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Dr. Akmal Hussain
Newspaper: The Daily Dawn, Lahore
Dated: Monday, March 24, 2008

The first task in the economic sphere confronting the democratic government is to provide relief to the poor who are in a state of acute distress. The relief package could consist of a new poverty reduction strategy designed for three levels of impact in time: Immediate First Aid for the poor; targeted programmes for short term impact; and institutional changes for medium term impact. In this article we will indicate a First Aid Programme for the poor that can be immediately undertaken. In subsequent articles we will present the elements of a poverty reduction strategy for the short and medium terms respectively.

A three pronged First Aid Programme for the poor is proposed: (1) Food security programmes consisting of targeted food subsidy for the poor on the one hand and urban lunggars on the other. (2) Income for work. (3) Asset building for the poor. The idea is to combine immediate relief with a subsequent stream of regular income, through employment and asset building. This programme ought to be conducted on the basis of a partnership between the government, members of Parliament working actively for the poor in their constituencies, councilors in local governments, development NGOs, women’s NGOs and Chambers of Commerce. Let us briefly articulate each of the three elements of the First Aid for the poor programme and the institutional mechanisms for implementation and monitoring.  

Food Security for the Poor. This would consist of a government sponsored targeted food subsidy for the extremely poor and a private sector based network of lunggars in the urban areas. Consider the targeted food subsidy programme. According to earlier estimates there may be at least 1.4 million households (about 10 million persons) in the category of extremely poor, defined as those who borrow for food consumption purposes. Subsidized atta, lentils and cooking oil could be provided to a carefully selected set of extremely poor households with the total subsidy for all three items amounting to Rs.1000/- per household per month. This means an annual food subsidy expenditure of Rs.16.8 billion by the government for 1.4 million households. This programme could be financed from a new fund that could be called the National Relief Fund (NRF) for the poor. This fund could be created through an Act of Parliament stipulating that 10 percent of the privatization proceeds be transferred to this fund: In the period 1999 to 2007 privatization proceeds amounted to Rs.363 billion. This means that a relief fund of Rs.36.3 billion could be created immediately.

Implementing such a programme would require members of Parliament in the National and Provincial Assemblies to work closely with the Bait-ul-Mal to quickly prepare a provisional list of extremely poor households in every constituency in the country. The Prime Minister’s Office supported by development NGOs such as the PPAF, Kashaf, Baanh Beli and specialized women’s NGOs such as Shirkat Gah and Aurat Foundation could then finalize the list of extremely poor households that would be eligible for subsidized food items. To ensure gender equality the distribution mechanism should include representatives from women’s organizations, women members of Parliament and women councilors at the local government level. Moreover, wherever possible the subsidized food items should be handed over to women members of recipient households.

The purpose of private sector lunggars is to strengthen food relief in the urban areas by providing Dal and Roti in the evening to the extremely poor in the locality. In pursuit of this objective city based Chambers of Commerce and various associations of traders could be encouraged to establish lunggars in each locality, and also at the sites of sufi saints. A network of lunggars named after national martyrs of democracy such as Mr. Zulfiqar Ali Bhutto and Mohtrama Benazir Bhutto could also be established through foundations named after them. Lunggar networks could also be established in the name of national heroes such as Justice Iftikhar Chaudhry, Barristers Aitzaz Ahsan, Munir Malik, and Ali Ahmed Kurd. These lunggars could be financed through donations from members of the Chambers of Commerce, traders’ associations, philanthropic organizations and individual citizens.  They could be administered by city based coalitions of Chambers of Commerce, NGOs, councilors of local government and philanthropic organizations such as the Edhi Foundation.  

To enable a scientific specification of poor households and systematic impact assessment of the food subsidy programme and the lunggar networks, a time series data base on the nutrition status of the extremely poor households, needs to be established. These regular surveys could be conducted for the same set of households on a six monthly basis by a reconstituted Federal Bureau of Statistics (FBS) whose independence is ensured by an Act of Parliament. An independent validation of the FBS data on a sample basis could be undertaken by a committee of independent experts.

Wage Employment through Improved Irrigation. Pakistan’s farmers are facing an acute shortage of irrigation water. This is due to the failure to build adequate storage capacity on the one hand and deteriorating irrigation efficiencies on the other. The reduced water availability is occurring at a time when deterioration of the top soil has increased the requirement of water per acre. To overcome this water deficit it is proposed that a national campaign be launched for building dams, desilting and lining of canals wherever possible and building pucca khalas. This construction activity would not only bring more water to the farm gate but would also be a major mechanism for generating employment and sustainable incomes for the poorest sections of rural society.

Asset Building and Income Streams for the Poor. To enable the rural poor to quickly build an asset base and generate increased incomes for themselves a national credit programme for the rural poor is proposed whereby poor tenant farmers and agricultural worker households could be provided with loans for one additional milch animal per household. This programme of asset building for the rural poor would combine loans with establishing a marketing infrastructure for milk collection and cash payment at the door step. This would give an almost immediate asset and associated steady income stream to the poor peasants.

Those who get employment in the irrigation infrastructure programme or successfully use their loans for milch animals would become eligible for an additional loan equal to their annual income from employment or milk sales. This additional loan would range from Rs.40,000 to Rs.70,000 per household. The loan recipient would be provided with training and support for identifying micro enterprise projects which she/he could undertake at the household level to enhance and diversify their income base. The training and support for micro enterprise development could be provided by development NGOs such as the Pakistan Poverty Alleviation Fund (PPAF).

The programme for First Aid to the poor proposed in this article is designed to provide immediate economic relief to the poorest while at the same time enabling them to start building their assets, increasing incomes and thereby laying the foundations of economic democracy.
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