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World Bank Document PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: 87726 Project Name Developing Artisanal Livelihoods in Rural Pakistan ‘RANG’ Project Public Disclosure Authorized Region SOUTH ASIA Country Pakistan Sector Other Industry (100%) Project ID P145420 Borrower(s) Indus Heritage Trust #13, 4th. Floor, 109 West Sardar Begum Plaza, Blue Area, Islamabad. Implementing Agency Indus Heritage Trust Environment Category [ ] A [ ] B [X] C [ ] FI [ ] TBD (to be determined) Date PID Prepared April 21, 2013 Date of Appraisal March 29, 2013 Authorization Public Disclosure Authorized Date of TF Approval I. Country and Sector Background Country Context 1. Pakistan’s population exceeds 180 million with over 60% living in rural areas. The United Nations Human Development Report of 2011 puts Pakistan in “low human development category” ranking 145 out of 187 countries. The current social and political unrest, conflict and economic downturn in Pakistan have had an impact on the development and economic growth initiatives of the country. Men, women and youth have few employment opportunities at the Public Disclosure Authorized local level, which has led to internal displacement, forced migration, crowding of urban centers, and increased political and social instability. 2. The Government of Pakistan seeks to restore the country’s economic growth rate to between 5 and 7 percent per year by stimulating growth and creating employment opportunities. Looking at the composition of employment within the country, while agriculture dominates the formal sector, crafts and related trades comprise 15 percent of formal sector employment, coming third behind unskilled labor. In the informal sector, crafts and related trades provide 31 percent of the jobs, of which 54 percent are filled by women. Given that the value of world exports of cultural and creative industries (goods and services) was $592 billion in 2008 according to UNCTAD, crafts and related trades is a viable sector of the economy for promoting Public Disclosure Authorized job growth and economic growth. Some of the major constraints to growth - and bringing informal workers into new formal enterprises - are the quality of goods and the marketability of goods. 3. Rural communities, especially in remote areas, despite being rich in traditional craft, remain the poorest and the most vulnerable. They are constrained by poor infrastructure, lack of market information and linkages with mainstream markets, absence of institutional support from the private sector and, difficulty in obtaining raw materials. Hence, they often have to sell their products to middle men and traders at marginal value or produce products for local markets only. 4. Youth unemployment and lack of livelihood opportunities for those at the Bottom of the Pyramid- the landless and the most vulnerable community members- is emerging as a major issue, especially in disadvantaged and sensitive regions. The pilot project will test a new model for improving the livelihoods of the most vulnerable communities in politically sensitive and lagging regions that depend on the craft sector for their livelihoods. Sectoral and Institutional Context 5. Traditionally, the arts and crafts of Southern Pakistan (Punjab and Sindh) suited the climate and were intrinsically interwoven with the farming seasons. This used to be an important source of generating income for the artisans locally. The areas, traditionally known as the cotton belt, fed the spinning wheels and the looms of the region to produce the rich soft fabric. In some cases, the fabric found its way into the hands of the nomadic tribes of the Thar Desert region for the most intricate embroideries, viz. Rabari and Megawar. The women in the identified areas were traditional known for the dexterous skill-set in weaving and embroideries. However, competition from the low cost imported mass produced machine made imitations, high cost of informal local finance, lack of access to markets or market information, etc., has resulted in sharp decline in the rural cultural and creative industry. 6. The sector (arts and crafts) has traditionally been the backbone of Pakistan’s economy. These identified areas are traditionally known for specialized products such as Khes from Gambath and Hala silk from Sind and multan pottery from Punjab. Khes is a rich, hand woven with silk and cotton thread and was worn by the elite of Sind thus fetched good prices. In the 1950s there were over 300 looms for this type of Khes and now barely 5 looms survive. Similarly, Hala silk is also disappearing. The region had 400 looms in 1950s and now only 25 survive. 7. Some of the key reasons cited by the artisan communities for the deterioration of the industry are technological obsolescence, marketing constraints, lack of market demand information pertaining to color story, embroidery motifs and styles, middlemen/money lender stranglehold and lack of skills development are leading to the weakening of the weaving and hand embroidery industry. II. Objectives 8. The Project Development Objective (PDO) is to improve the livelihood opportunities for rural artisans. It will demonstrate to policy makers the effectiveness of a crafts-based cluster approach to poverty alleviation and to improve living conditions for weavers and embroiderers (especially women and girls) and their families in targeted communities in Punjab and Sindh. 9. The project is to assist an estimated 2,600 vulnerable artisan families, mainly women headed households as is common in project districts, at the bottom of the pyramid to help them rebuild their lives and access sustainable livelihoods through establishing their own artisan institutions. The project is expected to benefit an overall population of about 18,200 individuals. Out of the total number of beneficiaries, 70% of the beneficiaries are expected to be women. III. Rationale for Bank Involvement 10. So far, the efforts of policy makers and development practitioners have been on supporting either the marketing efforts or providing micro finance support or design and product development. Unfortunately, there have been hardly any specific efforts to support the artisans through the entire process. For example, without design and product developments inputs, the artisans are bringing to market the same products over and over again On the other hand, by providing the artisans just the product development support, but no linkages to the market or to finance, the artisans are forced to sell their products to exploitative middlemen and traders. There have been several government initiatives and projects that have tried to support the industry, but have limited impact since they were only working on either one specific intervention or another but not setting up systems for development and strengthening of the entire craft value chain. This project will be working with the artisans to help them set up their own artisan institutions, support them in product development, provide tailored artisan specific financial products and finally, help them in marketing their products by linking them with mainstream buyers. 11. Also, the proposed project fully conforms to the second pillar of the Country Partnership Strategy (CPS), ‘improving human development and social protection’. The project’s focus is on generating inclusive growth in low-income provinces. It is aimed at achieving rapid, inclusive growth and ensuring that development is sustainable. IV. Description 12. The project aims to work with weavers and embroiders from poor income households in Punjab and Sindh. The identified project areas in these provinces have among the highest concentration of poverty in the country1, but are known for their exquisite traditional skill. The 1 “Income Poverty at District Level: An application of small area estimation technique”, Haroon Jamal, published by the SPDC in 2007 mentions that People below the poverty line in the identified districts of Sindh Province are as follows: Khairpur (27.4%) project will target women, who have lost or are at a high risk of losing their livelihoods because of their inability, to keep pace with contemporary market requirements. The project will support the communities to build their own artisan institution, create and access tailor made artisan specific products and finally, market their products through a brand that is fully owned by them. 13. The project aims to assist an estimated 2,600 vulnerable artisan families at the bottom of the pyramid to help them rebuild their lives and access sustainable livelihoods through establishing their own artisan institutions. The project is expected to benefit an overall population of about 18,200 individuals. Component A: Cluster Development and Capacity Building (US$ 0.941 million) 14. A total of 15 new cluster enterprises will be developed in these areas in the two provinces, and at least two complete with Common Facility Centers (CFC) for production operations and auxiliary centers for packing, tailoring, etc. While identifying these centers the financial feasibility will be factored in to ensure that these centers operate viably. 15. Specifically, this component will provide the necessary capacity building assistance, equipment and tools, facilities and focused hand-holding and mentoring support to the poor artisan communities to set up and strengthen their very own organization. It will also focus on working with artisans to develop newer and more marketable products. Product developers and designers, who have substantial experience in
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