International Development CommitteeWritten evidence submitted by the Department for International Development to the International Development Committee

Figure 1

MAPS OF PAKISTAN (WITH POPULATION FIGURES)1

1. Overview

1.1 The case for aid

Pakistan is the sixth most populous country in the world with an estimated population of 180 million.2 As many as one in three Pakistanis live on 30p a day or less.3 One in eleven children die before their fifth birthday.4 Levels of under nutrition are above emergency thresholds at 19%.5 Pakistan also faces an education emergency. Half of all adults, and two thirds of women, are illiterate and 12 million children are out of school.6

Entrenched poverty is denying opportunities to millions of people and undermining Pakistan’s long term stability and prosperity. Furthermore population growth is high. By 2020 the population could exceed 205 million, with nearly 40% aged 10–29 years.7 By 2050 it is expected to increase by more than half. With economic growth averaging only 3.5% over the past five years and the population increasing by 2% year on year, Pakistan is struggling to maintain living standards or to create jobs for millions of young people,8 leading to increased poverty and instability.

A politically and economically secure Pakistan can also help to support stability and development across the region, one of the least integrated in the world. As NATO troops drawdown from Afghanistan, Pakistan will have a key regional role to play over the next decade. Supporting Pakistan now to build peace and stability in its Border Areas, and to tackle its own economic and governance challenges will enable it to play a positive role and provide the economic linkages that Afghanistan needs. As dialogue between India and Pakistan progresses, trade relations are normalising, creating economic opportunities for both countries as well as potentially for Afghanistan and Central Asia. Helping Pakistan take advantage of these opportunities for trade and development will make a significant contribution to regional and global prosperity.

This is why Pakistan is one of the UK’s top development priorities. The Department for International Development (DFID) is committed to helping future generations be healthy, educated, nourished, able to work and play their part in transforming Pakistan, helping to ensure stability in the region and beyond.

1.2 The scale of the challenge

Achieving lasting change in Pakistan will be challenging. Recent years have seen regular humanitarian disasters and other upheavals. In 2008 the global economic crisis prompted sharp rises in oil and food prices. 2009 saw a massive internal displacement of people following military operations in the border areas. In 2010 unprecedented floods resulted in the world’s largest ever natural disaster. Pakistan also faces significant macro-economic challenges and an extended energy crisis.

Pakistan also faces internal instability and sectarian violence. Since 2001 more than 30,000 Pakistani civilians have been killed and many more injured. The Government of Pakistan (GoP) estimate that the adverse security situation has cost Pakistan’s economy up to $67.63 billion since 2001.9 This constrains economic growth, has held back public services and damaged Pakistan’s ability to address poverty.

Improving Governments ability to provide basic services like health and education can play a key role in undermining the grievances that contribute to this instability, as well as lifting people out of poverty. In 2010 important responsibilities (including education, health and social welfare) were devolved from the Federal to the Provincial Government, creating new opportunities by bringing government closer to the people and potentially increasing accountability and transparency. However, it also poses significant challenges as improved delivery will depend on the capability of local government.

National elections are due to be held by May 2013.10 Pakistan is on track to see a civilian government complete a full term in office and democratically transfer power for the first time in its history. Credible elections are essential to build faith in the democratic process and give the government a stronger mandate for reform.

1.3 HMG vision for Pakistan

Pakistan remains one of the UK’s most important foreign, defence and development priorities. The UK has one of the largest Pakistani diasporas in the world (1 million people, 1.7% of the UK population) creating strong family and business links.

DFID’s Operational Plan supports delivery of the National Security Council’s objectives for Pakistan. DFID’s work focuses on building peace and stability; making democracy work; promoting macroeconomic stability, growth and jobs; and the effective delivery of basic services. Together these help promote stability for the benefit of poor Pakistanis, the region and the UK.

DFID works closely with the Cabinet Office, Foreign and Commonwealth Office (FCO) and Ministry of Defence in Whitehall and in Pakistan. DFID’s work is central to the British High Commission’s Integrated Delivery Plan.

2. Summary of Pakistan’s Progress Against the MDGs

2.1 Introduction

GoP’s commitment to the Millennium Development Goals (MDGs) is reflected in their Medium Term Development Framework and 2011 Framework for Economic Growth. Development indicators have improved since 200102, but still lag behind most other countries in South Asia. Pakistan is off track to meet the majority of the MDGs by 2015 (Table 1).11 The international community is working with Pakistan to help them tackle these challenges.

Detail on overseas development assistance (ODA) to Pakistan is at Figure 2.

2.2 MDG 1—End poverty and hunger

Pakistan is currently assessed as on track to achieve the income poverty MDG12 but 21% of the population, some 37 million people, are still estimated to live under the south Asian average of $1.25 a day.13 Poor people remain particularly vulnerable to inflation of food and energy prices. Charitable giving, significant remittances, and GoP cash transfer schemes all help to boost poor people’s income.

2.3 MDG 2—Universal education

The Constitutional guarantee to free and compulsory education for all 5–16 year olds is a bold new step. This commitment is welcome but the challenges are huge. Pakistan has the second highest population in the world of out of school children, currently 12 million children. In 2011, only 56% of children were enrolled in primary school14 and the primary completion rate was just 54.6%, leaving Pakistan significantly behind the MDG target of 97.5%.15

2.4 MDG 3—Gender equality

Despite ground-breaking new legislation, gender inequality in Pakistan remains high. Pakistan ranked 133 out of 135 countries in the 2011 UN Global Gender Gap Report and violence against women is widespread. Progress towards the MDG target in primary schools is slow, becoming worse in secondary schools.16 As a result, female literacy is 42% compared to 67% for males.17

2.5 MDG 4—Child heath

Pakistan has the fourth highest number of child deaths in the world for under-five children18 and is making slow progress towards the MDG target.19 Over half of these deaths occur within the first month of a child’s life due to the lack of availability of vaccines and under nutrition of pregnant women.

2.6 MDG 5—Maternal health

Out of the eleven countries that account for 65% of global maternal deaths, Pakistan ranks fourth. 12,000 women still die during pregnancy or childbirth each year and 1 million more suffer ill health or chronic disability. The MDG assessment shows Pakistan as on track to meet the target but the methodology used to assess this is currently being reviewed.

2.7 MDG 6—Combat diseases

While HIV prevalence is low and concentrated in vulnerable groups, Pakistan has high rates of both tuberculosis and malaria. The MDG assessment shows Pakistan as making slow progress towards the targets for this goal.20 Pakistan is a major recipient of Global Fund for TB, Malaria and HIV/AIDs support for all three diseases.

2.8 MDG 7—Environmental sustainability

Pakistan faces huge environmental and energy challenges and fast rates of urbanisation. Slow progress is being made on the MDG target of people having access to an improved water supply and sanitation.21

2.9 MDG 8—Global partnerships

Improving Pakistan’s international competitiveness in markets is key. The UK is amongst Pakistan’s leading international advocates on trade and played a key role in finalising the recent European Union (EU) trade waiver giving Pakistan enhanced access to EU markets. We continue to work to secure Pakistan’s entry into the EU’s broader General Sales Preference + (GSP+) scheme. Recent dialogue between India and Pakistan on opening up trade has been positive. Pakistan is also a member of the Global Partnership for Education and the UK is encouraging Pakistan to join the Scaling up Nutrition movement.

Figure 2

ODA FLOWS TO PAKISTAN22

Pakistan Statistics: reference and receipts	2008	2009	2010
Population (million)	167.4	170.5	173.6
GNI per capita (USD)	940	1,000	1,050
Net ODA (USD million)	1,550	2,769	3.021
Bilateral share (gross ODA)	51%	46%	71%
Net ODA/GNI	0.9%	1.7%	1.7%
Net Private flows (USD million) 825	156	290

Top Ten Donors of gross ODA (2009-10) average
		(USD m)
1	United States	906
2	IDA	774
3	As DB Special Funds	403
4	United Kingdom	258
5	Japan	209
6	EU Institutions	135
7	Germany	134
8	United Arab Emirates	111
9	Turkey	82
10	Australia	78

3. DFID’s programme

3.1 The DFID Pakistan Operational Plan and Results

DFID Pakistan’s Operational Plan (2010/11–2014/15) sets out UK development assistance priorities: education; women and children’s health; creating jobs and supporting economic growth; strengthening democracy; and building peace and stability.

Over the life time of the Operational Plan, if GoP makes progress on key reforms, DFID will achieve the following results:

Education

support 4 million children in school;

help build 20,000 new classrooms; and

recruit and train 45,000 new teachers.

Health

prevent 3,600 mothers deaths in childbirth;

prevent half a million children from becoming under-nourished; and

help 500,000 couples choose when and how may children to have.

Economy

help 1.23 million people (50% women) access microfinance loans and set up their own small business; and

expand branchless banking enabling 3 million people to access financial services.

Democracy and governance

help 2 million more people vote in the next general election;

help strengthen GoP institutions; and

improve security and access to justice.

The UK will also continue to provide lifesaving humanitarian assistance when needed.

3.2 The uplift in DFID programme resources

The 201213 DFID Pakistan programme is £267 million. This could increase to £446 million in 201415 making Pakistan the UK’s largest bilateral aid programme. The increase is dependent on securing value for money and results in a challenging policy and operating environment, and linked to the Government’s own progress on reform. This includes taking steps to build a more dynamic economy, strengthening the country’s tax base, making progress on human rights and democracy, and tackling corruption.

Subject to design choices still to be made, DFID’s funding will be split approximately: national programmes (30%); programmes in DFID’s two focal Provinces of Punjab and Khyber Pakhtunkhwa (KP) (55%); and other Provinces (15%).

DFID focuses on Punjab and Khyber Pakhtunkhwa Provinces as together they account for over 70% of Pakistan’s population and the largest absolute numbers of poor people. Both Provincial Governments are open to reform and we assess that the fiduciary risks can be managed.

To manage risk and enable us to deliver in the volatile operating environment, DFID uses a variety of channels and partners. Over the Operational Plan Period, approximately 50% of funds will be channelled through government and 50% through private sector, civil society and multilateral partners.

3.3 Government of Pakistan reforms

Governance lies at the heart of Pakistan’s economic and social problems. Historically, Pakistan’s resources have disproportionately benefited elites, at the expense of the development and security needs of its citizens, especially women and minorities.23 Poor planning, budgeting and management mean health and education services do not meet the needs of the population. 79% of Pakistanis have “lost hope” in the current government’s ability to improve their lives.24

The Government needs to undertake significant macroeconomic reforms to increase growth, tackle severe energy shortages, and manage fiscal and inflationary pressures. This includes action to improve increase the tax to GDP ratio which is one of the lowest in the world. Until these policy issues are resolved, Pakistan will struggle to invest sufficient resources in basic services to provide for its people, or attract investment and create jobs for its growing population.

However, there has been progress. A series of constitutional amendments have been passed in recent years which could help drive reform. The 18th amendment devolves significant responsibility to the Provinces, with the potential to make Government more accountable and rebuild trust between citizens and the state. Amendment 25A makes universal education to the age of 16 a right of every Pakistani child. Federal Government has passed legislation to protect women from violence in the home and to prevent acid crime, ratified key UN Human Rights conventions, and is seeking to open up trade relations with India. In Punjab, the Government has demonstrated real commitment to tackling the education emergency and set up a Revenue Authority to increase tax receipts.

These steps have put in place the foundations from which GoP could make significant improvements to the lives of ordinary Pakistanis over the coming years.

3.4 The operating environment

The wider political and security situation frames the environment in which all donors operate. Pakistan’s broader relations with foreign partners can affect operational issues such as international staff visas and travel. Travel by UK staff outside of Islamabad requires prior Government approval.

DFID operates under FCO security protocols and the security situation is kept under constant review to ensure staff safety. While access to some parts of the country is limited, alternative approaches have been adopted to ensure effective programme monitoring. Audit, Third Party Verification (TPV) and beneficiary feedback ensure programmes are achieving results and help to safeguard UK taxpayer’s funds. For example, in Punjab DFID and the World Bank use TPV to assess progress on the education programme before funds are released. This includes whether schools have been provided with necessary facilities such as boundary walls and toilets, whether girls are receiving stipends to attend schools and whether teachers are being recruited according to need.

3.5 How DFID works with other donors and multilateral agencies

Donor co-ordination is important in Pakistan to leverage reform, engage political debate and ensure the efforts of the international community are complementary. Recently, DFID has driven the agenda on key issues including economic reform, gender equality, corruption and nutrition across the donor community and with the Ministry of Finance.25 DFID also participates in numerous working level donor groups including on elections support, anti-corruption, education, health and humanitarian issues.

Examples of joint working include:

Development co-operation agreements with the Australian Agency for International Development whereby DFID administers Australian funds to support DFID health and education programmes.

Working in partnership with the World Bank and Canadian International Development Agency on a sector wide education approach in Punjab. Results to date include: an increase in the provision of suitable facilities in schools (electricity, drinking water, toilets and boundary walls) from 69% to 84%; a decrease in teacher absenteeism in Government schools from 19% to 12% meaning that some 700,000 more students have a teacher each day; and an increase in student attendance to 87%.

Funding the World Bank managed Multi-Donor Trust Fund for Reconstruction and Development which supports delivery of the Government’s 2010 Post Crisis Needs Assessment for Khyber Pakhtunkhwa and FATA. Results to date include: building 10.5 kms of roads, giving 300,000 people better access to health and education services; the establishment of a judicial academy; and grants to help small businesses.

3.6 Tackling corruption

In 2011, Pakistan ranked 134 out of 185 countries in the Transparency International Corruption Perceptions Index.26 Many Pakistanis perceive corruption to be worsening: half the population reports paying bribes27 and four fifths believe corruption in Government is widespread.28

DFID takes a robust approach to tackling corruption and safeguarding UK taxpayers’ funds. Regular Fiduciary Risk Assessments29 help us identify risks and mitigating actions. Public Expenditure Reviews provide the basis for a dialogue with Government on their health and education budgets. DFID is also funding regular additional audits which scrutinise high risk programmes from the point of disbursement to point of delivery. A zero tolerance approach is adopted to corruption and fraud and all cases are reported to DFID’s Counter Fraud and Whistle Blowing Unit.

Improving public financial management, and creating more transparency and accountability in procurement and service delivery is also vital. DFID is supporting the Government of Khyber Pakhtunkhwa to pilot Output Based Budgeting in two districts. This enables communities to decide how best to spend resources and gives the Government better oversight, as funds are released only when results are achieved on the ground. Based on this successful model and the savings made, the approach is being replicated in six districts, and the Government plans to take it Province wide.

3.7 Addressing gender issues

Pakistan ranks 133 out of 135 in the World Economic Forum’s Global Gender Gap Index. A 2011 Thomas Reuters Foundation Report found Pakistan to be the third most dangerous country in the world to be a woman.

DFID has regular policy discussion with the Government at all levels on women’s empowerment and uses the annual “International Day for the Elimination of Violence Against Women” as an advocacy platform. Our programmes work with local communities across Pakistan to provide support to and protect women from honour killing, acid burning, domestic violence and other abuses. Other examples include: providing stipends to girls in some of the poorest districts in Punjab and Khyber Pakhtunkhwa to complete secondary education; working with the Election Commission to ensure an additional one million women vote in the forthcoming national elections; and supporting the Acid Survivors Fund.

4. Summary of DFID’s Response to the International Development Committee Report into the 2010 Floods

In 2010 Pakistan experienced the worst floods in its history and, in terms of numbers of people affected, the largest natural disaster in the world. The International Development Committee (IDC) reported on the UK Government’s response to the floods, to which HMG responded, agreeing to the majority of recommendations.

The IDC report, the Humanitarian and Emergency Response Review (2011) and the independent evaluation of DFID Pakistan’s 2010 Flood Response programme (2012) recommended that DFID focus on:

Investment in early warning systems and climate science to deliver better information for decision making.

At HQ level, DFID is improving early warning systems by building a global humanitarian risk register, monitoring open source data and specialist risk analysis to monitor current information on risks and disasters. In addition, DFID is working with the multilateral system to improve and better disseminate Early Warning reports to aid decision making and engaging with UK Collaborative Development Sciences on the use of science and climate research to anticipate disasters.

Investment in programmes to build household and community resilience to emergencies.

Through the 2010 and subsequent 2011 Floods programme, DFID is funding the reconstruction of over 64,000 homes that are designed to be resistant to future flooding. DFID is also providing livelihoods support to over 85,000 families that will build their resilience to future emergencies.

The Humanitarian Emergency Response Review commits all DFID programmes to mainstream resilience through their bilateral programmes by 2015. DFID Pakistan is currently designing a programme to build community level disaster risk management, response and preparedness. Resilience has already been built into existing programmes on cash transfers and earthquake proof schools.

Improving the international response and UN leadership.

In 2011, DFID and Norway funded an evaluation of the UN Emergency Response Fund’s (ERF) first year of operation. The ERF is the only UN humanitarian fund in Pakistan to which all donors can contribute to fund activities in the border areas arising from the on-going conflict and natural disasters.30 DFID’s new humanitarian and resilience programme will consider supporting the Office of the UN Humanitarian Co-ordinator with technical assistance and develop a monitoring mechanism to assess UN performance in the field.

Promote innovation and new approaches.

The 2010 and 2011 Floods programme used innovative technologies such as solar lighting and housing design. In the 2011 programme, DFID introduced a new approach to emergency shelter that offers much better value for money by providing shelter materials that can later be used to repair roofs—up to five times cheaper than conventional emergency shelter responses. DFID’s new humanitarian and resilience programme will consider how we can build on recent experience to effectively provide cash transfers in the event of an emergency.

Stronger accountability to beneficiaries.

Linking to DFID’s commitment to aid transparency, DFID Pakistan’s 2011 Floods programme will pilot feedback from people receiving assistance to. DFID will take forward the results of the pilot through the new humanitarian and resilience programme.

January 2013