Sustainable Development Policy Institute Press Release

Islamabad: The benefits of Public Sector Development Programme (PSDP) could only reach if approval and implementation processes are put in place through reforming the planning mechanism in the country, said Dr Vaqar Ahmed, National Institutional Advisor, Planning Commission of Pakistan.

Addressing a seminar on “Reforms Agenda for Public Sector Development Programme (PSDP) in Pakistan” at the Sustainable Development Policy Institute here on Monday, Dr Vaqar said the reforms agenda may include rationalization of projects maintaining a priority-based completion criterion, reduction of throw forward through alternate financing modes, building human capital while discouraging infrastructure development and undertaking developmental project in public private partnership, assuring full release of PSDP budget without cuts and careful re-estimation of cash flows and benefits.

Dr. Abid Q. Suleri, Executive Director, SDPI chairing the session said PSDP provides lubricant to the economic growth engine while involving the hard and soft and hard services. He said that country’s PSDP takes into account important subjects such as infrastructure, social development, production and disaster management adding that the country was facing fiscal constraints amid transition phase of transferring the subjects from federation to provinces under the 18th amendment. He lamented that PSDP in Pakistan heavily relies upon foreign assistance and suffers drastically due to uncertainties whenever flow of assistance is stalled.

Dr Vaqar presented the outline of Public Sector Development Programme (PSDP) featuring sectoral priorities, reasons for contractions in PSDP, post-18th amendment scenario and reforms agenda for Public Sector Development Programme (PSDP) in Pakistan. He said Pakistan’s PSDP is 300 billion rupees while the major chunk comprising 57 percent is spent on infrastructure and 42 percent is invested on the development of social sector.

Citing various researchers and experts, he added that there has been no strong relationship between PSDP and economic growth observed in Pakistan. He identified government’s efforts to lower fiscal deficit, low and stagnant tax to GDP ratio and rapid growth of current expenditure as major reasons for contraction in PSDP. He mentioned that for every Rs. 100 allocated in PSDP, Rs. 38 do not reach the beneficiaries.

Debating heavy reliance of PSDP on foreign assistance, he mentioned that 82 percent foreign aid is related to projects on infrastructure building involving nuclear energy, power, railways and communication while only 13 percent is aimed at social development. He said that provinces always faced problems in attracting donor assistance and now with the passage of 18th amendment and 7th NFC award, development planning has been shifted to provinces. However, federal government will continue to fund higher education and provide for vertical programs of health and population, he added.

During the question-answer session, the participants discussed the negative implications of poor security situation on development process, lack of expertise and right man for the right job culture at Planning Commission, the need for investment in management trainings but in line with civil services reforms, separation of Planning Commission from overall federal bureaucratic structure like of India and Malaysia, politically-patronized culture of development, unscientific allocations, challenges and limitations in capacity building of Council of Common Interests (CCI), the counter-productive effects of multiplicity of different plans and frameworks, significance of bottom-up planning system and lack of environmental risk-assessment among policy-makers.

For more information, contact:
Faisal Nadeem Gorchani
Coordinator, Policy Advocacy and Outreach
Sustainable Development Policy Institute (SDPI)
38 Embassy Road, G-6/3 Islamabad, Pakistan
Postal Code: 44000
Tel: +92-51-2278134, (Ext: 113)
Fax: +92-51-2278135
Cell: 00-92-333-559 2210

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