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	<title>DAWN.COM &#187; Faisal Bari</title>
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		<title>DAWN.COM &#187; Faisal Bari</title>
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		<title>Teachers &amp; bureaucrats</title>
		<link>http://x.dawn.com/2013/06/07/teachers-bureaucrats/</link>
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		<pubDate>Fri, 07 Jun 2013 00:10:16 +0000</pubDate>
		<dc:creator>Faisal Bari</dc:creator>
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		<description><![CDATA[“THE education department, believe me, is much more corrupt than the police department.” This is how one teacher put it in a conversation we were recently having about problems public school teachers face.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=x.dawn.com&#038;blog=32060626&#038;post=3329360&#038;subd=dawncompk&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><strong>“THE education department, believe me, is much more corrupt than the police department.” This is how one teacher put it in a conversation we were recently having about problems public school teachers face.</strong></p>
<p>He wanted to convey the height of corruption; what better department to use for comparison than the police? He knew I was not convinced, so he repeated it two or three times, with more emphasis each time. And then he went on to give examples.</p>
<p>As soon as your name comes on the wait-list of candidates who might be hired as teachers, the clerk ‘mafia’ reaches your home to get a cut for letting your name through.<br />
Then, postings and transfers are ‘facilitated’ by clerks, too, while promotions also need paying for. One of the teachers, who works as a head teacher, said that the clerk ‘mafia’ was a blackmailing racket, with female teachers the main victims. She seemed to suggest that money was not the only type of payment that was expected, accepted and given.</p>
<p>According to these teachers the rot was not only amongst the clerks in the education department, it has permeated higher levels as well. There were district education officers who were known to be corrupt; these officers not only took a cut in the various transactions mentioned, they also made money in the procurement of furniture and/or supplies and took a share when authorising the release of funds.</p>
<p>But the teachers were objective enough to realise the other side of the coin. They acknowledged that only about one-fourth of the teachers in Punjab, in their opinion, were in the teaching profession because they wanted to be teachers and enjoyed it. The rest, they opined, were in the profession because they could not find other jobs that were as good and paid as well. They also said that there is corruption in the system because of the teachers, too. So, without going into causality, teachers feed a corrupt system on one side and are victims of it on the other.</p>
<p>A lot of teachers are also close to specific officers, they said, or were recruited on the recommendation of an MNA/ MPA or a local notable. Some of these teachers get choice postings, many do not work hard and since they cannot be disciplined by their respective head teacher or headmaster, they get away with doing nothing.</p>
<p>These teachers had a lot of complaints about society at large. Teachers in rural areas are considered kammies (of a lower order) by the local notables, in some places treated as domestic servants. Some officers also treat their subordinates and the teachers working in their jurisdictions as servants; society at large does not give teachers the respect they deserve.</p>
<p>However, none of the teachers I met said that their salaries were low. Adjustments in salaries over the last few years, at least in Punjab, seem to have addressed the income issue for the time being.</p>
<p>Mainstream parties that have been elected to government recently in Islamabad and in the provinces had, in their manifestos, promised major reforms in the education system. The time has come for them to start work on delivering on these promises.</p>
<p>Most of the parties have said that they will put more money into public education, and devolve the management of the education system to the district and lower tiers of government. While more money is definitely needed and governance does need to go down to the district, tehsil and even school level, many of the points mentioned will not be automatically addressed by merely putting in more money or devolving the system.</p>
<p>There is nothing to stop district or even tehsil set-ups from remaining corrupt or becoming as corrupt as the teachers felt the current system is. And local authorities and set-ups might be even more vulnerable to being captured by local elites than the provincial set-up. The dangers of making the system even worse are quite substantial.</p>
<p>In addition, parallel to the thinking on the land-registration system and the police system, we have to find ways of using technology, and the codification of and access to information, to reduce corruption and the abuse of power that seems very entrenched in the education system. Why can we not have information about all teachers and their career records on computers? Why can we not make the posting/transfer criteria more transparent, as well as the way they are applied to individual cases? If this is done in tandem with other changes such as putting in more money and taking decision-making to lower tiers, automated systems managed out of provincial capitals can become a means of effective monitoring as well.</p>
<p>Similarly, the recruitment process can also be made much more transparent and open. The power of the bureaucracy — and it does not matter if it is the education or police bureaucracy or the patwari — comes from limiting access to information and keeping key systems non-transparent and ad hoc.</p>
<p>Irrespective of whether the complaints of the teachers I met were exaggerated, and irrespective of whether it is the teachers that are more to blame than clerks or the officers in the education bureaucracy, the problems are clear. The proposed solutions, of putting in more money and decentralising decision-making, will not be sufficient to address the issues. They can, in fact, make the system even worse.</p>
<p>A necessary part of the reform has to come from the introduction of very strong information systems that make the criteria for hiring, postings, transfers and other service issues clear and accessible, and make the implementation of these criteria open and transparent as well.</p>
<p><em>The writer is senior adviser, Pakistan at Open Society Foundations, associate professor of economics, LUMS, and a visiting fellow at IDEAS, Lahore.</em></p>
<p><a href="mailto:fbari@osipak.org"><strong>fbari@osipak.org</strong></a></p>
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		<title>The morning after</title>
		<link>http://x.dawn.com/2013/05/12/the-morning-after/</link>
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		<pubDate>Sun, 12 May 2013 00:10:20 +0000</pubDate>
		<dc:creator>Faisal Bari</dc:creator>
				<category><![CDATA[Columnists]]></category>

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		<description><![CDATA[THE votes have been cast and are now being counted. Whoever wins, we hope they are good for democracy, peace, the rule of law, growth and development: we hope they are good for Pakistan and Pakistanis.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=x.dawn.com&#038;blog=32060626&#038;post=3303189&#038;subd=dawncompk&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><strong>THE votes have been cast and are now being counted. Whoever wins, we hope they are good for democracy, peace, the rule of law, growth and development: we hope they are good for Pakistan and Pakistanis.</strong></p>
<p>This election had a number of features that should be borne in mind going forward and will need further analysis and understanding.</p>
<p>The election campaign was very violent. It was not the political opponents who were going after each other, it was the anti-democratic forces of the Taliban that made it very hard for some parties, the Awami National Party (ANP), the Muttahida Qaumi Movement (MQM) and the PPP, to run their campaigns on the same scale as others.</p>
<p>Though the reasons were different and related more to nationalism, it was equally hard to campaign in Balochistan. Will and should there be questions about the legitimacy and acceptability of election results under these circumstances?</p>
<p>Will what has happened in the campaign give impetus to all politicians to come together to address the menace posed by the Taliban? Will the winners take the lead in this? Or will the various parties remain as divided as ever on how to deal with the threat they have been witnessing? If they do remain as divided, the next five years and the next election will be even harder.</p>
<p>In Punjab, many ‘politicians’ before an election try to gauge which way the establishment is leaning and which party has a greater chance of winning. Then they try to get a ticket from that party. Party loyalty means little. Since parties also need ‘electables’, switching sides is encouraged. The idea is that one is able to get more done for oneself and for one’s supporters, if one is in power. And a lot of the time it is clear, before elections, which party has greater chances.</p>
<p>But this time, especially for Punjab and Khyber Pakhtunkhwa, it was harder to predict the outcome between the PML-N and the Pakistan Tehreek-i-Insaf (PTI). Hence the higher demand for party tickets from them. But interestingly a number of influential local politicians chose to contest elections as independent candidates. They have been promising supporters that if they win they will support the winning party and get benefits for their constituents that way.</p>
<p>Given that many people are predicting a ‘split’ mandate with none of the parties winning a majority, these independents could wield a lot of power — heaven for those who contested as independents with the specific purpose of getting a price for their support post-victory. But how will this impact the politics of ideology, loyalty and political commitment remains to be seen.</p>
<p>The Election Commission of Pakistan (ECP) has strict and fairly stringent limits on how much a candidate can spend in an election. The idea of the limits is to reduce the role of money in politics and to make the playing field more even for candidates with different wealth and income levels and with varying abilities to elicit financial support. The limits were and are flouted, often quite flagrantly, but nonetheless there are limits and legal recourse is always available for aggrieved parties.</p>
<p>But this time it was the parties that went for massive advertising and not just individual candidates. The use of new and old media, and even mobile phones (I received three calls with recorded messages from Imran Khan twice and one from the PTI candidate from the constituency where I live), for communication with constituents was unprecedented.</p>
<p>The PTI took the lead and was more savvy but other parties learnt and caught up fairly quickly. Even parties that could not campaign in the normal manner because of security issues could use these means of reaching out to their supporters. How will this change the politics of the country? Will future campaigns be even more virtual?<br />
And are advertisements a substitute for direct contacts between potential representatives and their constituents?</p>
<p>The ECP, judiciary as well as the next parliament will have to look at the advertising issue. If the objective was a level playing field, how can unlimited expenditure on advertising, even by parties, be allowed? Will smaller parties and/or more regional parties as well as independent candidates not be at a disadvantage? Appropriate legislation on campaign finance will be needed before the next election.</p>
<p>The Benazir Income Support Programme (BISP) has been giving Rs1,000 a month to millions of women across Pakistan. Opponents have accused the PPP of using BISP to win votes. But, in a way, almost any welfare programme, with specific beneficiaries, will have this issue. The same complaints have been aired against the laptop scheme of the PML-N. It will be worth seeing if there is an appreciable change in patterns of female vote if these are studied, especially in areas that have large numbers of BISP-supported households. If there is, what sort of a lesson will it be for incoming governments?</p>
<p>Judging by the campaigning, it seemed that political parties are becoming more regionalised. The PML-N and PTI focused on campaigning in Punjab and KP; the PPP was more present in Sindh and the southern districts of Punjab; the MQM focused on Karachi and Sindh, and the ANP on Karachi and KP. If election results confirm this pattern, what will be the lessons for the politics of the federation? Have we become so fragmented that no political party can credibly appeal to voters from across the country?</p>
<p>Whoever is announced the winner, all incoming representatives and legislators will have their work cut out for them: Pakistan faces very serious challenges and on numerous fronts. One hopes they are up to the challenge and the people are not disappointed, again, with the choices they have made.</p>
<p><em>The writer is senior adviser, Pakistan at Open Society Foundations, associate professor of economics, LUMS, and a visiting fellow at IDEAS, Lahore.</em></p>
<p><a href="mailto:fbari@osipak.org"><strong>fbari@osipak.org</strong></a></p>
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		<title>Only promises, no action</title>
		<link>http://x.dawn.com/2013/05/10/only-promises-no-action/</link>
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		<pubDate>Fri, 10 May 2013 02:10:16 +0000</pubDate>
		<dc:creator>Faisal Bari</dc:creator>
				<category><![CDATA[Columnists]]></category>

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		<description><![CDATA[THERE are a number of campaigns running in the country that are talking of making education an ‘election demand’ and an election issue. They are asking people to ‘vote for education’.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=x.dawn.com&#038;blog=32060626&#038;post=3300002&#038;subd=dawncompk&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><strong>THERE are a number of campaigns running in the country that are talking of making education an ‘election demand’ and an election issue. They are asking people to ‘vote for education’.</strong></p>
<p>There is a basis for these demands and it seems that the debate on education is being given impetus. All parties have given prominent space to education issues in their manifestos.<br />
Some have even talked of the need to view the situation in the light of an ‘education emergency’ or have expressed similar imperatives.</p>
<p>Those who have been in government in Pakistan in the past, and they constitute most of the mainstream parties except for the Pakistan Tehreek-i-Insaf, argue that although much still needs to be done a lot has already been achieved. They point to rising enrolment and literacy rates, give statistics of how many new schools were opened/upgraded during their tenure, the facilities provided, the number of teachers recruited and the scholarships offered.</p>
<p>Despite the stories of progress, the situation remains quite bleak. An estimated 15-20 million children remain out of school three years after the insertion of Article 25-A (right to education) in the Constitution. Surveys show that the quality of education we are giving most of our children, in public or low-fee private schools, is very poor.</p>
<p>Alif Ailaan, an education campaign, gave us access to complaints collected over the last year or so where citizens have been calling a toll-free number to register their complaints/suggestions about education. We have data from more than 16,000 calls. The data, predominantly, highlights the same issues as the major areas of concern that have been talked about for the last many years.</p>
<p>Most of the complaints relate to government schools. Access issues, in terms of non-availability and distance, are still important factors. Concerns regarding quality are linked to teacher non-availability/absenteeism, teacher apathy or poor training of teachers. Lack of infrastructure also figures high, as in the absence of boundary walls, rooms,<br />
bathrooms and potable water.</p>
<p>Is our predicament’s only explanation that previous governments have lacked the political will to work on education and have not given it the importance it deserves? With only about 2pc of GDP being spent on education currently, when the state has explicitly assumed the responsibility of ensuring that all five- to 16-year-olds have access to an acceptable quality of education, the explanation seems credible. But it is also a fact that the fiscal space for expanding educational financing is limited. The provinces, even today, spend some 40pc of their budgets on education.</p>
<p>Waste and corruption issues are endemic in Pakistan and in our education system. From the recruitment of teachers, their monitoring/accountability, transfer and posting to corruption in the construction of schools, procurement of books/furniture, the entire system has major flaws. And despite two decades of reforms, a lot of these problems persist.</p>
<p>Civil society is demanding the government fulfil its responsibility towards children by providing education to all, by increasing the funding for education, by making expenditure more effective and by delivering on the quality of education needed. These are all very important. But there is something missing. The failure of the reform efforts so far need to be further investigated. Can the government deliver on what we are asking for and what parties in the past have promised but not done, and that they are again promising to accomplish?</p>
<p>The current bureaucratic structure seems to be ill-suited to the needs of education. Schools need very close and almost constant monitoring, teachers need support but need to be held accountable too. Schools need to be embedded in local communities: these are spaces where our children spend many hours everyday; these spaces need to be a part of our community space and should be treated as such.</p>
<p>Providing for this or even facilitating this, for a variety of reasons, is not what the bureaucratic structure of the government is suited for. We, as a nation, need to develop a new model for how a school should be viewed as an integral part of our communities.</p>
<p>The new model cannot come from the government alone. What the government does, it does through its machinery that is based on the coercive power of large bureaucratic systems. We have seen the government take all sorts of initiatives that looked good as concepts such as school councils, parent committees, management committees, mentoring programmes, cluster models, contract teachers, local hiring of teachers and so on and make a complete mess of them.</p>
<p>This model has to come from civil society and the community. This is not a plea for private education or privatisation of education. The government is responsible for educating all children. But the model we need for achieving this needs to be embedded in local communities and have local support/ownership. Governments seem incapable of developing this. We need to develop such models. In a later article we will talk of some experiments.</p>
<p>Civil society’s demand for education provision and reform is very important and needed. And it is good to see political parties responding to it. But the failure of past reforms seems to tell a bigger story.</p>
<p>Where macro focus on getting more resources and on increasing efficiency is definitely needed, the demand for educational reform needs to be nested in newer and better models of how schools are to be structured and governed. Appreciation of this seems to be missing and until the time this becomes a part of the debate on education reform, the demands for change will remain incomplete.</p>
<p>The writer is senior adviser, Pakistan, at Open Society Foundations, associate professor of economics, LUMS, and a visiting fellow at IDEAS, Lahore.</p>
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		<title>Missing women voters?</title>
		<link>http://x.dawn.com/2013/05/07/missing-women-voters/</link>
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		<pubDate>Tue, 07 May 2013 06:12:14 +0000</pubDate>
		<dc:creator>Faisal Bari</dc:creator>
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		<description><![CDATA[The big puzzle is why political do not parties mobilise women voters in spite of the incredibly high electoral returns this promises.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=x.dawn.com&#038;blog=32060626&#038;post=3296275&#038;subd=dawncompk&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><img class="aligncenter size-full wp-image-3296767" alt="" src="http://dawncompk.files.wordpress.com/2013/05/diagram-6701.jpg?w=670&#038;h=350" width="670" height="350" /></p>
<p><strong>The Nobel Prize-winning economist Amartya Sen brought the phenomenon of “missing” women to the attention of the world in the 1990s. </strong><strong>His argument is simple: if the laws of demography hold women should make up a majority of the world’s population. They do not in many parts of Asia. Mr Sen calculated the number of “missing women” to be more than 100 million at the time</strong>.</p>
<p>A question he did not ask is how many women are “missing” from the electoral rolls in developing polities. This is a pertinent question to ask in the run-up to the general elections on May 11. If the laws of demography hold, we should as Mr Sen did, expect the gender (male-female) ratio to be below 1. In Pakistan, we find this ratio to be far in excess of one, nationally and in every province (Figure 1).</p>
<p>A crude conservative estimate of missing women voters can be found by comparing their actual numbers with the numbers that would have been, had the gender ratio equalled that of the 1998 census. This gives us an estimate of nearly eight million “missing” women voters or an astonishing one-fourth of the existing number of registered women voters.</p>
<p>The electoral system is not only missing registered women voters; in 2008 it was missing the votes of women who were registered to vote.<br /> We can crudely estimate gender differences in turnout in 2008 by comparing male-female differences in gender-segregated polling stations, which account for 46 per cent of all stations. The results show that in Punjab and Sindh, the average turnout among women was 11 percentage points less than the turnout among men. This difference exists even if we do not adjust for the high level of ballot stuffing that allegedly takes place in female polling stations (Figure 2).</p>
<p>The largest differences in male-female voter turnouts were in Khyber Pakhtunkhwa and Fata (Figure 2). In KP female turnout was 2.5 times less than Punjab and Sindh even though its male turnout was only slightly lower than the other two provinces. It turns out that KP’s lower than national average turnout is largely explained by the low turnout among women. The important takeaway for parties competing in Punjab and Sindh is that increasing turnout among women promises significant electoral gain given the narrow margins with which contests are decided in these provinces.</p>
<p>It is common knowledge that the vast majority of missing or unregistered voters are also missing from the Nadra database. In a recent (2011) representative survey of four poorer districts in south Punjab, researchers at the Centre of Economic Research, Pakistan found a huge gender gap in CNIC possession among adults, with only 60 per cent of women reporting having a CNIC compared to 80 per cent of men. This suggests that acute levels of gender inequality continue to exist in spite of the significant gains made by Benazir Income Support Programme in this regard. It is not that the state does not know that women voters are missing; it is simply not making enough effort to find them.</p>
<p><img class="aligncenter size-full wp-image-3296768" alt="" src="http://dawncompk.files.wordpress.com/2013/05/diagram-2-670.jpg?w=670&#038;h=350" width="670" height="350" /></p>
<p>The big puzzle is why political do not parties mobilise women voters in spite of the incredibly high electoral returns this promises. BISP is a novel intervention by a political party to register and mobilise women voters. It would be interesting to evaluate the electoral returns that the PPP gets from this strategy in the upcoming elections. The historical experience of other countries tells us that mobilising this huge demographic group has been a game-changer for parties that are able to appeal to women &#8211; a lesson that Obama’s campaign team got right in the recent US election. There are lessons here for political parties in Pakistan.</p>
<p>Mobilising women is not easy because of the deep social and political divide that exists regarding the question of the public and political space for women. Mobilising women will not be possible, in this context, unless all the main political parties make a public, non-partisan and unequivocal commitment to uphold the constitutional rights that guarantee dignity, freedom and equality to all citizens; including the right of political participation in terms of holding office and voting and forbid discrimination on the basis of gender. If low turnout exists among women it ought to be a result of the exercise of free choice and not because of violence and coercion. Unfortunately the manifestos of many political parties are extremely lacking in this regard. Parties have to realise that, if for no other reason, it is in their electoral interest to mobilise these citizens to vote.</p>
<p>Mobilising women will not be possible without developing campaigns around issues that matter to women voters. We know from varied contexts that household spending priorities are very different when women control household income instead of men. There is also evidence from the region, which suggests that public policy priorities also tend to vary by gender. This suggests that effective mobilisation will not be possible without getting to know what women want. However, the existing structure of voter mobilisation in Pakistan, the dhara, systematically excludes women and makes it hard for parties to elicit their preferences.</p>
<p>Therefore, what can be done? Evidence from varied contexts tells us that the increased representation of women on general seats has led to substantial reprioritisation of public spending towards public investments (such as education and public health) that are highly valued by women voters. Therefore, an effective mobilisation strategy is to increase the proportion of general election seats awarded to women members of political parties. This has been a long-standing legislative demand of the Women’s Parliamentary Caucus. At present, there is huge under-representation of women among candidates contesting general seats. The share of women candidates on a general seat in 2013 is less than four per cent of the total candidate pool, according to the Fair and Free Election Network.</p>
<p>It is important to realise that the effective mobilisation of women voters has resulted in tremendous social policy and spending gains across a range of democracies. For example, recent research by Professor Grant Miller of Stanford has shown that the passage of the right to vote for women in the US was followed by immediate shifts in legislative behaviour and large, sudden increases in local public health spending. This growth in public health spending led to a decline in child mortality by 8-15 per cent (or 20,000 less annual child deaths nationwide) as a result. Few public policy changes promise such large gains in such a short span of time.</p>
<p>As we stand today, in spite of the promise of substantial development gains, it appears that the electoral system is missing a lot of women voters, while political parties do not appear to miss this pivotal vote bank much.</p>
<p><strong><em>Faisal Bari is visiting Fellow at the Institute of Development and Economic Alternatives (IDEAS) and Associate Professor of Economics, Lahore University of Management Sciences (LUMS). Ali Cheema is Senior Research Fellow at IDEAS and Associate Professor of Economics and Political Science, LUMS. Syed Ali Asjad Naqvi is Research Director, Center for Economic Research in Pakistan (CERP).</em></strong></p>
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		<title>Why not land reforms?</title>
		<link>http://x.dawn.com/2013/04/26/why-not-land-reforms/</link>
		<comments>http://x.dawn.com/2013/04/26/why-not-land-reforms/#comments</comments>
		<pubDate>Fri, 26 Apr 2013 00:10:31 +0000</pubDate>
		<dc:creator>Faisal Bari</dc:creator>
				<category><![CDATA[Columnists]]></category>

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		<description><![CDATA[SOME political parties are promising to create a new or naya Pakistan, others are promising to go back to the Pakistan that had originally been dreamt of. But all are promising fundamental changes: defending the status quo is not an option in this election.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=x.dawn.com&#038;blog=32060626&#038;post=3282687&#038;subd=dawncompk&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><strong>SOME political parties are promising to create a new or naya Pakistan, others are promising to go back to the Pakistan that had originally been dreamt of. But all are promising fundamental changes: defending the status quo is not an option in this election. </strong></p>
<p>Even if parties want to actually defend the status quo, seeing the mood of the public, they are promising change. But, still, no party has made land reform a basic plank of their manifesto.</p>
<p>Can we think of changing Pakistan fundamentally without changing the politics of land, rural or urban, in the country? Many people now argue that Pakistan is no longer feudal. And they may well be right. A feudal society, defined in terms of certain modes of production and ownership patterns of productive assets, might not be what is present in Pakistan. But the nexus between land and power is still very strong.</p>
<p>Land buying and selling, for certain castes and classes, is almost impossible; landowning is associated with access to a lot of other important services, and there are clear links between landowners and tiers of the state at the local level: the police, courts and the bureaucracy. So how can the issue of land market reform not be important?</p>
<p>Large landholdings are still an issue in some parts of the country. And we do need to deal with it. But that is not all that is meant when land reforms are talked about.</p>
<p>Land reforms are about opening up land markets so that any person with money, and from whatever class or caste, can buy land when available; giving state land to people for productive use; reducing or eliminating holdings of the military and government departments; consolidating land parcels; keeping land records more efficiently to lessen or eliminate the role of the patwari; updating land titling to allow more land to come to the markets; and breaking the nexus between landowners and state institutions like the police, local courts and politics.</p>
<p>One of the more effective ways of tackling poverty is through the distribution of productive assets to the poor. For rural areas, given that the majority of poor already have a link with agriculture and/or have human capital in this area, giving land to the poor and/or livestock, makes the most sense. Given current poverty levels, can we afford to not think about distributing or redistributing land?</p>
<p>The major parties have either ignored the issue in their manifestoes or given rather weak and lukewarm ideas. The PPP has not really taken up the issue even though it was the PPP that brought in the 1972 regulations for land reform. The PML-N has focused only on computerisation and land consolidation. The Pakistan Tehreek-i-Insaf does promise giving state land to the poor, and computerising records etc., which others do too, but starts off by saying that it will implement the existing legislation on land reforms.</p>
<p>There is a problem with the existing legislation. A Sharia appellate bench of the Supreme Court, comprising three judges and two ulema, declared that land reforms were un-Islamic. This was on appeal after the Federal Sharia Court had held that land reforms were Islamic. If the promise is to implement existing legislation and the appellate court’s decision stands then, subject to the court’s definition of what constitutes land reform, we are saying that there cannot be any land reform.</p>
<p>The decision of the appellate bench needs to challenged and reconsidered. It was not a unanimous decision (one judge had dissented and dismissed the appeal), and there are issues with the Sharia bench’s jurisdiction regarding the cases on land reform. Earlier, the court had dismissed the same case.</p>
<p>But more crucially, it is hard to accept that we have to give up a very important means of creating equity, equality, social justice and social harmony because of a weak judgment by the court, when even the head of the bench acknowledged that the court had been poorly assisted in the case.</p>
<p>Does Islam really consider land reform to be un-Islamic? If so, why? Is it about the takeover of private property by the state? Does this hold under all circumstances?<br />
And what about elements that are not halal or religiously acceptable? If the state buys out private property, to redistribute it to the poor, is it unacceptable? Would that be the case even if the government pays market prices? Or is it unacceptable if the price is less than market price?</p>
<p>The other elements of land reform pertaining to reducing the patwari’s role, land consolidation and transfer, and updating land ownership data, are even less controversial from the Islamic standpoint. All of these elements can clearly be part of the strategy for all parties and should be.</p>
<p>But irrespective of the above, no party has made the issue an important part of their manifesto and we have not heard anything about it in the campaign so far. Is this a reflection of the power of the landowning classes? Do we still need an argument for why the issue is important? Is it a comment on the health of our democracy that even the numerically superior hordes of the poor cannot make such an important issue come on the agenda of the mainstream parties?</p>
<p>There is a petition with the Supreme Court that is looking to challenge the basis of the appellate court decision. We hope the court will take it up soon. And we hope the incoming government, in the interest of the majority, will also support the petition and join the argument for opening the doors to land reforms.</p>
<p><em>The writer is senior adviser, Pakistan, at Open Society Foundations, associate professor of economics, LUMS, and a visiting fellow at IDEAS, Lahore.</em></p>
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		<title>A long summer ahead</title>
		<link>http://x.dawn.com/2013/04/12/a-long-summer-ahead/</link>
		<comments>http://x.dawn.com/2013/04/12/a-long-summer-ahead/#comments</comments>
		<pubDate>Fri, 12 Apr 2013 00:10:50 +0000</pubDate>
		<dc:creator>Faisal Bari</dc:creator>
				<category><![CDATA[Columnists]]></category>

		<guid isPermaLink="false">http://dawn.com/?p=3265547</guid>
		<description><![CDATA[“HAD a really unproductive time at work yesterday thanks to electricity for only 1.5 hours…. The night was terrible too with electricity every alternate hour and a big chunk of no light from 3am to 6am. <img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=x.dawn.com&#038;blog=32060626&#038;post=3265547&#038;subd=dawncompk&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><strong>“HAD a really unproductive time at work yesterday thanks to electricity for only 1.5 hours…. The night was terrible too with electricity every alternate hour and a big chunk of no light from 3am to 6am.</strong> Today we don’t have electricity since 10am and things don’t seem any better.” This is what a friend wrote on Facebook quite recently. He is based in Lahore.</p>
<p>Though temperatures have started to rise, Pakistan’s long summer is only beginning. Yet, we are already seeing what we had been expecting and had been warned about: electricity outages are increasing rapidly. Even large cities like Lahore have seen outages of 14 to 17 hours per day over the last few days.</p>
<p>At this level of outages, it is almost impossible to get anything productive done. You can never be sure when you will have electricity. You cannot get your computers and phones charged. Tube wells cannot work long enough and water shortages become routine. Everyday business suffers and this is already evident. The situation in the smaller cities and rural areas is far worse.</p>
<p>Over the last few years, many businesses and even residences have had uninterruptible power supply (UPS) systems installed to get some continuity in supply to keep at least basic functions going and to derive a measure of convenience and comfort (in the form of lights and fans). But with 14 to 17 hours of no power every 24 hours, with some such periods extending to four or five hours at a stretch, UPS systems are no longer adequate; there is not enough time for them to be recharged.</p>
<p>Given this state of affairs at a time when temperatures are already on the rise, people should be prepared for a long summer without electricity.</p>
<p>A lot of acquaintances are getting oil and/or gas generators installed at their places of work and residences. A number of these generators are large enough to allow even air-conditioners to work. Even the smaller ones ensure that appliances and UPS systems can be recharged.</p>
<p>But generators are expensive. Oil-based ones, and especially the slightly bigger ones, can cost up to Rs500 to Rs700 an hour to run. If the generator is used for some 20 hours, it will cost about Rs10,000 to Rs14,000 a day.</p>
<p>Clearly, this option is not for poor or middle-class households. For businesses opting for this solution, this is a major hike in their cost of production and is only feasible if they have enough room for absorbing the additional cost in their price and profit margin.</p>
<p>Most middle- or upper middle-income households and small businesses will use smaller and/or gas-based generators as long as gas supply is available over the summer months. It will still be more expensive than paying the regular rates of the Water and Power Development Authority.</p>
<p>The cost to Pakistan overall is much more than the discomfort and disturbance caused to domestic life. People pay higher costs for fuel. If the fuel is imported, the foreign exchange requirements also rise.</p>
<p>The fixed cost of investment in generators is not a small or trivial expense. Small businesses are at an additional disadvantage as they usually do not have access to credit and/or savings to invest in fixed assets. They also cannot go for larger generators that are more efficient.</p>
<p>And if businesses are investing money in generators, they are clearly not investing this money in something else that could potentially have expanded their scope and given higher profits. The fixed investment requirement works against the poor as well. They usually do not have sufficient savings and even if they did, it would be very counterproductive for them to lock all their money into a generator.</p>
<p>The generators are also creating inefficient bypasses to the national grid. Since there are strong economies of scale in electricity generation, by having so many smaller units we are losing out on efficiency and cost effectiveness. If in a couple of years we do start producing more electricity through larger projects a lot of the investment being made today, because they are of a fixed nature, will go to waste.</p>
<p>The environmental cost of having so many generators across the country is going to be considerable as well. “Private generator noise at night in Lahore has become unacceptably loud.” This is another quote from a status update on Facebook, from a different friend on a different day.</p>
<p>This has become true across Pakistan, not just in Lahore. And then there is the smoke that comes from these generators. Diesel is the worst of culprits and smoke from diesel generators can form dark clouds over neighbourhoods. Not even gas generators are smoke-free. What effects will this pollution have on the health of people — will it give rise to respiratory disorders or even cancer as there are carcinogens in most exhaust clouds?</p>
<p>But what can the people do? The last government appeared clueless on how to tackle the issue or implement reforms. We need more electricity generation, but preferably from water. This can only happen in the medium to long run.</p>
<p>In the meanwhile, we need reforms that address concerns about tariffs (to cover costs), and supply priorities (agriculture and industry first, commercial activity next and domestic consumers last).</p>
<p>There should also be taxes on larger generators being installed for domestic use. But these reforms have to be done without discrimination and distinction ie high-profile personalities including politicians should face as much loadshedding as the worst-off consumer in a village. Will the new government have the courage and/or the political capital to do the right thing?</p>
<p><em>The writer is senior adviser, Pakistan, at Open Society Foundations, associate professor of economics, LUMS, and a visiting fellow at IDEAS, Lahore.</em></p>
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		<title>Education &amp; manifestos</title>
		<link>http://x.dawn.com/2013/03/29/education-manifestos/</link>
		<comments>http://x.dawn.com/2013/03/29/education-manifestos/#comments</comments>
		<pubDate>Fri, 29 Mar 2013 00:10:21 +0000</pubDate>
		<dc:creator>Faisal Bari</dc:creator>
				<category><![CDATA[Columnists]]></category>

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		<description><![CDATA[IT is heartening to note that the election manifestos of three of the main political parties — the PPP, the PML-N and the Pakistan Tehreek-i-Insaf — not only mention education as an important area requiring urgent attention, they also give some details of the plans they have for the sector in case they are in a position to form government and/or influence policy on education.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=x.dawn.com&#038;blog=32060626&#038;post=3243491&#038;subd=dawncompk&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><strong>IT is heartening to note that the election manifestos of three of the main political parties — the PPP, the PML-N and the Pakistan Tehreek-i-Insaf — not only mention education as an important area requiring urgent attention, they also give some details of the plans they have for the sector in case they are in a position to form government and/or influence policy on education.</strong></p>
<p>The PML-N’s manifesto says that “Education must be number one national priority.” And the PTI and PPP manifestos also accord similar importance to education.</p>
<p>There is a clear realisation, coming through the documents, that education is not only necessary for the social and economic well-being of the country, it is crucial for ensuring social mobility, reducing inequality and addressing poverty. The documents acknowledge that education is an issue of basic human rights.</p>
<p>There is also recognition of the need for urgent action in the field of education. Two of the manifestos mention the need for having an “education emergency”, while the third expresses similar urgency but without using these words.</p>
<p>All three of them promise substantial increases in outlays on education over the five years of their government, if they do come to power. The PML-N promises to raise expenditures on education to four per cent of GDP, the PPP will raise them to 4.5 per cent while the PTI, if it comes to power, will raise education outlays to five per cent of GDP by the end of their five years of government.</p>
<p>All the parties believe in universal enrolment as an essential goal, but they refrain from making explicit promises as to when universality will be achieved and to what level.</p>
<p>Beyond this point the policies begin to diverge. The PPP and the PML-N have been in power for the last five years. They feel compelled to defend some of the choices, right or wrong, made over this period and want to expand and universalise the ambit of some of these policies. The PPP wants to do conditional cash transfers for education, especially for the ultra poor, through the Benazir Income Support Programme. The PML-N promises to set up Daanish schools across the country. They also want to replicate the endowment fund model for scholarships for talented students across Pakistan.</p>
<p>The PTI has not been in power and has been, in a way, preparing for this election for the longest period. It has the deepest, most developed and coherent policy vision for education. It takes the trouble of identifying all of the major issues we face in the sector and then goes into a lot of detail to explain what it proposes to do. One can take issue with their understanding of the problems, the proposed solutions or the implementation mechanisms that they propose — and one should — but there is no denying the work and effort that must have gone into identifying the issues in such detail and proposing solutions.</p>
<p>For example, the medium of instruction debate is a major issue. The PML-N chose to solve it, in Punjab, by simply declaring English as the medium of instruction for all public schools without any preparation, discussion or debate. And now the topic is not mentioned or explained in its manifesto. The PPP also does not address the issue.</p>
<p>The PTI not only talks of why the issue is important and problematic in any multicultural, multilingual society, it also provides a solution: Urdu and/or the mother tongue to be the medium of instruction till grade VIII and then a switch to English, while English will also be taught as a subject from the beginning. One can argue whether the switch should happen earlier or later and ask what the role of the mother tongue may be (there are 40 plus languages/dialects spoken in Pakistan) versus Urdu. But at least the issue has been given its due in the manifesto and debate can occur around it.</p>
<p>After going through the proposals given by the PPP and the PML-N, one does feel that there is a disconnect between their claim that education should be one of the top priorities, if not the top one, and what they are proposing to do about it. The proposals do not address education as an emergency or as a top priority and feel more like business as usual sort of pronouncements. There is distance even between rhetoric and promise. The distance between rhetoric and reality might be even more.</p>
<p>By contrast the PTI does give the proposals the needed gravitas. Is this a reflection of the fact that the PML-N and the PPP, having more experience of governance, are being more realistic and the PTI more idealistic? Or does it actually stem from differences in the importance the respective parties and their leaders accord to the area of education? Imran Khan has, repeatedly, said that for him getting the education policy right is the most important medium to the long-term goal and it is necessary for securing any viable future for Pakistan.</p>
<p>On the whole it is heartening to see some agreement between the parties on a) the importance of getting the education policy right and b) spending more in the area. If a coalition government is formed, this overlap might become a basis for working out a broader consensus in this area. But detailed policies for this consensus will still need to be worked out as not only are the proposals in the manifestos generally weak, there is less agreement over them as well. But the real test will be whether the public is able to hold the parties accountable for the promises they are making in their respective manifestos.</p>
<p><em>The writer is senior adviser, Pakistan, at Open Society Foundations, associate professor of economics, LUMS, and a visiting fellow at IDEAS, Lahore.</em></p>
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		<title>How to help the poor</title>
		<link>http://x.dawn.com/2013/03/15/how-to-help-the-poor/</link>
		<comments>http://x.dawn.com/2013/03/15/how-to-help-the-poor/#comments</comments>
		<pubDate>Fri, 15 Mar 2013 00:10:11 +0000</pubDate>
		<dc:creator>Faisal Bari</dc:creator>
				<category><![CDATA[Columnists]]></category>

		<guid isPermaLink="false">http://dawn.com/?p=3223879</guid>
		<description><![CDATA[HELPING people move out of poverty, on a sustainable basis, and helping to lower their vulnerability threshold is not a straightforward or easy policy issue.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=x.dawn.com&#038;blog=32060626&#038;post=3223879&#038;subd=dawncompk&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><strong>HELPING people move out of poverty, on a sustainable basis, and helping to lower their vulnerability threshold is not a straightforward or easy policy issue.</strong></p>
<p>The poor have low incomes and they have low or non-existent wealth or asset levels — whether human assets (education and/or skills) or physical assets. So, in order to climb out of poverty and ensure that this move is sustainable the poor need help at two levels: they need resources to meet their current needs (food, clothing, shelter etc.), and asset accumulation so that they can continue to benefit from higher income levels in the future.</p>
<p>A pertinent question is that if the poor do not have enough even for today, how can they accumulate for the future? In most cases, apart from meeting their current needs, the poor need accumulation mechanisms for building their savings and assets. There are various ways one can facilitate this. If current income increases sufficiently to allow some savings, these can be accumulated to build assets.</p>
<p>Micro-credit takes this route by giving borrowers loans to make, predominantly, productive investments which leads to an increase in current incomes and allows not only higher current consumption but some accumulation of savings as well. Continued for a sufficient period or with some repetition of loan cycles, and without any negative shocks, the process allows people to climb out of poverty and to stay out of it on a sustainable basis.</p>
<p>If current income increases are not considered feasible or are not sufficient to allow for the accumulation of savings, a good way to address vulnerability and the future is through the transfer of assets. Though a slower route, this can be done through imparting education and/or vocational skills to build human assets. But here we have to ensure the quality of education as well as the relevance of skills. This, evidence shows, is not always easy to manage.</p>
<p>The other option is the transfer of physical assets to the poor. Studies show good returns on transfer to the poor of land, livestock and/or resources for starting a small business. The usual risks with these assets (death of animals, the closure of business etc.) apply but the reported returns, after taking risks into account, from countries that have used asset transfers to tackle poverty, are quite significant.</p>
<p>Within asset transfer programmes, though returns on land transfer to the very poor are significant, land distribution programmes are politically very difficult to set up, and to handle effectively and efficaciously. Taking productive land away from people, even from those who might have large holdings, is not an easy task, while distributing marginal lands does not result in returns that are high enough.</p>
<p>Livestock distribution and business loans are the easiest to manage, while still getting good returns. For these programmes, if there has been some relevant training for recipients, prior to asset transfers, in taking care of animals or in basic skills for business management, success rates appear to be even higher. If too many assets of the same kind are given in a small market and/or area, it can create market saturation issues and a reduction in returns.</p>
<p>The agency responsible for running the programme should keep an eye out for such issues. Too many animals in an area can create fodder shortages or a milk glut and raise the risk of epidemics. In the same way, too many women producing similar embroidery can lower returns as well. A good mix of assets can easily address these issues.</p>
<p>We are facing very substantial levels of poverty in Pakistan and, more importantly, very high levels of vulnerability where even a substantial number of non-poor are at high risk of falling into poverty. Health, employment, and income shocks that are household-specific are quite common, as are systemic shocks like floods and droughts.</p>
<p>The Benazir Income Support Programme has a large transfer programme, Rs1,000 a month for each eligible poor household, and this sum is now reaching millions of households. But this transfer, by design, just takes care of a portion of the current needs of those who are very poor. Federal and provincial governments need to experiment with asset transfer programmes too.</p>
<p>Waseela-i-Taleem (for education) and Waseela-i-Rozgar (vocational training) address human asset questions. But these programmes are just starting out and are still too small and recent for one to say whether or not they will be implemented well enough to address poverty issues at the scale required.</p>
<p>The Rs300,000 one-time transfer programme for business that has been started in Sindh is an asset-transfer programme but it has just been announced. We will not know about its efficacy for some time, even if it continues to work after the elections.</p>
<p>More importantly, for the moment, the government has chosen to only deal with a cash-transfer programme, even on the asset side. It has not tried to experiment with livestock transfer programmes and/or land transfer programmes. Since such programmes have shown promising results in other but comparable jurisdictions, incoming governments should definitely do pilot projects in these areas.</p>
<p>We need to establish the comparative advantages and disadvantages of the various options we have open to us through a careful and rigorous evaluation of these so that large-scale interventions can be designed with some level of confidence.</p>
<p>It is likely that there will be little political opposition to asset-transfer programmes for education/training or even against livestock transfers and business loans. But land redistribution programmes are bound to raise political difficulties.</p>
<p>Will the high returns on land redistribution, as a means of reducing poverty, provide any incentive to political parties to think of this as a policy option for fighting poverty in Pakistan? Will any party include such a programme in its election manifesto? It will be interesting to see this through the election process and beyond.</p>
<p><em>The writer is senior adviser, Pakistan, at Open Society Foundations, associate professor of economics, LUMS, and a visiting fellow at IDEAS, Lahore.</em></p>
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		<title>Literacy and skills</title>
		<link>http://x.dawn.com/2013/03/01/literacy-and-skills/</link>
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		<pubDate>Fri, 01 Mar 2013 00:15:00 +0000</pubDate>
		<dc:creator>Faisal Bari</dc:creator>
				<category><![CDATA[Columnists]]></category>

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		<description><![CDATA[A VERY large number of Pakistanis are illiterate and unskilled. If literate they are barely so, and if skilled, most have poor skills. <img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=x.dawn.com&#038;blog=32060626&#038;post=3204686&#038;subd=dawncompk&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><strong>A VERY large number of Pakistanis are illiterate and unskilled. If literate they are barely so, and if skilled, most have poor skills.</strong></p>
<p>Given the demographics of a young nation, it is the youth of the country that will bear the burden of national production and income-generation in the coming years. If the bulk of them are illiterate or barely literate and poorly skilled or unskilled, it is not hard to imagine the outcome in terms of income-generation and the implications for national income and growth.</p>
<p>There is plenty of evidence in economics literature, especially in new growth theories, regarding the importance of human capital in general and the returns on education as well as on skill and vocational training — for individuals and for a country as a whole. Many see vocational training as a way of addressing unemployment and poverty. The acquisition of a set of skills for the poor is an investment in human assets and if it pays well it can remove a family from poverty on a sustainable basis.</p>
<p>Election manifestoes are being revealed as polls are just around the corner. A number of political parties have lamented the state of education and skills in the country.</p>
<p>We will focus on the issue of skills here. It has been pointed out that only a few hundred thousand people are being trained in vocational training institutes despite recent efforts to remedy the situation. Some political parties are promising that over the next five years these numbers will be raised to a few million if they are elected and given the opportunity to govern and implement their manifestoes. But, as usual, the complexities involved in the skill training market are being ignored or brushed aside.</p>
<p>If jobs cannot be guaranteed at the end of training, incentives for acquiring skills and the ability to pay for training also decrease. And we do find, empirically, that the response to skill training, even amongst the poor and the unskilled and even when training is being offered for free, is surprisingly low. Deeper probing is needed in the area before we commit to big-ticket projects.</p>
<p>It is assumed that many of the unskilled and poor are also unemployed. These people seldom have jobs in the formal sector. But their poverty also implies that they have to work at anything they can find, at whatever wage available. Their marginal contribution, despite being small, can be crucial to the family budget. So the opportunity cost of their time is not zero. When offering training, it might be important to ensure continued monetary sustainability for the family, to offer scholarships and stipends apart from free training. But this will raise the cost of giving training, which must be kept in mind given our fiscal situation.</p>
<p>Training is more useful if the skills imparted are relevant to the labour markets people are connected to and if training is of good quality. Both issues are crucial but have often been ignored in Pakistan.</p>
<p>There is an important mismatch issue in skill quality/certification and the need to impart skills to illiterate/barely literate candidates. To ensure quality and standards most training programmes require candidates to have passed middle school or to be a matriculate. But this means that the illiterate are disqualified. Given the number of such people and the need to train them, how can we not allow them in? And if we do, how do we ensure quality standards?</p>
<p>This is a big issue for most skill programmes that are offered to the poor in Pakistan, especially for programmes in smaller cities and rural areas. We need to find innovative ways of allowing customised basic literacy/numeracy training to go with skill training. So far no political party or government has looked into this issue.</p>
<p>The issue of markets is equally complex. Transport to where the jobs are is expensive. Labour mobility in some parts of the country such as southern Punjab, interior Sindh and most of Balochistan seems to be low. This limits even skill training, let alone the issue of jobs post training. The problem is especially acute for women. They have limited opportunities for mobility, if at all. And their ability to travel to their workplace on a daily basis is usually severely circumscribed.</p>
<p>To argue, as some analysts do and have done, that people have to just become mobile to get to their jobs when that is not happening and is not practical in our context seems counterproductive when designing programmes. Keeping mobility and transport issues in mind, if we have to tailor skill training to suit locally available job demand, there must be a better plan and design. The current set of training skills on offer tends to be fairly standard and generic and providers do not have the means to customise training to suit local demand. Again this is something to bear in mind while we grapple with the issue of expanding vocational training programmes.</p>
<p>All political parties are for imparting skills and vocational training. And the returns do seem to be high when things are done well and done right. But it is not easy. If we are going to go for big skill training projects, as most parties are planning, independently or as part of their social protection strategy, we better investigate and address some of the larger concerns highlighted above at the pilot stage and before we actually embark on large projects.</p>
<p><em>The writer is senior adviser, Pakistan, at Open Society Foundations, associate professor of economics, LUMS, and a visiting fellow at IDEAS, Lahore.</em></p>
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		<title>Missing the target</title>
		<link>http://x.dawn.com/2013/02/15/missing-the-target/</link>
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		<pubDate>Fri, 15 Feb 2013 00:15:41 +0000</pubDate>
		<dc:creator>Faisal Bari</dc:creator>
				<category><![CDATA[Columnists]]></category>

		<guid isPermaLink="false">http://dawn.com/?p=3183992</guid>
		<description><![CDATA[THERE are too many large untargeted subsidies in Pakistan that are wasting a lot of resources due to their untargeted nature. The wheat subsidy goes to all the people who eat wheat and not just to the poor.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=x.dawn.com&#038;blog=32060626&#038;post=3183992&#038;subd=dawncompk&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><strong>THERE are too many large untargeted subsidies in Pakistan that are wasting a lot of resources due to their untargeted nature. The wheat subsidy goes to all the people who eat wheat and not just to the poor.</strong> Similarly, the electricity subsidy is enjoyed by all who have access to electricity.</p>
<p>The power subsidy alone was Rs464 billion in 2011-12, of which only some Rs4bn went to lifeline consumers. Should Pakistan, with a ballooning fiscal deficit and a dire need for resources to cover important areas like social protection, health and education, have such large untargeted subsidies? It does not make economic sense. But are there compelling reasons of political economy which explain their persistence?</p>
<p>The alternative to untargeted subsidies are targeted ones. But targeted programmes are expensive. We need to find those who truly need the subsidy and find them in a transparent way and verify their needs. And the identification mechanism has to be dynamic as we need to keep tabs on who falls into the poverty category and who doesn’t.</p>
<p>All of this is expensive to do. And whichever methodology is used for targeting, and there are a number of these, there will always be errors of inclusion and exclusion. But, depending on how the exercise is carried out, these errors can be minimised and eliminated over time.</p>
<p>Pakistan has, over the last five years, invested a significant amount of resources and effort in developing the mechanism for targeting subsidies to the poor through the Benazir Income Support Programme (BISP). Through poverty scorecards BISP has identified the population of the very poor across Pakistan. They have the ability, now, to make targeted subsidies to the poor. Why is Pakistan still using untargeted subsidies and ‘wasting’ resources when a targeting mechanism is available?</p>
<p>Untargeted subsidies are as large as 2.5 per cent of GDP, translating into a significant figure that, if targeted, could go a long way in addressing poverty issues across Pakistan. In fact, even when we are spending only Rs70bn or so through BISP we have evidence that these transfers have an impact on poverty. If we could directly spend 2.5 per cent of GDP on the poor, the impact could be dramatic.</p>
<p>I am not arguing that by doing away with untargeted subsidies we can get the ‘fiscal space’ for targeted subsidies. This argument, though often made, is not the focus. Our fiscal deficit is above eight per cent of GDP. Even if we cut down all untargeted subsidies the fiscal deficit is still at six per cent, still above the minimum that we are supposed to maintain.</p>
<p>So, even with no untargeted subsidies we will have no fiscal space. But that is not the issue. We are just pointing out that if the same money that is being spent as subsidy in the name of the poor was actually spent on the latter, and targeted well, we would be able to address the issue of poverty to a much larger extent. It is an issue of efficiency and effectiveness, not of more resources.</p>
<p>The story of untargeted subsidies is a complicated one. Is there a government, political or not, that can say it is going to do away with untargeted subsidies on wheat or electricity, replacing them with targeted ones, and risk facing the wrath of various interest groups that benefit from the way the current untargeted subsidies work? Or, is there a government that can halt the bleeding due to the transfers that are made to state-owned enterprises? Pakistan Steel, Pakistan Railways and PIA together had losses in excess of Rs80bn in 2011.</p>
<p>The government has also been unable and unwilling to implement tax reforms. Our tax-to-GDP ratio is one of the lowest in comparator countries. Even then cutting untargeted subsidies has been hard. Possibly the same reasons of political economy are involved in ensuring that the government is unable to carry out tax reform, revamp state-owned enterprises and cut untargeted subsidies.</p>
<p>Most insiders seem to suggest that all of these areas are so entrenched that they are taken for granted when future policies are discussed. According to one insider, a minister, starting the discussion on the reform of untargeted subsidies, said that the subsidies were a ‘given. Now let us go ahead and talk of how we are going to do things given these subsidies’.</p>
<p>Political economy issues aside, there is also tremendous mistrust among provincial governments and political parties (other than the PPP) of BISP and its method of targeting. Though few politicians from the opposition parties know the details, they are convinced that the methodology is flawed and people have been identified on a political basis.</p>
<p>Even a number of provincial bureaucrats have this impression. Clearly BISP and the PPP-led government have failed to share the details of the identification method with important stakeholders. But moving forward, if we are going to have any hope of continuing to develop the area of social protection, given the fiscal issues, we need a better dialogue between provinces and the federation and the various political parties in the country.</p>
<p>We do not have any fiscal space for providing resources for essential services. And it seems that governments are also unwilling and unable to implement reforms needed on the fiscal and governance side that can create fiscal space.</p>
<p>In such a situation the case for moving to targeted subsidies becomes even stronger as that seems to be the only way we can use our resources more efficiently. But though we have the basic tools for doing this now, ala BISP, lack of dialogue and consensus between political parties and the government is making this move hard too.</p>
<p>The gains from such a move could be substantial in terms of the dent we could make in poverty levels in the country. But given the intensifying divisions amongst political parties in the run-up to elections it seems unlikely that any attempt towards consensus development will be sought by anyone.</p>
<p><em>The writer is senior adviser, Pakistan, at Open Society Foundations, associate professor of economics, LUMS, and a visiting fellow at IDEAS, Lahore.</em></p>
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