Another five-year plan

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Another five-year plan

Saturday, 15 May, 2010

Ambitious 5-year plan projects 7pc growth rate

Consider Pakistan in 2015. The economy is increasing by seven per cent, agricultural output by 4.8 per cent, manufacturing by 8.5 per cent and services by 6.4 per cent. Trade is booming, the financial sector is thriving, all the children of primary school age are attending school, 65 out of every 100 adults are literate, the infant mortality rate is down to 40 per 100,000 live births and the maternal mortality rate to 140 per 100,000 deliveries. The incidence of poverty has declined to just 13 per cent, unemployment is at its minimum, social and economic disparities amongst the people have narrowed and those living in the rural and remoter areas of the country have access to basic public services like drinking water, sanitation, healthcare and education. Meanwhile, inter-provincial relations have significantly improved. Sounds impressive? Yes, but unrealistic too.

That, however, is what the draft 10th five-year plan envisages for Pakistan five years from now. The details inform us how cut off those sitting in the Planning Commission are from reality. Why do we need five-year plans when we cannot even properly implement our annual plans? Barring the first one, none of the previous five-year plans achieved its targets. Even that first plan owed its success to a generous infusion of funds from the US as the so-called free world used Pakistan as a frontline bulwark against the Soviet Union. The other five-year plans fell prey to chronic political instability, domestic and regional conflicts, inadequate funding, and a lack of capacity to implement them. The factors responsible for past failures still exist. Besides, now we also have full-blown insurgencies going on in at least two provinces — Khyber-Pakhtunkhwa and Balochistan. The law and order situation in the remaining two is far from satisfactory.

More importantly, as conceded by the authors of the draft plan themselves, the financial crunch, security concerns, energy shortages and global conditions are stalling fresh investments in the economy and preventing an economic recovery. The draft doesn’t say how it proposes to overcome these problems, and whether the government has the means and tools for ensuring the execution of its plan over the next five years. Needless to say there’s a need for fresh thinking on the entire planning process to link it to ground realities. Instead of coming out with a hurriedly drafted document, the planners must initiate a public debate on the proposals. Fed on the same old remedies for problems that have aggravated with time, we need to be careful in our choice of solutions. Only a debate can generate the fresh ideas that we so desperately need at this moment.

DAWN.COM | Editorial | Another five-year plan

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Ambitious 5-year plan projects 7pc growth rate

By Khaleeq Kiani
Friday, 14 May, 2010

ISLAMABAD: The government has finalised the 10th five-year plan (2010-15) which envisages an economic growth rate of seven per cent, wheat output of 30 million tons, increase in literacy to 65 per cent and a reduction in incidence of poverty from 30 to 13 per cent by 2015.

A summary of the plan acquired by Dawn suggests that the main focus of the strategy is to move gradually but decisively towards greater investment in people — by increasing the share of total expenditures both public and private — in education, health and improving people’s living standard as defined under the millennium development goals.

The plan would be released with the federal budget next month.

Economic tensions

The broader objective of the plan “is to address the underlying social and economic tensions that are now strongly coming to the surface in the form of rising poverty, stubborn persistence of inflation, deteriorating employment situation and rising inter-provincial disparity”.

It will also take into account the economic cost of the military operations to clear areas infested with terrorists and extremists as well as plan for reconstruction of the areas.

The planners concede that disparities among the provinces and various segments of society have increased over the past few years and, therefore, seek to clearly demarcate development activities between the federal and provincial governments as well as between the provincial and local levels.

“Vertical programmes that are clearly provincial subjects like health and education will be implemented by the provinces. The role of the federation in the areas would be restricted to ensure quality and ensure basic standards across provinces.”

As such, the government plans to increase adult literacy rate from the current 58 per cent to 65 per cent in 2015 and net primary enrolment from 74 per cent to 100 per cent. Technical education as percentage of enrolment at secondary level would be increased from three to eight per cent by 2015.

Paradigm shift

The government says that the development paradigm would see a fundamental change under the five-year plan in which ordinary people, especially those in underdeveloped provinces and regions, would be at the centre of development process.

To realise this, resources would be directed to accelerate growth in Balochistan, Khyber Pakhtunkhwa, Fata, Gilgit-Baltistan and underdeveloped areas in other provinces.

The plan envisages reducing infant mortality rate from 65 to 40 per 1,000 live births in five years and maternal mortality rate from 250 to 140 per 100,000 live births.

The coverage of lady health workers is planned to be increased to 100 per cent in five years from the current 90 per cent.

For the first time, the issue of terrorism has been taken care of in the plan as the government plans to confront extremism through broad-based socio-economic development and by laying a foundation for just and equitable development.

Poverty reduction

The plan seeks to ensure that gains of economic growth result in poverty reduction which will require that growth results in the creation of productive, remunerative and decent employment. “Moreover, growth would need to develop those sectors where the poor live and work, especially in rural areas”.

The plan takes into account the allocations under the three-year medium-term budgetary framework (2010-13) and 9-point economic reforms agenda announced by former finance minister Shaukat Tarin and hopes to increase agricultural growth rate of 4.8 per cent in five years from current year’s 3.6 per cent.

The government expects the industry to grow at the rate of 9.2 per cent instead of 2.3 per cent now and services to grow at the rate of 6.4 per cent in 2015 from 3.7 per cent in 2010.It says the wheat production that is estimated at 25 million tons in 2010 would increase to 30 million tons in 2015 while rice output would reach 7.5 million tons in five years from 5.9 million tons this year.

Likewise, cotton production is estimated to increase from the current 13.4 million bales to 20.7 million bales in 2015.

The plan envisages manufacturing growth rate of 8.5 per cent in 2015 from the current 2.8 per cent.

Of this, large-scale manufacturing is expected to increase from one per cent to 9.5 per cent in five years while services sector would grow at the rate of 6.4 per cent from the present 3.7 per cent.

This will be supported by 6.9 per cent growth rate in wholesale and retail trade and 9.5 per cent in financial and insurance sector compared with the present 3.5 per cent and one per cent, respectively.

The five-year plan identifies resource mobilisation, security situation and energy crisis as top constraints to growth and aims to overcome energy shortages through controlling circular debt, better management of scarce energy to protect productive sectors, getting maximum capacity from IPPs, conservation and importing liquefied natural gas.

It plans to improve transportation infrastructure.

DAWN.COM | Front Page | Ambitious 5-year plan projects 7pc growth rate

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10th Five-Year Plan 2010-15
Govt to increase size of PSDP to Rs 710bn by 2014-15

* Total spending Rs 2400 billion in next five years

By Ijaz Kakakhel

ISLAMABAD: The government is gradually increasing the size of Public Sector Development Programme (PSDP) from proposed Rs 300 billion in 2010-11 to Rs 710 billion in the next five years under 10th Five Year Plan (2010-15), sources told Daily Times on Saturday.

Keeping in view the emergent financial position of the country, the government proposes Rs 300 billion PSDP for 2010-11 against Rs 421 billion allocations in 2009-10. The 10th Five Year Plan suggested the government to increase developmental expenditure gradually during the five-year period. It recommended that proposed Rs 300 billion in 2010-11 would be enhanced to Rs 365 billion in 2011-12 and in next year it will be enhanced to Rs 460 billion in 2012-13. In 4th year the PSDP size would be enhanced to Rs 565 billion in 2013-13 and in last year of the 10th Five Year Plan, the development budget would be further enhanced to Rs 710 billion in 2014-15, the sources maintained. Cumulatively, total spending in the whole Five Year Plan would be Rs 2400 billion.

Sources further said that the 10th five year plan (2010-15) would focus on converting the country from agriculture-based economy to an industrialised nation in medium-and-long term. The plan would offer investment opportunities under public-private partnership for

infrastructure development and management and operation of different projects of public service. ‘To overcome resource scarcity in the country, there is a need to utilise the existing infrastructure up to optimum level,’ an official in the Planning Commission told Daily Times. ‘To achieve sustainable higher GDP growth of six percent and above, sound industrial sector is needed’ the official maintained. Private sector would be the main engine of economic growth and development in the plan. .

To finalise the development budget and macro economic framework for 2010-11, the Annual Plan Coordination Committee (APCC) meeting has been convened on May 21, which is likely to recommend Rs 300 billion federal component of PSDP, the sources maintained.

The National Economic Council (NEC) headed by Prime Minister would give final approval to the development budget and Annual Development Plan (ADPs) for four provinces on May 24. In the macro economic framework major economic indicators including saving, investment, employment, imports, exports, remittances, industrial production, inflation etc would be set for the coming fiscal year 2010-11.

The proposed Rs 300 billion PSDP comprises as; Infrastructure Sector Rs 130.9 billion against last year allocation of Rs 219 billion, Social Sector Rs 142.6 billion against Rs 163 billion last year, Production Related Project Rs 14.5 billion while last year it was Rs 19 billion, Science and Information Technology Sector Rs 8.8 billion against last year allocation of Rs 13 billion and allocation for Environment Sector Rs 3.2 billion, which was Rs 7 billion last year.

With total Rs 300 billion federal component of PSDP, Rs 10 billion is likely to be allocated for Earthquake Reconstruction & Rehabilitation Authority (ERRA), which make total value of PSDP Rs 310 billion. The proposed PSDP 2010-11 allocation for ERRA Rs 10 billion is 60 percent lower than last year allocation of Rs 25 billion.

Under the proposed Rs 300 billion federal component of PSDP, the government is likely to allocate Rs 39 billion for water sector against 47.255 billion last year, which is 17 percent lower allocation for next year. Decrease in allocation for water sector might hurt water related projects including construction of Diamer Basha Dam, national programme of watercourses, irrigation system rehabilitation, lining of canals and distributions etc.

The government proposed Rs 34.3 billion for Power sector against last year allocation of Rs 20.335 billion showing an increase of 67 percent, the sources maintained. Main purpose of more allocations was to over come power shortfall in the country. The government also proposed Rs 55 billion for Transport and Communication sector and Rs 2.6 billion for Fuel Sector.

For Social Sector, total proposed allocation is Rs 142.6 billion while last year it was Rs 163 billion, showing 12.5 percent lower allocation this year. The sub-sector allocation of Social Sector are; Rs 6 billion for Education and Training, Rs 18.5 billion proposed for Higher Education while last year Rs 22.5 billion was earmarked, Rs 20 billion for Health and Nutrition sector, Rs 15 billion for Physical Planning and Housing sector, Rs 5 billion for Population Welfare, Rs 1 billion for Rural Development, Rs 0.2 billion for Women Development, Rs 0.1 billion for Manpower and Employment, Rs 0.6 billion for Mass Media, Rs 1 billion for Culture, Sports, Tourism and Youth Affairs, Rs 0.5 billion for Social Welfare, Rs 7.7 billion for Governance, Rs 35 billion for Special Education and Rs 32 billion for Special Areas (AJ&K, GB and FATA).

For production related projects, the government proposes Rs 14.5 billion for PSDP 2010-11 while last year it was Rs 19 billion (about 24 percent shortfall). Further classification of these projects are; Rs 8.8 billion to be allocated for Agriculture Sector against last year. allocation of Rs 17.9 billion showing 51 percent lower allocation than last year, Rs 5.5 billion for Industrial Sector against last year allocation of Rs 7.8 billion, while the government proposes Rs 0.2 billion for Mineral Sector. The government proposes Rs 8.8 billion for Science and IT Sectors. Sub-allocations in this sector are; Rs 2.8 billion proposed for Science and Technology, Rs 6 billion for Information Technology. For Environment Sector the proposed allocations is Rs 3.2 billion compared with Rs 7 billion last year.

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