functional lines
388





Introduction of a system of self-assessment in income tax, federal excise, and
customs
Simplification of tax laws and procedures
Reduction in litigation and introduction of a mechanism of alternative dispute
resolution
Taxpayers’ education and facilitation
Setting up of model Custom Collectorates
In order to achieve the reforms objectives, the FBR established three Large Taxpayer
units and thirteen Regional Tax Offices. With the help of reform measures, the registered persons
in sales tax increased from 100,000 in 2002-03 to 153,000 at the end of fiscal year 2008-09,
indicating a growth of around 53. With regard to the income tax side, the return filers have
increased from one million in 2002-03 to 2.2 million during 2008-09, registering a 122 percent
growth. Another marked achievement of the FBR has been the disposal of pending appeals
related to both direct and indirect taxes. The GST has been rationalized and a single rate of 16
percent, both for local and import goods, has been introduced.
Improvements in Audit and Accounts
In the area of Audit and Accounts, the office of the Auditor General of Pakistan launched
phase-II of the ‘Project for Improvement of Financial Reporting and Auditing (PIFRA)’ at a cost
of Rs. 5.5 billion including foreign assistance of Rs. 5 billion. A reform programme is being
implemented to: separate audit and account functions, provide effective accounting and reporting
system in line with the international best practices, strengthen financial management practices
and increase the impact of development programmes, provide basis for enhancing public sector
accountability through financial monitoring and control, and produce timely and reliable
information for policy formulation. Implementation of the New Accounting Model (NAM) is
progressing smoothly. New accounting sites are being automated. Capacity building issues and
appropriate training of master trainers has been imparted. So far 114 Financial Accounting and
Budgeting System (FABS) out of 127 District Account Office (DAO) sites, two FABS out of 2
Departmentalized Account Offices, and 53 System Application Programme (SAP) Competency
Centers out of 60 have been established.
Public Sector Capacity Building
The “Public Sector Capacity Building Project” was launched to increase the efficiency
levels in the civil service. The total cost of the project was Rs. 3.5 billion including foreign
assistance of Rs. 3.2 billion. The project has sponsored significant human resource development
reforms in the government. The Pakistan Administrative Staff College and four National
Institutes of Public Administration (NIPAs) were restructured and replaced by a National School
of Public Policy (NSPP). The focus of training has now shifted from public administration to
supporting effective policy formulation and implementation. Under another component of the
Public Sector Capacity Building Project, 4,457 officers benefitted from foreign/ local trainings,
36 consultants furnished technical assistance to the Government and 28 studies were conducted.
The government established the National Commission for Government Reforms in April
2006 to propose a set of structural reforms for good governance. The Commission was mandated
to review government structures, civil service and government processes at all levels of the
government i.e. Federal, Provincial, and District, and make recommendations for improving
efficiency and effectiveness in the public sector. The Commission has published a two volume
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report on “Reforming the Government in Pakistan” in May 2008, in consultation with all
stakeholders to initiate a reform process that would improve service delivery and encourage
professionalism. Implementation of the proposals is still pending as the finalisation of the
recommendations was made when a political transition was taking place in Pakistan. However,
the Commission and its report provide a useful guide to future reform efforts.
Access to Justice
The “Access to Justice Programme (AJP)” was launched at a cost of Rs. 21 billion for
improvements in judicial and non-judicial legal services, security and equal protection of law to
citizens, and ensuring greater transparency and accountability in the performance of judiciary,
police and administrative justice institutions . Major efforts have focused on reduction in backlog
of pending cases as well as institutional delays, particularly for the poor and vulnerable segments
of the society. Commercial benches have been established for quick disposal of litigation as a
pro-investment measure.
In spite of some bottlenecks, significant policy reforms under AJP since 2002 include the
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786 development schemes for infrastructure development and capacity building were
launched out which 529 schemes have been completed thus far
Implementation of a delay reduction program, as part of judicial reforms, in 18
Model Districts across the country through case inventories, improved process
serving, monitoring & inspection mechanism, and targeted disposals
Annual judicial conferences at national, provincial, regional and district levels have
culminated in raising the performance of superior courts, since 2003
The laws affecting ordinary citizens have been enacted/amended to facilitate justice,
in particular the poor and vulnerable segments of the society. These include laws
concerning the contempt of court, freedom of information, defamation, habeas
corpus, family disputes, operationalization of Anjuman Musahilat Court inspections,
ombudsman, and alternate dispute resolution
Under police reform, enactment of New Police order includes provision of Public
Safety Commissions; functional separation of investigation from watch and ward;
functional separation of prosecution from investigation; internal and external
complaints redressal mechanisms; and District Criminal Justice Coordination
Committees
Institutional strengthening and capacity building measures relate to automation of
justice sector institutions including bar councils; training and capacity building; and
public awareness campaigns for citizens to learn about their rights and entitlements
Payment of judicial allowance (Rs. 7,000 to the judges of Session Courts and Rs.
6,000 to civil judges) to augment quality of justice. Utility allowance has been
allowed to the judicial officers in Sindh and Balochistan
Devolution and Police Reforms
The MTDF recognized the need for a devolved service delivery mechanism to provide
reliable and effective facilities, especially in the social sectors like education and health at the
local level. For improvement of law and order in Balochistan, three important projects were
launched. The “Raising of Balochistan Constabulary” costing Rs. 4.1 billion was provided to add
6,000 new personnel in the force. The second project related to the Conversion of ‘B’ (non-
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police) Areas into ‘A’ Areas costing Rs. 5.5 billion. All districts were converted into ‘A’ areas in
Balochistan under the project. The third project related to establishment of Nationwide Integrated
Truck Radio System for Police: Islamabad/Rawalpindi/Lahore/Karachi/Peshawar/Quetta costing
Rs. 1.9 billion is near to its completion. Another project titled, “Procurement/ Installation of NonIntrusive Vehicle X-ray Inspection (NVIS)” to improve the capability of the law enforcement
agencies to scan high volumes of vehicles and detect contraband and explosive laden cargos in
normal flow of traffic has been launched at a cost of Rs. 1.0 billion.
Public Information and Statistical Management
The fourth round of ‘Pakistan Social and Living Standard Measurement (PSLM)’ project
was also undertaken. In the first and second round of survey, data on district and provincial level
was collected from about 77,000 households on social indicators i.e. health, education, household
assets/amenities, immunization, water supply and sanitation and report has been released. The
fifth round report is under process in the Federal Bureau of Statistics. Rebasing of National
Accounts from 1999-2000 to 2006-07 has been launched to collect National Accounts and so far
19 surveys/ studies have been conducted.
Governance Issues
During MTDF 2005-10, a broad range of activities was undertaken to improve
governance in the country. While considerable progress has been made in a number of areas,
major governance challenges persist. Some of these are:
 Ineffective management of resources, disparities in the pace and level of
development across provinces and across districts
 Denial of basic needs of food, water, and shelter to a substantial proportion of the
population and poor service delivery mechanisms
 Marginalization, exclusion or even persecution of people on account of social,
religious, ethnic or even gender affiliations
 Lack of transparency and accountability in many facets of the State machinery,
particularly those that have an interface with the public
 State credibility – the gap between the policy intent and the development results – of
public service institutions
 Weak rule of law manifested by deteriorating law and order, tax-evasion, weak
regulatory frame-works and failure in getting timely justice
 Existence of a significant number of voiceless poor with little opportunities for
participating in decision-making and local governance
 Deterioration of physical environment in the urban and rural areas
Tenth Five Year Plan 2010-15 Strategy
The Tenth Plan’s objectives of sustained high and inclusive growth, improved economic
fundamentals and competitiveness and bridging the various divides that continue to fragment
society can only be achieved if there is a significant improvement in the quality of governance
and state effectiveness is enhanced. In this context the Tenth Plan articulates a strategy that will
ensure: reliable delivery of services and entitlements; enhanced rule of law, public sector reform
and creation of an enabling regulatory framework to facilitate private sector development and
investment. By implementing a comprehensive reform agenda, the governance indicators are
expected to improve during the Plan period. The Tenth Plan will focus on good governance by
addressing the following dimensions:
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Strengthen local government system to enhance the delivery of critical municipal
services
Strengthen participatory approaches and local governance structures by involving
civil society and other stakeholders in the design and implementation of policies,
programmes and projects, with capacity building of involved agencies
Address systemic problems that undermine the efficiency of legal, judicial and law
enforcement institutions. Judicial reforms under the National Judicial Policy to
bolster the delivery of justice
Address corporate governance issues and improve the public-private interface in a
manner which protects public interest as well as minimizes private transaction costs
Improve public sector management by (a) streamlining revenue administration; (b)
strengthening public financial administration; (c) implementing E-Governance
initiatives; (d) public sector capacity building and civil service reforms, covering
professionalization of civil services and qualitative improvements through continuous
training and skill up-gradation,; (e) procedural reforms to simplify government
processes and revising archaic rules; (f) enhancing the quality and coverage of data
and statistics; and (g) strengthening policy research functions within the government
Strengthen the Law Enforcement Agencies through capacity building to improve law
and order in the country thereby improving investors’ confidence
Reduce corruption by introducing transparent, open and accountable
financial/administrative mechanism in all fields
Improve implementation effectiveness, at the sectoral, policy coordination and
programme levels for key development outcomes with a particular focus on
monitoring and evaluation of outcomes of the Public Sector Development
Programme (PSDP)
Strengthen the legal and regulatory framework for effective implementation of
economic policies
Local Government System
Decentralisation is promoted for the reasons of increased administrative efficiency,
equity, service provision, participation and democratization, national cohesion, local
empowerment and poverty reduction, among others. The strategy for the devolution process aims
to correct the governance patterns marked by centralised and top-down decision-making,
haphazard planning, weak accountability and financial management, and lack of transparency and
citizens participation. During the Tenth Plan, local governments will be strengthened by
devolution of powers and capacity development of the Provincial Governments. The following
principles will inform this process:
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All local governments to function within the provincial framework
Provincial governments to ensure service delivery through policy, regulation,
guidance, incentives, oversight and monitoring of outcomes
Development authorities, the Public Health Engineering Departments, Local
Government and Rural Development Departments, and Water and Sanitation
Agencies to be devolved to local governments
Local government function may not be performed by provincial government or any
other agency/body. As far as possible, vertical programmes or parallel structures for
execution of local government functions will be phased out
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Local governments are fully empowered to take any administrative and financial
decisions relating to their functions
Local councils should notify their own byelaws relating to delegation of financial and
administrative powers
NGOs and civil society should assist in developing the capacity of local governments
and facilitate the local governments in improving service delivery
Participatory Approach
Involvement and participation of the people at all stages of planning, implementation and
monitoring is a pre-requisite for good governance. People must feel a sense of ownership of
policies and should participate in its planning and implementation at all levels of government.
This could be achieved through participatory approach involving self-help groups, women’s
groups, user groups, associations, trade unions, rural support organizations and civil society.
Participatory approach in economic and social development includes the following strategic
elements:
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Involve voluntary organizations in planning and implementation process to enhance
interface with the public
Develop core competencies for participatory governance and professionalism in the
voluntary sector
Broaden the base and scope of volunteerism by encouraging its growth in districts
and regions where such structures are weak. Such efforts will also aim to create an
enabling environment for greater involvement of the voluntary sector for
marginalized and the excluded groups
Build appropriate databases, carry out documentation, research and dissemination of
innovative development models evolved by voluntary organizations
Initiate a policy process whereby the financial and social mobilisation contributions
of civil society are harnessed to improve the national development process
Rule of Law: Police and Judiciary
The Tenth Plan takes police and judiciary to be key agencies that ensure the rule of law,
which is the bedrock of the democracy and development. Accordingly, capacity building in the
police and judicial system has been accepted as a legitimate activity for Plan funding. Over the
years, increasing politicization and corruption, overstretched duty hours and low policing
intensity have only contributed to the decline in police credibility. Under the Tenth Plan, the
Government intends to re-establish the rule of law and improve public perception through
effective delivery of justice and public safety services. There is a fundamental need to improve
the criminal justice administration system. Efficacy of the criminal justice system will also help
counter-terrorism drive of the government. During the Tenth Plan special attention will be given
to enhance the capacity of police, prosecution and public defenders’ system (under the new
legislation passed by the Parliament). Police and prosecution reform will help achieve
improvements in conviction rate, speedy disposal of criminal cases and increase citizen trust in
the justice system.
Access to justice is an important part of the governance reform agenda of the
Government. During the Tenth Plan efforts will be made to strengthen the judicial reforms
undertaken earlier in the MTDF 2005-10. In addition, the following areas will also be addressed:
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Provide better working environment for bar and litigant public, lawyers chambers,
bar rooms, libraries, and special courts
Introduce Jails reforms, arrange special training sessions for jail staff and provide
health facility to prisoners
Ensure the independence of the prosecution system and strengthen forensic facilities
Introduce institutional reforms by (a) removing the bottlenecks in the implementation
of law with special reference to drugs trafficking and human trafficking; (b)
strengthening the Bar; (c) providing training to judges and police; (d) automation of
court systems; and (e) ensuring judicial accountability
Protect clients by providing them awareness about their rights and legal support
Reduce workload in courts by establishing methods of alternative dispute resolution
Strengthen citizen-police liaison and community policing mechanisms and police
accountability
Public Sector Management
Enhancing public sector management efficiency will be a key focus of Tenth Plan.
Reforms are envisaged in the areas of public financial management, revenue administration,
capacity building, data and statistics, E-Governance and corruption as outlined below.
Public Financial Sector
Under the ongoing PIFRA project, substantial progress has been made in the four areas of
reforms: financial and budgeting reform, auditing, human resource development and change
management. Efforts will be made for the sustainability of these reforms during the Tenth Plan.
Further, the Office of Auditor General of Pakistan will be strengthened to carry out performance,
management, process, programme and financial audit by giving wider powers for audit.
Professional auditors may be appointed to carry out border audit functions. The scope of AGP
auditing may be expanded to Public Sector Enterprises by reviewing relevant article of the
Constitution.
Revenue Administration
During the Tenth Plan, earlier initiated reform agenda of the FBR to enhance its revenue
collection effort and service standards will be completed. The Value Added Tax (VAT) will also
be introduced.
Capacity Building
Poor public management stems in part from low levels of human resource development
and weak institutions. A major effort is envisaged during the 10th Plan (2010-2015) in the area of
public capacity building to produce a competent, accessible and motivated civil service, which is
accountable and responsive to the changing socio-economic needs of the people. The government
will explore the avenues to establish a professional cadre such as the National Executive Service
for economic ministries and divisions, social sector ministries and organizations, provincial and
district governments, and regulatory ministries and organizations. Civil Service Reforms will be
undertaken to enhance professional development, linking compensation to responsibility and
performance, introducing new modes of performance evaluation and reviewing pay scales.
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Data and Statistics
It is recognized that the availability, quality, and accessibility of data in Pakistan needs to
be improved to meet the planning and monitoring needs of the economy. Areas requiring
improvement are elaborated as:
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Addressing key gaps in economic and social statistics, including the quality and
coverage of management information systems national accounts, poverty estimation,
monitoring and analysis, and district and sub district data
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Timeliness of dissemination and presentation of statistical data
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Institutionalizing the monitoring system on key indicators that measure development
results
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Harmonization and integration between the different sources of data on key
indicators
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Making statistics accessible to public and as a source of improving citizen oversight
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Perception of the public regarding reliability of statistics
During the Tenth Plan the quality of statistics will be improved through measures such
as:
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Restructuring and re-organization of the Federal Statistical System through a new
legislation and business processes. Support will also be envisaged for provincial
statistical agencies
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Improve organizational structure of statistical agencies such as the FBS and
provincial bureaus
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Increase credibility by giving autonomy and implementing international standards
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Efficient use of resources for improving quality of statistical data
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Speed up collection of data by modernizing infrastructure
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Promote professionalism through capacity building and effective HRD
E-Governance
Electronic–governance is fast emerging as an important tool for achieving good
governance especially with regard to improving efficiency, transparency and making interface
with government user-friendly. So far the emphasis has been on providing connectivity,
networking, technology up-gradation, selective delivery systems for information and services and
a package of software solutions. During the Tenth Plan, the focus will be on re-engineering of
procedures and rules, which are in fact the core of any effective programme of E-governance.
Issues of sustainability, interactivity and standardization of E-governance activities will also be
addressed. Within the ambit of E-governance, government to government, government to citizens
and government to business functionalities will be developed. Further, one of the major initiatives
envisaged in the IT sector is to increase the access of citizens to IT tools and promote greater
connectivity. Capacity development within the public sector will also be carried out to ensure that
there is greater familiarity of electronic procedures within the government quarters.
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Corruption
One of the major challenges in improving governance is to act against corruption, which
is widely seen as having seeped into the administrative fabric. Evidence is mounting that
systematic corruption exacts a heavy price from development activities by reducing investment,
increasing capital costs, and increasing the time business executives need to spend negotiating
with government officials. Several initiatives during the Tenth Plan will be undertaken to curb
corruption. These include: (i) the public sector management agenda, consisting of actions to make
markets competitive and transparency in public administration; (ii) the development of proper
institutional and legal frameworks and the creation of a new high level anticorruption agency; (iii)
strengthening audit functions to improve resource allocation while making embezzlement more
easily detected; (iv) procurement reforms, while reducing transaction costs making fraud more
difficult to perpetrate; (v) civil service reforms, which will result in improving procedures for
recruitment and promotion that build capacity and help in reducing patronage and nepotism; and
(vi) streamlining regulations that improve public management while reducing opportunities for
corruption.
Effective Implementation of the Public Sector Development Programme
A distinguishing feature of the Tenth Plan is the emphasis on effective implementation of
the Public Sector Development Programme (PSDP). The strategy includes capacity building and
institutional development of agencies involved in development of performance indicators;
strengthening of planning and monitoring cells in ministries/departments; strengthening of impact
analysis and monitoring and evaluation activities in planning and development agencies, with
linkages to the District Monitoring Development Committees under the Devolution Plan; periodic
monitoring exercises, with reports to ECNEC/NEC, and training of project directors and other
staff in project management, monitoring and evaluation. A major focus will also be building
capacity for undertaking PPPs, monitoring the pace at which PPPs are actually realized, lessons
learned and disseminating the implementation experience to catalyze actual realization of PPPs to
enhance infrastructure development. Performance, outcomes and result-orientation will be the
guiding criteria not only for projects and programmes, but also for policies, action plans and rules
and regulations governing development as a whole.
In the past, the emphasis has only been on monitoring of activities related to the PSDP.
During the Tenth Plan, the development effectiveness framework will be introduced which will,
cover both the public and private sectors. Progress on the strategic thrust of the framework will be
monitored including policy coordination and effectiveness of key strategies and programmes. At
the project, programme and sector level, greater attention will be devoted to evaluation studies
with a focus on impacts and outcomes, and on lessons learned for incorporation in subsequent
phases. The monitoring system in the planning agencies, line ministries and departments/
agencies will be supplemented by constituting high level Standing Committees in each of the
thematic areas, with membership drawn from both the public and private sectors. These
committees will have a strategic role in reviewing the Tenth Plan, implementation relating to
overall policies, strategies and programmes, and key result areas, assessing recent developments,
both macroeconomic and sectoral, and making recommendations for action. It is planned to focus
on the following areas during the Plan period:
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Improving the quality of projects “at entry” through proper feasibility studies and
establishment of performance benchmark for all projects, incorporation of lessons
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learned from evaluation of earlier projects, capacity building, and interagency
coordination
Ensuring adequate and timely release of funds
Reviewing procedures for submission, examination, and approval of projects
Enhancing capacity for contract management, including transparency in contract
documents, greater professionalism and adequate delegation of authority
Strengthening the Result Based Monitoring System (RBMS)
Simplifying procedures for acquisition of land
Preparing a ready reference of financial control and regulation
Enhance information flows, resources capacity and expenditure at sub-national level
for effective monitoring and evaluation (M&E)
Training of Project and M&E Officials, M&E Officials will be made mandatory at
the Pakistan Planning and Management Institute for effective project implementation
and accrual of benefits envisaged under the development initiatives
Monitoring at district level for the beneficiary-oriented schemes and those schemes
requiring greater efforts at tehsil/union council and community level
Further to this, during the Tenth Plan, an effective monitoring and evaluation system for
managing development outcomes will be devised on the following lines:
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Realign resources in line with priorities
Translate overall government objectives into specific programs and activities
Make explicit choices and trade-off between objectives and policy options, by
assessing effectiveness and costs of various choices
Build capacity to report on outcomes; Build capacity of supervisory agencies to
undertake impact evaluation studies
Enable managers to take decisions based on performance to improve impact of
programmes rather than simply ensuring disbursements and utilizat