Common Country Assessment Pakistan 2011

Authors: Dr. Syed Aamer Abdullah Prof. Syed Mansoob Murshed Dr. Arshad Waheed Dr. Farrukh Saleem Victoria Jane Lee Akbar Nasir Khan Rehana Shaikh Dr. Moazzam Khalil

31 January 2012

Disclaimer The views expressed in this Common Country Assessment are those of the authors and do not necessarily represent those of the United Nations or the United Nations system in Pakistan or any of its agencies.

Acknowledgments The authors thank all those who have contributed to this report. The participants of the stakeholder workshops at Islamabad, Karachi, Lahore, Quetta, Peshawar and Muzaffarabad gave their valuable input to the initial draft of this report. Participants at Karachi and Quetta made it to the consultative session despite great hardships and their participation and feedback are gratefully acknowledged. The support team comprising Mr. Syed Saad Abdullah, Ms. Bazgha Amjad, Mr. Talha Masood and Mr. Shahzad Ali Gill helped the authors to forget about management issues and concentrate on the report itself. We thank them all. The members of the Steering and Technical committees of the UN in Pakistan gave their valuable comments on the draft and participated in marathon discussion sessions. The UN Country Team shared its expertise and guidance, and the authors thank them all. The Office of the Resident Coordinator of UN in Pakistan gave its extensive support to the process. Data, reports and feedback were provided to the team. Dr. Arjuna Parakrama, Mr. Waheed Lor-Mehdibadi and Ms. Shirin Gul deserve our special praise and thanks. We thank Mr. Timo Pakkala, the Resident Coordinator of UN in Pakistan for his keen interest, support and guidance throughout the process.

List of Acronyms

ADB Asian Development Bank ADR Alternate Dispute Resolution ADO Asian Development Outlook AF Aurat Foundation AJK Azad Jammu and Kashmir BTI Bertelsmann Transformation Index CAT Committee against Torture CCA Common Country Assessment CCP Competition Commission of Pakistan CEDAW Convention on the Elimination of All Forms of Discrimination against Women CNIC Computerised National Identity Card CPI Corruption Perceptions Index CPI Consumer Price Index CPR Contraception Prevalence Rate CRC Convention on the Rights of the Child CSOs Civil Society Organizations DOT Directly Observed Treatment Coverage DRR Disaster Risk Reduction ECP Election Commission of Pakistan EFA Education for All EEA European Economic Area EmONC Emergency Obstetric and Neonatal Care FAFEN Free and Fair Election Network FAO Food and Agriculture Organization FATA Federally Administered Tribal Areas FBS Federal Bureau of Statistics FDPF Friends of Democratic Pakistan Forum FIR First Information Report FY07 Fiscal year 2007 FY08 Fiscal year 2008 GBV Gender Based Violence GCI Global Competitiveness Index GDP Gross Domestic Product GER Gross Enrolment Rate GPI Gender Parity Index HBWs Home Based Workers HDI Human Development Index HRCP Human Rights Commission of Pakistan HFs Health Facilities HRBA Human rights based Approach IBGs Identity Based Groups ICCPR International Covenant on Civil and Political Rights ICESCR International Covenant on Economic, Social and Cultural Rights ICG International crises group IDP Internally Displaced Person

IMR Infant mortality rate KP Khyber Pakhtunkhwa LHWs Lady Health Workers LG Local Government LOC Line of Control MDGs Millennium Development Goals MEAs Multilateral Environmental Agreements MHHDC Mahboob ul Haq Human Development Centre MMR Maternal Mortality Rate MTDF Medium Term Development Framework NCSW National Commission on Status of Women NDMA National Disaster Management Authority NER Net Enrolment Rate NFC National Finance Commission Award NGO Non-government Organization NEP National Education Policy NPFP& PHC National Program for Family Planning and Primary Health Care NWFP North West Frontier Province OPV Oral Polio Vaccine PBA Pakistan Banks’ Association PCMA Pakistan Cement Manufacturers Association PEMRA Pakistan Electronic Media Regulatory Authority PILER Pakistan Institute of Labour Education and Research PIPS Pakistan Institute of Peace Studies PRSP Poverty Reduction Strategy Paper PRSP II Poverty Reduction Strategy Paper 2 PSLMS Pakistan Social and Living Standards Measurement Survey PSMA Pakistan Sugar Mills association RECOUP Research Consortium on Educational Outcomes and Poverty RH Reproductive Heath SBA Stand-By Arrangement SBP State Bank of Pakistan SDPI Sustainable Development Policy Institute TB Tuberculosis TCP Trading Corporation of Pakistan TFR Total Fertility Rate TTP Tehrik-e-Taliban Pakistan TVE Technical and Vocational Education TVET Technical and Vocational Education Training UNCT United Nations Country Team UNDAF United Nations Development Assistance Framework UNCRC United Nations Committee on the Rights of Children UNHCR United Nations High Commissioner for Refugees UNICEF United Nations Children's Fund VAW Violence against Women WDI Women’s Development Index WDI World Development Index WFP World Food Programme WGI Worldwide Governance Indicators YOY Year over year

List of Figures Page Number Figure 1: Map of Islamic Republic of Pakistan 10 Figure 2: Pakistan Balance of Trade (Million USD) 26 Figure 3: Pakistan Exports 27 Figure 4: Pakistan Inflation Rate Annual Change in CPI 28 Figure 5: FAO Food Price Index 29 Figure 6: Proportion of Population below the calorie-based poverty line 30 Figure 7: Global Food Prices and transmission to domestic prices 31 Figure 8: External and Domestic Debts 32 Figure 9: Global Median Age 35 Figure 10: Pakistan - Age Dependency Ratio of Working- Age Population 35 Figure 11: Structure of Inequalities in Pakistan 40 Figure 12: Structural Inequalities in Pakistan 42 Figure 13: The interplay of Processes, Policies and Consequences 44 Figure 14: Links between Energy and Development 53 Figure 15: Percentage of Energy mix 2007 55 Figure 16: The Cost of Floods 62 Figure 17: Earthquake Hazard for Pakistan 69 Figure 18: Genesis of Conflict in FATA and KP 70 Figure 19: Genesis of Conclict in Balochistan 71 Figure 20: Damages due to natural disasters 72 Figure 21: Pakistan MDG Nutrition Related Targets 81 Figure 22: Time trend in Malnutrition among under-5 Children 81 Figure 23: Violence Against Women 2004 – 2009 99 Figure 24: Voice and Accountability in Pakistan (1969-2009) 107 Figure 25: Voice and Accountability in South Asia 108 Figure 26: Regulatory Quality in Pakistan (1969-2009) 111 Figure 27: Regulatory Quality in South Asia (2009) 111

List of Tables Page Number Table 1: Pakistan’s Public Debt 2003 – 2010 33 Table 2: Global Competitiveness Index 46 Table 3: Forest Cover in Pakistan 49 Table 4: Area affected erosion (000 ha) 49 Table 5: External Cost of Pesticide Use in the Major Cotton Growing Areas of Punjab 50 Table 6: Cotton Farm workers' awareness about pesticides 51 Table 7: Cost of Load-shedding 53 Table 8: No. of Conflict related deaths and injuries in KP and FATA 61 Table 9: Population Growth Rates 78 Table 10: Under five Mortality Rates171 78 Table 11: Infant Mortality Rates 79 Table 12: Micro-nutrient deficiency and Food insecurity 82 Table 13: MDG Indicators for Goal 2 85 Table 14: Net Enrolment Rate by Provinces 86 Table 15: Literacy Rate (10 years and above) 87 Table 16: % Literacy Rates: Class, Urban-Rural Residence and Sex 87 Table 17: Missing Facilities in Public Schools 88 Table 18: Missing Facilities in Public Schools Pakistan: Urban/Rural Disparities 2008-09 89 Table 19: Comparison of Public Sector Spending on Education 97

Table of Contents Disclaimer ...... 2 Acknowledgments...... 3 List of Acronyms ...... 4 List of Figures ...... 6 List of Tables ...... 7 Table of Contents ...... 8 Executive Summary ...... 11 1 Background and Introduction ...... 21 1.1 Methodology ...... 21 1.2 Guiding Principles of the Meta Analytic Approach to Country Analysis ...... 22 1.3 Country Context of Development ...... 22 1.4 Macroeconomic Overview ...... 23 1.4.1 External Sector ...... 26 1.4.2 Inflation ...... 27 1.4.3 Food Insecurity ...... 28 1.4.4 Stagflation ...... 28 1.4.5 Poverty ...... 29 1.4.6 Feminization of Poverty ...... 31 1.4.7 Debt ...... 32 1.4.8 Money Supply ...... 33 1.4.9 Informal Economy ...... 34 1.4.10 Rapid Population Growth ...... 34 1.4.11 Urbanization ...... 36 2 Inclusive Growth ...... 38 2.1 Situation Analysis ...... 38 2.2 Inequalities and the Long Term Factors for Inclusive Growth Failure ...... 40 2.2.1 Distributional Inequalities ...... 40 2.2.2 Structural Inequalities ...... 42 2.3 Causal Analysis ...... 43 2.4 Rights Holders and Duty Bearers ...... 45 2.4.1 Framework for Economic Growth ...... 45 2.5 Conclusion ...... 47 3 Environment and Sustainable Energy ...... 48 3.1 Introduction ...... 48 3.2 Situation analysis ...... 48 3.2.1 Situation Analysis of Environment ...... 48 3.2.2 Situational Analysis (Sustainable Energy) ...... 52 3.3 Causal Analysis ...... 56 3.3.1 Causal Analysis (Sustainable Environment) ...... 56 3.3.2 Causal Analysis (Sustainable Energy) ...... 57 3.4 Duty Bearers and Right Holders ...... 58 3.5 Conclusion ...... 60 4 Human-made and Natural Disasters ...... 60 4.1 Situation Analysis ...... 61 4.1.1 Conflict in FATA and KP ...... 61 4.1.2 Conflict in Balochistan ...... 61 4.1.3 Ethnopolitical and Sectarian Conflicts ...... 62 4.1.4 Natural Disasters ...... 62

4.1.5 Impact of Disasters on the Excluded and Vulnerable ...... 63 4.1.6 Impact on Economy and livelihoods ...... 65 4.1.7 Impact on Governance and Rule of Law ...... 66 4.2 Causal Analysis ...... 66 4.2.1 Armed Conflicts ...... 66 4.2.2 Natural Disasters ...... 67 4.3 Duty Bearers and Rights Holders ...... 73 4.4 Conclusion ...... 75 5 Human Development and Human Security ...... 76 5.1 Introduction ...... 76 5.2 Situation Analysis for Human Development ...... 77 5.2.1 Population ...... 77 5.2.2 Health ...... 78 5.2.3 Education ...... 84 5.3 Causal Analysis for Human Development ...... 92 5.3.2 Gap Analysis ...... 94 5.4 Rights Holders and Duty Bearers ...... 97 5.5 Human Security ...... 98 5.6 Situation Analysis for Human Security ...... 99 5.6.1 Women ...... 99 5.6.2 Children ...... 100 5.6.3 Workers and Bonded Labourers ...... 101 5.6.4 Refugees ...... 101 5.6.5 Religious Minorities ...... 102 5.6.6 Internally Displaced Persons ...... 102 5.7 Causal Analysis for Human Security ...... 102 5.8 Duty Bearers and Rights Holders ...... 104 5.9 Conclusion ...... 104 6 State Effectiveness ...... 106 6.1 Situational Analysis ...... 106 6.1.1 Elections ...... 106 6.1.2 Accountability ...... 107 6.1.3 Service delivery ...... 108 6.1.4 Political Stability and Personal Security ...... 108 6.1.5 Rule of Law ...... 109 6.1.6 Regulatory Quality ...... 110 6.1.7 Integrity Management ...... 111 6.2 Causal Analysis ...... 111 6.2.1 Policy making and implementation ...... 111 6.2.2 Citizen Accountability ...... 112 6.3 Duty bearers and right holders...... 113 6.4 Conclusion ...... 113 7 Conclusion and Way Forward ...... 115 8 Selected Bibliography ...... 118 9 Notes ...... 126

Figure 1: Map of Islamic Republic of Pakistan1

Executive Summary

Introduction A Common Country Assessment (CCA) is the UN’s instrument for analysing the national development situation and identifying key issues and priorities relevant to the preparation of the One UN Programme. The current CCA is based on a meta-analysis of available research and scholarship on the Pakistan country context which has been augmented through inputs from stakeholder consultative workshops held in the provincial capitals. The analysis has focused on exclusions/inequalities and is informed by the Human Rights Based Approach (HRBA) to development. Patterns of exclusion, discrimination and inequality due to lack of access to entitlements and rights for minorities, refugees, IDPs, girls, boys, women and men has been the lens through which each priority development issue is viewed. Analysis of cause and effect relationships has also been guided by the HRBA. While the CCA does not propose solutions, for each priority development issue the roles and obligations of rights holders and (both state and non-state) duty bearers have been described.

Overview While significant positive strides have been taken in recent years to alleviate core development issues, the stresses of a weak economy, poverty, inequality and demands of sustainable development have been exacerbated by both human-made and natural disasters. Many of these challenges link Pakistan to its immediate neighbours and the international community at large. The Taliban-related crisis, ethnopolitical conflicts, the almost-annually recurring large-scale floods, earthquakes, droughts, landslides and cyclones are all external supply shocks which have impacted on the people, their livelihoods and on national infrastructure. The impact has been particularly harsh on the poor, women, children, old people, minorities, and persons with special needs, refugees and Internally Displaced Persons (IDPs). A severe setback to development was the floods of 2010 which affected more than 20 million people and caused an estimated $ 9.5 billion in damages. In September 2011, monsoon rains affected 5.1 million people in Sindh and Balochistan. Despite alternating periods of autocracy and democracy on the ground, the present constitution of 1973 provides the basis for parliamentary democracy in Pakistan. After the return to democracy in 2008, the 18th Amendment to the Constitution of 2010 has heralded a sea change by comprehensively devolving to the provinces the provision of basic services to the citizenry. Democracy is, however, weakened by the fact that the prevailing electoral order, in effect, broadly divides up the entire rural population into two categories: Zamindar (landlord/cultivator) and Kammi (Services/occupational caste/non-cultivator), though there is geographical variation. Election results in rural areas depend heavily on the creation of ‘patron-client’ relationships, and the use of human networks. In terms of poverty alleviation, Pakistan has made significant progress in the past decade. The recently released Economy Survey 2011-2012 records “a reduction in absolute poverty over a four-year period (2002-2006) as poverty headcount decreased from 34.5 per cent in 2000-2001 to 22.3 per cent in 2005- 2006.” No official estimates since 2006 are available. The National Planning Commission’s Poverty Centre has calculated the poverty rate as 17.2% for 2007/08, but this finding is contested. Feminization of Poverty issues in Pakistan need to be addressed to redress gender inequalities and provide women, especially female heads of households, with greater access and opportunities for economic empowerment.

Inclusive Growth and Population Dividend The past six decades have been period of sustained economic growth for Pakistan, however, growth slowed down during the 1970s and 1990s. Compared to the past, a downward trend in growth rates can be discerned currently. Historically, Pakistan has been a moderate inflation economy. For the first fifty years since Independence in 1947, Pakistan’s average economic growth rate was higher than the average growth rate of the world economy. For the decade of the 60s, 70s and the 80s, the average annual real GDP grew by 6.8 percent, 4.8 percent and 6.5 percent, respectively. By 2000, Pakistan’s annual GDP growth had fallen to a historical low of under 2 percent. GDP growth bounced back, and by end-2004 it showed the second highest growth rate in South Asia. The economy proved resilient in the wake of the 2005 earthquake and managed to grow by a healthy rate. However, the same growth was not maintained in subsequent years. In 60 years Pakistan’s urban population has increased by more than sevenfold whereby close to 37 percent of the population is now urban, making Pakistan the second most urbanized country in South Asia. While the emergence of meta urban regions are viewed as engines of growth, the major developmental challenges in this context are infrastructure deficit, urban poverty and unemployment, inconsistent future ambitions for urban Pakistan, gaps in urban sectoral policies like those for local economies, housing, land, primary and secondary education and basic heath, energy and fuel, increasing informal subdivision of land for housing, a limited recognition of the informal sector as provider of wide ranging urban services, increasing pollution, terror attacks, crime and vulnerability to natural calamities as well as the absence of mass transit systems and increasing investment for facilitating private road transport. The requisite coping strategies need to be ‘urban’ rather than sectoral, therefore, to be effective the economic, social, governance and environmental strategies should relate to each other. Pakistan’s population growth rate is decelerating, the working age population is expanding and the age dependency ratio is on its way down. By 2030, Pakistan’s working age population is expected to be around 67 percent from the current 54.9 percent. All of these factors point towards a transition with the potential of a huge demographic dividend resulting in a “rise in the rate of economic growth due to a rising share of working age people in the population.” The new Framework for Economic Growth of the Government of Pakistan identifies the translation of the ‘youth bulge’ into a ‘demographic dividend’ as the principal challenge. It focuses on economic governance, institutions, incentives and human resources and the reason for this ‘software’ centric approach is the shortage of capital needed for investment in physical infrastructure. The 2012 budgetary allocations suggest that the strategic aims of the new growth framework will take more time to be fully implemented. Moreover, the informal economy in Pakistan is estimated to be around 20% of GDP. Over the past six decades, sustained periods of comparatively high economic growth have not always translated into poverty reduction, primarily because of distributional and structural inequalities. Gender and regional inequities have also retarded Pakistan’s achievement of MDG targets. The government’s fiscal policy, especially the policy’s heavy reliance on indirect taxation, has a direct impact on market prices, which differentially affect the poorer segments of the population. In addition, government intervention in commodity operations has been a major source of food inflation.

Human-Made and Natural Disasters The stresses of a weak economy, poverty, inequality and demands of sustainable development are exacerbated by both Human-made and natural disasters. The Taliban related crisis, ethnopolitical conflicts, the almost annually recurring massive floods, earthquakes, droughts, landslides and cyclones are all external supply shocks which have impacted the people, infrastructure and livelihoods. The impact has been particularly harsh on the poor, women, children, old people, minorities, refugees and the Internally Displaced Persons (IDPs). The province of Khyber Pakhtunkhwa (KP) and the Federally Administered Tribal Areas (FATA) have witnessed the most sustained periods of intensive conflict. Even prior to floods, there were 2.6 million conflict-affected people in the country, mostly from these two regions. In Baluchistan, ethnopolitical conflict has led to an exodus of highly skilled people from the province. Some estimates put the number between 100,000 to 200,000. Sectarian conflicts especially in parts of FATA, KP and Karachi, have also claimed lives. As a legacy of the Afghan war, the country is already hosting and repatriating the largest refugee population in the world. Youth (15-29 years) comprising 27 percent of the population in crisis-affected areas, have been particularly exposed to militancy. Limited training and skills-base of uneducated youth, the militarization of educated youth and the young women who have suffered from forced and early marriages ‘for their protection’ are challenges of particular importance. The crises also had serious impact on the state of human rights in the country. However, the courts, media and a vibrant civil society have been doing commendable work in this regard. Natural disasters have also disproportionately affected the excluded and the vulnerable. The damage to villages, loss of livelihoods, trauma of displacement and disillusionment are adding to the stresses. Over 20 million people, mostly poor, were affected by floods in 2010, and more than 1.6 million homes were damaged or destroyed. However, despite challenges, the response of Government has been commendable. Education in conflict affected areas has suffered due to destruction of 333 schools in FATA and KP (100 boys’, 233 girls’) and partial damage to 275 schools (80 boys’, 195 girls’), affecting 0.98 million students (38.5 percent girls) and 27,765 teachers in KP. In FATA, 141 schools (53 girls’) have been destroyed and 174 (19 girls’) partially damaged. The access of poor and vulnerable to health facilities in these areas has also suffered. Peripheral health facilities (HFs) were forcibly shut down leading to the closure of services for birth spacing, prenatal and obstetric care, immunization, nutrition, and curative services. The national and regional economies have suffered due to crises. There have been major damages to the agriculture sector as well as exacerbating the pre-existing structural problems. The sector is the chief source of employment for women. This has increased food vulnerability in a country in which around 48.6 percent of the 180 million people are already food insecure. However, the opportunity in this is the bumper wheat crop which has been variously attributed to the increased fertility of the soil after floods. The local supply network has been affected leading to reluctance of traders, input suppliers, private service providers and transporters to work in the area. The mineral sector has faced a precipitous decline in output. Tourism in the country in general, and in areas like Swat in particular, has come to a virtual standstill, with a loss of some 40,000 jobs. The crises have affected women’s livelihoods disproportionately, especially for women who were already vulnerable. In the worst of flood- and cyclone-affected areas, most villages are dependent on subsistence agriculture which has suffered due to washing away of fields. Similarly, the Attabad Lake has cut off the Chinese trade route and washed away 25 kilometers of the Karakoram Highway, including six bridges, thus cutting off people from their livelihoods.

The impact of natural disasters on security and stability has been varied in different parts of the country. However, the common thread running across all situations has been the need for law enforcement agencies to provide protection services to those affected by natural disasters. Human-caused climate change may have played a role in the floods. However, major problems identified as causes of damage include embankment maintenance, barrage regulations and design issues, gaps in capacity relating to motivation of duty staff, plans, flood predictions and early warnings. The built environment also interferes with, diverts or constrains the natural pathways of the rivers, interrupting the flow and causing damages during floods. Farmers, especially those in Sindh, cite diversion of upstream waters, unequal access to land directly translated as unequal access to water and the rotational irrigation system as the causes for droughts. The biggest single determinant of risk to the vulnerable population and groups is their socio-economic status. Poverty and social exclusion, in most of these crises, have direct correspondence with the extent of damages. These are the people with least coping mechanisms and access to resources. Sustained help, till long after the crises, will be needed from all duty bearers. The necessary legal and regulatory structure required to discharge the duties and secure the rights in such circumstances is missing (e.g. Pakistan is not a party to the 1951 Convention on Refugees), and there is no national legislation on refugees or statelessness. The provincial governments and their irrigation and disaster management departments have the duty to maintain protection structures, give early warning and provide early rescue and relief. The capacity and resources of some of these duty bearers have serious shortages. It is also their duty to provide women the facility to help prove their property rights because of lack of documentation. A rights based approach to reconstruction also requires that the landless among disaster survivors not be evicted from lands to which they do not hold title. With the 18th amendment, the provinces are now taking the lead in reconstruction efforts as new duty bearers with different levels of capacity. The international community, in its roles as service provider and convener, needs to take the initiative to replicate successful models of recovery from one province to another. Traditional Alternate Dispute Resolution mechanisms exist but have been weakened over the course of crises, but they need to be viewed as actors with obligations. Their capacity development in legal and juridical assignments is a challenge and opportunity. Moreover, constitutional and legal arrangements on dispute resolution need to be strongly enhanced to ensure timely and effective implementation. Other challenges include sharing of knowledge and skills through the initiation of a regional research and development program for drought and water management, transforming communities into important duty bearers to fulfill some duties by taking ownership of crises related advocacy campaigns, the need for a comprehensive drought-mitigation infrastructure and strategy and the capacity gap of state institutions for formulating and implementing the seismic, landslides, cyclone and flood related building codes.

Human Development and Human Security Since a skilled, educated and healthy workforce, for both present and future, is required to achieve the targets of inclusive growth and cope with the crises, it is therefore important to locate the gaps in present policies and processes. With almost 80 million people under the age of 18, the importance of investment in and protection of youth, both girls and boys, is crucial, especially in relation to access to quality health and education services, as well as skills development.

In analyzing Pakistan’s present human development context and future challenges, it is clear that key improvements have been recorded in health and education and provision of basic rights, despite a litany of natural and human-made crises that has affected the country in the past six years. Pakistan’s HDI ranking, which had increased by 18 places during 2005-2009, slid back 20 positions in 2010 to end at 145th out of 187 countries measured. Its multidimensional poverty level has declined to 11.8%. In terms of MDGs 4 & 5, for instance, improvements have taken place in IMR, MMR, U5MR but do not match 2015 targets, and are marked both by urban-rural differences and stark regional disparities. A government-led analysis of MDG targets in 2010 concluded that Pakistan is off-track on 4 targets and lagging behind on 19 others, while it is ahead on 6 and on track on 3, of the 32 targets reported on.

Regarding MDG 2, while net primary enrolment rates (NER) have increased across the board and gender disparity has marginally reduced, there has been a significant decline in completion/survival to grade 5 during the past five years. Given all round increases this decline may reflect a shift to private schools, though inflation and global recession are also factors affecting parents’ ability to educate their children. The literacy rate of the 10+years population has increased over 25% in the past decade overall and 40% for women and girls, but it is still doubtful whether the MDG target for female literacy will be reached. Studies have demonstrated a strong direct correlation between literacy rate and household income, indicating that it is a consequence of socioeconomic causes. Immunization shows improved coverage but requires increased impetus if targets are to be met. The coverage of households by Lady Health Workers is a relative success story, increasing two-fold to 83% by 2009, and on track to ensure full-coverage by 2015. Both sanitation and water supply coverage (MDG 7) show marked improvement, but here too achieving targets by 2015 will not be easy. However, many challenges still remain. Nutrition status appears to have deteriorated or stagnated; the 2010 floods provided the occasion to bring this problem to the limelight, including the fact that Global Acute Malnutrition (GAM) rates in Sindh and Balochistan are well above the emergency threshold (15%). In addition, polio remains a serious concern. Pakistan accounts for highest number of cases in 2011. Overall, incidence has increased by nearly 15% in 2011 despite focused government and UN initiatives. Eradication efforts are hampered by lack of access and ideological issues. Population growth continues to be a serious concern, with the 2.5% annual increase being the highest in the region. Reproductive health issues take a heavy toll on women and need to be urgently addressed. Although the general population HIV prevalence in Pakistan is rather low (less than 0.1%), the key groups at risk in Pakistan comprise largely of people who inject drugs (20% prevalence) and sex workers (6.7% prevalence). As with health, despite gains, it is evident that girls continue to face significant disadvantage in access to education as they reach adulthood. Advocacy for equitable approaches to ensure quality of educational opportunities is a fundamental need. Progress notwithstanding, women’s participation in the labour force in Pakistan is low (21.8%), and is concentrated in the informal labour market and home-based worker sector where they face challenges, particularly in relation to social protection. Increase in expenditure on education and health is crucial to ensure inclusive development in Pakistan. With about 80 million children and young persons under the age of 18, investment in and protection of them is vital to enable them to fulfill their future roles as part of an educated and skilled workforce that can contribute to growth, and as part of an active citizenry that participates in the electoral and political processes. Similarly women should play a vital role whether through community engagement, paid work

or political participation, but this requires both attitudinal change and targeting of resources. Separate data on the Afghan refugee population is unavailable, but it is clear that they constitute a vulnerable and excluded group that requires special targeting. Human security is an integral part of human development as it focuses on all the risks to human development and the individuals’ and groups’ vulnerability to violence and their personal security. It includes safety from threats of job losses, political repression, hunger, disease, and natural disasters. Violence against women is a major challenge. Manifestations include murder often in relation to so called issues of honour, domestic violence, sexual assault, and acid throwing. Women face difficulties in accessing the paid labour market, and the Gender Inequality Index of the Human Development Report 2010 identifies the labour force participation rate as 21.8% for women and 86.7% for men. Hurdles to participation include illiteracy, social attitudes which restrict mobility, particularly in rural areas, and a deteriorating human security situation. Reserved seats in Parliament have given visibility to the political participation of women and the signs are encouraging. The 2009 Report of the UNCRC noted that challenges to protection included recruitment of children into armed conflict; and the application of the anti-terrorism legislation to minors. Children who work are excluded in multiple ways; as well as being denied the right to childhood work impacts negatively on education and health. Afghan Refugee children, girl child domestic workers and those in bonded labour are especially vulnerable. The State has made key gains such as obtaining consensus around the Management and Repatriation Strategy for Afghan Refugees in Pakistan (adopted in March 2010), but more needs to be done. This group is extremely vulnerable and marginalized that both shares the general needs of other excluded populations and also has special needs due to its non-citizen status within Pakistan. Religious minorities need special attention for their rights and welfare. Violent attacks against the person, their home and their place of worship, and abductions present a challenging environment. Based on their population size, Ahmedis were particularly targeted. The misuse of some laws against minorities increases their vulnerability. Despite these constraints the government has shown commitment to change. The ratification of international treaty obligations, most recently the International Covenant on Civil and Political Rights, and the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, both of which were ratified on 23 June 2010, demonstrate this. Legislation has been passed in relation to matters such as bonded labour and so called honor killings, and bills have been introduced in relation to matters such domestic violence, and corporal punishment. Government policy and plans have been formulated on diverse issues such as meeting the Millennium Development Goals, and a peace-building strategy for FATA and KP. Implementation on the ground is hampered by capacity gaps, a lack of awareness of people’s rights, and negative social attitudes reinforced by discriminatory legislation. Institutional capacity in relation to the investigation and prosecution, attitudes of those in the criminal justice system related to the acceptance that women, children, and religious minorities have rights, and that violence in the home is a public and not a private issue, may be exacerbating the situation. Again this presents an opportunity for the government to show leadership. It is important to ensure that parliamentarians in all the legislatures have the technical support they need to introduce legislation that is in conformity with international treaty obligations. Although the State is primarily responsible for guaranteeing the fundamental human rights of citizens, citizens themselves are also duty bearers. Social attitudes are exacerbating social exclusions. The factors

producing these attitudes may include discrimination and violence in the home environment, reinforced by prejudices in the education curriculum. The State can play a role in reversing this trend by reforming the education curriculum, repealing discriminatory legislation, and promoting non-discrimination in institutions such as the police and civil service.

Sustainable Environment and Energy The key challenge is to ensure that inclusive growth and human development for all, is future-sensitive. The needs of future generations can only be safeguarded through sustained utilization of environmental and energy resources. The strain on both economy and growth caused by climate change and the energy crisis are now becoming visible. The country is among the Worlds’ Top 10 in terms of vulnerability to the impacts of climate change. Estimates suggest that environmental degradation costs the country at least 6 percent of GDP, or about Rs. 365 billion per year, and these costs fall disproportionately upon the poor and women who suffer due to illnesses and premature mortality caused by air pollution, diarrheal diseases and typhoid (due to inadequate and unsatisfactory water supply), and lost livelihoods (due to reduced agricultural productivity and direct contact with fertilizers and pesticides). These burdens are compounded by problems such as hazardous solid waste, the loss of forest cover and desertification, soil erosion and loss in soil fertility. The cost for Pakistan to adapt to climate change has been estimated at US $ 10.7 billion per year for the next 40-50 years. This investment is needed in natural resource management and planning, implementation of incentive-based regulatory policy regimes and support for voluntary environmental protection initiatives by industries. National industrial strategy and policies need to be reviewed in order to better incorporate environmentally-sensitive and efficient resource-use considerations. Water conservation management techniques in agriculture with the support of community participation, separation of municipal wastewater from industrial effluent, a regular monitoring programme to assess the surface and ground water quality, the treatment of sewage and industrial effluent, clear guidelines for groundwater abstraction and resources commensurate with policy goals; are required to address the root causes of water pollution and scarcity. Environmental change will accelerate with increase in the economic growth rate. At present, Pakistan is short of up to 5000 Megawatts of electricity. 30% of the population has no access to electricity while 80% have no access to piped gas, and reliance on imports threatens the overall economy. The resulting load management practices are estimated to incur a cost of Rs. 495 billion to the different sectors of the economy and the loss of 400,000 jobs. Shortage in energy supply is a key constraint, along with issues in finance, institutional coordination, and industrial vision, which has made a number of productive activities uncompetitive in domestic and international markets leading to shutting down of SMEs and relocation of industrial plants to other countries. The Government’s reform plan 2010 aims at addressing issues of governance and efficiency, regulations, fuel mixing, financial requirements and investment.

Energy sector deficits are holding growth back and not address the needs despite clear demand and potential. There is comprehensive planning in individual sub- sectors, but it is fragmented; plans require better integration, implementation, monitoring, and financing. Circular debt is a major impediment to new financing in the energy sector. It is now not only affecting electricity, gas, and fuels sub-sectors but also discouraging future investments in the coal and alternate energy options. Improved corporate and operational governance and robust pricing mechanisms are important for the sustainability of the sector. Private sector attention will be contingent upon better environment for doing business. Energy efficiency

is a priority that needs to be backed by better capacity, legislation, management, and investment. These factors indicate a deeper crisis in energy policymaking, governance, and regulation. If the governance issues are fully and successfully addressed, then it will be possible to resolve the fundamental problems of the energy crisis.

For more effective and sustainable environment and energy, individuals as genuine stakeholders and as rights holders have to be transformed into responsible duty bearers. The State and its organs have the obligation to prevent “elite” capture of environment- and energy-related policies which should have broad-based participation and enhance the capacity of poor and excluded groups to claim and exercise their rights. To protect these rights, Pakistan has actively acceded to international treaties and conventions but attention will be needed over procedural rights, such as the right to information, the right to participation and the right to judicial redress. The obligation to protect requires the State to ensure that robust standards of environmental industrial hygiene are maintained and proper regulatory frameworks and monitoring mechanism are in place to ensure that private actors are behaving the way required by the laws. In the post 18th amendment era, this will involve policy formulation, provision of resources, public reporting, building capacity to monitor the standards and offer incentives and conduct accountability. The State’s obligation to fulfill requires the government to take appropriate steps, to promote the realization of rights such as introducing environment and industrial hygiene standards into national legislation. Civil society stakeholders can be involved in environmental and energy decision-making and oversight. With a weak economy, the government cannot fulfill some of these obligations and meet the costs alone. Therefore in addition to a national funding mechanism, multinational duty bearers will have to come up with more resources in this regard.

State Effectiveness An educated, healthy and safe citizenry, especially women, is necessary to play its role through community engagement, paid work or political participation. For inclusive and equitable human development to take place, the State must be able to deliver essential services and create an enabling environment in which people can take charge of their own lives. This necessitates the State to be able to develop and implement policy effectively, which requires enhancing the quality of governance mechanisms, including accountability and participatory processes to ensure implementation. Obstacles to delivery of services and the creation of an enabling environment include political instability, personal insecurity, weak rule of law, and corruption. Law enforcement agencies struggle to address domestic and transnational organized crime, and provide adequate security to many of Pakistan’s citizens, which comes at a serious cost to governance, development and security. Balochistan, Khyber Pakhtunkhwa and FATA are particularly vulnerable. The solution, like the problem, does not lie exclusively in Pakistan. Regional cooperation and coordination need to be strengthened to address such crime. Pakistan has attained remarkable achievements in political and policy domains in last few years, including participatory decision making in the form of landmark constitutional developments. The 7th National Finance Commission was unanimously approved in 2009 followed by the passing of the 18th Constitutional Amendment in 2010 by Parliament. These developments have established a new framework of devolution of powers from federation to provinces and new opportunities and challenges are emerging with greater scope for public participation. Reform and proposals to implement reform in

Gilgit Baltistan and FATA are positive developments. The successful implementation of these reforms will strengthen the democracy in Pakistan. The potential benefits of prioritizing improved service delivery are considerable; the evidence suggests that the ability to deliver essential services, in addition to the intrinsic value of those services, may be linked to political stability and reduced conflict. Measures to improve the security situation by the effective implementation of the rule of law would reap dividends in relation to the security of life, liberty and property of the people and provide a better economic and social environment. This would include measures to address capacity issues relating to the investigation and prosecution of offences, and improve and depoliticize police performance and accountability. The response to the 2010 floods also highlights the potential of supporting capacity building in relation to State effectiveness to reduce the impact of disasters. The government has demonstrated its commitment to disaster management by signing the international commitment the 2005 Hyogo Framework for Action and creating a disaster management framework. Assistance is now needed in relation to policy implementation and co-ordination.

Conclusion Problems and challenges come with opportunities. Pakistan has attained remarkable achievements in the political and policy domains which are also reflected in the relevant indices. Existing policy and regulatory frameworks, the implementation of 18th Amendment and 7th NFC Award and constitutional changes in the border regions of FATA and GB are historic events with far-reaching impacts. Successful implementation of the 18th Amendment and the 7th NFC Award will be critical. Corresponding reforms in the civil services and law enforcement capacities will be a sine qua non to translate the constitutional guarantees into measurable positive impacts in the life of the people of Pakistan. Recent gains should be used as foundation to enable the country to move forward on the path of sustainable and equitable development. Pakistan’s priority development imperatives include the need for inclusive growth, addressing urbanization concerns, nurturing a sustainable environment and energy regime, minimizing the adverse effects of human-made and natural crises, ensuring human development and human security, and the creation of an effective and accountable State. Special attention needs to be paid to excluded and vulnerable groups who are the worst affected by national setbacks and the least benefited by overall gains. Among the opportunities and challenges facing Pakistan is the increasing urban population, which requires a strategy to improve competitiveness by expansion in urban city markets, promotion of cluster development, improvement in urban governance, skill development and autonomous local government. However, this should not be at the expense of rural development, nor involve the shifting of resources towards urban centres. Tapping in to the demographic divided necessitates provision of skills and opportunities for productive employment, or else there is a risk that this fast growing young adult population may also be ripe for “social unrest, war and terrorism.” To take advantage of the demographic window of opportunity, economic growth needs to be translated into poverty reduction and employment creation for all. The existence of distributional, structural, gender and regional iniquities have retarded Pakistan’s achievement of MDG targets. The government’s fiscal policy, especially the policy’s heavy reliance on indirect taxation, has a direct impact on market prices, which differentially affect the poorer segments of the population.

Pakistan has already suffered badly from the war in Afghanistan and terrorism. In addition, inclusive growth is hampered by human-made crises and natural disasters. The external supply shocks have been particularly harsh on the poor, women, children, old people, minorities, refugees and IDPs. The damage to habitat, loss of livelihoods, trauma of displacement and disillusionment are adding to the stresses. The access of the poor to education and health in crises-affected areas has been affected, and food vulnerability has increased. Trust in the State’s effectiveness needs to be reinforced, basic services, employment and livelihood opportunities need to be provided equitably, and radicalization needs to be countered. Natural disasters affect and are affected by environmental conditions and climate change. Gaps in Disaster Risk Management (DRM) have increased the risk of damage from natural disasters. The built environment also interferes with the natural pathways of the rivers and causes damage during floods. However, the biggest single determinant of risk to vulnerable groups is their socio-economic status, necessitating a rights-based approach to recovery and reconstruction. It is important to enable everyone to participate in providing solutions and setting the country on track to attain MDG targets. The 80 million children and young persons under the age of 18 need investment for their education, security and health. Women need to be engaged with issues of their local communities and to be empowered to participate in the political process at all levels. To meet this end, a uniform vision, institutional capacity building and ownership at the provincial level will be needed. Without a research base and quality data, evidence-based policy-making will not be possible. Improved tax administration to ensure increased revenue collection, more effective expenditure planning and control, effectively addressing the energy crisis, reducing circular debt, minimizing corruption and bureaucratic delays, combined with strengthening governance institutions are necessary steps to facilitate necessary economic growth and progress towards achievement of MDG targets. Due to post-18th Amendment devolution and transitional arrangements, federal and provincial governments will need support to take advantage of the new constitutional power configurations and to develop the necessary capacity to respond to these additional responsibilities. The international community and development partners have a key role to play in helping to fill capacity and resource gaps. While it is clear that the State apparatus remains duty bound to fulfill its obligations to the citizenry as rights holders, the analysis of this mutual relationship needs also to account for resourcing and capacities on the duty bearers' side and responsibilities and attitudes on the side of rights holders. Rights holders have a role and responsibility to ensure that the State is doing its utmost and also to support this endeavor through their own practices. Therefore, rights holders need to mobilize themselves to hold government authorities accountable, and in turn they too must respect the rule of law and due process. However, rights holders do not constitute a uniform or homogeneous group, and sub-group self-interest often dominates. The tendency to seek preference through influential contacts is both a cause and effect of weakening the State's governance role, and lies at the heart of differential access to services. In this sense, layers of elite capture of scarce resources and capacities severely exacerbate problems of access for excluded and vulnerable groups at the national, provincial, district, tehsil, union council and village levels.

The correct choices and strategies relating to priority development issues would enable Pakistan to move forward towards sustainable and equitable development in cooperation with its neighbours and with the support of the international community. This requires the spectrum of federal and provincial/regional stakeholders, including civil society, media and academia, to be constructively engaged and empowered to participate in determining the development agenda. In turn this agenda should be consonant with Pakistan’s obligations vis-à-vis ratified international covenants and core human rights principles.

Background and Introduction Since 1997, United Nations works under a comprehensive programme with the aim of preparing the UN for the challenges of future. The Common Country Assessment (CCA) and the United Nations Development Assistance Framework (UNDAF) are part of this strategy. As defined by the General Assembly, the CCA is the common instrument and a country-based process for reviewing and analysing the national development situation and identifying key issues as a basis for advocacy, policy dialogue and preparation of the UNDAF. Based on the above, this CCA has taken into account national priorities, with a focus on Millennium Development Goals and the other commitments and targets of the Millennium Declaration as well as international conferences, summits and conventions. It is based on a comprehensive meta-analysis of the situation through which the UN and its partners have identified areas requiring priority attention, based on an analysis of key development challenges within the country.

1.1 Methodology A Meta analytic approach to the country analysis has been selected by the UNCT in recognition of the fact that UN agencies are constantly engaged in data collection, research, studies, reviews and analysis in support of their work. Furthermore, added to this is a wide spectrum of relevant analytic work on Pakistan produced by the government, CSOs, academia, research and humanitarian and development partners. These included documents and reports produced by relevant and reliable non-state actors (including shadow alternate reports to and comments by Treaty Bodies and supervisory bodies in the UN system). Also included are studies, reports and analysis that use data sufficiently disaggregated (by sex, age, financial status, rural/urban, ethnicity, region, religion and language, as well as disability, HIV/AIDS and other status) to identify excluded groups and explain the nature of their exclusion. The documents were selected on the basis of data reliability (citation, authors, and agencies), currency of information, and their coverage of the core areas An inductive methodological approach was used. This helped the team to (a) condense analyses of documents into brief, summary formats; (b) establish clear links between the objectives of the study and the summary findings derived from the reports; and (c) develop a framework of the underlying structure of Priority Development Issues that are evident in the reports. Problems and challenges were selected for further analysis on the basis of their persistence, severity and scope, trends that might lead to crises, disparities which suggest unequal treatment or discrimination against the rights holders, capacity issues or negligence of the duty bearers, and where problems are closely linked via immediate causal relationships. These priority issues are also taken as felt realities that are brought out through properly conducted public opinion surveys (as opposed to personal priorities of the researchers) which complement the UN’s or Government priorities and issues identified through other well documented scientific inquiry. This approach provided a user friendly and systematic set of procedures for analyzing reports that could produce reliable and valid findings. The priority development issues were then subjected to methods of inquiry that are based on empirical as well as qualitative principles of reasoning. The Primary drivers or root causes behind every priority were catalogued, classified and analyzed and the enabling factors identified and unpacked into components and sub-components. The initial findings were then presented to stakeholders in a series of workshops in Islamabad, Karachi, Lahore, Quetta, Peshawar and Muzaffarabad. The stakeholders included Federal and Provincial

Government officials, Academia, Media, CSOs, Professionals, Young people and Political Representatives. The results of these consultations were compiled, reported and taken into consideration. The draft findings were also shared with the UN’s steering committee, the technical committee set up to help the team and some of the individual UN agencies and their experts. Their input is reflected in the report subject to the disclaimer above.

1.2 Guiding Principles of the Meta Analytic Approach to Country Analysis The two guiding principles of this CCA are the focus on exclusions/inequalities and the Human Rights Based Approach (HRBA) to development. The priority development issues of Pakistan have been described and analyzed with attention to patterns of exclusion, discrimination and inequality to substantiate the condition of groups excluded due to lack of access to their entitlements and rights. This application of an Exclusion/Inequality filter has helped to analyze and describe forms of discrimination & exclusion in terms of the different ways in which minorities, refugees, IDPs, girls, boys, women and men experience them. The priority development issues are manifestations of underlying and root causes. The findings, data and trends of the descriptive analysis have been organized into relationships of causes and effects. This causality analysis is guided by the HRBA. The causes and their effects are understood as rights unfulfilled. Immediate and superficial causes have been explored further to reveal the underlying causal mechanics. This causal analysis has been further used in the identification of Rights holders and Duty Bearers (both state and non-state). The relationships between and among the rights holders and duty bearers have been analyzed for specific human rights. The identification of skills, resources, responsibility, authority and motivation, of each actor; have been used to identify capacity gaps of these right holders and duty bearers.

1.3 Country Context of Development The Islamic Republic of Pakistan has been a member of United Nations since September 1947. For much of this time, the country has mostly been ruled by the military with intermittent periods of democracy. The present constitution of 1973 provided for a parliamentary democracy. Yet the country was ruled by the army from 1977 to 1988 and then from 1999 to 2008. With return to democracy in 2008, there has been a major transformation of the state and its institutions involving both political and juridical results. This transformation, through the 18th amendment to the constitution, has changed the method of organizing authority, especially when it comes to development. With the removal of the ‘concurrent list’ from constitution, important functions of the State, especially those related to service delivery, have been completely devolved to the provinces. During the same period, the country has been through multiple crises. The province of Khyber Pakhtunkhwa (KP) and the Federally Administered Tribal Areas (FATA) have been particularly affected by an insurgency like situation. This has impacted the law and order situation in the rest of the country. Added to the problems, the floods of 2010 affected more than 20 million people. A poor economy gender inequality, multiple exclusions faced by large populations and conflict and natural disasters are contributing to reduced outcomes of human development, sustainable environment and energy. The development initiatives for this purpose must not impair the ability and the right of future generations to develop. Underlying these reduced outcomes of sustainable human development are the challenges the State faces in being an effective agent to plan and implement the development policies that will improve the delivery of core services. The concept of an effective State goes beyond that of an entity

that can deliver core services. It has an existence that is separate to, and will continue beyond the lifespan of, the current government and parliamentarians. As such it creates an enabling environment and provides the means of participation that will empower people to contribute to their own development. An effective State enables people, especially the most excluded, to vote in and stand for free and fair elections. Through the equitable provision of literacy, access to information, and access to justice, an effective State enables people to contribute to policy making and hold to account public bodies and elected officials for the policy decisions they have made and the way those policies have been implemented. The different subject areas addressed in this report are in themselves multi-layered and these different layers are examined. The narrative of development in Pakistan is not linear and the different subject areas connect in different ways. An examination of the floods in July 2010 demonstrates the linkages. The destruction to communication network, irrigation system and, environmental degradation and displacement caused by the floods has exacerbated food insecurity making the already excluded and vulnerable populations more marginalized which has contributed to increased levels of malnutrition. More than this, pre-existing levels of exclusion and poverty meant that many people were already suffering from food insecurity and malnutrition so that when the floods came they were more vulnerable to acute malnutrition and also therefore more susceptible to disease. Conflict and insecurity limited the access of humanitarian workers to many of those affected by the floods. Whilst the link between climate change and the floods may be uncertain, it has caused massive land degradation and exacerbated landslides in mountainous areas of AJK and KP caused due to the 2005 earthquake and deforestation. The scale of destruction, loss and displacement caused by the floods is linked to the State’s effectiveness in implementing disaster risk reduction strategies such as watershed management and the maintenance of flood protection embankments and a well-coordinated disaster response. This also linked with effected populations’ existing levels or lack of resilience to mitigate disasters. The implementation of disaster management systems requires adequate funding and will be challenging in the absence of economic reforms aimed at widening the tax base and reducing the tax gap. Based on this narrative, this report is not prescriptive and does not make any deliberate attempt at proposing solutions, except wherever the context cannot be explained without resort to normative statements. The report focuses on exclusions and inequalities and identifies the significant regional disparities that exist in Pakistan. The Millennium Development Goals are an important focal point for development interventions in Pakistan and the Government’s commitment to them should be supported. The MDG’s present a crucial opportunity not only to meet the individual targets but to meet them in a way that reduces these regional inequalities. Post 18th amendment, the roles and capacities of the individual provincial governments to achieve the developmental targets are also in focus. De-jure, provincial autonomy is now at its highest. The regional exclusions and inequalities are now more of a responsibility of the provinces.

1.4 Macroeconomic Overview This section will present the macroeconomic overview related to the external Sector, inflation, food insecurity, stagflation, poverty and its feminization, debt, money supply and the informal economy. The past six decades have been period of sustained economic growth for Pakistan, however, growth slowed down during the 1970s and 1990s. Compared to the past, a downward trend in growth rates can be discerned. Historically, Pakistan has been a moderate inflation economy. For the first fifty years since Independence in 1947, Pakistan’s average economic growth rate was higher than the average growth rate

of the world economy. For the decade of the 60s, 70s and the 80s the average annual real GDP grew by 6.8 percent, 4.8 percent and 6.5 percent, respectively. Pakistan’s GDP growth for 2010 was 4.2%. 1n 1997 the Asian Financial Crisis, precipitated by the collapse of the Thai baht, had an adverse impact on GDP growth rates in Indonesia, South Korea, Malaysia, Hong Kong and the Philippines. By 1998, El- Nino brought about the worst drought in Pakistan’s history. Balochistan was the worst hit where 26 districts were classified as “suffering from severe famine”. According to some sources, in Sindh, nearly 60 percent of the population was forced to migrate to irrigated land.2 In May 1998, followed by Pokhran-II, India’s test explosion of nuclear devices, Pakistan conducted tests of its own nuclear explosive devices. The two nuclear detonations triggered ‘sweeping U.S. economic sanctions’.3 In late 2001, as a consequence of the attack on the Indian Parliament, India and Pakistan massed around 1 million troops along the Line of Control (LOC). The potentially nuclear standoff sent shockwaves around the world and heightened Pakistan’s risk perception. On 7 October 2001, the United States and the United Kingdom launched Operation Enduring Freedom and by the end of the year Pakistan became the host of the largest refugee population whereby nearly 20 percent of Afghanistan’s population was living in Pakistan. By 2000, Pakistan’s annual GDP growth had fallen to a historical low of under 2 percent. But GDP growth bounced back and by end-2004 Asian Development Bank’s Asian Development Outlook (ADO) expected Pakistan to show the second highest growth rate in South Asia. In 2005, the Kashmir Earthquake, 7.6 on the moment magnitude scale, the 17th deadliest earthquake in human history, left 79,000 dead and more than 100,000 injured as well as causing massive environmental degradation. But the economy proved resilient and managed to grow by a healthy 6.8 percent for the twelve months ending 30 June 2006. The same growth rate could not be maintained for the subsequent years. Table: Comparison of Pakistan with other countries in the South Asian region (2009)4

Bangladesh India Nepal Pakistan Sri Lanka GDP $241.1 billion $3.57 trillion $33.66 billion $433.1 billion $96.6 billion

Growth rate of 5.6% 7.4% 4.7% 4.2% 3.5% GDP (%) Total 156 million 1.173 billion 28.9 million 184.4 million 21.51 million Population (July 2010 estimates) GDP per capita $1500 $3100 $1200 $2500 $4500

Household Lowest 10%: 8.8% Lowest 10%: 3.6% Lowest 10%: 6% Lowest 10%: 3.9% Lowest 10%: 1.1% income or Highest 10% : Highest 10% : Highest 10% : Highest 10% : Highest 10%: consumption 26.6% (2008) 31.1% (2009) 40.6% (2008) 26.5% (2005) 39.7% (2004) by percentage share Current $2.8 billion $-31.54 billion $537 million $-2.89 billion $-1.69 billion Account Balance Inflation rate 5.4% 10.9% 13.2% 13.6% 3.4% (%)

Total External $23.22 billion $223.9 billion $4.5 billion $52.12 billion $19.45 billion Debt Burden (in US b)

Unemployment 5.1% 10.7% 46% (2008) 14% 5.9% Rate Gender Gap 0.6812 0.6190 0.5888 0.5583 0.7212 Index and 69 113 126 133 31 Rank [out of 135 countries] (2011)

The Table above shows Pakistan’s relative standing in the South Asia region in terms of economic indicators, with its growth rate among the lowest, its inflation highest, unemployment, external debt burden and trade deficit worrying. The internal and external factors influencing these trends will be discussed in the following pages.

Table: Pakistan’s key economic indicators over the past decade5

2001 2004 2007 2008/9 Per Capita $533 $576 $651 $650 Income (PPP $) GDP $311 billion $361 billion $438 billion $448 billion

Growth rate of 3.3% 6.1% 5.3% 4.3% GDP (%) % share in GDP Agriculture 24% 22% 20% 20% Manufacturing 24% 27% 27% 27% Services 52% 51% 53% 53% Total Revenues 10% 10% 9.8% 9.8% as % of GDP Inequality Index 31 31 NA NA (Gini) Income share of 27% 26% NA NA richest 10% Income share of 3.98% 3.99% NA NA poorest 10% Gender Gap NA NA 126 132 Index (rank from 135 countries) Trade Balance -1.1% 1.0% -7.2% -11% as % of GDP Inflation rate 7.9% 7.7% 7.7% 16% (%) Debt to 44% 35% 28% 29% foreigners by public & private as % of GNI

The Table above provides a comparison of economic development during the last decade, showing gradual increases in per capita income, GDP and reduction in foreign debt. However, revenue collection has remained static and trade balance is declining significantly. Inflation too has doubled in the last few years of the decade.

1.4.1 External Sector During FY07, net inflow of foreign investment peaked at $8,428 million. In FY08, with 599 bomb blasts and 59 suicide attacks, the crisis scared investors and net inflow of foreign investment fell to $5,475 million. By end-2008, the fast deteriorating balance of trade caused a balance of payment crisis. High levels of imports of goods and services, combined with stagnant exports, were a key cause. In 2007-8 there was a trade deficit of $15 billion on goods and $6.5 billion on services.6 of The war on terror further damaged Pakistan’s merchandise exports.7 In November 2008, the International Monetary Fund (IMF), in order to avoid a sovereign default, committed a 34-month, $11.3 billion Stand-By Arrangement (SBA). Figure 2: Pakistan Balance of Trade (Million USD)8

According to an IMF Program Note, “Pakistan’s economy had initially made progress toward stabilization under the program. Macroeconomic imbalances shrank and inflation fell below 10 percent in mid-2009. More recently, however, the budget deficit has increased, reaching 6.3 percent of GDP in 2009/10, and inflation has been on the rise, recording 13 percent in March 2011.” In 2010-11, the economy’s capacity to withstand internal and external pressures of extreme nature, according to the Economic Survey 2010-11, was tested by devastating floods that engulfed one-fifth of the country, jeopardizing fiscal consolidation efforts of the government. On the external front, according to the IMF, “The external position has strengthened, the exchange rate has been stable, and the current account deficit has narrowed considerably, helped by lower import growth, higher exports, and a robust increase in workers’ remittances.” Foreign currency reserves have also increased from $6.4 billion in November 2008 to over $17 billion as of May 2011.

Figure 3: Pakistan Exports9

The 2011 United States debt-ceiling crisis along with the European sovereign debt crisis presents Pakistan with new challenges as well as opportunities. The talk of a W-shaped, double-dip recession in the U.S. and the European economies in a shock of their own are bound to deflate their foreign aid portfolio. For the Budget 2011-12, which has projected an ‘external resource’ component of Rs413 billion that may translate into a higher budgetary deficit. As of March 2011, monthly Workers’ Remittances for the first time crossed the billion dollar mark and that momentum has sustained for the months of April, May, June and July. Worker remittances are a mixed blessing. One the one hand, they assist the positive side of the balance of payments and raise consumption. But on the other hand, they may crowd out manufactured goods exports. The decelerating global economy is expected to depress global oil demand and Pakistan as a net oil importer stands to gain. On the export front, Pakistan’s cotton-related exports are considered ‘non-luxury’ and thus the volume of Pakistani exports is not expected to drop much. However, the impact of the 2011 flood will adversely affect the economy.

1.4.2 Inflation Pakistan has historically been a moderate inflation country. The Consumer Price Index (CPI) for 1999-00, 2000-01 and 2001-02 was recorded at 3.58 per cent, 4.41 per cent and 3.54 per cent, respectively. Pakistanis, accustomed to lower rates of inflation, have, as a consequence, a very low tolerance for double digit inflation.3 According to KASB, a local investment house, YTD, CPI has averaged 14.01 percent where effective monetary tightening and improved government discipline in latter half of fiscal year have contained the pressures seen in the aftermath of the floods. With inflation likely to remain sticky in the immediate term, KASB expects the State Bank of Pakistan (SBP) to maintain the discount rate for now.

Figure 4: Pakistan Inflation Rate Annual Change in CPI10

As per the latest data released by the Federal Bureau of Statistics (FBS), the Consumer Price Index (CPI) has been in the double digits for the past four years. In March 2008, the rate of inflation, as measured by the officially calculated CPI, stood at 14 per cent. By December, the same year, the officially calculated CPI had hit a 30-year high of 25 per cent. According to FBS, CPI for May 2011 clocked in at 13.23 percent YOY.

Stagflation The rate of inflation is in the double digits while, at the same time, real economic growth has slowed down to under 4 percent a year. That is classic stagflation-high rate of inflation plus low economic growth. This is a particularly difficult situation to cure because most governmental intervention to lower the rate of inflation adversely impacts the rate of economic growth. The two primary drivers behind Pakistan’s stagflation are: First, growth in money supply that is way beyond the rate of real growth in the economy and, second, supply shocks-like the escalation in the international price of oil and frequent domestic energy shortfalls-that increase the price of production and decrease the economy’s productive capacity.

1.4.3 Food Insecurity In late-2006, droughts in several grain-producing countries coupled with a spike in oil prices, global food prices began increasing. The spike in oil prices also caused an increase in the price of fertilizer and an increase in transportation costs. In 2006, Australia, the second-largest exporter of wheat and a major producer of rice experienced a severe drought. The 2006 harvest loss in Australia’s Murray-Darling Basin, the 2006 North American heat wave especially in California, the 2008 destruction of rice crop in Burma due to cyclone Nargis, the 2008 stem rust fungus invasion in Yemen and the unusually high rainfall in India; forced some of these countries to import food grain for the first time in a very long time. This further increased price pressures on the crop.

Figure 5: FAO Food Price Index11

The other powerful force behind global food inflation is ‘food for fuel’. In 2008, a World Bank policy research working paper concluded: “Large increases in biofuels production the United States and Europe are the main reasons behind the steep rise in global food prices.” According to the World Bank, “Driven in part by higher fuel costs connected to events in the Middle East and North Africa, global food prices are 36 percent above their levels a year ago and remain volatile, pushing people deeper into poverty.” According to the World Bank’s Food Price Index, year-over-year price of maize has gone up by 74 percent, wheat 69 percent, soybeans 36 percent and sugar 21 percent. The more significant impact was the irrational increase of support prices for wheat from Rs. 525 to Rs. 950 per 40 kg during 2008, which could not allow the benefit of decline in world wheat prices during 2009 onward. Consequently the food insecurity increased from 38 percent in 2003 to 48.7 percent in 200912. According to Oxfam close to 50 million Pakistanis are now malnourished and more than 100 million Pakistanis, around 57 percent of the population, are “not eating the same thing they did 2 years ago” because of high food prices. An Oxfam survey claims that 75 percent of the population ends up spending between 50-70% of their income on food, and thus more than 130 million Pakistanis are highly “vulnerable to rising prices”.13 The prognosis, according to Oxfam, is that food security in Pakistan will “seriously worsen” as the “sources of continued food insecurity continue unabated as Pakistan is on the brink of another monsoon season for which the country is ill prepared and a potential new conflict in the North that is likely to result in yet more displacement of the population.”14

1.4.4 Poverty In 2000, Pakistan signed the Millennium Declaration agreeing to do “everything in its power to eradicate extreme poverty and hunger and also promised to achieve other seven goals of the MDGs by 2015.” Pakistan had also agreed to do “everything in its power” to halve, between 1990 and 2015, the proportion of people living in extreme poverty. In 1990-91, as per the Federal Bureau of Statistics (FBS) calorific based poverty line, 26.1 percent of the population was below the poverty line. By 2000, the percentage of population below the poverty line was recorded at 34.5 percent.

Over the past three years, double-digit inflation has caused a decline in real income and has increased the vulnerability of lower, middle and fixed income segments of the population. Business and investor confidence continues to erode. Over the past four decades, head-count poverty peaked in 1969 at around 46 percent reaching a low of around 17 percent in 1987 and then increased steadily for the following several years.15 Inflation “affects poverty mainly through its impact on real wages because nominal wages fail to increase as fast as prices in episodes of rising inflation rates.” Latin America’s extended struggle with high rates of inflation shows that the regressive nature of the inflation tax only has a limited impact on individuals “below the poverty line due to their negligible average cash holdings…” but inflation wipes off the savings of the middle class and thus increase the number of poor.16 The recently released Economy Survey 2010-11 claims that “Pakistan has experienced reduction in absolute poverty over a four-year period (2002-2006) as poverty headcount decreased from 34.5 per cent in 2000-2001 to 22.3 per cent in 2005-2006.” Unfortunately, successive governments that assumed power beyond 2005-2006 have failed to officially enumerate the prevalence of poverty.

Figure 6: Proportion of population below the calorie-based poverty line17

In Pakistan the last official poverty estimates were released for the year 2005-06. Accumulated food inflation since then is estimated at 84.9 percent. Simulation analysis based on ADB staff calculations based on the latest POVCAL database suggests that “about one-third of the increase in global food prices gets transmitted to domestic food prices in developing Asia. This also means that the estimated increase in the number of poor due to a 10 percent increase in domestic food prices may have already occurred in the region. The impact is even greater for a 20% and 30% increase, with the percentage of people living below $1.25 per day increasing 3.9 percentage points and 5.8 percentage points, respectively. This means an additional 128.8 million and 193.2 million poor people, respectively.”18 Thus, while no official figures exist, due to rising food costs, high inflation and low economic growth, poverty levels in Pakistan would surely have increased, as Figure 7 indicates.

Figure 7: Global Food Prices and transmission to domestic prices19

According to the Research Consortium on Educational Outcomes and Poverty (RECOUP), “A comparison between multidimensional and the consumption based uni-dimensional poverty estimates using Official Poverty Line (OPL) … reveals that OPL, not only provides highly conservative estimates of poverty, it also fails to accurately capture deprivations faced by the poor.” In order for Pakistan to make progress towards its commitments under MDGs there has to be a “multidimensional understanding (of poverty) as well as measurement of poverty.” Among the suggested dimensions are education, health, consumption, child Status, livelihood, housing, electricity, assets, landholdings, access to safe drinking water, sanitation and fuel for cooking.20

1.4.5 Feminization of Poverty The feminization of poverty generally refers to the “growing female share of the population living under the poverty line.”21 It marks “a change in poverty levels that it biased against women or women-headed households.” Thus, the feminization of poverty combines poverty and gender inequalities, requiring the special attention of policymakers and planners to ensure that allocation of resources is both pro-gender equity and anti-poverty in its aim.22 In Pakistan, the feminization of poverty has been linked to firstly, a perceived increase in the proportion of female-headed households (FHHs) among the poor groups and secondly, the rise of female participation in low-return urban informal sector activities.

In Pakistan women work predominantly in the agricultural sector, with 62.7% being skilled agricultural and fishery workers (as opposed to 31.4% of men) in 2009/10. 16% of women workers are classified as having “elementary (unskilled) occupations” while 10.9% work in craft and related trades. 9.5% of women work in professional and semi-professional categories, in comparison with 23.3% of men.23 However, it is in classifying unemployment rates that a clear bias within the economic system itself is

manifest. Female unemployment in 2009/10 is recorded as 9.5% overall, comprising 7.2% in rural areas and 20.8% in urban areas. This difference is to the fact that “a major portion of [the female] labour force is working as unpaid family helper[s] in rural areas which is classified as employed.”24

The absence of sex disaggregated data in relation to poverty is quite marked in Pakistan. However, a Time Use Study undertaken by the Ministry of Finance in 2007 made the following assessment of structural discrimination against women: “It is noticed that most of the female’s productive life time is spent in housekeeping activities which bear minimal relevance for galvanizing the innate faculties of mind and body. The conclusion suggests that policies need to take into account the time that women spend in unpaid care work and how this might constrain their ability to engage in other activities, including learning and income-earning; and the need to acknowledge the contribution that this unpaid care work makes to the well-being of the nation and the productivity of the country’s people.”25

The Global Gender Gap Index of 2011 which placed Pakistan 133rd out of 135 countries, has ranked the country 134th in women’s Economic Participation and Opportunity, 127th in Educational Attainment, 123rd in Health and Survival, but 54th in Political Empowerment.26

At least six factors have been behind the feminization of poverty in Pakistan.27 They are: (i) the “perception of the greater investment value of the survival of boys in comparison with girls.” (ii) The opportunity “for getting outside work and paid employment.” (iii) The “perception of “who is ‘contributing’ how much to the joint prosperity of the family.” (iv) Intra-household “inequalities and son preference.” (v) That “boys can be counted on for old-age security of parents.” (vi) Women are “perceived to either contribute less in terms of their labor and income-generating capacity, or to be a drain on the household budget because of the costly requirements of marriage.” As a consequence, there is an “unequal allocation of resources within households resulting in differential allotments of nutrition and healthcare.” The above factors are “cultural patterns” that may “themselves be the product of poverty, but they also perpetuate household and community poverty.” Work addressing the feminization of poverty should link to CEDAW and other relevant international conventions that Pakistan is a signatory, ensuring that the approach is rights-based.28

1.4.6 Debt On 6 June 2010, Budget 2010-2011 had projected a budgetary deficit of Rs 685 billion ($8 billion). By May 2011, the deficit was estimated to have crossed Rs1 trillion ($11.4 billion). On 3 June 2011, Budget 2011-2012 projected a deficit of Rs950 billion ($ 10.8 billion) – the highest in the country’s history.

Figure 8: External and Domestic Debts29

Domestic Debt External Debt

5 60 4.5 50 4 3.5 40 3 2.5 30 $ Billion $

Rs Trillion Rs 2 20 1.5 1 10 0.5 0 0 2000-2010 2006-2010

In order the fill the budgetary gap the government has two choices: borrow from the banking system or further expand the money supply. Borrowing such a huge amount from the banking system will ‘crowd out’ the private sector and push the already high rate of interest even higher. Expanding the money supply will mean even higher rates of inflation. Over the past three years, the government has been on a borrowing binge, both internally as well as externally.7 The Pakistan: Fiscal Policy Statement 2010-11 issued by the Ministry of Finance indicates that the total public debt for FY 2010 is 60.6% of GDP and this reflects a steady increase from FY 2006 onwards.30

Table 1: Pakistan’s Public Debt 2003 - 2010

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10

(In Billions of Pakistan Rupees) Domestic 1,852 1,995 2,152 2,320 2,600 3,266 3,853 4,651 Currency Debt Foreign 1,771 1,816 1,913 2,038 2,201 2,778 3,776 4,243 Currency Debt Total 3,623 3,810 4,065 4,357 4,802 6,044 7,629 8,894 Public Debt GDP 4,876 5,641 6,500 7,623 8,673 10,243 12,739 14,668 Total Public Debt 74.3% 67.6% 62.5% 57.2% 55.4% 59.0% 59.9% 60.6% (as % of GDP)

1.4.7 Money Supply The current inflationary spiral has its roots in fiscal 2007-08, when the federal government’s budgetary deficit skyrocketed from Rs377 billion ($ 4.5 billion) in 2006-07 to Rs777 billion ($9.2 billion) in 2007- 08; a jump of more than 100 percent in a year. The huge gap between government revenue and its stream of expenditures has to be filled either by borrowing from the banking sector or the expansion of money supply. The government has ingeniously devised a whole host of devices to fill its ever-ballooning deficit. The government has unfunded debt that includes Defense Savings Certificates, Bahbood Savings Certificates, Mahana Amdani Accounts, Khas Deposit Accounts, Special Savings Certificates and Regular Income Certificates. Then there is floating debt that includes Treasury Bills and Ad-hoc Treasury Bills. On top of all that there is permanent debt that includes prize bonds, Federal Government Bonds, market loans and Federal Investment Bonds. Over the past five years, M3, the broadest measure of money supply, has gone up from Rs4.375 trillion to around Rs8 trillion. This growth in money supply is critical because money supply is directly linked to inflation.31

1.4.8 Informal Economy In 2009-10, Pakistan’s documented economy produced goods and services worth Rs14.4 trillion ($170 billion)32, which is a substantial segment of national income. Estimates on the potential size of the informal economy range from a low of 10 percent to a high of 30 percent placing the value of goods and services produced by the informal sector at between $17 billion to $50 billion. A recent study suggests that the informal economy has declined from 30% of GDP in 2003 to 20% in 2008, with the State Bank of Pakistan estimating its value at approximately $34 billion in 2009/10.33 Pakistan’s informal economy primarily comprises: (i) The illegal economy-economic activities that produce goods and services the production of which violates legal statues such as arms trafficking, drug trafficking and prostitution. (ii) The unreported economy-economic activities that produce goods and services but evade FBR’s tax code and evade labour laws/regulations such as contributions to EOBI, minimum wage laws, age limits, working conditions, etc. Some of the latter category of activities can be attributed to the regulatory burden. Economic activities that take place within the informal sector not only create huge costs for legitimate economic activities but also weaken states and threaten development opportunities keeping countries trapped in cycles of poverty and instability.34 Activities of international organized crime groups and insurgent and extremist groups active in conflict zones throughout the world are financed through the informal sector. There is a feedback loop between the illegal economy and economic inequalities. Economic inequalities provide an enabling environment for illicit trade, corruption and organized crime. In turn, the proceeds reinforce the power of the privileged, while undermining economic development by raising the costs of doing legitimate business, thereby increasing inequalities both within and between countries.35

1.4.9 Rapid Population Growth Pakistan, with 180 million population, is the planet’s sixth most populous country. Over the past six decades, Pakistan’s urban population has increased by more than sevenfold whereby close to 37 percent of the population is now urban making Pakistan the second most urbanized country in South Asia. Pakistan’s median age of 21.2 years-with a global range of 48.9 for Monaco and 15 for Uganda-makes Pakistan one of the world’s youngest of countries. By 2050, with an annual growth rate estimated at 2.07 percent, Pakistan is expected to become the fourth most populous state. Pakistan’s population growth rate, its age structure, income distribution and the development of its human capital could be the principal determinants of the economy’s productive capacity. According to the Economic Survey 2010-11, “Pakistan’s population has been growing at a decelerating pace but still Pakistan has one of the highest population growth rates in the world. Population growth has decelerated from 3.06 percent in 1981 to 2.07 percent in 2011.”

Figure 9: Global Median Age36

Pakistan’s population growth rate is decelerating, the working age population is expanding and the age dependency ratio is on its way down. All of these factors point towards a demographic transition with the potential of a huge demographic dividend resulting in a “rise in the rate of economic growth due to a rising share of working age people in the population.” By 2030, Pakistan’s working age population is expected to be around 67 percent from the current 54.9 percent. There are two issues in relation with Pakistan’s high population growth, similar to a double- edged sword. The first, which is positive, is related to the demographic dividend, where a higher proportion of young working aged population can support the economy. This is providing adequate gender-sensitive economic growth takes place to accommodate and employ young men and women into the work force (the working age population is usually defined as being the 15-65 year old segment of the population, not all of whom will be employed in the labour market due to disabilities or domestic responsibilities, for example).The second point relates to a potentially negative factor known as the youth bulge. This refers to unemployed youths, mainly male, who are not gainfully employed by the economy, and who may turn to crime, violence, drug addiction as well as being ready recruits for rebel organizations in the context of civil war. So too, young women’s needs should be addressed as a matter of the highest priority.

Figure 10: Pakistan - Age Dependency Ratio of Working- Age Population37

The demographic dividend has to be reaped within a demographic window of opportunity. The Commission on Population and Development defines that window as the period “when the proportion of children and youth under 15 years falls below 30 per cent and the proportion of people 65 years and older is still below 15 per cent.” According to the Woodrow Wilson International Center for Scholars, Pakistan’s “population promises to remain youthful over the next few decades. In the 2020s, the 15-24 age bracket is expected to swell by 20 percent. Pakistan’s under-24 population will still be in the majority come 2030. And as late as 2050, the median age is expected to be only 33.”38

Europe’s demographic transition opened up the demographic window in 1950 and that remained open for a good 50 years. The Chinese window opened up in 1990 and is expected to remain open till 2015. Pakistan’s window of opportunity can only be exploited if sufficient infrastructure is in place; there is an emphasis on education and human capital accumulation, both of which contribute to economic growth that can employ its growing youthful population. However, the Framework for Economic Growth states: “With almost two-thirds of the population (68.4 per cent) below the age of 30, Pakistan is going to experience a youth bulge in coming years, which is likely to change the age structure of labor force over the next couple of decades.”39 A study by Population Action International suggests a “strong correlation between countries prone to civil conflicts and those with burgeoning youth populations. Social scientists label this demographic profile ‘youth bulge,’ and its potential to destabilize countries in the developing world is gaining wider acceptance among the American foreign policy community. The theory contends that societies with rapidly growing young populations often end up with rampant unemployment and large pools of disaffected youths who are more susceptible to recruitment into rebel or terrorist groups. Countries with weak political institutions are most vulnerable to youth-bulge-related violence and social unrest.” A paper by the Pakistan Institute of Development Economics neatly summarizes the situation: “For economic benefits to materialize, there is a need for policies dealing with education, public health, and those that promote labor market flexibility and provide incentives for investment and savings. On the contrary, if appropriate policies are not formulated, the demographic dividend might in fact be a cost, leading to unemployment and an unbearable strain on education, health, and old age security.”40

1.4.10 Urbanization In 1998, Pakistan’s population of 130.58 million was 32.5% urban. In 2010, the urban population was estimated at 63.1 million.41 These challenges are compounded by the emergence of Meta urban regions around a large city with more than 100,000 urban settlements in the proximity of 50 km connected by transport and communications and with strong economic and social linkages. Such Meta urban regions and cities are assuming the role of engines of economic growth.42 To improve competitiveness and business environment, an expansion in urban city markets, promotion of cluster development, improvement in urban governance, skill development and autonomous local governments are needed. However caution is needed to avoid further increasing the urbanization growth rate and therefore all these interventions should neither be at the expense of rural development nor the shifting of resources towards urban centres. The major developmental challenges in this context are infrastructure deficit, urban poverty and unemployment, inconsistent future ambitions for urban Pakistan, gaps in urban sectoral policies like those for local economies, housing, land, primary and secondary education and basic heath,43 energy and fuel, increasing informal subdivision of land for housing, a limited recognition of informal sector as provider of wide ranging urban services, increasing pollution, terror attacks, crime and vulnerability to natural calamities and the absence of mass transit systems and increasing investment for facilitating private road transport. The coping strategies need to be ‘urban’ rather than sectoral therefore the economic, social, governance and environmental strategies should relate to each other. For this to happen, the elected local Government should have the authority and resources to devise and implement its own city plan.

1.4.11 Government Expenditure In terms of development expenditure, the national budget for social protection has doubled from 0.88% in 2007/8 to 1.65% in 2009/10, though in real terms this is still small. Actual expenditure on social

protection, however, reflects the opposite trend. In 2007/8 expenditure was 160% of the budget, whereas in 2009/10 it was under 60% and actually reflected 55% lower value in rupee terms.44 Housing and Community Amenities accounted for 12% of the budget and 14% of expenditure in 2007/8, and 15% of the budget and nearly 17% of expenditure in 2009/10.

The budget for Health increased by 150% (not accounting for inflation) in this two year period but expenditure remained the same. Education appears to be regularly under-spent, with only 30% of the allocated budget in 2009/10 being expended. Construction and Transport remains the largest single item, accounting for 43% of both the total budget and expenditure in 2009/10. Overall, in 2007/8, 2008/9 and 2009/10, 72%, 89% and 70% of the budget was expended respectively, pointing to a significant capacity gap, especially at the provincial level.45 The lack of sex disaggregated data in the budget and fiscal analyses is a gap that needs to be addressed.

Another concern is that “overall, provinces recover less than five percent of recurring expenditure on services. The highest level of recurrent cost recovery is for community services [9.6% in 2000 increased to 24.4% in 2010] and irrigation [43.2% in 2000 decreased to 22.2% in 2010].”46 Here too provincial disparities are stark with poorer provinces lagging behind: cost recovery for community services in 2010 ranged from 54.9% in Punjab to 1.9% in Balochistan. Yet, Balochistan was the only province which should an increase in recovery percentage between 2000 and 2010, while overall cost recovery declined from 6.8% to 4.8%, and no province had a recovery rate of over 6%.

2 Inclusive Growth

2.1 Situation Analysis Although Pakistan has seen sustained periods of economic growth, these have not always translated into proportionate poverty reduction.47 Growth, holding the distribution of income constant, lowers poverty, but truly pro-poor and inclusive growth requires an improvement in the distribution of income which has not occurred.48 The poverty head count using the purchasing power parity (PPP) $1.25 a day international poverty line is 41%. The distribution of income shows a GINI coefficient of 32.7, based on consumption. According to a UN study, The “second significant period when high growth rates did not get translated into rapid or sustained poverty reduction gains was the most recent period from around 2002 till 2007 when once again, perceptions of rising inequalities led to political alienation from the economic model being pursued.”49 Around 1960 Pakistan and South Korea were at about the same level of GDP per capita. The evolution of their economies since that time may even be considered a natural experiment. Half a century later the gulf between the two has widened considerably with South Korea ranking as a developed country, yet Pakistan’s historical growth rates are not poor by global or developing country standards. There can be two issues of importance here, neither of which is mutually exclusive. The first may relate to the fact that Pakistan’s growth rates although impressive have not resulted in human development 50 Secondly, it may be argued that unlike in East Asia, and neighbouring India since the 1990s, Pakistan’s growth rate has stalled. The next question is, why is growth important for human development, human security or a rights or capability based approach to development? The answer lies in the fact that for a poor low-income developing country like Pakistan redistribution alone can only make the mass of people slightly less poor. Hence, there is no option but to expand the size of the cake, because it creates the potential for human development. Redistributive policies matter, in order for growth to be inclusive. In summary, there are two issues to be examined: (1) Growth has not resulted in adequate human development; (2) growth itself has slowed since the 1980s, with a downward trend As Easterly (2001) argued a decade ago, countries at the same level of per-capita income compared to Pakistan, and also countries with similar growth rates have achieved more in terms of education and health indicators. Its health, educational outcomes are poor. Illiteracy is high, especially female illiteracy, and education is elitist. Also, no efforts at population control to reap benefits of something called the demographic dividend. This happens when the share of the dependent population (in Pakistan’s case children) decline. In other words, when the birth rate falls, at some point in the future the 15-65 aged group becomes a larger fraction of the population; since they are “productive”, the economy gains. Why? Two factors according to Easterly (2001): the interests of the ruling elite, and inter-regional or ethnic conflict. Modern growth relate this phenomenon to factors (a) its proximate causes, that is the right policies; and (b) long-term institutional factors.51 The right policies include the right trade and industrial policies as well as sound macroeconomic management (inflation control, sustainable budget deficits, sound balance of payments and exchange rate management). Moreover, growth is related to human capital and health, thus the new growth theory confirms what is included in the UNDP’s HDI index. Much is known about these and does not require further elaboration.

The institutional factors explain the long-run, and are less well known. That may be why Korea did well and Pakistan did not despite both countries pursuing similar policies (obviously more vigorously and successfully applied in South Korea). The argument is as follows. Acemoglu, Johnson and Robinson (2005) have produced the most influential recent theoretical basis for the role of institutions in determining long-term growth. They argue that political and economic institutions need to be differentiated. The latter are mainly related to property rights and contract enforcement, which are associated with the rule of law. Political institutions pertain to both formal rules (the constitution or long established conventions), as well as the informal exercise of power. In many ways, this corresponds to North’s (1990)52 distinction between formal and informal institutions. Formal political institutions are slow to change, as evidenced by the infrequency with which constitutions are altered. Informal political institutions refer to the power of the influential, and are very much related to the distribution of income or wealth. Political institutions and the distribution of wealth are the two state variables that jointly determine economic institutions, which in turn determine economic performance or growth, and the future distribution of resources and political institutions. According to Acemoglu, Johnson and Robinson (2005) the conditions for the development of good economic institutions consist of53 firstly, constraints upon the executive and a degree of democracy with separation of powers. With less than perfect democracies, few checks on the elected executive, unbridled power in office may lead to economic policies that only enrich narrow support groups. Some actually set about actively dismantling or undermining checks on their executive power, such as the independence of the judiciary. Secondly; the enforcement of property rights (necessary to secure investment) are broad based and are not confined to an elite group’s interests. Otherwise predation will be common; violence is the easiest means of protecting the vast estates of the wealthy few. In other words, societies with less inequality and a powerful middle-class are more likely to devise superior economic institutions. Finally, when there are few “rents” that can be appropriated by a small group---implying the absence of rents that can be easily captured is also a condition for the emergence of more sound economic institutions. Pakistan, unlike South Korea, has not moved up the technological ladder. It is not just because of Korea’s special relationship with the USA. Pakistan too has been occasionally blessed and showered with aid. Pakistan’s exports are unskilled labour intensive. It also exports raw labour: worker remittances are a major source of income in the current account of the balance of payments positive side. Pakistan’s comparative advantage appears to lie in unskilled labour intensive services (manpower). Yet, there are some success stories like Sialkot’s surgical instruments industrial cluster. Dani Rodrik 54 has proposed a diagnostic methodology for searching for the more binding constraints on growth. This manner of proceeding is predicated by the fact that institutions are slow to change, but policy makers cannot wait for fundamental institutional improvement before attempting to foster economic growth and poverty reduction. Given the presence of many distortions in the economy, the removal of a single problem can cause matters to get worse, unless that particular distortion is a major constraint on growth. The Planning Commission’s framework for economic growth is an example of this diagnostic methodology. The rest of this chapter addresses long-term factors that impede inclusive growth, followed by policies to tackle these in the context of framework for economic growth.

2.2 Inequalities and the Long Term Factors for Inclusive Growth Failure In Pakistan, historical and geographical patterns have long been behind economic, social and political exclusion of large segments of the population. Inequality of economic opportunity is of two types: distributional and structural. Distributional inequalities persist primarily because of three factors: the government’s fiscal policy, the government’s commodity operations and monopolized markets. Structural inequality has four dimensions: gender, regional, economic class and social identity. This section examines each of these dimensions and then analyses the causes of these factors.

Figure 11: Structure of Inequalities in Pakistan

For the purpose of this Assessment Pakistani households as opposed to individuals will be treated as the primary unit of analysis because most empirical studies in this field have considered a Pakistani household as the primary unit of production as well as that of consumption.

2.2.1 Distributional Inequalities Distributional inequalities have acted as market distortions raising the prices of goods including food. This section examines fiscal policy and rent seeking behaviour.

2.2.1.1 Fiscal Policy Taxation serves at least two other major purposes: redistribution that is collecting from the rich and spending on the poor-or vice versa-and re-pricing that either discourages or encourages particular economic activities. For fiscal 2011-12, the Government of Pakistan is projecting to collect 64 percent of the entire tax revenue from indirect taxes and 36 percent from direct taxes55. Indirect taxes are regressive in nature in the sense that they take “a larger percentage of the income of low income people than of high- income people.” The impact is to increase inequalities between households. Indirect taxes may “increase the price of a good so that consumers are actually paying the tax by paying more for the products.” Fiscal policy, therefore, has a direct impact on disposable incomes. According to the Food and Agriculture Organization of the United Nations (FAO), “Poor urban households spend from 60 to 80 percent of their income on food.”56 The rural off-farm and small farmers spending on food increased considerably, especially of wheat flour being the major food item. Increased by 131 percent as compared to 50 percent 57 in wage rate compared the pre-crises (May 2007) to present (May 2011) . According to Dr. Aisha Ghaus-Pasha of the Institute of Public Policy, Beaconhouse National University, “Pakistan’s overall tax-to-GDP ratio has remained stagnant at around 10-11% or so and, in fact, has

shown a decline in recent years. Today Pakistan has a lower tax-to-GDP ratio compared to other Asian countries like Sri Lanka (13 percent), India (16 percent), Indonesia (15 percent), Malaysia (14 percent), Thailand (17 percent), Philippines (14 percent), and South Korea (16 percent).” Looking at individual taxes, the significance of customs duty and central excise duty within the overall tax pie has gone done while the contribution from direct taxes and sales taxes has gone up. The picture therefore is a mixed one whereby the government has not been able to increase the tax-to-GDP ratio but revenue losses from a decrease in customs duties as a consequence of trade liberalization have been recouped through a steady increase in Sales and income taxes collection. While tax coverage remains low the Islamabad Chamber of Commerce and Industry suggests that the “government should look into reforming the tax collections and filling process to foster greater public trust in tax authorities, eradicate the occurrence of corruption and make the system fair.” According to the Institute of Public Policy, “The way forward … is the implementation of a resource mobilization strategy which has three pillars: expansion of the current GST to cover services and exempt and zero-rated sectors; improvement of direct/income tax administration; and enhancement in the provincial tax- to-GDP ratio.”

2.2.1.2 Rent Seeking Rent-seeking is defined as the “practice of an individual, company or government attempting to make a profit without making a product or producing wealth without contributing to society…by manipulating the social or political environment in which economic activities occur, rather than by adding value.”58 Commodity operations and monopolized markets are the main manifestations of this in Pakistan. Commodity operations The real objective of food stock management through the use of a government support price mechanism was to enhance food security. Government-run commodity operations were modest to begin with but have since expanded to an extent where the governments of Punjab and Sindh plus the Trading Corporation of Pakistan (TCP) and Passco now collectively borrow hundreds of billions of rupees to finance the purchase of wheat, sugar, urea and rice. This, at times, may not have been in the best interest of end-consumers. In May 2011, the State Bank of Pakistan (SBP) reportedly informed the Monetary and Fiscal Co- ordination Board that “government borrowing for commodity operations is likely to touch Rs425 billion” by fiscal end 2011.59 As of April 2011, “outstanding on account of commodity operation stood at Rs276.5 billion for wheat, sugar, urea and rice. Punjab and Sindh governments owed Rs99 billion and Rs17 billion respectively whereas Passco and TCP have to clear Rs61.1 billion and Rs99.3 billion, respectively. The borrowing includes Rs175 billion for wheat, Rs44.7 billion for sugar, Rs41.1 billion for urea and Rs15.2 billion for rice.”60 Regrettably, due to inefficiency and lack of federal-provincial coordination, these commodity operations result in a reduction in the purchasing power of the poor who reduced spending on non-food items to compensate for basic food need. Thus, food insecurity drastically shoots up. Monopolized Markets Collusive practices to set prices and prevent competition exacerbate existing inequalities. On 11 January 2010, the Competition Commission of Pakistan (CCP) held the country’s first National Conference on Competition Regime in Pakistan. The conference was organized “to provide a platform for the exchange of information on a number of competition-related issues in various sectors of the country’s economy.” A report titled ‘State of Competition’ asserts that Pakistan has had a long history of rent-seeking behavior by the business community which needed to be dealt with decisively sooner rather than later.28

There is evidence that members of some business associations have been-and continue to-engage in collusive behavior that maximizes profits for the members at the cost of consumers thus intensifying the existing inequalities.61

2.2.2 Structural Inequalities There are at least four kinds of structural inequalities that exist in Pakistan: gender, regional, economic class and social identity.

Figure 12: Structural Inequalities in Pakistan

2.2.2.1 Gender-based inequalities According to a World Bank report, “the issues of gender inequality in Pakistan are well documented, less is known about what drives these gender differences and what policy levers are at hand to effect change.”62 Gender-based inequalities are typically divided up into two categories: economic and non-economic. The two commonly used indicators for economic inequality are labor force participation and asset ownership. In the non-economic category are indicators on education, health and political participation. Section 4 examines the differentials relating to factors such as labor force participation, education and health.

2.2.2.2 Regional Inequalities In Pakistan, regional inequality is an important dimension of overall inequality. Regional inequalities fall into three categories: infrastructure, social services and economic opportunities. Inequalities are geographic with inter-regional as well as intra-regional inequalities. The PIDE inequality rankings of 2003 “show wide disparities between as well as within provinces. Punjab and Sindh turn out to be more developed for a range of indicators than Balochistan, NWFP and FATA. Within provinces there are important dualities. In Punjab, for example there is a sharp divide between north-central parts of the province and its south. In Sindh the main source of duality is the disparity between Karachi and the rest of the province.”63 Dr. Akmal Hussain states, “It is important to note that not only does the overall growth rate of provincial income vary between provinces but recent research suggests that there is also considerable inter- provincial variation in the level of poverty and changes over time.”64

There are also political and demographic dimensions. According to the World Development Report 2006, “Weak resource endowments and distance from markets can constrain development in lagging regions. In many cases, economic differences are linked with longstanding, unequal relations of power between advantaged and lagging regions, and institutional weaknesses within the latter.” Concentration of disadvantaged Identity Based Groups (IBGs) in regions causes regional inequalities. The situation may be made worse by the regional elites who hijack power.65

2.2.2.3 Economic Class Inequalities based on a household’s belonging to a particular economic class seem to be dependent on asset ownership and is more prevalent in rural rather than urban areas. In regions where “asset ownership is highly unequal, economic mobility can be constrained even under conditions of apparently open markets. Entrenched class inequalities, particularly in rural areas, are known to be impediments to equal citizenship, economic productivity, and poverty reduction….”66 Gender bias in claiming assets, inheritance and access to justice are also determinants of the economic class of individuals and female headed households.

2.2.2.4 Social Identity Social identity influences the functioning of Pakistan’s formal and informal institutions. “The labor market, for example, is not always anonymous and a person’s identity can be an important determinant of opportunities. This is partly due to discrimination and party because of the importance of personal reference and group-based collective action in contract enforcement. Studies of bonded labor have also revealed that a key common element among vulnerable workers is that they belong to historically marginalized groups that have relatively restricted access to political voice or state functionaries.”67

2.3 Causal Analysis Pakistan’s tax-to-GDP ratio continues to be one of the lowest in the world. The macro policy regime, particularly the non-implementation of the government’s anti-monopoly policy and multi-billion rupee commodity operations distort the market and encourage rent seeking behavior. A regressive policy regime formulated by a combination of special interest groups has been instrumental in creating and perpetuating inequalities as well as exclusions. Such exclusions and inequalities have impeded the alleviation of poverty even during sustained periods of economic growth.

Figure 13: The interplay of Processes, Policies and Consequences

Legal Exemptions

Fiscal Policy Poverty Commodity Operations Inequality Competition Policy Exclusion

Pakistan’s tax structure is affected by small coverage and low compliance. The upper tax brackets have been allowed substantial rate discounts. A large chunk of personal income tax is in practice collected as withholding tax. Revenue from indirect taxation predominates. In effect, tax policies to redistribute income and wealth need a revisit. Such policies require political will and administrative capacity. In order to alleviate poverty and reduce inequalities the question of who will pay income taxes has to be answered in terms of ‘source neutrality’-everyone pays regardless of the source including the income generated from agricultural sources. The question of how much will they pay has to be answered in terms of ability-to-pay and the progressive structure of income taxation. Presently, public policy encourages rent seeking which leads to under investment in infrastructure and in human capital.

2.3.1.1 Current Electoral Order Around two-third of all directly contested National Assembly constituencies are rural or rural-cum-urban. In most of these constituencies “Biradari seems to be stronger than political fidelity as far as motivations for voting behavior are concerned. Two elements are required for the victory of a candidate; one is the ticket of a major political party and the other is the favor of a major biradari.”68

The prevailing electoral order, in effect, divides up the entire rural population into two categories: Zamindar (landlord/cultivator) and Kammi (Services/occupational cast/non-cultivator/manual working class), though there is geographical variation. As per election data from 1977, 1985, 1988, 1990, 1993, 1997 and 2002 the winners in rural areas in for example Punjab are always from land-owning classes like Jatt, Rajput, Arian, Gujar and Kharal.69 The Kammi has little or no interaction with the State. The Zamindar acts as the State for the Kammi providing livelihood and resolving disputes. The Kammi holds and operates on ‘survival values’ whereby his/her primary concerns are physical and economic security. So in elections the Kammi are prone to analyze the candidates strictly on the basis of physical and economic security rather than some higher values of quality of life.

Election data from 1977, 1985, 1988, 1990, 1993, 1997 and 2002 clearly shows that the candidates’ ability to manipulate patron-client relationships is the major determinant. Winning elections in rural areas is about two things: one, the creation of ‘patron-client’ relationships; and, two, the use of human networks. After winning an election the winning candidate has to pay off ‘human network debts’ in terms of providing for and protecting the client (sometimes from the State). Voters that are not part of the patron-client relationship may be at a disadvantage. Gender bias also plays an important part in the exclusion of women from public life. Very few tickets are awarded to women however some of the possible negative consequences such an exclusion have been mitigated with the introduction of women’s seats in the parliament.

2.4 Rights Holders and Duty Bearers Rights holders are voters; consumers, especially those with an income of less than $1.25 a day; and taxpayers, especially those paying indirect taxes. Duty bearers are parliamentarians, the Election Commission of Pakistan, the Federal Board of Revenue, the Competition Commission of Pakistan, the Supreme Court and provincial High Courts, the business elite, the Trading Corporation of Pakistan, and the Pakistan Agricultural Storage and Services Corporation. Given the above analysis the Election Commission and Competition Commission could provide potential entry points for interventions. The Planning Commission of the Government of Pakistan has now presented the strategic framework for growth should therefore be read as the future plan of the most important duty bearer for inclusive growth.

2.4.1 Framework for Economic Growth70 According to the Planning Commission’s Framework for Economic Growth the principal challenge is to be able to translate the ‘youth bulge’ due to its rapid economic growth into a ‘demographic dividend’ within a demographic window of opportunity. The new growth strategy, in that sense, is pragmatic, prudent and practical-all in one. In the 1970s, Pakistan’s GDP comprised of 40 percent agriculture, 25 percent industry and 35 percent services. By 2010, the shares of the various sectors in GDP were as follows: 20 percent agriculture, 30 percent industry and 50 percent services. Agricultural employment, however, outstrips its share of GDP. The share of services in GDP rises with growth, as the economy matures, but most services are mainly an input into other productive sectors of the economy, including agriculture and manufacturing. The new growth strategy’s recommendation is to focus on “economic governance, institutions, incentives and human resources.” One of the principal reasons behind this recommendation is that Pakistan is short of capital needed to invest in physical infrastructure-brick, mortar, machinery and equipment. According to the Framework there has been an “undue emphasis (over 60 percent of PSDP) on brick and mortar.” The recommendation does not need huge amounts of capital and has the potential of generating growth – growth that Pakistan cannot live without. The aim is to increase productivity. This has two facets, the rate of return on investment has to become higher, which in turn will raise labour productivity, particularly in manufacturing, enabling the economy to become an exporter of manufactured goods along the lines of other East and South Asian economies.71 How can productivity of investment be improved? This involves identifying the constraints to economic growth. These include infrastructural improvement, the availability of power supply and increasing the attractiveness of productive sector investment, all determining factors for global competitiveness. Pakistan ranks low on the Global Competitiveness Index among south and Southeast Asian countries (Table 2). The new growth strategy has two specific recommendations: Increase competitiveness and ease

entry and exit. How can profitability of private investment be increased? The new growth strategy has three specific recommendations: improve the investment climate; reduce costs of doing business; remove impediments to entrepreneurship. How can investment be encouraged? The new growth strategy has three specific recommendations focusing on a commercial judicial system, a reformed taxation system and newer bureaucratic (regulatory) practices, but does not identify the key areas that need change to provide equal access and opportunities for women. The Framework argues that “infrastructure in Pakistan (hardware of economic growth) is at least of a similar quality to that in our neighbors. However, they point out that other missing factors (such as innovation, entrepreneurship, markets etc.) impact negatively on the country's competitiveness and need urgent attention. While hardware of growth cannot be ignored given the current infrastructure shortages in the country, the point is of relative weakness—Pakistan is much weaker in software than in hardware. Development focus is therefore to be reoriented towards factors that are part of the software of economic growth.”

Table 2: Global Competitiveness Index72

Global Quality of ICT Usage Quality of Quality of Quality of Quality of Competitiveness Electricity Roads Railroad Port Air Index Supply Infrastructure Transport

Malaysia 26 40 50 21 20 19 29 Thailand 38 42 79 36 57 43 28 China 27 52 78 53 27 67 79 Indonesia 44 97 103 84 56 96 69 Vietnam 59 98 70 117 59 97 88 Philippines 85 101 106 114 97 131 112 India 51 110 118 90 23 83 71 Pakistan 123 128 109 72 55 73 81

The youth bulge has to be converted into a demographic dividend. New engines of growth have to be located for economic growth. The potential of rapid growth out of rural areas is limited. The new strategy proposes a complete transformation of our highly restrictive urban zoning laws which have “impeded the growth of domestic commerce and hampered the role of cities as generators of economic growth.” According to the Ministry of Industries and Production, Pakistan’s manufacturing sector has an excess capacity that in 2009-10 stood at 51 per cent. There were three major reasons behind that under- utilization: a severely constrained energy sector, the high cost of production and depressed external demand. Accumulated manufacturing losses because of the shortfall in energy have been estimated to be around 2.5 percent of GDP. According to Asian Productivity Organization labor productivity in Pakistan’s manufacturing sector is higher than in India and Bangladesh (but lower than in China). 73 The Framework asserts that the productivity and the competitiveness of the manufacturing sector can be enhanced through governance and institutional reforms. The Framework further claims that at the “present level of investment and institutional functioning, Pakistan's potential GDP growth rate is of the order of 5–6 per cent a year. Given the right policies and a modicum of good luck, it should not be impossible to get the economy back to a growth rate of between 5–6 per cent in a reasonable time, especially given the extent of unused capacity that exists in the manufacturing sector.”

The Framework suggests that the agriculture sector on its own does not have the potential of absorbing the youth bulge and thus the focus ought to move from agriculture to the services sector and from rural areas to cities as the new engines of economic growth. The Framework of Economic Growth is about new engines of growth, economic governance, strengthening of existing institutions and a re-focus on the software of growth-rather than hardware. And the new engines of growth are to be driven by the private sector with the government acting as a facilitator to entrepreneurship and innovation. The recent budgetary allocations suggest that the strategic aims of the Framework for Economic Growth will take some more time to be fully implemented in terms of tax and incentive policies.

2.5 Conclusion In summary, inclusive growth strategies require a holistic approach which combine the right policies particularly with regard to infrastructure, education (human capital) and health, along with an improved institutional environment concerning governance, which address structural or enduring inequalities and a rapidly growing population (that could be both a blessing or a curse). Pakistan needs reductions in the cost of doing business and removal of the impediments to entrepreneurship, especially for women. Constraints in the energy sector will also need to be addressed; accumulated manufacturing losses because of the shortfall in energy have been estimated to be around 2.5 percent of GDP. For growth to be inclusive and to reduce the inequalities that presently exist, the distributional and structural inequalities examined in this chapter will need to be addressed. Some of these are also related to economic governance but some will require targeted interventions, for example to ensure that excluded groups will also benefit from the job creation that the growth strategy forecasts. Pakistan’s growth potential, with effective implementation of governance and institutional reforms could pay a dividend not just in terms of economic growth but, coupled with reforms of the tax system, dividends in terms of overall human development. Strategies will need to be in place that utilize Pakistan’s young working aged population in terms of a demographic dividend, rather than the threats posed by a youth bulge. Furthermore, improved political institutions with greater democratic accountability will only serve to foster economic growth via institutional improvement. However, the vast rural agrarian population’s needs and aspirations too should be addressed by an overarching strategy that does not limit itself to urban growth, thereby treating all Pakistanis’ rights as equally important and underscoring the State’s obligation as duty bearer towards all citizens.

3 Environment and Sustainable Energy

3.1 Introduction The pattern of resource use to meet the needs of the present generation of Pakistan has been eroding the ability of her future generations to meet their needs. The forecast for the potential impact of climate change on the long and short term development in Pakistan and the investment required to cope with it are not encouraging. Pakistan is counted among the Worlds’ top 10 countries that are highly vulnerable to the impacts of climate change. The vulnerability and exposure of natural resources and ecosystems; and large segments of population puts enormous challenges on the human and economic development of the country. The challenge of environmentally sustainable development also puts strains on the energy requirements of a growing economy. The United Nations General Assembly adopted resolution to declare 2012 is declared as “International Year of Sustainable Energy” for all because there is a close nexus between energy and development. Reasons are several. First, without access to modern energy services, it is difficult to effectively provide modern health services, improve agricultural productivity through increased value-added product processing, get the full benefit of improved educational systems, support democratic governance through communication with citizens, or building an economic base that can participate in today’s globalized economy74. There is a direct link of energy and MDGs from poverty alleviation to gender empowerment, which must be predicated on equal access and opportunities for men and women. To protect environment and prevent against pulmonary and ophthalmological diseases, people also require energy access at the household level. Access to basic needs like water and health services is linked to availability of power. According to a World Bank study, access to electricity can be correlated to the number of people living in poverty75. Of course, correlations do not equate to causality, but as documented in USAID’s 2006 report on ‘The Role of Energy in Development’, access to modern energy services can be a powerful enabler for economic and social development, while the lack is an obstacle to successful development. The subsequent subsections will analyse the situation related to both the problems of sustainable environment and energy. A causal analysis will be given followed by an assessment of the roles and obligations of the duty bearers and rights holders.

3.2 Situation analysis

3.2.1 Situation Analysis of Environment The natural resource base in the country is stressed which is threatening to undermine the growth prospects. Conservative estimates suggest that environmental degradation costs the country at least 6 percent of GDP, or about Rs. 365 billion per year, and these costs fall disproportionately upon the poor, especially women. 76 The environmental damages identified and estimated are due to illnesses and premature mortality caused by air pollution (indoor and outdoor) at almost 50 percent of the total damage cost, diarrheal diseases and typhoid due to inadequate water supply, sanitation and hygiene at about 30 percent of the total), and reduced agricultural productivity due to soil degradation at about 20 percent of the total.77 The above costs are in addition to the challenges presented by economic growth and urbanization such as hazardous solid waste. The subsequent sections will present the situation related to forests, land, air, water, coastal mangroves and the challenge of climate change.

3.2.1.1 Forests, Pakistan has very low forest cover, but these forests are very diverse in nature and of significant importance for the livelihood security of millions of rural people who live in and around these forests. The forest cover has declined in the recent years at an increasing rate (-1.8% during 1990-2000 and -2.1% during 2000-2005). The 3.3 million hectares of total forests today is equivalent to 4.8% of the total land which is the lowest relative forest cover are in the world.78

Table 3: Forest Cover in Pakistan Year Forest Cover (Hectares) 1995 2527000 2000 2116000 2005 1902000

The impact of the low forest cover can be seen in the form of erosion, desertification, decreased water quality and availability, decreased quality of air, siltation, landslides, and lower capacity of land to hold water.79 The forests therefore are in in urgent need of protection and conservation.

3.2.1.2 Land Soil erosion has become a serious problem in Pakistan as about 13.05 million hectares of area is affected by water erosion and about 6.17 million hectares is affected by water erosion.80The extent of the area affected by water and wind erosion is given in Table 4. Soil erosion is taking place at an alarming rate and is mainly due to deforestation in the north of the country. The highest recorded rate of erosion is estimated to be 150-165 tons/hectare/year. According to some estimates the Indus is adding 500,000 tons of sediment to the Tarbela Reservoir every day, reducing the life of the dam. By comparison, wind erosion has a relatively lower impact than water erosion.

Table 4: Area affected erosion (000 ha)81

Degree of Water Punjab Sindh KP Balochistan Northern Pakistan erosion Area Slight (sheet & rill 61.2 - 156.3 - 110.5 328.0 erosion) Moderate (sheet & 896.8 - 853.8 1858.6 25.8 3635.0 rill erosion) Severe (rill, gully 588.1 58.9 1765.1 2724.4 504.2 5640.7 and/or stream bank erosion) Very severe (gully, 357.9 - 1517.0 - 1571.6 3446.5 pipe & pinnacle erosion) Total 1904.0 58.9 4292.2 4583.0 2212.1 13050.2

Degree of Wind

erosion Slight 2251.4 295.0 13.1 36.0 NA 2595.5 Moderate 279.1 70.2 3.8 143.6 NA 469.7 Severe to very 1274.0 1686.8 19.6 100.9 NA 3081.3 severe Total: 3804.5 2052.0 36.5 280.5 NA 6173.5

The fertility status of Pakistani soils is also rapidly declining. The data suggests deficiency of nitrogen in 100% soils and phosphorus deficiency in more than 90%. Same is the situation with organic matter content, which is around 0.5% only. Potassium deficiency in Pakistani soils, which was not a soil fertility problem earlier, is increasing rapidly due to the discriminate use of only nitrogenous and phosphatic fertilizers. Various public and private organizations in the country are reporting a soil potassium deficiency in the range of 20-40%. The nutrient balance sheet of Pakistani soils reflects severe declining trends for all nutrients. The estimated loss of productivity as a result of land degradation is US $ 353 million annually, and the loss to rangeland productivity is between US $ 90 - 160 million/year.82 The need to produce more food for the present generation has led to an increase in fertilizer and pesticide use in the country. This is resulting in deterioration of overall soil health (poor tilth), soil structure (compaction) and health hazards for the general public especially those in direct contact with these chemicals. In 2003, about 5.6 million tons of fertilizer was used every year with a per hectare consumption of approximately 133 kg. This is higher than world average of 94.1 kg/ha but the yield productions are substantially lower.83 Yet, by the fertilizer industry standards, Fertilizer usage in Pakistan is low.84 The use of pesticides began in 1960s in Pakistan. Traditional methods to eliminate pests were gradually discontinued. Consumption of pesticides in Pakistan has increased from 665 metric tons (MT) in 1980 (when subsidy was withdrawn) to 69897 MT in 2002.85 This overuse has disturbed the agro-ecosystem, induced pest resistance and resurgence and destroyed the bio-control agents e.g. the natural enemies of the insects including birds; have declined up to 90 percent, in cotton growing areas of the country.86 A break up of the total cost of pesticide use in the cotton growing areas of Punjab is given in Table .

Table 5: External Cost of Pesticide Use in the Major Cotton Growing Areas of Punjab87

Typed of External Cost Effects Identified Value ((Million Rs.)

1. Human Health Occupational Poisoning Pesticide Applications Fatalities, Treatment costs, workdays loss 266.7

Women Cotton Pickers Treatment cost, Workdays loss 765 Acute/Minor Ailment Cost 0.64 Distribution, Storage and Disposal Environmental/ Health Problems Effects not quantified Pesticide Residue in Food Chain

Kharif Vegetables Potential Externality for Rejected Outputs 72.3

Drinking Water Opportunity Cost of labor to get Clean water 14.3

Cottonseed-oil and Cottonseed-cake Cottonseed-oil and Cottonseed-cake 23.3 2. Production Externalities Pest Resistance Yield loss and more pesticide use cost 5667 Domestic Animal Poisoning Production loss, mortality and treatment cost 1304.5

Wild honeybee and sunflower Loss of honey and yield loss due to pollinator 63.2 production losses loss 3. Environmental externalities Wildlife and birds Loss of useful insects and birds fauna with Effects not increased use of pesticide quantified

Loss in Biodiversity Increased Dependence on pesticide use to get 3745 stagnating or declining productivity

4.Health/Environmental Monitoring Cost of toxicity Analysis 4.8

5. Public Awareness Campaigns Cost of public extension media and NGOs 14.1 Total 11,941

The harmful effects of indiscriminate pesticide use are disproportionately high for women. Traditionally women pick cotton in the fields in Pakistan. These women, numbering about 2.6 million, uninformed of the dangers as compared to their male colleagues, are increasingly exposed to highly toxic pesticides. Fears prompt farmers to use pesticides even during the cotton-picking period. These late sprays, their usefulness questioned, have serious implications for cotton pickers. Table indicates the relative disadvantageous and harmful situation that these women farm workers are exposed to.

Table 6: Cotton Farm workers' awareness about pesticides

Men Women Percentage who have received training 86 32 and information on the danger of pesticides Percentage who are provided with 82 5 access to protective equipment and other precautionary measures

3.2.1.3 Water Per capita water availability in Pakistan has also decreased from 5,000 cubic meters per annum in 1951 to 1,100. About 80% of the Punjab has fresh groundwater, but in Sindh, less than 30% of groundwater is fresh. In KP, increasing abstraction has resulted in wells now reaching into saline layers, and much of Balochistan has saline groundwater.88

The surface and ground water reserves are also affected by the uncontrolled discharge of industrial effluent leading to lead, chromium and cyanide in groundwater samples from industrial areas of Karachi. In Sindh almost 95% of shallow groundwater supplies are bacteriologically contaminated.89 In Balochistan drought, depleting ground water, Tsunami (coastal belt) and loss of flood water (flood run off) are seen as pressing environmental concerns.90 Although there is a proper Ground Water Management Ordinance, according to which no one can dig a tube-well without the permission of deputy commissioner; the rules are violated with impunity. Electricity was charged at a flat rate of Rs. 4500 per month which worsened the situation of ground water level. There has also been a quantitative and qualitative decline in the mangroves forests of coastal regions over the last two decades.

3.2.1.4 Air

Although the Green House Gases emissions in Pakistan are still insignificant, totaling 157 million t CO2 in year 2007-08, these are bound to rise with GDP growth. For Pakistan, A 1% increase in GDP growth has been shown to lead to 0.84% increase in growth rate of carbon dioxide emissions. An increase of 1%

in the energy intensity growth rate causes almost 0.24% increases in growth rate of CO2 emissions.

Energy Intensity growth and CO2 emissions growth are affecting the level of development significantly and positively by 0.3% and 1.2%, respectively. 91

3.2.1.5 Climate Change The cost for Pakistan to adapt to climate change has been recently put at US $ 10.7 billion per year for the next 40-50 years.92 The climatic change will have massive impacts on the water security, food security and energy security.93 The regions most vulnerable to climate change are also the most underdeveloped in the country. Delayed action or inaction in countries like Pakistan could lead to irreversible consequences.94 The likely impacts may include overall temperature increase in Pakistan, additional stress on water resources due to variability in water flows in the Indus river system, variability in monsoon and winter rains leading to more frequent and intense floods or droughts, Saline water intrusion due to ongoing sea level rise in Pakistan, Increased heat, water scarcity and increased intensity and duration as well as increased frequency of droughts which would seriously threaten agriculture and food security. Health care would face additional challenges from outbreak of heat related and insect- transmitted diseases, from malnutrition as well as growing food and water insecurity. The effects would be more pronounced because Pakistan is less able to adapt to the expected changes and the impact on its poor would be disproportionately high.

3.2.2 Situational Analysis (Sustainable Energy) Electricity shortages in the summer of 2010 have peaked at 5,000 megawatts (MW). According to an estimate of Asian Development Bank report95, 30% of the population in Pakistan has no access to electricity, and about 80% have no access to piped gas. Pakistan ranks 165th out of 218 countries in per capita access to electricity (India ranks 160th)96. More reliance on these imported fuels is adding to problem of balance of payment. Increased cost of imported fuels is increasing the cost of electricity generation. Gas shortages have resulted in rationing of gas for domestic and transportation purposes. Energy shortages are not only blocking growth but also limiting employment opportunities which is affecting daily lives of people directly and impeding human development. “These shortages are therefore a serious handicap in the government's strategy to fight the poverty that breeds extremism and violence in society at a time when the country is fighting a war against terrorism in its border areas.”97 Table gives an overview of the impact of load shedding due to energy crisis in Pakistan.

98 Table 7: Cost of Load-shedding Cost to the Industrial Sector Rs. 157 Billion Cost to the other sectors of industrial loss Rs. 53 Billion of value added Total Cost of Industrial Load Shedding to Rs. 210 Billion the economy Cost as %age of GDP 2 Loss of Employment in the Economy 400,000 Loss of Exports Rs. 75 Billion (over $ 1 Billion)

The power sector experiences transmission and distribution losses estimated at about 21.9%; these are substantial and raise the cost of electricity and contribute to shortages. 99 The Government has taken many important steps to increase the performance of energy sector. Reform plan 2010 of GOP aims at addressing the issues of governance and efficiency, regulations, fuel mixing, financial and investment100. According to Growth framework, the Government of Pakistan will expedite the promulgation of an energy efficiency framework law covering provisions for codes, standards, energy reporting, labeling, testing, mandatory audits, fines and incentives, monitoring, and compliance mechanism in 2011. Despite acknowledging these government efforts, situation of power shortages demands immediate attention.” The subsequent subsections will discuss the situation related to energy efficiency, governance, financing needs, energy mix and alternative and renewable energy.

Figure 14: Links between Energy and Development

3.2.2.1 Energy Efficiency Energy efficiency has not been a priority in mainstream policy development in the sector.101 As a result, Pakistan's energy intensity is high. It uses 15% more energy than India and 25% more than the Philippines for each dollar of its gross domestic product. Savings from energy efficiency could reach 18% of total energy consumed in the country. According to the National Energy Conservation Centre (ENERCON), annual energy savings of up to 25% are possible in all sectors equaling $3 billion in savings annually and a 51% reduction in oil imports102. These are attainable gains in supply to be realized

from energy efficiency.

3.2.2.2 Governance Capacity gaps prevail in governance of Energy crisis in Pakistan. There is neither a single accountable institution in government nor enabling legislation to promote energy efficiency in the country. The legislative framework for energy efficiency needs to be addressed. An energy conservation and management ordinance was planned along with the development of a national energy conservation program but not implemented to get desired results. The National Energy Conservation Act of 2009 has likewise not been enacted. The Pakistan Energy Conservation Council has not yet been convened. There is requirement of a framework energy efficiency law and a central national energy conservation body. There are currently a number of institutions involved in energy efficiency, but they often have conflicting mandates and mixed responsibilities. Consequently, implementing energy efficiency has remained limited due to the lack of coordination among key stakeholders, to weak institutional structure and capacity, and to the unavailability of financing for priority or pilot energy efficiency projects.

3.2.2.3 Financing Energy Pakistan has insufficient capacity to meet the financing needs of the energy sector. Because of a lack of consistent demand from energy investors, the financial sector has not been able to develop sophisticated financial engineering products to serve the energy market. The existing capacities of financial institutions in the country have in any case been eroded because of their exposure to the inter-company circular debt. The corporate debt market for the energy sector has, therefore, not developed. Friends of Democratic Pakistan Forum (PDPF) identify a requirement of $14.88 billion in private sector investments for priority projects in energy sector. There is another estimate that $ 35 billion to meet the energy sector demands which will be increased to 25000 MW. Economic Growth framework suggests that private sector should be attracted after diverting the available public sector investment to energy sector. To attract private investors some fundamental changes in the administrative setup of the efficiency and conservation agencies will be a pre requisite to realize the substantial potential gains from conservation and efficiency improvements.

3.2.2.4 Energy Mix Pakistan's product mix in the fuels sector has very high and unsustainable reliance on two main fuels which account for 84% of consumption i.e. high-speed diesel (41%) mainly used for transportation and fuel oil (43%) primarily consumed in the power sector. Fuel oil alternatives for thermal power are available in the country: coal and alternate energy sources.103 Critics argue that a flawed energy mix has seriously exacerbated Pakistan’s energy problems, especially since the country has high coal reserves.

Figure 15: Percentage of Energy mix 2007104

Coal has substantial untapped potential for power generation. At present, it comprises only 9% of Pakistan’s energy mix, which is significantly lower than the examples of India, China and the USA [Figure 15]. Pakistan has approximately 186 billion tons of coal reserves most of which remain untapped. Coal is found in all four provinces of Pakistan with estimated reserves of 217 million tons in Baluchistan, 235 million tons in Punjab, and 90 million tons in Khyber-Pakhtunkhwa. Sindh has estimated reserves of as much as 185 billion tons which can generate sufficient to power 100,000 MW. One encouraging project (under process) is the Sindh ENGRO coal power project which is a joint venture between the Government of Sindh (40%) and Engro PowerGen Limited (60%) at a cost of $3-$4 billion. Such efforts are, therefore, needed to increase the share of coal in the primary energy mix. This, however, would require a capital investment of over $30 billion plus associated transmission networks. This is particularly true if external assistance is required for tapping coal reserves for electricity generation and meeting the environmental standards to reduce the emission concerns105. The problem with increased use of coal is the exacerbation of environment and climate change related problems. Any project in this regard will have to get through a rigorous Environmental Impact Assessment Study.

3.2.2.5 Alternative and Renewable Energy Pakistan Alternative Energy Development Board (AEDB) introduced the Policy for Development of Renewable Energy for Power Generation in 2006. This was Pakistan’s first energy policy aimed specifically at the promotion of renewable energy power projects. In 2010, share of renewable energy is 1%106. The goal under energy policy is for Renewable energy technologies (RETs) to provide 10% of Pakistan’s energy supply mix by 2015. The policy focuses on solar energy, wind energy and small-scale hydropower projects. Small initiatives in wind energy in Sindh and small hydro dam in KP and Punjab are already taken up107. In addition, Pakistan has a huge renewable energy potential (50,000 MW from hydropower, 40,000 MW from wind energy). Solar energy too offers opportunities: much of Pakistan, especially Baluchistan, Sindh, and southern Punjab, receives abundant solar irradiation on the order of over 2 megawatt hours/square meter and 3,000 hours of sunshine a year, which is among the highest in the world. These unexplored opportunities and challenges in the existing set up have deprived people form universal access to energy in Pakistan. Pattern of exclusion can be explained on rural-urban framework. “Many rural areas have no electricity for up to 20 hours a day. Urban areas are witnessing outages of 8 to 10 hours.”108 Social priority sectors like health, police, and emergency services are badly affected. Among the people, the poor are more vulnerable because their ability to sustain their livelihoods is severely

affected. Urban population is affected due to the impact of electricity in industrial sector, small industries and in everyday life. The rights to sustain and develop require energy access to these small and medium size enterprises. Those on daily wages or piecework are only paid for the work they can do when the power is on. The deprivations caused by energy scarcity on right to develop are much more significant than the energy poverty itself.

3.3 Causal Analysis Human rights and sustainable environment and energy are mutually reinforcing. Access to energy and environmental protection are essential to the realisation of basic human rights, including the rights to food, health and even life itself. The lack of empowerment of citizens to contribute to the management of natural resources and energy is the overarching cause of the problems and challenges for both. The lack or inadequacy of processes and mechanisms to balance the conflicting interest and rights of the present generations versus the inter-generation claims for the right of environment protection and access to energy resources; is the second overarching cause. In the subsequent sections, separate causal analysis for the situations related to environment and energy; above will be presented.

3.3.1 Causal Analysis (Sustainable Environment) Causes common to most challenges to a sustainable environment in Pakistan include poor investment in natural resource management and lack of proper planning of natural resources. Lack of incentive based regulatory policies and systems and the absence of support for voluntary environmental protection initiatives by the industries; also cause lack of compliance with regulations. There is a need to incorporate environmental and efficient resource-use considerations into industrial strategy and policies. The end of pipe remedies to pollution are difficult due to extra costs they impose on production, hence lack of knowledge about alternate solutions worsen the state of existing pollution. Only about 5% of national industries conduct environmental assessments and therefore no proper environmental profile of industries are available. The industries also find it capital intensive and with very low or no rate of financial return. The cause of a sustainable environment also lack platforms for contribution by concerned citizens. In the absence of a structured, systematic and sustained effort to scientifically chart the biomes/ecosystems, the lack of use of indigenous knowledge of local people is also a contributory factor. The excessive exploitation of forest resources for commercial and subsistence purposes, encroachment, fire, a growing population, insecure land tenure, land use changes such as crop cultivation, overgrazing of livestock, unplanned urban and industrial expansions, inequity, unemployment and poverty are some of the proximate reasons why Pakistan continues to have a high deforestation rate today.109 The underlying causes for these are commitment unaccompanied with adequate investment, poor planning, unrealistic forest working plans and weak implementation of forest protection laws. The primary causes of overharvesting by domestic cutting in private and community forests are widespread poverty, population pressure, lack of fuel-wood alternatives, and a lack of awareness about sustainable resource use methods. Uncontrolled use of pesticides, diseases and damage by insects, and fires are other causes of forest degradation. 110 Increased surface runoff is the proximate cause of soil erosion, which in turn is caused by reduced natural vegetation. This is caused by deforestation, overgrazing and improper land use practices.

There is a need of water conservation management techniques in agriculture with the support of community participation. Most of the water pollution stems from very little separation of municipal wastewater from industrial effluent in Pakistan. There is no regular monitoring programme to assess the surface and ground water quality. The treatment of sewage and industrial effluents is at present a very low priority due to the huge cost associated with it. There are no clear guidelines, rules or regulations for groundwater abstraction. The water agencies in urban areas are decentralized but have few resources The root cause of the reduced supply of fresh water to the Indus Delta is found at the national level. The decision to apportion and/or divert water supplies for upstream uses only takes agricultural needs into account. 111 Mangrove forests and coastal belt has been suffering due to the increases in volume of untreated industrial and domestic wastewater discharges from Karachi and its vicinity and the dredging of port channels. The underlying causes for these are non-efficient production and post-production technologies and processes. Another underlying cause is the capacity gap in the implementation of international dredging. The government agencies responsible for enforcing standards are understaffed and under-equipped. The capacity gaps of regulating agencies for controlling marine pollution will continue to contribute to environmental degradation. In the coastal region, the household data show that most households are directly or indirectly linked with fishing. Household fuel consumption patterns show that nearly two-thirds of the resident communities do not use mangroves at all. This may change if the returns from fishing decline. Overharvesting of fish resources however is a bigger problem for biodiversity in the mangrove ecosystems. The root causes of degradation of mangrove forests stem, at the national level, from industrial, trade, and conservation policies. Centralized growth with subsidies promoting inefficient production technologies leads to increased marine pollution. Trade policies; emphasize export expansion to reduce trade deficits and revenue gaps. These need to be augmented with conservation policies which can guard against overharvesting of fish resources in shallow waters. Tax and water pricing policies also need to discourage inefficient water use.112 Climate change is a global problem however some local underlying causes can also be observed in the country. The rapid deforestation is expected to cause changes in species composition and reduction of forest area. The loss of precipitation thus brings higher temperatures and changes in humidity levels.

3.3.2 Causal Analysis (Sustainable Energy) There are multiple reasons for reaching the present situation; however, a combination of following four factors has contributed to the energy crisis. First, Pakistan experienced high, persistent gross domestic product (GDP) growth rates that generated accelerated energy demand. Electricity demand was growing by 3%-4% annually up to 2003-04. It spiked in subsequent years to reach 10% in 2007-08 in line with higher economic growth.”113 Subsidies on power sector also resulted in increase in domestic demand of power. The growth in demand in the current decade was clearly not fully anticipated and adequate provisions, therefore, were not made to cater for this increased demand114. The share of public sector expenditure on the power sector, which averaged at about 28 percent since the 1980s, fell to less than 3 percent in the current decade. Second, the Independent Power Producers (IPPs) have held back on investment in improvement/up- gradation citing un-realistic tariffs for household consumption.115. It is however very difficult for the Government to increase the power tariff beyond a politically acceptable limit. Evidence of poor capacity of the power sector management is the accumulation of over Rs.370 billion of circular debt. “The inability

of federal and provincial government agencies and semiautonomous corporations to timely pay their dues to power generating entities have in turn weakened their ability to pay for their inputs, in particular fuel, resulting in reduced power supply by IPPs. Heavy line losses (22%), large scale theft are other examples of the overall mismanagement of the sector.”116 Third, energy reforms remained incomplete, and delays in implementing energy projects due to lack of investment. Responsibilities and accountabilities in Pakistan's energy sector are dispersed in various gas, oil, water and power sub-sectors. These dispersed institutional arrangement blocks integrated planning and budgeting in the energy sector, distorts efficiency, creates disequilibrium among the sub- sectors, and generates disharmonious regulatory structures. “Energy security simply cannot be achieved unless it is treated as an integrated item. Corporate governance in energy companies is weak, and they lack financial and administrative autonomy and independent boards with authority.” 117 Lastly, the crisis situation has been a hurdle in collecting electricity bills in regions like FATA. The energy infrastructure in some crisis-affected areas has also suffered. 118

3.4 Duty Bearers and Right Holders Placing people at the center of development the duty bearers and rights holders approach in this section will be based on the perceptions, needs, and legitimate claims of people, benefits for poverty reduction, education, health, and gender equality. This lens can potentially contribute directly to the realization of related MDGs e.g. There are clear links between the right to clean drinking water and MDG 4 on reducing child mortality and environmental and energy rights contribute directly to MDG 7 on ensuring environmental sustainability. For more effective and sustainable environment and energy, individuals as rights holders have to be included as active participants to meet local preferences and needs, use local knowledge and technology, and match local capabilities. As informed citizens and genuine stakeholders, individuals feel committed to maintaining the programme and to protecting their environment. They are thus transformed from rights holders to responsible duty bearers. The stakeholders on the supply side have the obligation to prevent “elite” capture of environment and energy related policies. The objectives of such policies should be broad-based participation which builds the capacity of poor and marginalized groups to claim and exercise their rights. Gender inequalities impact on non-fulfillment of rights, lack of protection, and lack of women’s participation in policy-making and implementation. Hence, concretely addressing these inequalities must be a pre-requisite for a more effective and efficient environment and energy regime, which is consonant with international covenants. Environment and energy issues are understood as implicitly included in the international conventions on human rights e.g. The right to the highest attainable standard of health included in the Covenant on Economic, Social and Cultural Rights (1966) and the right to life in the Covenant on Civil and Political Rights (1966) depend on a clean and healthy environment. Other recent international human rights instruments specifically acknowledge the importance of a clean and enabling environment. The human right to water119, food safety and other protective measures to prevent contamination through “bad environment hygiene”, “housing not be built on polluted sites nor in proximity to pollution sources that threaten the right to health of the inhabitants, the right to environmental information, and active participation in environmental decision making, and the right to effective redress for environmental harm are all now part of one or another UN convention. Similarly, the duties of both individuals and states,

including government obligations to disseminate information, facilitate public participation, control harmful activities, monitor and manage environmental use, and provide effective remedies and redress for harm. At a national level, asserting procedural rights, such as the right to information, the right to participation and the right to judicial redress, has provided communities and NGOs with tools for ensuring good environmental regime. A rights-based approach to energy is implicit in other policies, and many of the principles and issues are identical to those in the environment area. Pakistan has signed and ratified all 14 major Multilateral Environmental Agreements (MEAs) and has also enacted legislation and established institutional mechanisms aimed at translating its commitments under the MEAs. Pakistan has also formulated several national policy frameworks such as the National Environment Policy (2005), National Forest Policy (Draft), National Energy Conservation Policy (2006), National Renewable Energy Policy (2006) and Policy for Development of Renewable Energy for Power Generation (2006) etc. 120 Looking at the above, it is easy to observe that out of the three dimensions of State Obligations i.e. respect, protect and fulfill, 121 the Pakistani state has been particularly active in its second and third role while not enough obligations have been discharged in its first role i.e. the obligation to respect which requires states to refrain from interfering with the exercise of the right and refrain from direct injury to human health through poor environmental and industrial hygiene. Some of the most well-known, government supported mega projects were declared in violation of the statutory provisions related to Environment and Energy. The obligation to protect requires the state to supervise relations between citizens, to ensure that private parties are respecting the rights of others, that healthy standards of environmental industrial hygiene are maintained, proper regulatory frameworks and monitoring mechanism in place to ensure that private actors are behaving the way required by the laws. In this regard the role of the state needs strengthening by strengthening the linkages in institutional design, especially in the post 18th amendment era. This includes policy formulation, provision of resources and public reporting. It also includes building capacity to monitor these standards and offer incentives and conduct accountability. The third dimension, the obligation to fulfill, requires the government to take appropriate steps, through legislation, policies, budgetary allocations and other measures, to promote the realisation of the rights such as introducing environment and industrial hygiene standards into national legislation to ensure that healthy standards are met for air, water and soil quality and efficient energy use in consumer appliances including transportation vehicles. In Pakistan, this will also include public provision of quality information, including the daily publication of Quality Indices in major cities, will built in support for air and water quality improvement initiatives and enabled with the issuance of health alarms when necessary. In this role, civil society stakeholders can be involved in environmental decision-making and oversight, and by supporting public interest advocacy through legal associations and the establishment of environmental law clinics at universities. For individual areas of concern related to Environment, the government in its obligation to fulfill, have to promote research on the climate impacts on ecosystems, Research and establish gene banks, remove barriers to accommodate the natural migration of fauna due to climate change, promote compensatory farm practices, reduce forest fires and other hazards through timely warning and firefighting systems and biologically control pests.

The financial size of some of the obligations for mitigation and adaptation to climate change; has been estimated at US $ 10.7 billion a year.122 With a weak economy, the government cannot fulfill this obligation alone and must be matched by the multinational duty bearers especially given the fact that the problem is not one of Pakistan’s making. However, a national funding mechanism has to be developed in this regard.

3.5 Conclusion Capturing the development dividend of growth calls for complementary policies that address the constraints to sustainable environment and energy while facilitating development. These constraints fall into; institutional design, regulatory framework, capacity limitations, finance and incentives and accountability. Pollution and climate change are predicted to induce rapid melting of glaciers which feed the rivers in Pakistan which may well result in the creation of glacial outburst lakes. These changes will result in a reduction in the flow of water feeding major rivers in Pakistan. Other potential challenger may include disruption and unpredictability of monsoon rains thereby significantly altering the future of some of Pakistan’s ecosystems with accompanied increased frequency and intensity of droughts, storms, erosion, and landslides, increased temperatures, pest outbreaks and diseases. The adaptation should therefore aim at restoration, sustenance and enhancement of the biodiversity. Community-based natural resource management offer promising possibilities to establish more equitable and sustainable natural resource management systems. Structured and systematic access to natural resources for all local residents helps avoid the exclusion of the poorest, particularly women. The inclusion of women in decision-making at all levels is necessary for successful management, over and above issues of equity. The implementation of codified rights in the shape of international treaties, conventions and national legislation to access natural resources are necessary in Pakistan, especially to ensure the rights equal access to natural resources for women, poor and indigenous communities.123 Energy sector deficits are holding growth back and not address the needs despite clear demand and potential. There is comprehensive planning in individual sub- sectors, but it is fragmented; plans require better integration, implementation, monitoring, and financing. Circular debt is a major impediment to new financing in the energy sector. It is now not only affecting electricity, gas, and fuels sub-sectors but also discouraging future investments in the coal and alternate energy options. Improved corporate and operational governance and robust pricing mechanisms are important for the sustainability of the sector. Private sector attention will be contingent upon better environment for doing business. Energy efficiency is a priority that needs to be backed by better capacity, legislation, management, and investment. These factors indicate a deeper crisis in energy policymaking, governance, and regulation. If the governance issues are fully and successfully addressed, then it will be possible to resolve the fundamental problems of the energy crisis.124

4 Human-made and Natural Disasters During recent years, Pakistan’s polity, economy and society had to endure both Human-made and natural disasters. These included the Taliban related crisis125 mainly in KP and FATA, ethnopolitical conflicts in Balochistan and Karachi, the devastating floods of 2010, earthquakes, droughts, landslides and cyclones. All these external supply shocks have impacted the people, infrastructure and livelihoods. The impact has

been particularly harsh on the poor, women, children, old people, minorities, refugees and the Internally Displaced Persons (IDPs). In the following sub-sections the situation will be reviewed and the impacts of these Human-made and natural disasters will be examined with particular focus on the poor and the socially excluded. The political, social and economic causal links will be explored for a better understanding of these disasters. The response of various actors to the challenges will be seen in the context of respective roles of rights holders and duty bearers.

4.1 Situation Analysis This section presents the situation created due to both human-made and natural disasters. For most issues, examples related to the main crises (in FATA, KP and Balochistan) have been highlighted. Similarly for natural disasters, the flood of 2010 has had the greatest impact and therefore is chosen as the leading country wide example. The 2011 flood, though on a smaller scale that 2010, reiterates the fact that natural disasters in Pakistan occur on a near-annual basis. Therefore, to highlight regional impacts of crises, data from other conflicts and natural disasters has also been presented, wherever relevant. Causal analysis will follow in Section 4.2.

4.1.1 Conflict in FATA and KP Post 9/11 crisis in Pakistan has now taken the shape of an armed insurgency between the state and various armed groups, chief among which is the Tehrik e Taliban Pakistan (TTP).126 Although the whole country has witnessed violence and terrorism, it has been the province of Khyber Pakhtunkhwa and the Federally Administered Tribal Areas (FATA), in which the crisis has been overtly violent, sustained and intensive.127 Table 8 shows the number of crisis related deaths and injuries in KP and FATA. 128 Table 8: No. of Conflict related deaths and injuries in KP and FATA Region Number of Number of No. of Deaths Injured Incidents FATA 4,034 1,920 577

KP 2,331 6,427 1757 Grand 6,365 8,347 Total

As of July 2011, there are still more than 284000 IDPs from FATA living in camps or host 129 communities. Even Prior to floods, there were 2.6 million conflict-affected people in the country.

4.1.2 Conflict in Balochistan Balochistan, the province with the largest area (42.9%) and the least population (5%), has four main ethnic groups of Balochis, Brahvis, Pashtuns and settlers mainly from Punjab. There is a history of Baloch nationalism in the province and the last phase was during 1974-78. There was visible lull in the violent conflict throughout the 1980s. A steady rise in violence is witnessed since then. After 2002, the conflict with state agencies has become overtly violent. The target killings of approximately 1200 people of other ethnic groups has led to an exodus of highly skilled people from Balochistan, most of whom were teachers, doctors, nurses and engineers. Some estimates put the number between 100,000 to 200,000.130

4.1.3 Ethnopolitical and Sectarian Conflicts Sectarian conflicts in especially in parts of FATA, KP and Karachi, have also claimed thousands of lives. In Kurram agency of FATA, in the 2007-08 period alone, more than 1,500 persons have been killed and 5,000 others injured.131 Violence has spread to the sectarian problem districts of Kohat, Dera Ismail Khan and Hangu. Local tribes have been joined by al-Qaeda fighters and Taliban from Waziristan who have targeted the paramilitary forces. As violence continued, the road from Parachinar to Peshawar has remained blocked for the last three years, resulting in a shortage of food and medicines; and people have to use Afghanistan’s routes to travel to Peshawar.

Afghan Refugees Since 2002, in what has become the world's largest self-organized but assisted return programme, UNHCR has been facilitating voluntary repatriation from Pakistan to Afghanistan with nearly 3.7m Afghans having returned home to date. During 22 March and 31 October 2010, UNHCR assisted 109,383 Afghans to repatriate through the Voluntary Repatriation Centres (VRC) in Baleli, Balochistan and Chamkani, Khyber Pakhtunkhwa. Unlike 2009 when both centres were closed for much of the year because of insecurity, in 2010 the voluntary repatriation operation was largely unimpeded with no 132 security incidents and, as a result, the number of returns doubled. Registered Afghans enjoy de facto protection from refoulement and freedom of movement within the country. Meanwhile, non-registered Afghans and non-Afghan asylum seekers are regulated by the Foreigners Act of 1946 which contains strict provisions addressing foreigners contravening its rules.133

4.1.4 Natural Disasters Natural disasters have added to the complexities of the conflict related problems. The exposure, vulnerability and capacity to cope with these disasters vary with regions, socio-economic class of the affected population groups, age, gender and livelihood strategies. The 2010 flood in Pakistan has been the worst natural disaster in Pakistan’s history. The cost of the flood to different sectors is as shown in Figure .134

Figure 16: The Cost of Floods

Even after passage of one year, there are massive challenges to recovery, especially in housing, food insecurity, protection for vulnerable groups, women, hard to reach communities and the landless. Over 20 million people were affected by floods in 2010, and more than 1.6 million homes were damaged or destroyed.135 The overwhelming demand outstrips the recovery effort with 351,980 houses/shelters provided but 827,380 units were still required (Oxfam 2011). Although the vast majority of flood- displaced people have returned, many citing interlinked livelihood, debt, and protection concerns as

reasons for remaining homeless or staying in the camps.136 The monsoon-fed flood of August 2011 affected over 5 million people and re-enacted many of the national and international response concerns of 2010. The country is also still experiencing the lingering effects of the earthquake of 2005. Recovery and reconstruction effort is still drawing resources from national and provincial budgets. In addition to floods and earthquakes, parts of the country, especially in Sindh and Balochistan are susceptible to droughts. Prior to flood, the Indus had shrunk to a trickle in parts of Sindh, forcing farmers to rely increasingly on wells drawing saline groundwater. This has lowered the fertility of soil and in the long run, may well impact the yields of cotton, rice and wheat. Parts of lower Sindh as well as Balochistan coastal region have also been hit by cyclones. Recently two tropical cyclones hit the Makran Coast leaving destruction in their wake. The rains left an estimated 250,000 homeless in Turbat in the Ketch district alone. 137 The unusually strong rains have also led to frequent landslides, especially in Gilgit Baltistan, Azad Jammu and Kashmir and northern KP. At Attabad in GB, a massive landslide in January 2010 led to the formation of a 21 km long and 100 meters deep lake and the displacement of more than 23000 people.

4.1.5 Impact of Disasters on the Excluded and Vulnerable138 Both conflicts and natural disasters have disproportionately affected the excluded and the vulnerable. Socio-economic vulnerability of the conflict affected population has been exacerbated by indiscriminate damage to villages, loss of livelihoods, trauma of displacement and disillusionment over the failure of support systems to respond to people’s needs. There are a number of groups which are particularly badly affected for they are most vulnerable specifically: all women, youth (male and female), children, the poor, female-headed households, people with disabilities, and victims of acts of violence.139 The communities’ social fabric has been severely disrupted, with destruction of social infrastructure, displacement and a realignment of power in favour of religious extremists. An environment of fear and distrust among the communities exist where people find it difficult to regain confidence in the social structures. Communities have been divided during the conflict between those who supported militants and others. Youth (ages 15-29 years) comprising 27 percent of the population in the affected areas, have been particularly exposed to militancy. After the defeat of militants in some areas, the future of young men is particularly at risk since their training and skills are limited. In Balochistan, although numbers are difficult to ascertain, a new phenomenon is the militarization of educated Balochi youth as opposed to the mostly tribe based militias of the past conflicts.140 Young women have also suffered from forced and early marriages ‘for their protection’. The people of Kurram agency have been cut off from the rest of the country now for more than three years with little or no access to medicines and food from the outside. With little supplies, prices are more than double those of the rest of the country. This has exacerbated the situation for the poor and the daily wagers. Similarly, in Karachi, where conflict has kept the businesses close for days on end, the street vendors, daily wagers and those who depend on daily handouts from charities; have suffered the most. The susceptibility of being cut off from businesses and livelihoods for long periods has also been observed in case of natural disasters. The riverine communities along rivers Swat, Jehlum, Nala Lai, Chenab and Indus have been the hardest hit due to floods. Some of these, especially in mountainous terrains are hard to reach. The problems in Sindh and South Punjab are more complex. Widespread communities of landless peasants, who are already extremely poor and with no legal title to the land, have lost close to 30% of the 2.6 million housing units in Sindh alone. A recent decision of the Supreme Court has declared ‘All such illegally constructed structures on government lands which had been destroyed by the recent floods are not allowed to be re-erected’.141 This will potentially bear hardships for most of these poor and affected communities who will now be cut off from the only source of their livelihoods.

Other natural disasters also had their cutting off effect on livelihoods. The Coastal Highway was cut off for seventeen days due to cyclone damage. In GB, all the valleys upstream of the Attabad Lake, where no damage had occurred, were cut off. An estimated population of 25000 is suffering due to no economic activity and non-availability of items of daily sustenance.

4.1.5.1 Access to Education Education in conflict affected areas has suffered due to destruction of 333 schools in FATA and KP (100 boys, 233 girls) and partial damage to 275 schools (80 boys, 195 girls), affecting 0.98 million students (38.5 percent girls) and 27,765 teachers in KP.142 In FATA, 141 schools (53 girls) have been destroyed and 174 (19 girls) partially damaged. Anecdotal evidence suggests very few schools operating in FATA; those too under risk. Latest reports indicate that none of the TVET institutions in FATA are functioning. Gross primary attendance rates for females in Khyber-Pakhtunkhwa have fallen.143 In Balochistan, Gross primary attendance rates for females are lower than in the non-conflict regions both before and during the conflict period. In 2007, both conflict regions experienced a decrease in primary gross attendance rates among girls.144 The natural disasters have also affected access to education because of the impact of floods on families, on school building and the use of the left over buildings as shelters for prolonged periods. The impact could have been greater had it not been for the summer vacations in most regions.

4.1.5.2 Access to Health Services Access to health, knowledge, practices and services is generally very low, especially for women. The situation was further aggravated by conflicts and natural disasters. The access of poor and vulnerable to health facilities in conflict affected areas have been further restricted. Peripheral health facilities (HFs) were forcibly shut down. These facilities provided services for birth spacing, prenatal and obstetric care, immunization, nutrition, and curative services. Access to preventive intervention such as immunizations has decreased. Health staff mobility for field work has been severely restricted. Home visits of LHWs, outreach immunization programs and polio supplemental immunization activities have been badly hampered. Out of total polio cases in Pakistan, the proportions in KPP and FATA increased from 44% in 2008 to 55% in 2010 (till June). In 2011 there was an outbreak of polio in Balochistan. In 2009, KPP and FATA together contributed 60% of total new polio cases. Vandalism, theft of expensive equipment, coercions, killings and kidnappings of health personnel have reduced the number of available health service providers in some areas. The physical, mental and psychosocial well-being of women, men and children have been severely impacted with fear, anxiety, panic attacks, violent reactions, feeling of insecurity, sleeping and eating disturbances, depression and sadness. Many of the above health related problems have been exacerbated by natural disasters. Of the almost 3000 hospitals and clinics in flood affected districts, more than 400 were damaged or destroyed, limiting the provision of emergency and routine care.145 Global Acute Malnutrition (GAM) rates have spiked, up to 22% in some areas of Sindh.146 The food insecure population after the floods could be as high as 94 million people.

4.1.5.3 Freedom of Expression The current conflict has had serious impact on the state of Human Rights in the country. The forceful abductions of persons who are suspected of involvement in anti-state activities have been challenged in the courts. The Human Rights Commission of Pakistan, in its latest report,147 contains details of 140 people who had been reported missing in Balochistan, but their mutilated bodies were found between July last year and May this year.

Although few in numbers, minorities in some conflict affected areas had to migrate to the interior of the country to avoid persecution for their faith. Although few and far between, in some flood affected areas, discriminatory treatment has been reported to the affectees belonging to the Ahmadiya minority. Here too, the situation has a bright lining. The courts are actively pursuing cases of forced abductions with some success. The vibrant media and the civil society have taken up the plight of ALL flood affectees.

4.1.6 Impact on Economy and livelihoods Both conflicts and natural disasters have had serious impacts on the national and regional economies. Agriculture and food security, trade, mining and tourism have all suffered. There have been major damages to the agriculture sector as well as exacerbating the pre-existing structural problems. In conflict affected areas of KP and FATA, animals have been abandoned, Standing crops not harvested; irrigation, animal shelter, fish ponds and hatcheries damaged; and stocks of seed, fertilizers and feed lost. Veterinary hospitals, offices and research facilities have been damaged, destroyed or looted. Forests have suffered due to uncontrolled cutting of trees. There has been disruption of the local supply network with damage to shops, stores and sheds. There is increased reluctance of traders, input suppliers, private service providers and transporters to work in the area. As a result market linkages and information flows that underpin market driven development have been disrupted. The floods have also impacted the agriculture sector across the country. As the most affected sector, agriculture is the chief source of employment for women. Recovery activities in rural areas have not made any deliberate effort to reach these women directly. The impact on agriculture has increased the food vulnerability in a country in which around 48.6 percent of the 165 million people are already food insecure. The conditions for food security are inadequate in 61 percent [of] districts (80 out of 131). The food security situation is worst (67.7 percent) in the conflict-ridden Federally Administered Tribal Areas along the Pakistan-Afghan border followed by Balochistan Province (61.2 percent). However, the silver lining here is the bumper wheat crop which has been variously attributed to the increased fertility of the soil due to the silt deposited during the floods. The armed conflict in KP and FATA has also caused extensive damage to productive assets, sharply reducing economic activity. The mineral sector has faced a precipitous decline in output. Of 270 marble mines that were operational before the crisis, only 25 are in operation at present, and production is less than 5 percent of previous levels (in large measure due to a ban on the use of dynamite). Tourism, one of the mainstays of the Swat economy before the crisis, has come to a virtual stand-still, with a loss of some 40,000 jobs. The damage to related assets will also take years to restore. 9% units in retail sector were damaged, 17% in industry/commercial sectors, and 12% in tourism/hospitality. The sector has seen a partial return of tourists this summer but is a long way from normal business. The crises have affected women’s livelihoods. As an example, according to one estimate148, the crisis had displaced 85 per cent of the population of Dera Bugti. More women are now shouldering the responsibility for maintaining the household as insecurity fears were keeping their men away. This situation added livelihood problems for the women who were already vulnerable in a tribal society in the midst of a crisis. In the worst of flood and cyclone affected areas most of the villages are dependent on subsistence agriculture and flood has washed out up to an estimated 70% of the fields, thus sweeping away their crops, trees and fruit plants. Similarly the Attabad Lake has cut off the Chinese trade route which is by far

the cheapest trade route. The landslide has also washed away 25 kilometers of the Karakoram Highway and six bridges thus cutting people from their livelihoods.

4.1.7 Impact on Governance and Rule of Law Crises and natural disasters have also affected the state of governance and the rule of law in certain areas. The crisis in FATA and KP has further weakened the ability of the state and traditional governance systems to control the situation and exercise core functions like providing security, stability and access to basic services. More than 600 traditional leaders have been killed leaving a severe vacuum of governance power in the region. Civic governance mechanisms CSOs, political parties, media or community groups have been further weakened. Their limited capacity to develop political demands and pursue them, to hold public and traditional governance institutions to account or to contribute to development and service delivery have been further eroded. In FATA, militant groups occupy and assert control, creating safe havens and local illicit economies. The lack of a formal justice system and development initiatives have correspondingly reduced the stakes of citizens in State and society. Residents of FATA have been so far denied basic Constitutional protections149 and freedoms.150 However, with the introduction of the new FATA regulations in August 2011, a good start has been made to rectify the situation. The impact of natural disasters on security and stability has been varied in different parts of the country. However the common thread across all situations has been the need for the law enforcement agencies to provide protection services to those affected by natural disasters. Sporadic reports of looting during the floods, maintaining security cordons for the visiting dignitaries and INGOs personnel, preventing child and women trafficking and abuse of the affected population, have all kept the police and security forces under pressure. The situation before floods was also problematic e.g. in Sindh where in the weeks leading up to the floods, angry farmers affected by drought, marched through villages in Sindh demanding access to water. Those who could no longer make a profit in the fields were increasingly resorting to banditry or migrating to urban slums.151 In GB, Victims of the landslide and expansion of the lake have staged numerous sit-ins protesting the lack of government action and compensation payments to them. Clashes with police have also led to loss of lives.

4.2 Causal Analysis The subsequent sub-sections present causal analyses for the crises and natural disasters.

4.2.1 Armed Conflicts General propositions about the risk of internal conflict, that emerge from quantitative studies152, are informative, stressing the presence of opportunity and feasibility in forming rebel movements (something which increases in the presence of natural resource rents as in Balochistan), as well as state capacity to restrain these tendencies. On the other hand, it has long been recognized that deprivation produces rebellion.153 This relates to the differences between what people have in terms of tangible socio-economic indicators (income, assets, education, health, access to common resources and public services), and what they think are their just rights. If they have less, they may be inclined to rebel. Furthermore, in the absence of corrective policies, this is more likely in more ethnically fragmented societies, and hence the importance of identity. This point is applicable to both the Khyber-Pakhtunkhwa and Balochistan provinces.

For the crisis in FATA and KP, the drivers of conflict identified by the Post Crisis Needs Assessment are presented in Figure 18. 154 The advocates of ‘motivational’ factors hold that it is the gap between expectations and achievements which motivates the parties to enter conflict. On the other hand, the proponents of a … simple inequality between political process model of conflict stress the primacy of power rich and poor is not enough resources in the explanation of conflict.155 In Balochistan both the to cause violent conflict. models have equal explanatory power. Ted Robert Gurr classified What is highly explosive is … group grievances into those related to political autonomy, those ‘horizontal’ inequality: when related to political rights other than autonomy, economic rights and power and resources are 156 social and cultural rights. Horizontal Inequalities have been used unequally distributed as instruments to gauge these grievances of identity based groups. between groups that are As discussed in the Economic Growth and Human Development also differentiated in other sections, Balochistan has lagged behind the rest of the country. ways – for instance by race, Distinguishing among economic inequality, political inequality religion or language. So- and the inequality of welfare, we find that all three types are called ‘ethnic’ conflicts occur present in today’s Balochistan vis-à-vis the rest of the country. between groups which are While the death of Nawab Bugti in 2006 is agreed as the distinct in one or more of immediate cause of the present conflict, the participants of the these ways, when one of consultative workshop at Quetta stressed the importance of them feels it is being understanding the history of Balochistan in order to understand its discriminated against, or current conflict. For the violent and non-violent conflict in another enjoys privileges Balochistan from 1986 to 2005, regression analysis shows that which it fears to lose income gap (per capita GDP), and political inequality at elite level are positively related to all types of conflict and the coefficients are statistically significant. The gap in senior civil service positions is statistically positively significant for total conflict and violent conflict. The literacy gap (social access) is also positively related and significant for total conflict.157 One underlying cause of the present conflict is the issue of exploitation of energy resources in the province. The quantum of gas supplied to Balochistan and the well head prices of gas were cited by the participants of the consultative workshops as the chief reasons for grievances. It is envisaged that with the introduction of the 18th Amendment, a framework now exists to address most of these grievances related to natural resources. The development work in the province and the mega projects like the Gwadar Port and motorways have not been welcomed by some among the elite who allege lack of adequate safeguards for local employment and local autonomy. For the conflict in Balochistan, the interaction among the conflict drivers and effects is presented in Figure 19.

4.2.2 Natural Disasters Disasters affect and are affected by environmental conditions. Both the earthquake of 2005 and the floods of 2010 brought out four main reasons for widespread damage caused by almost all natural disasters in Pakistan. These include the gaps in Disaster Risk Management (DRM), increased risks of natural disasters like floods, cyclones and droughts, the presence of widespread and deep vulnerabilities and the lack of

adequate contingency planning. On behalf of the Government, the National Disaster Management Authority (NDMA) reports on national progress on implementation of the Hyogo Framework for Action (HFA), and in its 2009-11 report has identified lack of awareness across the board, paucity of expertise and institutional capacity, especially at the local level, inadequacy of resources and absence of reliable data as key challenges that need to be overcome in order to implement an effective DRM strategy.158 The human-caused climate change may have played a role for the floods.159 Yet, some of the damage may have been avoided. Since risk reduction measures can also have adverse environmental consequences, it should be noted that the Supreme Court-appointed commission identified major problems related to embankment maintenance, barrages regulations and design issues. The commission also found gaps in capacity and performance relating to motivation of duty staff, plans, flood predictions, early warnings and to the extent that some of these bordered on criminal negligence. It also found fault with rescue and relief activities.160 Formal and informal human settlements have expanded together with the construction of dams, roads, bridges, flood protection structures, canals and drainage channels. All these divert or constrain the natural pathways of the Indus and its tributaries, interrupting the natural ebb and flow of the monsoon flood waters. There is no overarching effort to ensure that the physical infrastructure is designed and constructed in balance with the capacity, scale and limits of the local ecosystems. This inadequacy in the design and location of infrastructure interferes with the regulating function that the local eco‐systems provide to the river system. A combination of increased inflows from the highlands and reduced water‐carrying capacities of the heavily silted river channel, fertile wetlands and flood plains (now densely populated) exposes large numbers of people to increased risk from severe flooding during times of heavy rains. In the short‐term, small localised flooding has been reduced and land protected for settlements and cultivation, but in the longer term the river system has little flexibility and redundancy to absorb heavy rainfall. 161 For spells of drought particularly in Sindh, farmers cite diversion of upstream waters to feed farms. Unequal access to land directly translates to unequal access to water in most of Sindh. This unequal access is facilitated by rotational irrigation system. Another reason for less water in the rivers is the melting of glaciers in Pakistan’s north. Pakistan could face a 30-40 per cent drop in river flows in 100 years’ time. (Kugelman)162 As more water is diverted to feed agriculture, average flow speeds have fallen, dumping silt on river beds. Shallower channels are less able to cope with sudden rainfall, rendering Pakistan more vulnerable to extreme flooding. It is difficult to predict earthquakes even in technologically advanced settings. As can be seen in Figure , the earthquake hazard for Pakistan is more pronounced for the regions of Northern Punjab, KP, AJK and northern Balochistan. The genesis of damages due to natural disasters in Pakistan is given in Figure. The biggest single determinant of risk to the vulnerable population and groups is their socio-economic status. Poverty and social exclusion, in most of these crises, have direct correspondence with the extent of damages. These are the people with least coping mechanisms and access to resources. Sustained help, till long after the crises, will be needed from all duty bearers.

Figure 17: Earthquake hazard for Pakistan in terms of Peak Ground Acceleration [m/s 2] for the 0.002 annual exceedance probabilities (500yearrecurrence)

Figure 18: Genesis of Conflict in FATA and KP

Figure 19: Genesis of Conclict in Balochistan

Figure 20: Damage due to natural disasters

Meta Analytic Approach to Country Analysis

4.3 Duty Bearers and Rights Holders Humanitarian crises tend to affect and displace those who are already underserved, vulnerable and marginalized. They are the ones with least coping mechanisms and access to resources. It may be that at the height of any humanitarian response the affectees’ immediate needs are met by humanitarian actors, sometimes for the first time in their lives. But as they go back to their places of origin the displaced communities have to start from scratch, and may again be forgotten and underserved. The problems arising out of the crisis in FATA and KP are similar to some of those encountered during the natural disasters, particularly the issue of IDPs and the problems faced by the host communities. The necessary legal and regulatory structure required to discharge the duties and secure the rights in such circumstances is missing e.g. Pakistan is not a party to the 1951 Convention on Refugees and there is no national legislation on refugees or statelessness. The lack of data is also an issue and much less is known about the needs of those outside the camps. Challenges to provide services exist in both the host communities they move to which may struggle to cope with a large influx of people and the destroyed communities they return to. A particular example is that of education where it is not seen as a priority by the humanitarian agencies overwhelmed with the challenges of proving lifesaving care. Education, a basic right under the constitution suffered with 1.8 million children losing access to schools.163 Looking beyond the initial recovery and reconstruction phase, humanitarian community and the government will have to fill this gap through provision of essential services. Displacement can also increase access to education for those who had no access or exposure to education in their home communities. The obstacles to accessing education vary but can include security, the affordability of school fees, the lack of teachers and/or books, inadequate sanitation and, for those outside camps, the need to work or look after siblings so that parents can work. For refugees living in communities a major obstacle is that the government may not allow them to attend public schools, particularly beyond primary education. Certification of learning achievements can be an issues as a lack of recognition on their return home can be problematic for accessing further education or employment. The government, as the body with primary responsibility, needs to develop laws and policies to ensure that IDPs receive education. There is also a need to look after displacement affected communities, whether as hosts, those coping with returnees or those left behind. The Internally Displaced People have suffered from a shortage of support and the ‘push’ forces applied in the name of reducing dependencies. Their constitutional rights to choose where to live, does not have a corresponding duty bearer and advocate among the international community and the national and provincial governments. The riverine communities have the right to adequate protection measures against future disasters. The provincial governments and its irrigation and disaster management departments have the duty to maintain protection structures, give early warning and provide early rescue and relief. The capacity and resources of some of these duty bearers have serious shortages.164 Women are facing difficulties to recovery and proving their property rights because of lack of documentation. This problem is compounded for widows and female-headed households who already face difficulty in claiming inheritance and land after leaving their homes.165

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A rights-based approach to reconstruction166 also requires that the landless among disaster the affectees not be evicted from lands to which they do not hold title. Distribution of state land, especially to women, needs advocates in the government and international community. Since with the 18th amendment, the provinces are now taking the lead in reconstruction efforts, therefore the risk of divergent standards is high. This has also created new duty bearers with different levels of capacity. The international community, in its roles as service provider and convener, needs to take the initiative to replicate successful models of recovery from one province to another. In the crisis affected areas of KP, FATA and Balochistan where the traditional Alternate Dispute Resolution mechanisms exist but have been weakened over the course of crises, the same needs to be viewed as actors with obligations. These need to be strengthened with capacity development in their legal and juridical assignments. These can prove beneficial especially in areas of ongoing sectarian violence. The jirgas for the resolution of disputes have attempted peace accords but have failed to incorporate the essentials of successful peace agreements namely credible interlocutors, commitment premiums and implementation machinery. The role jirgas for the purpose of these peace negotiations needs strengthening. At the same time, these duty bearers should encourage the participation of youth from both Shia and Sunni communities wherever possible. The integrated planning for and management of natural disasters is the domain of National and Provincial Disaster Management Authorities. However the roles are not clear with respect to the Earthquake related recovery and reconstruction where duplication can be seen through the work of Earthquake Relief and Reconstruction Authority (ERRA). There is a need for disambiguation in these roles. The role of the provincial irrigation systems is also important in managing the efficiency of the system. Plugging capacity gaps of these duty bearers can improve the water availability and reduce the risk of droughts. These capacity gaps are related to the existing system of monitoring, information management and databases. For any such database to be effective there is a need for exchange of information and building joint programs among Pakistan, India, Afghanistan and Iran. Such programs would help all the four countries. International organization can fulfill this much needed role of facilitator and convener. As rights holders and with important role to play for avoidance of droughts, farmers need awareness on actual water requirements, farm leveling, ground water management and correct scheduling to avoid over- irrigation. There is a need for a duty holder who can facilitate sharing of knowledge and skills through the initiation of a regional research and development program for drought and water management. Communities as important rights holders need to fulfill some duties by taking ownership of the campaign of recharging the aquifers and in the optimum use and management of surface water and groundwater resources. As duty bearers the federal and provincial governments need a comprehensive drought-mitigation infrastructure and strategy. The capacity of state institutions for formulating and implementing the seismic, landslides, cyclone and flood related building codes; is limited. The NDMA, PDMAs, Rescue 1122, Engineering Universities and Building Control Authorities need a convener to formulate a joint strategy for the formulation, update and implementation of these codes.

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4.4 Conclusion Pakistan needs to get out of the conflict poverty trap, whereby conflict and poverty beget each other. Just as conflict risk is enhanced by poverty, conflict also serves to perpetuate poverty. The reduction of poverty is a developmental goal, which requires conflict prevention. In practice, however, it is also difficult to separate the development and security agenda. Freedom from want and the freedom from fear are in reality inseparable, because without security ensuring livelihoods is meaningless, and the converse is equally true. The reduction of absolute poverty yields a triple dividend by simultaneously addressing security considerations, disaster mitigation and developmental concerns. The long shadow cast by past experiences of conflict on individuals and households is significant. The household livelihood decision making is important in regions that have experienced conflict, and where there is a danger of conflict reigniting. This will be an important lesson in regions of KP, some parts of FATA and Balochistan where there is a decreasing trend of violence. It should also be clear that peace in these regions is enforced and not negotiated. For a durable and positive peace, attention needs to be paid to all the drivers of conflict. The impact of conflicts in Karachi has been felt on the whole national economy. Contributing 20% of the GDP, 30% of manufacturing and 53% of FBR’s revenues, it is the economic engine of the country. The Federation of Chambers of Commerce and Industry (FPCCI) estimated the loss of one day of violence at around 7-8 billion. 167 This does not include the intangible loss due to investor confidence and flight of capital. In both Karachi where the situation is returning to normalcy and in parts of FATA where the state has reestablished its writ, Political negotiation and positive settlement may still be the best course to address the root causes of those conflicts. To mitigate the risk of natural disasters, the key challenge identified is the difficulty to predict them and prepare contingency plans in an integrated manner. Post disasters, all the actors have to follow technical guidance to ‘build back better’ as it is important for future Disaster Risk Reduction (DRR). Trends show that Pakistan may be more prone to both droughts and floods. An increased frequency of natural disasters threatens to induce donors’ fatigue among the international partners. These duty bearers will have to combat compassion fatigue for discharging their duties.

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5 Human Development and Human Security

5.1 Introduction “Human Development is about steadily sustaining positive outcomes and combating processes that impoverish people or underpin oppression and structural injustice.”168 The holistic concept of human development includes a number of indicators of well-being including health, education, employment, and political participation. Human security addresses barriers to human development. Thus, this section covers both key aspects of human development in Pakistan as well as human security which provides the enabling environment for development. While the emphasis here as elsewhere in this report is on citizens’ gendered rights to basic services, the MDGs and HDI rankings will provide the basis for analyzing Pakistan’s present human development context and future challenges. In general, it is clear that key improvements have been recorded in health and education and provision of basic rights, despite a litany of natural and Human-made crises that has affected the country in the past six years. Pakistan’s HDI ranking, which had increased by 18 places during 2005-2009, slid back 20 positions in 2010 to end at 145th out of 187 countries measured.169 Its multidimensional poverty level has declined to 11.8%. In terms of MDGs 4 & 5, for instance, improvements have taken place in IMR, MMR, U5MR but do not match 2015 targets, and are marked both by urban-rural differences and stark regional disparities. Regarding MDG 2, while net primary enrolment rates (NER) have increased across the board and gender disparity has marginally reduced, there has been a significant decline in completion/survival to grade 5 during the past five years. Given all round increases this decline may reflect a shift to private schools, though inflation and global recession are also factors affecting parents’ ability to educate their children. The literacy rate of the over-10 population has increased over 25% in the past decade overall and 40% for women and girls, but it is still doubtful whether the MDG target for female literacy will be reached. Studies have demonstrated a strong direct correlation between literacy rate and household income, indicating that it is a consequence of socioeconomic causes. Immunization shows improved coverage but requires increased impetus if targets are to be met. The coverage of households by Lady Health Workers is a relative success story, increasing two-fold to 83% by 2009, and on track to ensure full-coverage by 2015.170 Both sanitation and water supply coverage (MDG 7) show marked improvement, but here too achieving targets by 2015 will not be easy. However, many challenges still remain. Nutrition status appears to have deteriorated or stagnated; the 2010 floods provided the occasion to bring this problem to the limelight, including the fact that underweight children under five years are still at 1990 levels. Population growth continues to a serious concern, with the 2.5% annual increase being the highest in the region. Reproductive health issues take a heavy toll on women and need to be urgently addressed. As with health, despite gains, it is evident that girls continue to face significant disadvantage in access to education as they reach adulthood. Advocacy for equitable approaches to ensure quality of educational opportunities is a fundamental need. Progress notwithstanding, women’s participation in the labour force in Pakistan is low (21.8%), and is concentrated in the informal labour market and home-based worker sector where they face challenges, particularly in relation to social protection. Increase in expenditure on education and health is crucial to ensure inclusive development in Pakistan.

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With about 80 million children and young persons under the age of 18, investment in, and protection of, them is vital to enable them to fulfill their future roles as part of an educated and skilled workforce that can contribute to growth, and as part of an active citizenry that participates in the electoral and political processes. Similarly women too, if allowed, can play a vital role whether through community engagement, paid work or political participation, but this requires both attitudinal change and targeting of resources. Separate data on the Afghan refugee population is unavailable, but it is clear that they constitute a vulnerable and excluded group that requires special targeting.

5.2 Situation Analysis for Human Development This section identifies and describes key elements of the overall context relating to human development in Pakistan, paying special attention to health, including nutrition and food security, education, and human security. In such an analysis, it is appropriate that the global Human Development Index (HDI) becomes the initial frame of reference. The HDI ranks Pakistan as a medium developing country. Pakistan has enhanced its ranking from 143rd position171 in 2005 to 125th position in the year 2010 out of 169 countries172. Up to 2010, HDI was calculated on the basis of three dimensions – health, knowledge and income. The HDI introduces three new indices this year to reflect unequal growth, gender inequality, and the multidimensional nature of poverty. The inequality adjusted HDI for Pakistan is 0.336, a 31.5% loss on the HDI figure of 0.490. This compares with a global average loss of 22%. The biggest inequality adjusted loss is in relation to education, at 46.4%.The gender inequality index is 0.721 (with 0 being the best score). The multidimensional poverty index (MPI) puts 51% of the population in multidimensional poverty with 11.8% of the population at risk of multidimensional poverty although the report comments that the figures could be lower because nutritional data was not available. The following sub-sections will flesh out this analysis, incorporating MDG assessments and other indicators as relevant.

5.2.1 Population The population burden is having a negative impact on poverty. Linked to this is the issue of women’s rights, particularly in relation to child spacing and access to contraception. Those most excluded from positive health outcomes are women and children, particularly those in rural areas and/or poverty. Pakistan, a country with already scarce resources and facing multiple challenges, houses the world’s seventh largest population currently estimated at around 180 million people of which around 22% are adolescents, carrying opportunities along with challenges173. Pakistan is projected to be the third highest contributor towards the global population between 1995-2025 after India and China174. Although the last four decades have witnessed a decrease in annual population growth rate from above 3% to 2.5%, the rate of decline has been one of the slowest in the region (Table 9). Even if the current growth rate is maintained the nation is projected to nearly double its size by the year 2050. Similarly although the average life expectancy at birth has increased from 54 in 1970 to 67 in 2009, the increase is much slower (24%) compared to Bangladesh (52), India (31), and Iran (33). The last two decades have also witnessed the reduction in death rates and Pakistan is now classified demographically as a high fertility and low mortality nation175.

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Table 9: Population Growth Rates

COUNTRY 1970-1990 1990-2000 2000-2009 % Decline Pakistan 3.1 2.5 2.5 19 Bangladesh 2.6 2 1.8 31 India 2.2 1.9 1.7 23 Iran 3.4 1.6 1.3 62 Sri Lanka 2.9 2.5 2.4 17

It is estimated that nearly one-third of Pakistan’s population lives below the poverty line, where the poverty line (health perspective) is officially defined on the basis of per capita ability to purchase the nutritional requirements of an adult (i.e., caloric norm of 2,350 calories per adult equivalent per day which was US $13 per month in 2001)176. Although per capita income has increased from $576 in 2002- 03 to $1,254 in 2010-11 the benefits have not been felt by all177. Pakistan is categorized as one of the poorest countries in the world178 where nearly 40% of women can be termed as poor, amongst whom nearly 30% can be considered both economically and socially poor i.e. having a low social status against international indicators assessing status in societies179.

5.2.2 Health In order to achieve MDGs by 2015, Pakistan has committed to: Reduce the proportion of under-five underweight children to less than 20; Reduce infant mortality rate (IMR) to less than 40 per 1,000 live births; Reduce under-five mortality rate (U5MR) to less than 52 per 1,000 live births; Reduce maternal mortality ratio (MMR) to less than 140 per 100,000 live births; Reduce incidence of TB to 45 per 100,000 population; Increase utilization of effective malaria preventive and treatment measures to 75% in high risk districts; Increase sustainable access to an improved water source to 93% of population and to improved sanitation to 90%.

173 Table 10: Under five Mortality Rates

COUNTRY 1970 1990 2000 2009 % PROJECTED Decline 2015 Pakistan 180 130 108 87 52 83.8 Bangladesh 236 148 90 52 78 46.2 India 186 118 93 66 65 61.8 Iran 190 73 48 31 84 28.4 Sri Lanka 84 28 21 15 82 14.1 Sweden 13 7 4 3 77 2.8

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MDG 1 includes reduction in prevalence of underweight children under-five years of age from 40 in 1990 to less than 20 by 2015. The proportion of underweight children was increased during 2001-2 to 41.5 and remained stagnant at 38 during 2004 to 2009. The Pakistan Millennium Development Report 2010 states that it has worsened since 2006180. MDG 4 includes under-five mortality rate, infant mortality rate, fully immunized children aged 12-23 months, proportion of 1 year old children immunized against measles, incidence of diarrhoea among under-fives, and Lady Health Workers’ (LHWs) coverage. Out of these six indicators, Pakistan's performance in achieving the targets by 2015 is unsatisfactory particularly in the case of the first two indicators180. Although the under-five mortality rate has reduced to half the rate in 1970, at the current rate of decline the MDG target will not be met (Table ). The decline in U5MR has been lowest for Pakistan compared to other countries in the region. Within Pakistan, the under-five mortality rate is 28% higher in rural areas than in urban areas, and rates are further lower in major cities than in other urban areas181. Similarly the IMR target will not be met if it continues to decline at the current pace (Table ).

Table 11: Infant Mortality Rates

1990 2009 % PROJECTED Decline 2015 Pakistan 101 71 30 61.5 Bangladesh 102 41 60 21.7 India 84 50 40 39.3 Iran 55 26 53 16.8 Sri Lanka 23 13 43 9.8 Sweden 6 2 67 0.7

Information from 50 Demographic and Health Surveys around the world undertaken between 1995 and 2002 reveal that neonatal mortality rates are around 20–50 per cent higher for the poorest 20 per cent of households than for the richest quintile182. In Pakistan, a higher prevalence of low birth weight babies, a main predisposing factor for neonatal mortality, has been observed among poorer households in the country183. The target for diarrheal incidence among children under-five years was achieved in 2007-08 much ahead of time. Similarly, the coverage of households by Lady Health Workers (LHW) has increased from 38 to 83% in 2008-09 in the first nine years of the MDGs so the attainment of 100% coverage by 2015 seems to be on track.184 As regarding MDG 5, the MMR has declined from 350 in 2001-02 to 260 (PDHS 2007 reports it 276) in 2009173. The MMR for rural areas (319) is almost double than urban (175) areas. There are marked variations among provinces as well, Punjab being at 227, Sindh 314, KP 275 and Baluchistan at 785181. This MDG target still requires almost a halving of the current MMR.

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There has been a decrease in deliveries attended by skilled personnel from 48% in 2004-5 to 39% in 2009. There is also considerable disparity between urban (60%) and rural (30%) areas as well as between the provinces: Punjab (38), Sindh (44), KP (38) and Baluchistan (23). The 2015 target for skilled birth attendants is still more than twice the proportion achieved in 2008-09. Despite the persistent high knowledge of contraceptives among married women (96%), from 2001 onwards, there is a slight increase of 2% in the contraceptive prevalence rate (from 28 to 30%) which is still one of the lowest in the world181. The total fertility rate (TFR) has declined at a reasonable pace from 7 in 1970 to 3.9 in 2009 but is still one of the highest in the region. It seems that the MDG target for both these indicators is unlikely to be achieved. The Pakistan MDG Report 2010 concludes that many of the specific targets for MDG 5 will not be met in the immediate future, and it will be challenging to meet the targets by 2015 unless herculean efforts are made. Regarding MDG 6, the HIV situation in Pakistan since 2004 has fallen into concentrated epidemic category. Although the general population HIV prevalence in Pakistan is rather low (less than 0.1%), the key at risk populations in Pakistan comprise largely of people who inject drugs, sex workers and sexual minorities (transgender persons and men who have sex with men). The HIV prevalence among key populations is considerably higher than the national prevalence, recording 20% for people who inject drugs, 6.1% for transgender sex workers and 11.4% for men who have sex with men.185 This high prevalence among the key populations reflects their low HIV service coverage of 5.8%, 13.5% and 53.8% for female se workers, male/transgender sex workers, and people who inject drugs, respectively.186 Pakistan still has a window of opportunity to halt and reverse this HIV epidemic across the country by 2015, provided there are concerted efforts in scaling up universal access to HIV prevention services for at risk populations, as well as to give HIV treatment to those who need it, which stood at only about 5% in 2009.187 This includes reaching out to the most excluded and marginalized communities through specific measures (which may comprise social protection, economic support, social inclusion, provision of services – prevention and treatment, etc.) and ensuring allocation of adequate resources for this approach. Additionally, there is an urgent need for the removal of punitive laws, policies and practices that drive these key populations underground, prevent their access to HIV services, and allow high HIV prevalence among them. It is important to recognise that people living with HIV are subject to exclusion, stigma and discrimination in Pakistan, as in other countries in the South Asia. Data from a recent nine-country study in the Asia Pacific region, which included Pakistan, identified key concerns such as exclusion from religious worship and family activities, denial of health services, job promotions, and breach of confidentiality.188 The DOT coverage for TB cases has increased from 79% in 2001-02 to 85% in 2008-09 and the MDG target has been met before time. However, the incidence of TB is stagnant at 181 per 100,000 of population since 2001-02.To achieve challenging target of 45 will require extensive measures both at community and service delivery levels while keeping prime focus on high risk areas, poor and excluded segments of population. From 2002 to 2008-9, the access and utilization of effective malaria prevention and treatment measures have increased from 20 to 30% in 19 high districts. The MDG target of 75% seems a major challenge.

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This certainly requires strategic measures to actively involve and build capacities of the most at risk communities. Regarding MDG 7, water supply coverage has increased from 53 % in 1990 to 65 % in 2008-09. However, the MDG target of 93% by 2015 seems to be challenging at the current rate. Sanitation coverage has increased from 30% in 1990 to 63% in 2008-09 according to the PSLM survey 2008-09 but again the MDG target of 90% appears challenging.

5.2.2.1 Nutrition Situation in Pakistan Pakistan is one of the 189 signatories to the MDGs. Although alleviation of hunger and nutrition interventions are a corner stone of MDG targets, the mid-term evaluation suggest that Pakistan is lagging behind several key nutrition and health indicators (Figure ).

Figure 21: Pakistan MDG Nutrition Related Targets

However, the reality is that the last two decades have seen a significant increase in Stunting and Wasting among children under 5. In fact, Wasting is at its highest level since records were first taken in 1965, while Stunting is at 1977 levels (See Figure below). Approximately half of the world’s malnourished children are in three countries: Pakistan, India and Bangladesh. Clues to this “Asian Enigma” of malnutrition lie in the differences that exist between rates of LBW, unhygienic conditions, breastfeeding and weaning practices and the status of women. Malnutrition in Pakistan is directly and/or indirectly responsible for almost 50% of all under-5 deaths.

Figure 22: Time Trend in Malnutrition among Under-5 Children

Time trend in malnutrition prevalence of under-5 children in Pakistan

60 50 Underweight 40 Stunting 30 Wasting 20 10 0 1965 1977 1985-7 1990-4 2001 2011

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A high prevalence of under nutrition has existed throughout Pakistan for long time, well before the most recent floods, however the floods did provide an opportunity for unveiling of the problem and bringing it into sharp focus both at national and international levels. The table below shows that acute malnutrition levels have been consistently above the cut-off of a public health problem even before the floods. The results of 2010 flood affected nutrition surveys indicated a very serious situation especially in Sindh (21.2-22.9%) where the malnutrition levels are way above the emergency thresholds and a serious malnutrition situation (GAM of 14%) in Punjab after the 2010 floods (Nutrition Survey Reports 2010). Furthermore, the rate of chronic malnutrition (stunting) is unacceptably high in Pakistan and NNS 2001 revealed that more than 40 percent of the children between 6-59 months were stunted which in the recent survey in flood affected areas are 50 percent. Moreover, micronutrient malnutrition inclusive of Vitamin A deficiency, iron deficiency anemia and Iodine deficiency disorder in women and children were detected at levels of severe public health significance in Pakistan with Sindh and Punjab recording the highest levels. Low birth weight has remained high 22.1% from 1980 to 1991 before further deteriorating to 26% in 2006.

Table 12: Micro-nutrient deficiency and Food insecurity

Indicators Pakistan Sindh Punjab KP Balochistan

Iron Deficiency anemia (Children) (NNS, 2001) 67% 68% 72% 56% 36% Iron Deficiency anemia (Mothers) (NNS, 2001) 45% 47% 45% 44% 55% IDD deficiency ( mothers (NNS, 2001) 76% 69% 71% 56% Low birth weight (weight less than average-PDHS 2006) 31.1% 27.4% 24% 34% 43% Poor food consumption score ( WFP, 2009) 15.7% 13% 29% 10% 27% Population with food insecurity (WFP 2009) 48.6% 44.3% 56.2% 38.5% 61%

Poor nutrition is compounded by food insecurity and poor food intake, particularly for women and girls. According to the 2009 study, KP has the highest percentage (29%) of people with a poor food consumption score. These figures indicate a poor food security situation in the provinces (Food insecurity in Pakistan, 2009): KP (56.2%), Sindh 44.2% and Punjab (38.5%). The low birth weight babies, and high stunting rate (chronic malnutrition) are the reflections of poor nutrition and health during pregnancy and even pre-pregnancy periods due to embedded gender inequality in the society (low literacy rate of women, no control over household resources, limited decision making power for her own health, and her choices for pregnancy, being last in the family food chain) in Pakistan.

5.2.2.2 Health System & Health Care Delivery Constitutionally, the provision of health care in Pakistan is primarily the government’s responsibility. Since 1947, health services provision has been the domain of provincial governments. The federal government is mainly responsible for formulating policy, directly administering key urban tertiary care hospitals, and implementing a few vertical programs189.

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Pakistan has a total of nearly 127,859 qualified physicians, 62,651 nurses and 15,790 dentists in both the public and private sectors. Contrary to the recommended Physician-Nurse ratio of 1:3-4, in Pakistan for every ten thousand of population there are 4 nurses and 8 doctors compared to 13 and 6 in India, 3 and 3 in Bangladesh, 14 and 9 in Iran and 17 and 6 in Sri Lanka, respectively190. The health care delivery system of Pakistan can be broadly divided into private and public sectors191.The private sector operates in formal and informal ways. The informal system provides care through non- qualified care providers. The formal system consists of large accredited hospitals and nursing homes which are concentrated mainly in the major urban areas and render fee-for-service healthcare192. In 2000, under the Local Government Devolution plan, health care provision became primarily district based with provincial health departments responsible for financing, monitoring and facilitating district governments193. Despite this the overall budgetary allocation for the health sector has never exceeded more than 1.0% of GDP with the most recent decline to 0.7% in the year 2009.194,195 Many of the primary level care centres are in a severely dilapidated condition due to poor maintenance, low budgetary allocations, prolonged absence or lack of availability of staff, institutional insufficiencies and poor governance. The dearth of available and functional local primary care services imposes a heavier burden on higher level facilities. In 1993 the government responded by launching the National Program for Family Planning and Primary Health Care. The program has gradually expanded involving nearly 95,000 lady health workers (LHWs) who provide preventive and basic curative services at the household level throughout the country196.

5.2.2.3 Women’s and Girls’ Health Women in the reproductive age group have specific needs which have higher negative implications in rural as compared to urban areas and is suggestive of deep-rooted culturally defined gender roles197. Current estimates suggest that nearly 28% of non-pregnant women and 39.1% of pregnant women suffer from anaemia198. In Pakistan, the role of traditional birthing and early child care practices has been shown to enhance neonatal morbidity and mortality. Among women who give birth at home and have traditional birth attendants, there is higher risk of neonatal deaths due to higher rates of birth asphyxia, neonatal tetanus and sepsis199. In rural Pakistan 58.1% of women get married before the age of 20 compared to 27% in urban areas. Although the legal age of marriage for girls in Pakistan is 16 years, early child marriages are common and around 37% of girls get married before the legal age.200 The concept of early pregnancy after marriage is synonymous with the women’s gender-defined role of motherhood. This exposes the adolescent mother to multiple adverse health conditions: First, children born to young mothers are more prone to illness and death. Second, teenage mothers are more likely to experience complications during pregnancy and less likely to be emotionally, physically and psychologically prepared to deal with pregnancy-related challenges, which often leads to death and maternal disability, the most debilitating being obstetric fistula. This complication leads to incontinence of urine, faeces or both, and devastating their lives. These women are often abandoned by their husbands and become ostracized members of society.Poverty, malnutrition, poor health services, early marriage and gender discrimination are interlinked root causes of fistula, which is also termed a social calamity. Unfortunately, there are no statistics available for Pakistan, because the problem of fistula is a neglected and under-prioritized issue, but there are estimates that indicate 4000-6000 new cases per year

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according to fistula experts. Vulnerability to obstetric fistula violates many of the human rights that collectively constitute the right to reproductive health (RH). Thus, the failure to provide timely prenatal care ( including medically indicated caesarian deliveries) and timely fistula repair violate women’s internationally recognized human rights, especially to healthcare in general and reproductive healthcare in particular. Third, their early entry into reproduction denies them the opportunity to pursue academic and/or professional goals, thus maintaining the lower status of women in society. The incidence of mental health problems may increase among women during the maternal period, especially during the postpartum phase201. Their occurrence is shown to be aggravated among those who face domestic abuse and violence, especially during pregnancy. Around 42% of pregnant women suffer from symptoms of anxiety and/or depression and domestic abuse.202 The occurrence or chronic presence of these conditions has been demonstrated to predispose a 1.5-3 times higher risk towards adverse pregnancy and health outcomes for women and poorer health and higher morbidity and mortality among newborns.203 Globally, the major causes of child death especially among infants are largely attributable to communicable diseases including those that are vaccine avertable and preventable. In Pakistan more girls than boys die after the neonatal period as the child mortality rate for female is found to be 22 compared to 14 for boys. This pattern continues for the age group of 5-14 years where female and male mortality rates are 3.4 and 2.3 respectively.181,204 Women, girls and infants most often die of common communicable diseases such as tuberculosis, diarrhea, pneumonia, and tetanus. Furthermore, under nutrition during early life is considered to be a strong predictor for vulnerability to fatal preventable infections205. In Pakistan children living in rural areas have a higher incidence of low birth weight and poorer nutritional status than urban residents. The incidence of common illnesses such as diarrhea and acute respiratory infections during the neonatal period is known to be much higher in children living in rural areas, which is associated with use, accessibility, availability, and type of health care services206.

5.2.3 Education Education carries a multi-dimensional value. As well as a fundamental right it plays a pivotal role in growth and progress. It plays a vital role in human capital formation and is widely acknowledged as the single most important factor contributing towards the alleviation of poverty and is considered a vital investment for human and economic development207. Education has a substantial impact on the degree of social cohesion in society and the reduction in regional disparities. Apart from the economic value for its user, it is an extremely important instrument for social mobility, and serves as a repository and defender of core national values, leading to an innovative and peaceful society. Like many other developing countries, unfortunately the situation of education sector in Pakistan has not been very encouraging primarily due to poverty and a challenging economic situation208,209. On the Education Development Index, which combines all educational access measures, Pakistan lies at the bottom in South Asia with Bangladesh, and is considerably below Sri Lanka. A similar picture is painted by the gross enrolment ratios that combine all education sectors, and by the adult literacy rate measures. Pakistan’s HDI has improved over the years but the rate of progress in other countries has been higher. Bangladesh, starting at a lower base, has caught up, while other countries have further improved upon their relative advantage. These developments do not indicate well for Pakistan’s competitive position in the international economy. As the Global Competitiveness Index (GCI) shows, Pakistan’s

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performance is weak on the health and education related elements of competitiveness when compared with its major competitors like India, Bangladesh, Sri Lanka and Malaysia. Despite major economic challenges, Pakistan is consistently striving towards improving its education sector and has taken some key decisions to enhance access to education. Recognizing, as an important barrier to access to education, since 2004 Pakistan has abolished school fees and is providing free text books to students up to grade 10 in the public sector, as well as extending monthly stipends to middle and secondary girl students in selected schools in three provinces. Under the 18th constitutional amendment, education has been devolved to provinces. More funds have been provided to the provinces through the 7th NFC award. Every province emphasizes the provision of access to quality education at all levels in order to achieve the MDGs and the objectives of Education for All (EFA)210. This commitment follows the principle of inclusion which is seen as a process of addressing and responding to the diversity in the needs of all children, youth, and adults through increasing participation in learning, cultures, and communities, and reducing and eliminating exclusion within and from education. It involves changes and modifications in content, approaches, structures, and strategies, with a common vision that covers all children of the appropriate age range and a conviction that it is the responsibility of the regular system to educate all children211. Recently Pakistan has taken many new initiatives aiming at providing missing facilities, improving teaching quality and learning environment, building capacity of education managers and administrators, etc. Apart from the Ministry of Education, organizations and departments like National Commission for Human Development (NCHD), Higher Education Commission (HEC), National Vocational & Technical Education Commission (NAVTEC), Ministry of Social Welfare and Special Education (MoSW&SE), Labour & Manpower Division, have launched initiatives to develop the Human Resource of Pakistan to meet the emerging challenges.

5.2.3.1 Status of Education-related MDG The education-related MDG 2 focuses on three core indicators: (a) the net primary enrolment ratio (NER); (b) completion/survival rate from grade 1 to 5; and (c) the literacy rate. NER The net primary enrolment ratio has increased from 52% in 2004-05 to 56% in 2006-07. The PSLMS 2008-09 reports that NER has gone up to 57% but fell to 56% in 2010-11(Table ). The economic recession and high inflation are identified as the main reasons which have adversely affected real incomes thereby negatively affecting the enrolment rates of children of poor households. There are significant variations in NER among the four provinces (Table ). The NER is highest in Punjab as compared to the other provinces. Gender disparity in NER has shown a slight reduction, except in Punjab. During the last five years, the NER for girls has improved by 4% in KP indicating a decline in gender disparity in this province.

Table 13: MDG Indicators for Goal 2212

INDICATORS 1990- 2001- 2004- 2005- 2006- 2007- 2008- MTDF 2010-11 MDG 91 02 05 06 07 08 09 Target Target 2009- 2015

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2010

Primary Net 46 42 52 53 56 55 57 77 56 100 Enrolment Ratio (%) Completion/survival 502 57.3 67.1 72.1 54.7 52.3 54.6 80 100 rate Grade 1 to 5 (%) Male 53.3 61.8 71.6 56.2 53.2 54.8 Female 64.3 75.8 72.8 52.9 51.1 54.6 Literacy rate (%) 351 45 53 54 55 56 57 77 58 88 Male 48 55 65 65 66 69 69 85 69 89 Female 21 35 40 42 43 44 45 66 46 87

In recent years there has been a mushrooming of private schools. According to PRSP II, in urban areas almost half of the total primary enrolment was in private schools. However in rural areas private school enrolment as a share of total primary enrolment increased from 18 percent in 2004-05 to 20 percent in 2006-07. This suggests that in rural areas, where the majority of the poor live, public schools remain the main source for primary education and therefore special focus on improving access and quality of education there is required.

Table 14: Net Enrolment Rate by Provinces213

Provinces 2004-05 2006-07 2008-09 2010/11

Male Female Male Female Male Female Male Female Punjab 60 55 64 59 64 60 62 59 Sindh 53 42 56 43 57 49 57 48 KP 53 40 56 41 58 45 57 45 Balochistan 44 29 49 32 51 36 56 35 Total 56 48 60 51 61 54 60 53

5.2.3.2 Completion/Survival Rate There has been a significant decline in the completion/survival rate to grade 5 during the last five years (Table ). One probable reason for this could be the shifting of students from public to private schools due to compromised quality of education in public schools, the unavailability of teachers, poor infrastructure, etc. The completion and survival rate, however, has been almost stagnant since 2005-06.

5.2.3.3 Literacy Rates Although the literacy rates of the population of 10 years and above has shown some improvement (Table ) during 2001-09, it is highly unlikely that the MDG target of female literacy will be achieved in 2015213.Like other developing countries literacy is higher in urban than rural areas in Pakistan. It is also higher among men than women.

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Table 15: Literacy Rate (10 years and above)214

Provinces 2001-02 2004-05 2006-07 2007-08 2008-09 2010-11 Over all 45 53 55 56 57 58 Male 58 65 67 69 69 69 Female 32 40 42 44 45 46 Urban 64 71 72 71 74 74 Areas Male 72 78 79 80 81 81 Female 56 62 65 63 67 67 Rural 36 44 45 49 48 49 Areas Male 51 58 60 64 63 63 Female 21 29 30 34 33 35

At the provincial level, in Punjab and Sindh it was 59 percent followed by 50 percent in KP and 45 percent in Baluchistan. The PSLM 2007/08 found a strong association between literacy rate and household income suggesting that literacy rate varies, directly, with income (as well as with gender and urban-rural location), and is highest amongst the high income quintile. The literacy-income table has been included as follows.

Table 16: % Literacy Rates: Class, Urban-Rural Residence and Sex

URBAN RURAL Income Bracket Male Female Both Male Female Both PAKISTAN 80 63 71 64 34 48 1st Quintile 54 35 44 45 17 31 2nd Quintile 64 46 55 68 23 40 3rd Quintile 73 54 64 66 35 50 4th Quintile 82 65 74 73 44 58 5th Quintile 93 81 87 83 57 70 Source: PSLMS 2007/08

5.2.3.4 Major Systemic Challenges in Education215 The systemic challenges to education include: (i) Lack of access to basic education- with around 7 million out-of-school primary age children; (ii) Parallel streams of education- creating/accentuating social inequities; (iii) Lack of school in close proximity; (iv) Missing Facilities in schools- some schools even being “shelterless”; (v) Shortage of qualified and trained teachers; (vi) Teacher absenteeism; (vii) Lack of learning and teaching materials; (viii) Poor assessment/examination systems; (ix) Poor governance and lack of capacity in education planners and managers (especially at the provincial level); (x) Lack of effective supervision and monitoring; (xi) Ineffective (delayed and inadequate) assistance in emergencies.

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In addition, with a shortage of middle schools and secondary schools in close vicinity, a large number of primary graduates, especially girls, cannot continue their education beyond Class V. Access and quality of education can improve with improved governance, higher allocation and better utilization of budgetary resources, strengthened public-private partnership, expansion of effective non formal basic education network, and strong community participation.

Quality of Education The quality of education has been a major casualty of the system’s inefficiency. The biggest victim has been the public sector but quality cannot be assumed in private schools. Efforts to increase enrollments are not sustainable in the absence of quality education. Re-prioritization of quality can only be initiated with a common understanding of the term and then focus on the curriculum, textbooks and learning materials, assessments, teachers and the learning environment.

5.2.3.5 Teacher Quality There is a general consensus that the quality of teachers in the public sector is unsatisfactory. Poor quality of teacher in the system in large numbers is owed to fragmented governance, an obsolete pre-service training structure and a less than adequate in service training regime. Presence of incompetence in such a huge quantity and permeation of malpractices in the profession have eroded the once exalted position enjoyed by teachers under the eastern cultural milieu.

5.2.3.6 Missing Facilities in Public School The poor quality of the existing learning environment is evident from the fact that a large number of schools are missing basic infrastructure i.e. 37.7% schools up to elementary level are without boundary wall, 33.9% without drinking water facility, 37% without latrines and around 60% of schools are without electricity (Table ).

Table 17: Missing Facilities in Public Schools216

Province / Area Without Without Without Without Without Building Boundary Drinking Latrine Electricity Wall Water

Punjab 505 13,378 8,279 14,551 26,825 Sindh 11,669 24,470 26,240 22,588 39,616 KP 1,113 9,116 10,029 7,888 13,719 Baluchistan 681 7,689 4,197 8,425 9,806 AJK 2,705 4,498 3,074 3,390 4,083 Gilgit‐Baltistan 183 1,084 1,069 1,072 1,072 FATA 908 1,024 2,101 1,882 1,640 ICT 0 15 7 50 8 Total Pakistan 17,764 61,274 54,996 59,846 96,769 In % 10.90% 37.70% 33.90% 36.90% 59.60%

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To enhance access to education, particularly for girls in low income households, and to enhance enrolment, output and quality, existing schools should be upgraded with the necessary infrastructure. The missing facilities in public schools become more glaring, if analyzed from an urban/rural angle (Table ).

Table 18: Missing Facilities in Public Schools Pakistan: Urban/Rural Disparities 2008-09217

Missing Facilities Urban Rural Total

Electricity # 11,609 85,160 96,769 % 35.80% 65.50% 60.20% Water # 2,179 52,817 54,996 % 6.70% 40.60% 34.20% Latrine # 9,763 50,083 59,846 % 30.10% 38.50% 37.20% Boundary Wall # 9,026 52,248 61,274 % 27.90% 40.20% 38.10%

5.2.3.7 Emergencies Pakistan has suffered serious emergency situations in recent years causing collateral damage on a large scale. Schools have been worst hit by the earthquake and floods because the school infrastructure was not constructed to bear the tremendous shock of the earthquake, and the school administration as well as the students were not prepared to meet such kind of challenges. Pakistan’s education system has now recognized the need for the preparation of individuals and groups to cope with the demands of emergencies through organized and effective responses. Credible rehabilitation and disaster management plans need to be put in place to ensure early restoration of the education service.

5.2.3.8 Social Exclusion Education has a societal role of selecting, classifying, distributing, transmitting and evaluating educational knowledge, reflecting both the distribution of power and the principle of social contract. The education system in Pakistan is accused of strengthening the existing inequitable social structure as very few people from the public sector system can move up the ladder of social mobility. If immediate attention is not paid to reduce social exclusion and move towards inclusive development, the country could face unprecedented social upheavals. It is well documented that uneven distribution of resources, and opportunities and apprehensions of sliding down the scale of poverty promote social exclusion. Increased levels of social exclusion express themselves in different forms such as ethnic strife, sectarianism and extremism. Social exclusion or extremism is not exclusively a function of the curriculum but a host of traditional factors like poverty, inequity, political instability and injustice, and it becomes a huge challenge that calls for a comprehensive, urgent response.

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5.2.3.9 Equity in Education The education statistics, given above, depict large differences in access across gender, ethnic minorities, provinces, regions and rural-urban divides. This results in weaker performance on equitable distribution of educational opportunities. This discrimination and inequity has been the result of poor implementation and social customs. Over the years, little attention has been paid to rectify the situation. The issue of equity runs through the entire education system and has serious implications for sustainable and equitable development in the country. In 2005-06, the Gender Parity Index (GPI) for primary education was below the parity level 0.82 and 0.85 in 2007-08 for both Gross (GER) and Net Enrolment Ratios (NER). These figures showed significant improvements from 2001-02 with a figure of 0.72218. The Index falls for the secondary level to 0.77 in 2005-06 and 0.77 in 2007-08 (GER and NER) but, again, registers improvement from its 2001-02 level of 0.73. Despite improvements it is evident that girls continue to face significant disadvantage in access as they reach adulthood. Advocacy for equitable approaches to ensure quality of educational opportunities is the fundamental need of the time.

5.2.3.10 Education Policy Pakistan has formulated its National Education Policy (NEP) 2009 which requires federal-provincial ownership and effective coordination within the basic principle of provincial autonomy as key to successful implementation. In this context, the Policy limits the federal role to that of facilitator and coordinator. The salient policy features include: achievement of Dakar EFA goals and MDGs by 2015; introduction of Early Childhood Education (3‐5 years); setting primary education age at 6 to 10 years; ensuring equity in Education (gender, geographical, Urban‐Rural areas); merging grades 11 and 12 into the school education; ensuring waiver of maximum age limit for recruitment of female teachers; extending availability of Technical and Vocational Education (TVE) at district and tehsil levels with relevance to the labour market; raising enrolment in the higher education sector from an existing 4.7 percent to 10 percent by 2015, and 15 percent by 2020. Education in general and ‘Education for All’ in particular, is one of the top priorities of the government219. The country had a ten year Perspective Development Plan (2001-11), visualizing long term macro-economic and sectoral growth strategies.

5.2.3.11 Uniformity The Constitution of Pakistan demands a uniform education system in the country and entrusts the State with the responsibility of organizing an equitable and effective system, with an aim to enhance the overall wellbeing of Pakistanis. Contrary to this, there are three parallel streams in education that have created unequal opportunities for children. These are public sector schools, private schools and Madrasahs. Moreover there are sub-streams within each. Within public sector and private sector schools there are elite and non-elite schools. The former caters to the economic elite only and therefore to a very small minority of children. The majority of lower middle class to poor children study in the non-elite low quality private and public schools. Most of these schools fail to produce students who can compete for high end jobs to allow vertical social transition.

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The provision of educational services is a public function and the Constitution of Pakistan expects the public sector to take the lead in performing this function. The relative failure of the public system has resulted in the emergence of the private sector which violates the principle of uniformity.

5.2.3.12 Public-Private Divide Existence of parallel systems of public and private education in Pakistan remains a cause for concern as it creates inequitable social divides. First, a small but important component of the private sector caters to the elite and offers high quality that only the rich can afford. Its long-term socio-economic impact is divisive for the society. Second, the religious Madrasahs form a component of the private sector. The parallel system in this case consists of a curriculum that lies outside the mainstream. Third, private sector establishments within the mainstream are not properly regulated, which can leave students unprotected. They do not often register with the Provincial authorities as they are required by law and do not often comply with the regulations. Registered private schools often charge more fees than they are authorized to take (the average household annual expenditure per student in a private establishment is reported to be four times greater). Fourth, the curriculum and qualifications structures do not give a clear idea of their equivalence with public sector qualifications, which can put these students at a disadvantage. Finally, the public sector has failed to capitalize on the potential benefits from the growth in private sector. Over the last few years, the private sector has made some attempts to bridge the gaps of education system like inequitable access, poor quality, high drop outs, etc. These efforts have been through formal agreements as well as on an informal basis. It is important to institutionalize the arrangement to optimize results. The private sector can assist in areas like textbooks and libraries development, teacher education, food supplement to poor children, literacy programs, etc.

5.2.3.13 Early Childhood Education (ECE) Historically ECE has not been formally recognized by the public sector in Pakistan. The traditional ‘katchi’ class in some public sector schools has predominantly remained a familiarization stage towards formal schooling for un-admitted, young students. A limited part of the Grade I curriculum is taught to this group. Against this background, for the first time in Pakistan’s history, ECE was included as a component in the Education Sector Reforms programme and funding was provided to the provincial governments. ECE was also included in the National Plan of Action of Education for All. Pakistan is committed to the Dakar Framework of Action, the first goal of which is to expand and improve comprehensive ECE for all children, especially for the most vulnerable and disadvantaged. Although progress has been achieved over the last few years, but further action is required to improve provision of ECE across the country for wider participation, better quality and improved governance.

5.2.3.14 Technical Education and Vocational Training Pakistan has a large population and therefore, a comparative advantage in labour force. However, low skill levels dampen the potential of the labour force to significantly contribute to economic growth. Improvements in the skill levels of the labour force will increase efficiency and competitiveness of the local industry, attract international investment and allow overseas employment of Pakistanis generating a flow of foreign remittances. The formal Technical and Vocational Education (TVE) system is not a major supplier of skills to the country’s labour market. Like all other sectors of education in Pakistan, TVE also suffers from issues of access as well as quality. While theoretically it caters to the market needs,

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practically it meets a very small portion of the demand. Therefore, the base of technical and vocational skills provided to the economy in Pakistan is narrow. Generally, the certificate and diploma programs do not seem to have a progression ladder into higher level skills. The current TVE certificate stream is too narrow in its scope and does not cover the large variety of skills training that takes place in the traditional sector. Two way cross-over between the academic and the applied / professional streams is lacking in the system. The absence of a well-articulated qualifications system is a major structural shortcoming. As the manufacturing and services sectors have expanded, skill requirements of the country have changed as well, and there are needs for technical and vocational skills even in the traditional sector as it adopts more productive techniques of production. The technical intensity of production processes will increase as new technologies become more pervasive, thereby raising the demand for TVE skills of a higher quality.

5.2.3.15 Higher Education Good quality, merit-oriented, equitable and efficient higher education is the most crucial instrument for translating the dream of a knowledge-based economy into reality. The higher education sector contributes to social goals of developing civic responsibility, social cohesion, and a more tolerant society. To its traditional functions of producing skilled labour force and developing new knowledge through research, a third is being added to the higher education sector the world over; service to society. It includes making a contribution to the innovation process, economic growth, sustainable development and social cohesion. Enhancing equitable access to higher education remains a difficult challenge for the higher education sector in Pakistan. Although significant achievements have been recorded with an enhancement in access to higher education rising from 2.2% of 18 to 23 year olds in 2002 to over 4.7% in 2008, participation rates remain low compared to India (7%) and Malaysia (12%).

5.3 Causal Analysis for Human Development The following is an account of the main causes for the current human development context in Pakistan, which follows the situation analysis in examining the major sectors of health and education as distinct yet mutually influencing areas.

5.3.1.1 Fragmented Governance Governance, whether of health or education, is the overarching framework that determines the ability of the State to meets its role and obligation as duty bearer: the responsibility to ensure that education and health services of quality are available to all without discrimination. The largest proportion of the service delivery in Pakistan remains with the public sector even as the private sector is growing it calls for a more inclusive approach to dealing with basic service delivery. The roles are defined in the Constitution, a lack of clarity in roles and responsibilities at different levels of government leads to unclear regimes of accountability. In case of the provincial-district interaction the Local Government Ordinances have not spelt out any functional divide and each province continues with its own interpretation of bottlenecks.

5.3.1.2 Health Structural weaknesses in the health care system and the difficulties women face in accessing it impact negatively on health outcomes. The trend of low spending on health needs to be reversed to improve key outcomes, especially in relation to the relevant MDGs. In addition, some traditional cultural beliefs and practices appear to be a deterrent to effective use of health services even when they are available.

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Poor infant feeding practices have been recognized as one of the major contributing factors to malnutrition among young infants. In Pakistan, the 2006/07 PDHS showed that despite an increase in exclusive breastfeeding rate over a period of 15 years, (25% in 1991 and 37% in 2006-7), levels in many areas of the country remained disappointingly low. Nutrition surveys data from 2009 and 2010 in KP, Sindh and Punjab showed significantly high levels of wasting among young children (6-23 months old) compared with older children ( 24-59 months old). This is evidence that younger children are at higher risk of malnutrition than the older children, probably because the transition from exclusive breastfeeding to the introduction of complementary foods is usually difficult for children as the diet is not adequate, and they are also more susceptible to disease and especially due to unawareness on this critical issue. The data collected by the UN Inter Agency Mission on High Food Prices (July 2008) suggest that the feeding practices and the quality of diet offered to children are generally inadequate. Rising food prices, while not the principal cause of malnutrition, will affect the nutritional outcomes (particularly acute malnutrition and stunting) both in terms of food availability and food choices. Reasons for non-achievement of immunization targets are manifold but inter-related. While there are significant gaps in health care delivery, the traditional beliefs pertaining to childhood immunizations, mainly OPV, further reduce the utilization of these services. These include perceived harmful effects such as vaccinations causing ill health and fever, inflicting pain to children through use of injections, and such vaccinations as a possible source of inflicting sterility among children. Such beliefs are more common among the remote areas and more prevalent among religiously orthodox segments and less developed geographical areas of the country220. There are multi-dimensional factors that cause high MMR including poor access221to maternal health services, inadequate community health behaviours, early marriages and hence early pregnancies, too long and high parities. The government is already addressing most of these issues through the National Maternal Neonatal and Child Health Program and LHW Program. However, in view of the recent 18th constitutional amendment these programs have been devolved to provinces which are in the planning phase. One of the major reasons for stagnation in CPR is persistent short supply of contraceptives across the country as well as inadequate access of women to contraceptives, while there is demand ranging to an unmet need of 30%. Moreover, a study conducted by Population Council in 2009 found that the largest proportion of the population not using contraceptives fall in the category of the poorest of the poor and excluded communities. Hence, addressing this issue is tied to more complex socioeconomic concerns and requires more integrated structural responses, including attitude and behaviour change. So too, with RH issues outlined above, including domestic abuse-induced mental trauma. In terms of healthcare services utilization, the private sector caters for more than 70% of the population222. This low level of public sector utilization has been attributed to a plethora of factors like cultural beliefs and trust in traditional and spiritual healers, and low levels of satisfaction in the public health care services which are attributed to poor quality223, lack of availability and the poor attitude of health care staff, poorer quality of medicines224,225, women’s social status in the society especially in the rural areas226, and accessibility in terms of financial, social and geographic barriers227. The availability and regular supply of contraceptives is almost always compromised. Moreover, the issues of social barriers, mobility and access, specifically for women, generate high unmet need for family planning services for which no specific measures are directed to address the issue.

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The healthcare system in Pakistan and its utilization especially during the maternal period is known to have a differential for females as compared to males. Cultural and social issues limit the use of services by women; particularly the dearth of trained and skilled female healthcare providers and women’s limited independent mobility228. As a result the system has failed to deliver efficient preventive and contraceptive care, emergency obstetric and neonatal care, and other reproductive health services specifically in rural areas where health facilities are also poorly maintained, poorly managed, and poorly supplied with appropriate medicines.

5.3.1.3 Education There are multiple causes of low literacy including social taboos, poverty, child labour, the illiteracy of parents and families, and institutional weaknesses. Efforts to combat illiteracy have been halfhearted, disjointed and not suited to local conditions and requirements. There are four main difficulties with current literacy and non-formal learning programs. First, the quality of such programs is variable as they are not regulated. One reason is the poor quality of teachers, which is also not regulated. Second, a certification and accreditation regime is missing. There are no benchmarks or standards that can be used for assessing literacy programs. As a consequence, it is difficult to link the certificate offered by these programs to formal learning opportunities. Hence, graduates of these programs find it difficult to enter into the formal sector. Third, current literacy programs are not well-linked to employment opportunities. Fourth, literacy programs are often found to be effective if there is a follow-up programme of reinforcement, and these are lacking at present. Political will is a key component of moving forward. Addressing inconsistency in literacy related policies, bias of conventional development planners against NFE approach that has led to frequent stoppage of literacy projects, will remove some impediments to the development of this sub sector. Teaching has become the employment of last resort of most educated young persons, especially males. Reform is required in all areas: pre-service training and standardization of qualifications; professional development; teacher remuneration, career progression and status; and governance and management of the teaching workforce. As important are the causes of lack of access and low quality of primary education. With net primary enrolment below 60%, high non-attendance, drop out and repetition rates, are a serious concern. Economic and social factors are key determiners, as is the fact that low quality education does appear to add value to the economic potential of the poorest and most vulnerable segments of the population. As outlined above the gender disparity in education is marked, and its causes are rooted both in socioeconomic realities and cultural practices. These have been exacerbated in the crisis areas through displacement and destruction of schools for girls.

5.3.2 Gap Analysis Existing gaps in capacity, resources and implementation provide the frame of reference for UN and other concerned agency engagement to address major shortcomings in human development indicators in Pakistan. HEALTH

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5.3.2.1 Capacity Gap The provincial governments need assistance in improving current fragmented and almost ineffective health system into a functional and effective health system which is capable of meeting health needs of all segments of population on equitable basis. In view of devolution, assistance is needed in planning and management of devolved programs, implementation and monitoring, and making evidence-based decision-making. Special attention needs to be paid to RH-related awareness-raising and attitude change.

5.3.2.2 Implementation Gap To achieve the MDGs requires strengthening the programs, specifically the TB control program, MNCH, LHW, Malaria and AIDs control programs. Assistance is needed in strengthening and creating new public private partnerships at the community level through developing locally feasible and acceptable means and mechanisms to involve communities specifically the most poor, socially excluded and marginalized communities. Keeping in view the health requirements of various age groups in the population, the following appear to be the minimum basic health needs: 1. Access to adequate, safe and hygienic food; 2. Access to knowledge and information on beneficial health practices; 3. Access to prevention from preventable diseases including vaccine preventable illnesses; 4. Access to clinical care for illnesses, accidents, and emergencies; 5. Access to clinical care and support for chronic illnesses; 6. Timely identification and management of potential threats to health including childhood illnesses, pregnancy related risks and environmental hazards; 7. Provision of safe deliveries and neonatal management, as well as addressing RH concerns 8. Effective and efficient referral of high risk cases from community to higher levels of health care delivery system; 9. Specific measures to ensure universal health care coverage (reaching out to the most excluded) 10. Community involvement in healthcare delivery. 11. Health insurance for the poorest of the poor and the most excluded populations

5.3.2.3 Resource Gap The health budget needs to be increased. It is now at X% of GDP which is well below other comparable countries.

EDUCATION

5.3.2.4 Capacity Gap Pre-18th amendment, education policies were prepared by the federal ministry with active participation from the provincial authorities and experts, though the responsibility of coordination rested solely with the federal ministry. Responding to questions about the consistency or rationality of any policy measure was the duty of the federal ministry. Also, preparation of any clarification sought by the national parliament was the task of the federal

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ministry. Discussions on key policy issues as well as dialogues and workshops on suggested measures were almost always facilitated by the federal ministry.

It is still to be seen if the education departments of the provinces have learnt and developed capacity to suggest viable education policies and ensure their coherence with the policies of other provincial departments e.g., finance, social work, labour. With their limited institutional capacity, each province may not be able to grasp and assess various challenges and present them in a coherent policy document, at least in the next few years. Hence, capacity building support is crucial in the immediate transition phase and beyond.

Educational management demands professional standards and expertise for which the traditional policy makers at the ministries or the head teachers are untrained. Recognizing this, many countries around the globe are paying special attention to developing school leaders. In contrast, most persons with management responsibilities in Pakistan’s education sector have no relevant training. After the 18th amendment considerable strengthening of planning capacity is required for programme development and delivery at the provincial levels. An important requirement for planning is the availability of standards for both input requirements and educational outcomes, which is lacking at present. Adequate gender-sensitive planning also requires data and indicators of performance, as well as attitude change. These have been severely lacking at all levels of educational activity and performance. Recently the National Education Management Information System (NEMIS) has provided the basis for computing indicators. However, these indicators are those that have been internationally identified and developed by UNESCO or by some of the donors for cross- cutting international programs like Dakar Framework of Action for EFA and Fast Track Initiative (FTI) for EFA. It is essential to develop a data base that covers all planning needs specific to Pakistan’s context. The deficiencies in data developed by these systems led the Government to undertake a comprehensive census, the National Education Census 2006, which for the first time also covered all non-state-owned institutions, colleges and universities. Moreover, even when the data is available, its use remains insufficient in decision-making and planning partly due to the culture of not using quantitative analysis and partly because the managers lack the relevant capacities. More importantly, this is also due to the large lag between data collection and data dissemination. Information based planning also receives setback from political interventions that distort decision making and also impacts merit and efficiency. Unless political interference and corruption are rooted out, social policies and plans would have low impact; and this is more devastating for Education sector.

5.3.2.5 Implementation Gap The implementation gap, though less well documented, is believed to be more persistent in that it affects many aspects of governance and the allocation and use of resources. The underlying causes may lie in the lack of a planning culture, planning capacity and weaknesses in the accountability mechanisms. Another problem in implementation is the corruption that is believed to pervade the entire system. The diversion of allocations to personal use at most levels, political influence, and favoritism are believed to interfere in the allocation of resources. The pervasive nature of corruption indicates a deeper problem where service to students and learners is not at the forefront of thinking and behavior on the part of some involved in operating the system.

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5.3.2.6 Setting Minimum Standards A key deficit in the system is the absence of clearly articulated minimum standards for most educational interventions and their outcomes. Even where these are established, there is no measurement or structured follow up. As a result the impact of interventions remains subject to speculation.

5.3.2.7 Resource Gap The low resources stand in sharp contrast to the commitment required by policy statements which set up ambitious goals for the education sector. The contrast between the vision and the commitment has been pointed out by the Planning Commission: “We cannot spend only 2.7 % of our GDP on education and expect to become a vibrant knowledge economy.”229 Financial resources for education come largely from the public sector. For the years 2004-5, 2006-7, 2008-9 and 2009-10, the percent of GDP spend on education was 2.2, 2.5, 2.1 and 2.05 respectively. On average Pakistan spent 2% on education during the period 1998 to 2008. Spending on education is far less than needed and there is a declining trend in public expenditure. While Pakistan's spending is the lowest in South Asia (Table), factors like weak governance, ineffective service delivery, poor administration, and lack of accountability aggravate the situation.

Table 19: Comparison of Public Sector Spending on Education230

Country Public Sector spending Literacy Rate (%) as % GDP

Bangladesh 2.6 55 India 3.3 ‐ Indonesia 3.5 ‐ Iran 5.2 ‐ Malaysia 4.7 92.1 Nepal 3.2 57.9 Pakistan 2.1 57 Sri Lanka … 90.6 Vietnam 5.3 92.5

5.4 Rights Holders and Duty Bearers The International Covenant on Economic, Social and Cultural Rights, which Pakistan ratified on 17 April 2008, recognizes in Article 12 the right of everyone to the enjoyment of the highest attainable standard of physical and mental health. The Article, in particular, obliges the State to take steps in relation to stillbirths and infant mortality; and the prevention, treatment and control of epidemic, endemic, occupational and other diseases. Article 13 recognizes the right of everyone to education and, in particular, the right that primary education shall be compulsory and available free to all. Related to adult literacy programmes, Article 13(2) (d) provides that “Fundamental education shall be encouraged or intensified as far as possible for those persons who have not received or completed the whole period of their primary education”. Article 13(1) makes reference to the quality of education in that it recognizes that education shall strengthen respect for human rights and fundamental freedoms; “They further agree

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that education shall enable all persons to participate effectively in a free society, promote understanding, tolerance and friendship among all nations and all racial, ethnic or religious groups, and further the activities of the United Nations for the maintenance of peace.” Section 9 of the Constitution (Eighteenth Amendment) Act, 2010 inserted a new Article 25A in the Constitution, with effect from. April 19, 2010 that guarantees the right to free and compulsory education. This clause is important enough to cite in full: “Right to education ---The State shall provide free and compulsory education to all children of the age of five to sixteen years in such manner as may be determined by law”.

The duty bearers are varied. In relation to education, parents have a duty to make their best efforts to send their children to school and teachers have a duty to make their best efforts to provide a safe learning environment, free from corporal punishment, in which the principles of equality and tolerance are promoted. They are also rights holders who should be able to participate in the decision making processes related to the delivery of quality education. The State has a duty to provide quality education, maintain safe schools, and protect children and educational professionals from acts of violence. The State must target those who are particularly marginalized and excluded from education and address underlying issues such as child labour and human trafficking. In relation to health, while the State is the primary duty bearer, citizens must be able to realize their role in the process. For example, communities can be empowered to lobby the government to increase its budget allocation for health; and when the government establishes an effective waste management system citizens are obliged not to discard their waste elsewhere where it may block drains and create stagnant pools of water that may become malarial breeding grounds.

5.5 Human Security Human security is an integral part of human development in that it ensures against threats to people’s freedoms, the expansion of which constitutes human development. This concept of security focuses on all the risks to human development. It is thus not only broader than the traditional security paradigm that priorities the integrity of a country’s territorial borders but is also wider than a framework that focuses on individuals caught up in conflict but only focuses on violence and their personal security. It includes safety from threats of job losses, political repression, hunger, disease, and natural disasters. Human rights feed into this concept of human security in two important ways. First, ensuring the realization of the rights contained in a State’s constitution and in international conventions and protocols will not only reduce these risks to development but contribute to human development. Second, the realization of these rights, particularly those related to elections, political representation, and participation contained in, for example, the ICCPR231 and CEDAW232, will empower people to strive for further reductions of these risks and an enlargement of the choices and freedoms that they have. International standards and protocols are an important articulation of these rights because they provide a legal and normative basis for the improvements in human welfare that people seek. They are also important to the UN’s role in Pakistan and its comparative advantage in advocating for the ratification of instruments and the realization of the rights therein, in advising and supporting the Government to fulfill its obligations, and in convening groups to find solutions to the challenges to human development.

Meta Analytic Approach to Country Analysis

5.6 Situation Analysis for Human Security This section provides a descriptive analysis of the risks to human development that is centered on those groups who are particularly excluded from development. It describes their exclusion in terms of rights unfulfilled and identifies those duty bearers who have a role in fulfilling those rights. The section then examines the causes of these exclusions including the identification of capacity gaps. From a survey of the literature, the groups most excluded from development are women, children and youth, workers and bonded labourers, religious minorities, and refugees and internally displaced persons. In addition, enhancing the fundamental freedoms of association and expression should be an urgent priority to create the enabling environment for a secure and safe space within which development needs to take place. For instance, on occasion those seeking to bring the government to account or bring about change were prevented from exercising their fundamental rights which in turn affected their ability to act effectively. Media reporting was restricted by insecurity, targeted violence and reporting restrictions. 233

5.6.1 Women Women are excluded from development in diverse ways. The status of women is not homogenous and different groups are excluded in different ways. Some experience multiple exclusions and others play a greater role in shaping their own destiny. Violence against women is a major challenge. Manifestations include murder, committed predominantly by relatives and often in relation to so called issues of honour, domestic violence, sexual assault, and acid throwing. [See Table below] The practice of early marriage and exchanging girls as a means of settling disputes persists 234 and the UN Committee on the Rights of the Child (UNCRC) in its 2009 Report on Pakistan235, noted that this had not diminished since the last Committee report in 2003. Violence transcends issues of class, religion, ethnicity and geography. The lack of reliable data makes it difficult to assess the scale of the issue. Shame and pressure leads to incidents not being reported and deficiencies in the government record system result in under reporting. Reports by civil society organizations and the media suggest an increasing trend of violence. Women’s reduced access to justice impacts negatively on the proper investigation and prosecution of crimes.236

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Cases of violence against women in Pakistan, 2004-09

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Burnings Domestic Violence Kidnapping Killings Sexual Harassment Suicide (including attempts)

Figure 23: Violence against women 2004 - 2009 Women face difficulties in accessing the paid labour market. Women have a lower participation rate in the labour force as compared to men. The Gender Inequality Index of the Human Development Report 2010237 puts the labour force participation rate as at 21.8% for women and 86.7% for men; a figure which is below the lowest average of the six geographical groupings used by the Report (the Arab States at 27%). Women are concentrated in the informal labour market and the home-based worker sector and as such face specific challenges, particularly in relation to social protection.238 Hurdles to participation include illiteracy, social attitudes which restrict mobility, particularly in rural areas, and a deteriorating human security situation. Reserved seats in Parliament have given visibility to the political participation of women and the signs are encouraging. Female members of the National Assembly were the most active, introducing private members’ bills for example239. Concern remains though that election through reserved seats and the absence of an electoral base undermines their legitimacy which in turn diminishes their influence within their political party and in the legislature. Disenfranchisement limits the political participation of women. More generally, challenges need to be overcome to ensure that women are able to exercise their rights. These require broad attitude change as well as policy reform. For example, there are instances of women- headed households being unable to obtain humanitarian aid provided at IDP camps because the necessary NIC was denied them by their families240. The lack of an NIC also impacts negatively on land ownership. However, key positive achievements such as the enactment of legislation on sexual harassment and the efforts of civil society to engage in research and capacity development, as well as ongoing efforts on violence prevention through awareness-raising with men and boys, are encouraging.

5.6.2 Children Violence against children including corporal punishment at home and in schools, sexual abuse particularly of girls in rural areas, and child abduction needs to be addressed. 241 The 2009 Report of the UNCRC noted the challenges to protection included the overall human rights situation in the context of

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the war on terrorism; recruitment of children into armed conflict; and the application of the anti-terrorism legislation to minors. Children who work are excluded in multiple ways; as well as being denied the right to childhood work impacts negatively on education and health. There is no current data on the numbers of child workers, but it is known to be prevalent among Afghan Refugee children242 and includes children in bonded labour. Some work is injurious to health. Physical and sexual abuse in the workplace, particularly affects female domestic workers. Street children suffer a complex interaction of violence, sexual abuse, drug abuse, lack of education, a lack of access to welfare benefits in the absence of an NIC, a lack of shelter, and higher rates of child mortality.243 Children in the criminal justice system face challenges in relation to procedure, the age of responsibility, the length of detention and the treatment there.244 Education is dealt with above but it is worth highlighting how human insecurity is hindering access. The available data suggests there is a link with conflict, with particularly low attendance for IDP children living in host communities.245 Violence in Balochistan, including the targeting of teachers and schools, has had a negative impact on education.246 In 2009 government schools were open for 120 days compared to around 220 in the rest of Pakistan. Safety concerns have caused teachers to seek transfers leaving schools under staffed or with less qualified replacements.

5.6.3 Workers and Bonded Labourers The right to earn a living wage from work in a safe environment is a significant challenge. Tens of thousands have lost their jobs due to the closure of mills and factories due to load shedding. The right to freedom of assembly has been affected by restrictions on joining a trade union. 247 Although bonded labor has been outlawed under domestic legislation, it is practiced, particularly in the agricultural sector in Sindh, and has become an issue of human trafficking.248

5.6.4 Refugees The State has made key gains such as obtaining consensus around the Management and Repatriation Strategy for Afghan Refugees in Pakistan (adopted in March 2010), but more needs to be done. The Afghan refugee population in Pakistan comprises an extremely vulnerable and marginalized group that both shares the general needs of other excluded populations and also has special needs due to its non- citizen status within Pakistan. Concentrated in KP, FATA, Balochistan and Karachi, in the particular context of armed conflict, their presence is looked at with suspicion and is a barrier to their getting aid during Human-made and natural disasters. Issues related to security from violence and exploitation are a cultural taboo for refugees and local population alike and GBV cases are often underreported. Thus, obtaining information is extremely difficult and providing interventions from outside Afghan communities is refused. Cases of GBV of female-headed households and male survivors continue to require greater attention, while many Afghan refugee children and adolescents living in urban areas in Pakistan are deprived of education and work in hazardous environments under difficult conditions to support their households where they are subject to further exploitation and abuse.249 Refugees and asylum seekers do not have access to basic facilities and essential services including education, health care and work, and, with limited income opportunities they survive through informal work arrangements. UNHCR projects provide subsistence support to extremely vulnerable individuals

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and as well as other limited assistance in areas such as education, however it is insufficient to meet their needs. 250

5.6.5 Religious Minorities Religious minorities remain outside the mainstream and special attention needs to be paid to their rights and welfare. Discrimination and neglect have led to social vulnerability in the form of lack of access to education, jobs, healthcare, and flood-related assistance. 251 Violent attacks against the person, their home and their place of worship, and abductions present a challenging environment. Based on their population size, Ahmedis were particularly targeted. The misuse of the blasphemy laws against minorities increases their vulnerability.252 The combination of attacks on minorities and their perceived tolerance by the State are part of a long-term pattern of State inability of protection of minorities at all levels: judicial, executive and legislative.253

5.6.6 Internally Displaced Persons This is dealt with elsewhere but highlighted here is the issue of personal security. The key challenge is ensure that IDPs are being returned to safe areas.254 Tying humanitarian assistance to time-bound returns may discriminate against the most vulnerable IDPs. Persons displaced from areas not officially declared conflict zones cannot register as IDPs, thus denying them access to aid.

5.7 Causal Analysis for Human Security The political leadership in Pakistan faces a complex interaction of challenges in pursuing its development goals to improve service delivery of basic amenities and implement the political, economic and social reforms needed to enlarge the choices and freedoms that people have. Inherited structural constraints on governance cannot be overcome swiftly and anti-democratic veto players and deep social and political cleavages impede the ability of the government to build a broad consensus on reform. Extreme poverty, the lack of an educated workforce, natural disasters, and violence act as constraints on the leadership to manage change. Despite these constraints, the Government has shown commitment to change. The ratification of international treaty obligations, most recently the International Covenant on Civil and Political Rights, and the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, both of which were ratified on 23 June 2010, demonstrate this. Recent constitutional amendments, particularly the Article 25A right to free education for those aged 5 to 16, and the Article 19A right to information in matters of public importance reinforce this. Legislation has been passed in relation to matters such as bonded labour and so called honor killings, and bills have been introduced in relation to matters such domestic violence, and corporal punishment. Government policy and plans have been formulated on diverse issues such as meeting the Millennium Development Goals, and a peace building strategy for FATA and KP. The focus now needs to be on sustaining that commitment to enable the effective implementation of policy, the passage of bills into legislation, and increased budgetary support to provide the necessary funding to fulfill these development commitments. Commitment is crucial but this will not suffice to counter too small budget allocations in areas such as health and education; 0.54% GDP and just over 2% GDP, respectively.

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Implementation on the ground is hampered by capacity gaps, a lack of awareness of people’s rights, and negative social attitudes reinforced by discriminatory legislation. For example there have been instances where although the Election Commission issued instructions to set up female booths for voting in by- elections this was not done and women were barred from voting in all the combined polling stations by an understanding between all the contesting political parties. Such incidents represent an opportunity for the Election Commission to demonstrate its commitment to universal suffrage and fulfill its obligations under the ICCPR and CEDAW by raising awareness of rights among election officials, re-holding the by- election, and instigating disciplinary measures against the relevant officials. Attitude change and rethinking some cultural practices are required to address GBV and RH issues, as well as to increase CPR. Institutional capacity is particularly weak in relation to the investigation and prosecution of offences, creating a culture of impunity. The attitudes of those in the criminal justice system, relating to the acceptance that women, children, and religious minorities have rights, and that violence in the home is a public and not a private issue, may be exacerbating the situation. Again this presents an opportunity for the government to show leadership. For example while it may not currently be feasible for the government to implement reforms of the blasphemy laws, the Pakistan Electronic Media Regulatory Authority could take action against hate speech in the media by developing systems to monitor and penalize violations of the Media Code of Conduct. The ability of all parties in the Parliamentary Committee for Constitutional Reform to pass the 18th Amendment unanimously demonstrates what can be achieved when parliament rises above the dominance of partisan issues to reach consensus on priority issues. The introduction of private members’ bills on key development and human rights issues by female members of the National Assembly is a positive step. What is need now is the diffusion of that commitment to parliamentarians in general to overcome the slow pace of legislation that is hampering reform efforts. As well as measures to build consensus, increased attendance and participation would also assist. Steps need to be taken to understand why during the 2nd Parliamentary Year, almost one-fourth (23%) of the Members of the National Assembly did not participate at all in any form of the parliamentary business whatsoever. There was a lack of quorum in almost every sitting throughout the parliamentary year (March 2009-April 2010). However, the Members pointed it out only on three occasions.255 It is also important to ensure that parliamentarians both in the National Assembly and, especially since the 18th Amendment, the Provincial Assemblies have the technical support they need to introduce legislation that is in conformity with international treaty obligations. For example the Punjab Industrial Relations Act 2010, in raising the threshold of workers from 10 to 50 to form a union, has deprived many of the right to freedom of association. In relation to child labour, the International Labour Organisation’s 2011 Report of the Committee of Experts on the Application of Conventions and Recommendations noted that Pakistan has not implemented obligations into its domestic legislation.256 Although the State is primarily responsible for guaranteeing the fundamental human rights of citizens, citizens themselves are also duty bearers. Social attitudes are exacerbating social exclusions. One manifestation is the significantly higher under 2 mortality rate for girls owing to inadequate care, malnutrition and a lack of immunization. Intolerance is being acted upon and driving attacks on the media, political violence, and identity based human rights violations.

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The factors producing these attitudes may include discrimination and violence in the home environment, reinforced by prejudices in the education curriculum. The ignorance of segregation and the absence of positive role models to counter prejudice, particularly in relation to religious minorities and women, may foster the acceptance of certain beliefs. The poor education and poverty of victims may be both a result and cause of discrimination, reinforcing perceptions of inferiority. Some factors may be part of a vicious cycle in perpetuating attitudes; domestic violence may be caused by specific attitudes towards women and the witnessing of that violence may influence the formation of the same attitudes about women. The State can play a role in reversing this trend by reforming the education curriculum, repealing discriminatory legislation, and promoting non-discrimination in institutions such as the police and civil service.

5.8 Duty Bearers and Rights Holders The core international human rights instruments represent an important way of transforming the excluded groups described in the situation analysis into empowered rights holders, and of identifying the relevant responsible duty bearers. The ratification of many of these instruments by Pakistan demonstrates a positive commitment to the rights enshrined in these treaties. Although many of the rights contained in these treaties are triggered by the situation analysis, the following are examples to demonstrate the breadth of the rights invoked. It should be noted that these rights are applicable to the Afghan refugee population in Pakistan as well. CEDAW, CRC and ICCPR and related international covenants signed by Pakistan form the basis of the rights and obligations outlined in this section. The term ‘the State’ encompasses many actors whose responsibility it is to ensure the effective realization of these rights and includes government leaders, inspection monitors, teachers, the police, prison staff, the courts, and the military. Duty bearers are also those who violate or facilitate the violation of rights and may include employers, parents, families, citizens, NGOs, the media, members of political parties, terrorists and insurgents. Civil society has an important role to play in collaborating with the government to provide service delivery and humanitarian assistance. There is also an important role in terms of advocacy include raising awareness of rights, promoting changes in legislation and policy making, conducting research, and analyzing and publishing data. The media has recently emerged as an entity that has shown willingness to highlight issues and stimulate debate. As standards vary care needs to be taken that the media is not used to publish hate speech. The Constitutional amendment to create a right to information in matters of public importance presents an opportunity to build on the work of both civil society and the media.

5.9 Conclusion Given the complex interaction of challenges that Pakistan is currently facing in relation to human development, it is crucial that everyone is able to participate in providing solutions and setting the country on a path to inclusive growth. With close to 80 million children and young persons under the age of 18, investment in and protection of them is vital to enable them to fulfill their future roles as part of an educated and skilled workforce that can contribute to growth and as part of an active citizenry that participates in the electoral and political processes. Similarly, women too, if allowed, can play a vital role whether through community engagement, paid work or political participation. This requires a sea change in attitudes to understand that the majority of the population is not a burden but an active partner in contributing to solutions. The Government has a key responsibility to provide leadership to the process and ensure that all actors

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own and support this vision. This will require assistance in relation to institutional capacity building, and particularly so at the provincial level following devolution introduced by the 18th Amendment. An important component of this is technical assistance in relation to the collection and analysis of data without which evidence-based policy-making will not be viable. Assistance will also be needed in improving the availability and management of budgetary resources. Interventions to mobilize and empower citizens to hold State actors to account in relation to effective service delivery and the protection of rights will also need support. Recent events have shown that progress can be quickly undermined by natural disasters. The displacement of large sectors of the population, whether because of insecurity or natural disasters, puts an enormous strain on human and financial resources which the dedicated commitment of the former is not enough to counteract. Displacement looks set to be a continuing issue and therefore it is important that the government has the support it needs to minimize the effects of displacement.

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6 State Effectiveness257 For human development to take place the State must be able to deliver essential services and create an enabling environment in which people can take charge of their own lives to bring about improvements. This requires the State to be able to develop and implement policy effectively. This process must be inclusive and requires people to have a role, through the process, in deciding who will make those policy decisions and, through consultation, a role in what those decisions will be. Accountability mechanisms are important to ensure that those decisions are implemented effectively. It is important to ensure broad participation in both the decision making and accountability process to ensure everyone, not just those who voted for the winning or majority party, feels that they have a stake in development. This participation is also important for the consolidation of the electoral process as the legitimate means of deciding who will wield power. The delivery of services and the creation of an enabling environment can be undermined by political instability, personal insecurity, weak rule of law, and corruption. This chapter addresses these risks after an examination of the electoral processes, accountability mechanisms, and service delivery systems. The last few years have seen participative decision making in the form of landmark constitutional developments. 7th National Finance Commission was unanimously approved in 2009 followed by passing 18th Constitutional Amendment Act in 2010 by the parliament. These developments have established a new framework of devolution of powers from federation to provinces and new opportunities and challenges are emerging with greater scope for public participation. Reform and proposals to implement reform in Gilgit Baltistan and FATA are positive developments. The successful implementation of these reforms will strengthen the emerging democracy in Pakistan.

6.1 Situational Analysis This section discusses seven processes and outcomes as the major constituents of state effectiveness. These include elections, accountability, service delivery, political stability, regulatory quality, rule of law and integrity management.

6.1.1 Elections The political and economic transformation Status Index of the Bertelsmann Transformation Index (BTI) records an improvement in political participation and the stability of democratic institutions in Pakistan. In 2010, political participation ranked at 4.8/10 as compared to 4/10 in 2006. Similarly stability of democratic institutions ranked at 2/10 as compared to 1.5/10 in 2006258. International Parliamentary Union (IPU) ranks Pakistan 48th out of 186 nations based upon number of women in parliament. After 2008 elections Pakistan has 22.2% female parliamentarians (76 out of 342 seats) and 17/100 female senators in 2009 senate polls. Despite the above improvements there is still a need to further strengthen the process. Important entry points could be further enabling women candidates and voters to fully participate in the electoral process, and further improving the capacity of the election commission and civilian law enforcement agencies to supervise and deliver a free, fair and transparent process. The strategic action plan of ECP 2010-2014 is a positive step in this direction and needs implementation.259 The injunction introduced into Article 140A of the Constitution by the 18th Amendment for local elections to be held in the provinces by the Election Commission of Pakistan is a positive development in that it

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bolsters the independence and therefore the legitimacy of the elections. Local government elections were scheduled to be held in 2009 but have, until now, been postponed by the provincial governments pending reform of the local government system. Participation of all major ethnicities and minorities has been ensured in the constitution. Giving political voice to the socially excluded e.g. Kammi (worker) and the landless would be a further step in the right direction.260 The numeric weight of the lower classes makes them a vital resource in democratic politics. Inequalities rooted in society generally translate into unequal political influence. Increased political participation of these socially excluded groups will lead to a pro-poor public policy generally, and solutions in service delivery specifically 261.

6.1.2 Accountability Accountability has several elements, the most important of which is the legal framework and the judicial system that keep checks on the various functionaries of the State. As shown in Figure , Pakistan’s voice and accountability index has steadily risen since 2003 but a comparison across south Asia (Figure 23) points towards the need to strengthen the legal framework and institutions. Such steps will improve the public’s general confidence in the system, engage the disenchanted among youth and improve service delivery. Media and a vibrant civil society are positive developments in changing the perceptions of people about accountability. According to Global Integrity Index, Pakistan’s media scored 72/100 in 2008 and regarded as moderate; an improvement from 2006 when media was very weak i.e. 40/100. Multitude of TV channels is freely exposing the weaknesses of the institutions and state is responding more positively to these issues. Media has equipped people with a resource to raise their voice and empowered them to make an effort to change. TV channels in regional languages are very positive development for political awareness, art and culture of diverse population of Pakistan. According to Global Integrity Index, Pakistan’s civil society organizations scored 91/100 in 2008 and regarded as very strong. This positive element needs further support and inputs for creating public awareness and positive action against growing corruption.

Figure 24: Voice and Accountability in Pakistan (1969-2009)262

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Figure 25: Voice and Accountability in South Asia263

6.1.3 Service delivery Pakistan’s ranking on Governance effectiveness compares well in South Asia but still needs considerable improvement.264, 265 This will need improvements in the quality of public services which can elevate user’s satisfaction with roads, health, education, garbage disposal, sewerage and sanitation, water supply, agricultural services, electricity, and gas supply.266 Except for electricity and gas, the percentages of satisfied households for the rest of these services, have increased in 2009-10 as compared to 2001-02.267, 268 However long strides still need to be taken to further improve users’ satisfaction. In the meanwhile, the gap is being filled via continuous growth in the private service sectors relating to, for example, security, education and health. In most of mainland South Asia but in Pakistan in particular, the private sector has stepped in to provide quality ‘services’ to the segments of the population that have the means to pay for it.269 There is a need to particularly cater to the poor who cannot pay a higher price for these public goods. For improvements in public services, the outcomes of landmark constitutional amendments will depend on protection of human rights through land reforms, electoral reforms, civil services reform and overhauling of criminal justice system.270 The institutional design also needs reform to strengthen the implementation capacity of the State. Among the key factors that have adversely affected service delivery are increased arbitrariness in decision-making in disregard of merit, corruption and lack of accountability, declining standards of the bureaucracy. In addition parliamentary support for effective governance remains weak, which is compounded by judicial delays. The challenges to improvements in public services also include growing population and urbanization, pervasive resource and institutional constraints, and isolated delivery mechanisms.271 The quality of service rendered in public offices may vary according to the status of the citizen. There is a need to empower the ordinary citizen, the poor, socially marginalized groups, minorities, women and the disabled; to have greater and freer access to services without any hurdle.

6.1.4 Political Stability and Personal Security272 The government has shown resilience in the face of many crises like Floods and internal disagreements in political coalitions. Successful military actions in border areas of FATA and Swat have helped in decreasing violence in KP and improving the security situation since 2008. There is a very encouraging step taken by the state in the form of 2011 amendment in FCR and extension of Political parties act 2002

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in FATA on August 13,2011.Credible dialogue between the political parties on making and unmaking the government at all levels was encouraging in Punjab, Sindh and in the federal government. It is a sign of a maturing democracy in Pakistan. There is need to promote this trend and encouraging political leadership to express their differences in constructive and non-violent fashion. However, the WGI for political stability points towards the need for further political stability.273 Regionally, although FATA, KP and Balochistan are the areas most affected by violence, terrorism is undermining security in urban areas. On the positive side, the number of terrorist, ethno-political violence and sectarian incidents decreased in 2010 by 21% as compared to 2009. But the spike in such incidents in Karachi in 2011 is a challenge to political stability274. The reach of present administrative system in FATA is limited275 and the inability to effectively secure the border with Afghanistan is exacerbating transnational organized crime in the form of drug, arms and human trafficking.276 According to one estimate the annual revenue generated by Afghan opiate trafficking to and through Pakistan exceeds $ 1 billion per year277. GB, FATA, Islamabad capital territory and AJK are under federal government after passage of 18TH Amendment so despite devolution, federal government has direct responsibility of governance in these areas. Therefore, the capacity of federal as well as provincial governments needs to be improved to ameliorate the condition of personal security. Due to multiple socio-economic factors crime rates are on the rise. According to an opinion poll conducted in spring 2009, 93% of Pakistanis surveyed consider “crime” as the biggest problem they face278. Enforced disappearances are particularly an issue in Balochistan.279The Supreme Court of Pakistan has taken it up and there was a positive response from other state institutions to address the problem. Like many other countries, organized crime in Pakistan exists in various forms - including drug and precursors trafficking, money laundering, extortion, murder, cyber-crime and fraud. Other criminal operations engage in human trafficking and migrant smuggling, corruption, timber trade, kidnapping, political violence and terrorism. These forms of organized crime, orchestrated by complex informal networks of supplier rings, wholesalers, financiers, protectors and patrons have resulted in an extensive illegal network. Some of these crimes only have domestic implications, but most others have more regional and global consequences. Law enforcement agencies struggle to interdict trafficking and smuggling of various kinds and scales, particularly at the borders, at a serious cost to governance, development and security – not only in Pakistan but around the world. Balochistan, KP and FATA are particularly vulnerable. The solution, like the problem, does not lie exclusively in Pakistan. Regional cooperation and coordination needs to be strengthened to effectively address organized crime. Since some of the border areas are also hideouts for non-state elements, their combined activities and the understandable counter operations by the state institutions have led to displacement of huge number of people in Swat, and FATA. The most vulnerable groups are the poor, women and elderly. There is absence of data to ascertain the actual numbers of affected people. State does not have capacity to assess the total needs and respond effectively within its existing resources. This capacity gap has a direct bearing on the administrative institutions of service delivery.

6.1.5 Rule of Law280 A positive trend has been set by the higher judiciary to uphold rule of law. However the relevant indicators point towards the need for further improvements.281Pakistan has diverse systems of dispute

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resolution, reflecting the diversity of its communities and the accompanying devolution of powers below the federal level. Yet, access to justice, in whatever form the processes take, is crucial to personal security and national stability. The Access to Justice Programme has been a focus of international donors such as Asian Development Bank but qualitative impact of these interventions is uncertain282. Gaps in equipment and border management are hurdles to preventing the flow of drugs, arms, money and insurgents which are the direct and indirect means and agents of violence. The security vacuum, particularly in the border areas, is contributing to trade in arms and drugs, migrant smuggling and human trafficking which are further destabilizing the region and has negative impact on economy283. Capacity issues in the legal aid system reduce the effectiveness of government-sponsored advice and representation for defendants. There is a strong reliance on judges to manage cases and police-prosecutor cooperation tends to cease after the handover of initial incident reports undermining the capacity of prosecutors. The unsuccessful prosecution of terrorism cases is due to insecurity, unreformed rules of criminal evidence, and a poor investigative capacity of the police. The probation service and prison system face challenges in working together with the community and other partners to rehabilitate offenders. Poorly resourced and overcrowded prisons do not have the capacity to rehabilitate offenders or address the ideological beliefs behind the acts of terrorists. Higher Judiciary in Pakistan is emerging as an institution of hope for people to redress their grievances. However, this trend is still to be followed by their junior colleagues at district level. Court cases arising from land disputes continue in courts for years affecting the vulnerable groups like women much more than others284. During Floods of 2010 many women lost their land ownership documents and courts will be facing much more cases. Alternate Dispute Resolution (ADR) mechanisms for civil matters, the prompt resolution of cases and the enforcement of private contracts are absent. Professionalizing the bar councils and ensuring the timely disposal of cases requires training as well as a change in attitude of people and in the legal paradigm285. As part of its broader legislative and regulatory framework against criminality, the GOP has signed, acceded to, or ratified a number of international instruments. Examples include agreements relating to narcotics, terrorism and corruption. In many cases, elements of these obligations have already been incorporated into domestic law; in others, a gap exists between the international level and local implementation. The integrity of the legal system is being undermined by the ability of people to use influence and bribes to avoid judgment, promoting a culture of impunity. This may have a direct bearing on the perceptions of people about the legitimacy and capacity of these institutions.

6.1.6 Regulatory Quality286 According to WBI regulatory quality of Pakistan has generally improved between 2004 and 2009 placing Pakistan in the 33.3 percentile. In the region, Pakistan stands ahead of Nepal, Bangladesh, Burma and Afghanistan.

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Figure 26: Regulatory Quality in Pakistan (1969-2009)287

Figure 27: Regulatory Quality in South Asia (2009)288

The 2006 Doing Business report particularly commends efforts to liberalise trade and improve systems of taxation, as well as reduce corporate tax rates. The International Finance Corporation recently ranked Pakistan at 85 out of the 183 economies surveyed for the cost of doing business.289 Investment needs of the country can be met with, by improving the overall political stability, policy certainty, further reduction in red tape, improvement in contract enforcement, commercial dispute resolution and alternate dispute resolution systems.

6.1.7 Integrity Management Various indicators related to integrity management in public services, point towards the need for further and continuous improvement.290 Institutionalized integrity management is particularly needed in Pakistan’s tax, power generation and revenue administration291. To facilitate this process a review of discretionary powers, regulatory mechanisms and human resource management is necessary with a focus on recruitment, training, motivation, compensation and automation. This will reduce the cost of doing business, facilitate service delivery and encourage international investors. 292 The need is especially acute with the growth of the economy and the increasing complexity in procurement issues and government contracts.293 This will strengthen rule of law, reduce organized crime, increase the chances for economic, political and social development and help in prevention of conflicts and civil wars. It will also decrease the level of public expenditure on law enforcement and security, and indirectly influence public policy in key areas such as border control, customs procedures and the viability of infrastructure and transport projects; and ultimately a reduction in poverty.

6.2 Causal Analysis

6.2.1 Policy-making and implementation The need to respond to crises of insecurity and natural disasters and the diversion of human and financial resources that this requires makes it difficult to commit to long term planning and the prioritization of

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both development and the institutional reforms needed to foster development. The impact of insecurity and natural disasters, including difficulties of access, is one of the main hurdles to development. Pakistan’s MDG Report 2010 attributes failure to achieve MDGs targets to floods of 2010 and “war on terror” being fought in Pakistan294. The prioritization of national security strategy, including the potential threat of conflict on the eastern borders, over developmental demands negatively impacts budgetary allocations for institutional capacity building and development, security and state effectiveness. These difficulties are reflected in the Bertelsmann Transformation Management Index which assesses and compares the steering and management of development and transformation processes, and the reform activities of political decision makers. The BTI recognizes that “Management performance may be limited by structural constraints that do not result from the current political leadership’s actions and cannot be overcome swiftly”295, such constraints including in the case of Pakistan extreme poverty, the lack of an educated work force, severe infrastructural deficiencies, and natural disasters. The BTI has given Pakistan a level difficulty rating of 8.2/10 to reflect the fact that the structural constraints on governance are high and the problems faced due to violence.296 The ability to make and implement policy that will promote inclusive development, including the ability to raise and manage the necessary budget allocations, is a challenge. Policy making is affected by a number of factors; quality data, political commitment, long term planning, effective prioritization and coordination of competing or different interests, and consensus building. Participants in the consultative workshops agreed that challenges exist to ensure that policy making is based upon sound research and impartial evidence and that links need to be strengthened between academic institutions and policy formulation forums. The government seeks to achieve political, economic and social reforms, but capacity gaps relating to the effective implementation of reform policy need to be addressed. There was a consensus of participants in the consultative workshops about the need to strengthen the capacity of the civil services to deliver public goods. Implementation will require the effective use of human and financial resources at the government’s disposal. Oxfam’s recent report on the floods highlighted the dedication and hard work of state actors and private individuals in responding to the floods.297 The government can harness this commitment by supporting competitive recruitment procedures. This would assist in counteracting the marginalization298 of bureaucracy, thereby improving neutrality and effective service delivery. In terms of financial resources assistance is needed to support a balanced state budget with transparent planning and implementation, and a manageable level of state debt. There needs to be a balance between the administrative expenses of service providers relative to the services offered by the State. Measures to improve the security situation by the effective implementation of rule of law would reap dividends in relation to the security of life, liberty and property of people and provide a better economic and social environment. This would include measures to address capacity issues relating to the investigation and prosecution of offences, and improve police performance and accountability. Related to this are measures to support the separation of powers between the executive, legislative and judicial functions of governance.299

6.2.2 Citizen Accountability Effective formulation and implementation of policy reforms requires citizen participation. One aspect of this is that members of the National and Provincial Assemblies and the government are held accountable

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through the ballot box. This needs regular electoral events to the national, provincial and local government fora. The hurdles to effective citizen accountability include high rates of illiteracy and lack of information. Reforms may be needed to support questioning the process and quality of decision-making by elected representatives and government officials. Decision makers are likely to be more responsive to informed citizens. 300 Improved awareness of rights is also needed to ensure that government officials effectively perform their duties.

6.2.2.1 Regional Cooperation This criteria relates to the extent to which the political leadership uses the support of international partners to implement a long-term strategy of development, the extent to which the government acts as a credible and reliable partner in its relations with the international community, and the extent to which the political leadership is willing to cooperate with neighbouring countries in regional and international organizations. The evidence suggests that increased international cooperation would improve the management of transformation processes. Performance management comparison across the region points towards the need for more regional cooperation.301

6.3 Duty bearers and right holders The State is the primary duty bearer and for this section as well as the previous section of this report, the term ‘State’ encompasses many different actors including government leaders, civil servants, the police, prison staff, and the courts. With particular relevance to the rule of law and political violence citizens have the duty to obey the lawful orders of the state and express their dissatisfaction through established channels of communication in a peaceful manner. Political parties also have a duty to provide leadership in promoting a democratic culture. From the HRBA perspective, “people are recognized as key actors in their own development, rather than passive recipients of commodities and services.” To ensure this end result, participation of citizens should be treated as a right both in the electoral and accountability processes. Their empowerment should be monitored and evaluated at all stages of these processes. Then, among them, the marginalized, disadvantaged, and excluded groups have to be given ownership of the processes with the aim to reduce disparity. Motivational and capacity gaps of the duty bearers need to be addressed. The human, organizational and financial resources needed to discharge the obligations of the state are enormous. However these challenges must not deter from embarking on comprehensive reforms undertakings in electoral processes, accountability mechanisms, service delivery, integrity management and ensuring rule of law.

6.4 Conclusion The indicators for political and economic transformation, voice and accountability and regulatory quality; have shown improvements over the last few years. The indices for service delivery and regulatory quality also compare well in the region. However all the indices generally and especially those for security, stability, rule of law and integrity management, point towards the challenges and gaps that still need to be overcome.

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The potential benefits of prioritizing improved service delivery are considerable; the evidence suggests that the ability to deliver essential services, in addition to the intrinsic value of those services, may be linked to political stability and conflict. The Peace and Conflict Instability Ledger302, which ranks States according to their estimated risk of future instability or armed conflict, identifies five risk factors; One of these factors is infant mortality rate which serves as a key indicator of socioeconomic well-being and “a proxy for a country’s overall economic development, its level of advancement in social welfare policy, and its capacity to deliver core services to the population”. The Ledger notes that research findings show a strong relationship between high infant mortality rates and the likelihood of future instability. Given that Pakistan has been newly classified as a high risk State by the Ledger and is in the Ledger’s top 10 countries for the largest increases in risk of instability, this link between conflict and socioeconomic development, and the role that improving State effectiveness can play in both areas is important. This finding is supported by the PCNA which identified poor state effectiveness as a prime reason of violence in FATA and KP303. The response to the 2010 floods also highlights the potential of supporting capacity building in relation to State effectiveness to reduce the impact of disasters. The government has demonstrated its commitment to disaster management by signing the international commitment the 2005 Hyogo Framework for Action and creating a disaster management framework. Assistance is now needed in relation to policy implementation and co-ordination. An elected functioning local government could also assist in relation to relief efforts and reconstruction304. A positive trend is the willingness of the media and an active judiciary to engage in issues of accountability. Support relating to media strengthening, particularly in relation to responsible reporting, and judicial strengthening, particularly in relation to decision making that respects the separation of powers between the judiciary and executive, will promote this positive trend. Pakistan has attained remarkable achievements in political and policy domains in last few years. Existing policy framework and forthcoming devolution of powers and resources thorough 18th Amendment and 7th NFC Award from Federal government to provinces and constitutional changes in the border regions of FATA and GB are historic with far reaching impacts. After the 18th Amendment development sector lies more with the provinces305. Given this the UN and other organizations will have to revise their modes of intervention and review their existing capacities. Federal and provincial governments will need more support and assistance from all UN and other stakeholders to take advantage of these constitutional powers and develop the necessary capacity to respond to these additional responsibilities.

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7 Conclusion and Way Forward The prevailing political and socioeconomic situation in Pakistan, though challenging, carries a number of opportunities as well. The right choices, priorities, and strategies in priority development issues could enable Pakistan to move forward on the path of sustainable and equitable development. In 2010, Pakistan’s urban population was estimated at 63.1 million. The increasing rate of urbanization compounds the challenges of sustainable development and environment by the emergence of meta urban regions. The planners view these regions as the future engines of growth. They propose a strategy to improve competitiveness by expansion in urban city markets, promotion of cluster development, improvement in urban governance, skill development and autonomous local government. However, this strategy must avoid further increasing the urbanization growth rate and should neither be at the expense of rural development, nor the shifting of resources towards urban centres. The urban centres need to cope with the challenges of infrastructure, poverty, unemployment, and provision of basic services. There is a potential of a huge demographic dividend resulting in a “rise in the rate of economic growth due to a rising share of working age people in the population.” By 2030, Pakistan’s working age population is expected to be around 67 percent from the current 54.9 percent: According to the Economic Survey 2010-11, “Empirical evidence suggests that a large part of East Asia’s spectacular economic growth derives from demographic transition, i.e. from working age population bulge because those countries have invested in their population and converted them in highly skilled human capital. This transition from a young to prime age population presented a demographic gift because East Asia has had relatively fewer young population -- but in countries where an increasing share of the population is of working age, economic growth per person tends to be highest and national saving tends to rise.” However, it entails a risk that this fast growing young adult population unable to find productive employment is also vulnerable to being manipulated towards social unrest and terrorism. To take advantage of the demographic window of opportunity, economic growth needs to be translated into poverty reduction and employment creation for all. The existence of distributional, structural, gender and regional iniquities have retarded Pakistan’s achievement of MDG targets. The government’s fiscal policy, especially the policy’s heavy reliance on indirect taxation, has a direct impact on market prices, which differentially affect the poorer segments of the population. Pakistan has already suffered badly from the war in Afghanistan and terrorism. In addition, inclusive growth is hampered by human-made crises and natural disasters. The external supply shocks have been particularly harsh on the poor, women, children, old people, minorities, refugees and the Internally Displaced Persons (IDPs). Youth (ages 15-29 years) comprising 27 percent of the population in the affected areas, have been exposed to militancy. The damage to habitat, loss of livelihoods, trauma of displacement and disillusionment are adding to the stresses. The access of the poor to education and health in crises-affected areas has been affected and food vulnerability has increased. Opportunity and feasibility, radicalization, the State’s incapacity to restrain these tendencies and deprivation are the general formative conditions creating risk of internal conflict in Pakistan. To cope with these, trust in the State’s effectiveness needs to be restored, basic services, employment and livelihood opportunities needs to be provided, and radicalization needs to be countered.

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Natural disasters affect and are affected by environmental conditions and climate change. Gaps in Disaster Risk Management (DRM) have increased the risk of damage from natural disasters. The built environment also interferes with the natural pathways of rivers and causes damage during floods. However, the biggest single determinant of risk to vulnerable groups is their socio-economic status, necessitating a rights based approach to recovery and reconstruction. Sharing of knowledge and skills is required through the initiation of a regional research and development program. Natural disasters and conflicts can quickly undermine progress in human development and, therefore, it is important that the government has the support it needs to minimize the effects of these disasters and crises. An encouraging finding of the HDR is that some countries have achieved improvements in health and education even without economic growth. The report also notes that the trends conducive to empowerment include the increases in literacy and education that have improved people’s ability to make informed choices and hold governments accountable. The scope for empowerment and its expression have broadened due to technology and institutions. It is important to enable everyone to participate in providing solutions and setting the country on track to attain MDG targets. The 80 million children and young persons under the age of 18 need investment for their education, security and health. Similarly, women need to be engaged with issues of their local communities and to be empowered to participate in the political process at all levels. To meet this end, a uniform vision, institutional capacity building and ownership at the provincial level will be needed. Without a research base and quality data, evidence-based policy-making will not be possible. Improved tax administration to ensure increased revenue collection, more effective expenditure planning and control, effectively addressing the energy crisis, reducing circular debt, minimizing corruption and bureaucratic delays, combined with strengthening governance institutions are necessary steps to facilitate necessary economic growth and progress towards achievement of MDG targets. Pakistan has attained remarkable achievements in political and policy domains in last few years which are also reflected in the relevant indices. Existing policy and regulatory frameworks, the implementation of 18th Amendment and 7th NFC Award and constitutional changes in the border regions of FATA and GB are historic events with far reaching impacts. Successful implementation of the 18th Amendment and the 7th NFC Award will be critical. Corresponding reforms in the civil services and law enforcement capacities will be a sine qua non to translate the constitutional guarantees into measurable impacts in the life of people of Pakistan. After the 18th Amendment the development sector lies mostly with the provinces. The transferred subjects include Education, Health, Labor, Food and Agriculture, Environment, population, livestock and dairy development, industries, local government and rural development, sports, textile, women’s development, youth, natural resources, labor and manpower, social welfare, Zakat, Auqaf, tourism, print media and cinematograph films, culture and archeology, ensuring sanctity of contracts and clarity of property rights and levying additional taxes. The federal government is responsible for FATA, GB, and the Islamabad Capital Territory for these subjects. Given this, the UN and other organizations will have to review their modes of intervention and revisit their existing capacities. Federal and provincial governments will need more support and assistance from all UN agencies and other stakeholders to take advantage of these constitutional powers and develop the necessary capacity to respond to these additional responsibilities. The international community and development partners can help in filling the capacity gaps in governance to provide means to duty bearers

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in the country for honouring their commitments to right holders. While it is clear that the State apparatus remains duty bound to fulfill its obligations to the citizenry as rights holders, the analysis of this mutual relationship needs also to account for resourcing and capacities on the duty bearers' side and responsibilities and attitudes on the side of rights holders. For instance, unlike in the case of the immediate responsibility to respect, fulfill and protect civil and political rights, many areas that come under State Effectiveness relate to economic, social and cultural rights for which the international obligation is invariably towards "progressive realization," a subjectively-interpreted concept that is non-justiciable. This means that the State is not duty bound to create social, cultural and economic equality overnight, but to do so gradually as best it can within its resources. The rights holders have a role and responsibility to ensure that the State is doing its utmost and also to support this endeavor through their own practices.

Therefore, rights holders need to mobilize themselves to hold government authorities accountable, and in turn they too must respect the rule of law and due process. However, rights holders do not constitute a uniform or homogeneous group, and sub-group self-interest often dominates. The tendency to seek preference through influential contacts is both a cause and effect of weakening the State's governance role, and lies at the heart of differential access to services. In this sense, layers of elite capture of scarce resources and capacities severely exacerbates problems of access for excluded and vulnerable groups at the national, provincial, district, tehsil, union council and village levels.

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9 Notes

1 Pakistan Provincial Map UNDSS 17 January 2012 2 Pakistan Weather Portal; http://karachimetrological.wordpress.com/2011/05/08/history-of-drought-in-pakistan-in- detail/ Date accessed: 1 July 2011 3 Congressional Research Service; http://fpc.state.gov/documents/organization/6202.pdf Date accessed: 1 July 2001 Page 2 4 CIA Factbook 5 Gapminder data www.gapminder.org 6 (Economic Survey 2008-9) 7 (Mamoon, S Akhtar, & Hissam, 2011) suggesting export losses of up to US$ 30 billion directly and indirectly for the years 2006-09. 8 TradingEconomics.com 9 ibid 10 Federal Bureau of Statistics 11 The real price index is the nominal price index deflated by the WB Manufacturers Unit Based Index 12 (WFP & SDPI, 2003) and (WFP & SDPI, 2009) 13 (Azad & McElhinney, 2011) 14 ibid 15 (Kamal AR, 2002) 16(Cardoso, 1992) 17 Source: Based on PSLM Data analyzed by Planning Commission 18 (ADB, 2011) 19 ADB simulation analysis 20 (Naveed & Islam, 2010) 21 Moghadam, V.M. (2005). Globalizing women: Transnational feminist networks. Baltimore, MD: The Johns Hopkins University Press. p. 7. 22 See “What do we mean by ‘Feminization of Poverty’” International Poverty Centre, July 2008, No 58. 23 Economic Survey 2010-11, p. 162. 24 Ibid., p. 162. 25 Cited in Economic Survey 2008-9, Chapter 12, p. 193 26 Global Gender Gap Report 2011. 27 (Moghadam, 2005) 28 See http://treaties.un.org/Pages/Treaties.aspx?id=4&subid=A&lang=en for a list of human rights conventions that Pakistan has ratified. 29 Source: State Bank of Pakistan, Economic Data; Domestic Debt (outstanding) 30 Pakistan: Fiscal Policy Statement 2010-11, p. 34 31 State Bank of Pakistan; Monetary Aggregates http://www.sbp.org.pk/ecodata/M3.pdf 32 This was GDP at current factor cost as reported in Ministry of Finance, Economic Advisor’s Wing. 2010. Pakistan Economic Survey, Statistical Appendix, Table 1.5. 33 Sustainable Policy Development Institute, Examining the Dimensions, Scale and Dynamics of the Illegal Economy: A Study of Pakistan in the Region, Dec 2011. P. xiii. 34(World Economic Forum, 2011a) 35 (World Economic Forum, 2011a) 36 Source: CIA World Factbook 2009

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37 TradingEconomics.com 38 (Kugelman & Hathaway, 2011) 39 (GOP, 2011a) 40 (Nayab, 2006) 41 (GOP, 2011b) 42 (GOP, 2011b) 43 (Haider, 2006) 44 Data taken from Competitiveness Support Fund, 2011. 45 Ibid. 46 Ibid., p. 23 47 Over the past six decades, Pakistan’s average economic growth rate was higher than the average growth rate of the world economy. The overall economic performance, according to the Asian Development Bank (ADB), “for the period 1961–1990 was respectable … the average growth rate during the 1960s was 6.8 percent per annum, dropping lower than 5 percent in the 1970s and then climbing to 6.5 percent in the 1980s.” Sustained periods of economic growth, however, have not always translated into poverty reduction. According to ADB, “Periods of slow growth (the 1970s and 1990s) have alternated with periods of high growth (the 1960s and 1980s). Although the incidence of poverty has tended to decline most when the economic growth rate was high and increased when the growth rate was low, it has also declined during period of slow growth (e.g., in the 1970s) and increased during periods of high growth (the 1960s).”18 48 See (Kakwani & Pernia, 2000) 49(Gazdar, 2009) 50 (Easterly, 2001) 51 (Acemoglu, Johnson, & Robinson, 2005) 52 (North, 1990) 53 (Acemoglu et al., 2005) 54(Rodrik, 2006) 55 Explanatory Memorandum on Federal Receipts 2011-12 56 http://www.fao.org/ag/agp/greenercities/en/whyuph/foodsecurity.html Date accessed 2 July 2011 57 WFP-VAM analysis 58 http://financial-dictionary.thefreedictionary.com/Rent+seeking Date accessed: 2 July 2011 59 http://www.pakissan.com/english/news/newsDetail.php?newsid=24200 Date accessed 2 July 2011 60http://www.brecorder.com/epaper/br_259964_956.html?title=Commodity%20operations:%20govt%20making%20 a%20big%20mistake Date accessed: 2 July 2011 61 Among others, the competition commission has found the Sugar Industry, Pakistan Steel, the Banks Association, and the Cement Manufacturers, engaged in collusive behaviour and in breach of several provisions of law. 62 (World Bank, 2005) 63 (Gazdar, 2009) 64 (Hussain, 1993) 65 (Sajjad Akhtar, 2008) 66 (Gazdar, 2009) 67 (Gazdar, 2009) 68 (Ahmed, 2008) 69 ibid 70 An important consideration here is infrastructural under development, particularly power shortages, also roads and telecommunications. Equally important are educational policies which lead to human capital formation and a healthy population. These factors are addressed elsewhere in the report, including in the section on human development.

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71 It should be noted, however, that the NGF appears “gender blind” and has little to say about the need to address both legal and socio-cultural differentiation on the basis of sex that hinder women’s access to jobs and entrepreneurship. 72 Source: (World Economic Forum, 2011b) 73 (GOP, 2011a) 74(USAID, 2007) 75 IEA Analysis, Income statistics from World Bank Indicators, 2001 76 (Environment, Unit, & Region, 2006) 77 ibid 78 (A. A. Malik, Amir, Ramay, & Ahmad, 2011) 79 ibid 80http://www.pcrwr.gov.pk/Journals/Vol.no.10(1)/11-22%20Estimation%20of%20Soil%20Erosion..GIS-- %20Nasir,Uchida%20&%20Ashraf.pdf 81 (Shah & Arshad, 2006) 82 ibid 83 (Khaskheli. M.A, 2011) 84 (IGI Securities, 2007) 85(Khan, Iqbal, And, & Soomro, 2002) 86 ibid 87 ibid 88 WWF 2007 89 ibid 90 Feedback from Consultative Workshop at Quetta 91 Source: (S Alam, A Fatima, & S. Butt., 2007) 92 (A. A. Malik et al., 2011) 93 (GOP, 2010a) 94(IPCC, 2007) 95 (ADB, 2010a) 96 CIA World Factbook, https://www.cia.gov/library/publications/the-world-factbook/index.html 97 (ADB, 2010a) 98(IPS, 2009a) 99 ibid 100 Pakistan Power Sector Reforms Presentation, Government of Pakistan, September 27, 2010 101(GOP, 2011a) 102 http://www.enercon.gov.pk Accessed on August 19, 2011 103 (ADB, 2010a) 104 Source: Based on “Integrated Energy Plan 2009-2022”, Economic Advisory Council, March (Updated for USA) 105 As per the International Energy Agency's 2009 report (data for 2007), Pakistan's coal-related CO2 emissions of 21.1 million tons are low compared to the Republic of Korea's (210), Australia's (223), South Africa's (283), Japan's (445), India's (895), the United States' (2115), and the People's Republic of China's (5003). 106 (M. Shaikh, 2010) “(Yazdanie, 2010), Mashael Yazdanie June 2, 2010 Accessed on August 19, 2011 107 (M. Shaikh, 2010) 108 (ADB, 2010a) 109 (A. A. Malik et al., 2011) 110 http://www.wwfpak.org/forests.php 111 http://www.wwfpak.org/pdf/forest_mangrove_rcpakistan.pdf 112 http://www.wwfpak.org/pdf/forest_mangrove_rcpakistan.pdf 113 (ADB, 2010a) 114 (IPS, 2009b) 115 Islamic Republic of Pakistan: Rental Power Review, Asian Development Bank, January, 2010

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116 (IPS, 2009b) 117 (ADB, 2010a) 118 ibid 119 CESR 120 (A. A. Malik et al., 2011) 121 http://hurilink.org/tools/Integrating_HRs_into_Energy_and_Environment_Programming.pdf 122 (A. A. Malik et al., 2011) 123 (K. Mumtaz, Iftikhar, & Noshirwani, 2007) 124 (GOP, 2010a) 125 The PCNA characterizes the situation in FATA and KP as a “Crisis”. The same terminology has been adopted in this document. For the situation in Balochistan and elsewhere, the term conflict has been used. 126 (Rana, 2009) 127 Violence and terrorism in general and across the whole country will be discussed in another section of the report. 128Numbers are for the period 2005 - August 2010, Numbers for FATA vary due to ongoing operations, Source: FATA Sectt, KP police, satp.org 129 (FDMA, 2011) 130 For details see http://www.dawn.com/2011/06/29/settlers-caught-in-crossfire-2.html Last accessed on 20/7/2011 131 (The News [Islamabad], September 19, 2008). 132 (UNHCR, 2010) p. 15 133 Ibid., p.18 134 Cabinet Division: NODMC Secretariat, Planning Commission’s Report dated 15th December 2010) 135 (UNOCHA, 2011) 136 (Azad & McElhinney, 2011) 137 http://pakistanwetlands.org/MCWC%20Assessment-final.pdf 138 Source: Adapted from individual Sector Reports and the final report of (GOP, 2010b). The situation is presented as it stood June 2010 139 This includes victims of bomb blasts, bombings, torture, and killing by militants. 140 (A. Khan, 2009) 141 Cited in Oxfam (2011) 142Updated figures for KP were reported to the KP assembly in response to a parliamentary question in February 2011 which shows that in KP 710 schools have been destroyed or damaged in 2009 and 2010. For details please see http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=30044&Cat=2. 143 (UNESCO, 2010) 144 ibid 145 http://www.who.int/hac/crises/pak/highlights/september2010/en/index.html 146 Ibid 147(HRCP, 2011) 148 For details please read http://www.dawn.com/2011/06/17/ruling-class-accused-of-treating-baloch-as-others.html. Last accessed on 20/07/2011 149 For example, the rights of legal representation and appeal before the courts. 150 For example, freedom of association 151 http://www.ft.com/intl/cms/s/0/ae400046-ab70-11df-abee-00144feabdc0.html#ixzz1V6NoEJra 152(Collier & Hoeffler, 2004);(Fearon & Laitin, 2003). 153 Mention of this factor is made in Aristotle’s Politics. The contemporary classic on the subject is (Gurr, 1970). 154 (GOP, 2010b) 155 (Korpi, 1974) 156 (Gurr, 1997) 157(Abdullah, 2010)

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158 www.preventionweb.net/english/hyogo/national/progress/reports 159For a discussion about climate change and its role in floods please refer to http://weather.calendarlive.com/blog/JeffMasters/comment.html?entrynum=1576&tstamp= 160Flood Inquiry Commission 2010. Appointed by Supreme Court of Pakistan on the causes of major breaches of bu nds in River Indus during the flood 2010 161 (Oxley, 2010) Available at http://duryognivaran.org/documents/Pakistan_Floods-Marcus%20Oxley.pdf 162 http://legacy.wilsoncenter.org/topics/pubs/ASIA_090422_Running%20on%20Empty_web.pdf 163 UNICEF Estimates 164Flood Inquiry Commission 2010. Appointed by Supreme Court of Pakistan on the causes of major breaches of bu nds in River Indus during the flood 2010 165 (Azad & McElhinney, 2011) 166An approach also stressed in (WB & ADB, 2010) 167 http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=255360&Cat=3&dt=8/8/2010 168 (UNDP, 2010) 169 (UNDP, 2011) 170 See footnote 183 for source. 171(UNDP, 2005) 172(UNDP, 2010) 173 (UNICEF, 2011) 174(IISA, 2002) 175(Nayab, 2006) 176 (Arif, 2004) 177 (GOP, 2011a), (GOP, 2011c) 178(UNDP, 2008) 179(Kausar & R. Qureshi, 2005) 180(GOP, 2010c) 181 (GOP, 2008a) 182 (UNICEF, 2008) 183 (GOP, 2008a), (GOP, 2008b) 184 http://www.gcappakistan.net/Downloads/MDG%20Book.pdf Civil Society Perspective on Pakistan Millennium Development Goals Report 2010, p. 5. These statistics are, however, contested by other sources, who find the “effective coverage” of LHWs to be significantly less. 185 (UNGASS Report, 2011) 186 Pakistan National AIDS Control Programme (2010) UNGASS Pakistan Report 187 (WHO/UNICEF/UNAIDS 2010) 188 (UNAIDS 2011) 189 (GOP, 2011d) retrieved 29 June 2011 190 (WHO, 2010) 191(Ghaffar & Kazi, 2000) 192(Khowaja, 2009) 193 (N. Khan & B. Shah, 2007) 194(B. T. Shaikh & Hatcher, 2005) 195(Khalid, 2009) 196(Garwood P., 2006) 197(Rizvi N. & Nishtar S., 2008) 198(WHO, 2008) 199(Butta & Memom, 2008)

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200 (NCSW, 2009) 201(Karmaliani & Bann, 2006) 202(Karmaliani & Asad, 2009) 203(Rahman & J Bunn, 2007) 204(Rizvi N. & Nishtar S., 2008) 205(Lawn & Cousens, 2005) 206(Butta & Memom, 2008) 207 (GOP, 2010c), 208 (GOP, 2011e),(GOP, 2011c) 209(GOP, 2005) 210 (GOP, 2011f) 211(UNESCO, 2009) 212 (GOP, 2009)Sources: Pakistan Integrated Household Survey (PIHS) 1990-91, 2001-02; Pakistan Social and Living Standard Measurement and National Education Management Information Systems (NEMIS), Ministry of Education (whole series). 213PSLM 2008-09 214PIHS 2001-02, PSLM 2004-05, 2006-07, 2007-08 and 2008-09 215(GOP, 2009) 216NEMIS 2008‐09 AEPAM, Ministry of Education, Islamabad 217 ibid 218(GOP, 2007a) 219(GOP, 2003) 220(Siddiqui N. & A. Khan, 2007) 221 Access here refers to physical, geographical, financial and socio-cultural dimensions 222(Loevinsohn, B, 2009) 223(Gadit, 2007) 224 (A. Malik & Hill, 2009) 225(Nisar & Amjad, 2007) 226(Z. Mumtaz & Salway, 2007) 227(Siddiqui & A. A. Keilmann, 2001) 228(B. T. Shaikh & Hatcher, 2005) 229(GOP, 2007b) 230(GOP, 2011e) 231 International Covenant on Civil and Political Rights (IPCCR) 232 Convention on the Elimination of All Forms of Discrimination against Women 233Freedom of Expression chapter of Part III Fundamental Freedoms (HRCP, 2010a) 234 (HRCP, 2010a) 235 Summary record of 1444th and 1445th meetings held 28 September 2009; CRC/C/SR. 1444 and CRC/C/SR.1445 236 (Shaheed.F., 2010), (HRCP, 2010a),(SDPI, 2008). 237 Table 4 Gender Inequality Index, Human Development Report 2011 238 Ministry of Labour & Manpower (2009) Pakistan Institute of Labour Education and Research reported that in 2008 out of a total labour force of over 50 million only 6.62 million benefited from social protection schemes in 2008. 239 (HRCP, 2010a) Women in Parliament section in “Part IV: Democratic Development” 240Internal Displacement section of chapter on Women in “Part V: Rights of the disadvantaged” in (HRCP, 2010a) 241 (HRCP, 2010a) 242 (UNRC, 2009) 243 Street children section of chapter on Children in “Part V: Rights of the disadvantaged” in (HRCP, 2010a)

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244 (UNRC, 2009) 245(Ferris & Winthrop, 2010) 246 (HRCP, 2010b) 247 Labour and Freedom of Association chapters of (HRCP, 2010a) 248 See, for instance, http://www.tbl.com.pk/the-menace-of-bonded-labour-in-pakistans-agricultural-sector/ which reports that out of an estimated 1.7 million bonded labour in Pakistan, the majority (1.2 million) is in the agricultural sector in Sindh. 249 SOURCE: (UNHCR, 2010) p.20 250 SOURCE: (UNHCR, 2010) p.22 251 Freedom of Thought, Conscience and Religion chapter of Part III Fundamental Freedoms in (HRCP, 2010a) 252 UN Committee on the Elimination of Racial Discrimination Summary records of the 1910th and 1911th meetings of, respectively, 19 and 20 February 2009, CERD/C/SR.1910 and CERD/C/SR.1911 253 (Jinnah Institute, 2011) 254(ICG, 2010a) 255 "Fafen Parliament Monitor " Annual Performance Appraisal of the 13th National Assembly (March 2009 to April 2010)" The report is available at http://www.fafen.org/site/v4/admin/contents/PDF/504_798.pdf 256 The Employment and Service Conditions Act 2009 which would prohibit the employment of a child below the age of 14 is still in draft form. The Employment of Children Act of 1991 and the Employment of Children Rules of 1995 do not comply with Article 3(1) of the Convention in that the Convention sets as 18 the minimum age for hazardous work whereas the domestic legislation prohibits it only in respect of those under 14. 257 Ability of the state to effectively develop and implement sound policies, WB, Worldwide Governance Indicators http://info.worldbank.org/governance/wgi/sc_chart.asp, accessed 27 July 2011 258Transformation Index 2010, Bertelsmann Stiftung http://www.bertelsmann-transformation- index.de/fileadmin/pdf/Anlagen_BTI_2010/BTI_2010__Ranking_Table_E_web.pdf, accessed 27 July 2011. With a goal of constitutional democracy and a socially responsible market economy, the BTI is an international ranking of 128 developing and transition countries which provide comparison of the political and economic status of each country including an assessment of the political management performance of relevant actors. 259(ICG, 2011) 260 (Ahmed, 2008) 261 (Husnain, 2005) 262 (World Bank Governance Indicator) Regional Trends 263 ibid 264 It is defined as “capturing perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies”. Worldwide Governance Indicators http://info.worldbank.org/governance/wgi/sc_chart.asp, accessed 27 July 2011 265 Worldwide Governance Indicators http://info.worldbank.org/governance/wgi/sc_chart.asp, accessed 27 July 2011 266 For the current levels of user satisfaction with these services, please refer to United Nations Development Programme (UNDP) and DTCE. 2010. Social Audit of Local Governance and Delivery of Public Services. Islamabad 267 United Nations Development Programme (UNDP) and Devolution Trust for Community empowerment 2010. Social Audit Local Governance and delivery of Public Services, Islamabad. 268 The social audit differentiates among four main categories of services, Basic services, Health, Education and Police & Courts. Under basic services, it lists roads, sewerage and sanitation, garbage and disposal, public transport and water supply as services provided by Tehsils (units of local government within a district except a few cases where districts & tehsils coincide); Agricultural services provided by districts; and electricity and gas services provided by the federal government.

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269 (IPS, 2011) , http://ippbnu.org/publications.php , Accessed on July 28,2011 270 (Husssain, 2008) 271(ADB, 2010b) 272 This dimension of governance is defined by the WGI as “capturing perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including politically‐motivated violence and terrorism”. WGI 273 Worldwide Governance Indicators http://info.worldbank.org/governance/wgi/sc_chart.asp, accessed 27 July 2011 274 (Pakistan Institute of Peace Studies, 2011) 275 Have a look at ICG FATA report for geographical reach of police 276 (UNODC, 2009) 277 ibid 278 Survey conducted by the Pew Global Attitudes Project ‘Growing Concerns about Extremism, Continuing Discontent with U.S.’, 13 August 2009. ‘Crime’ tops the list of problems Pakistanis face. 279 Administration of Justice and Enforcement of Law chapters in (HRCP, 2010a) 280 The WGI rule of law dimension of governance is defined as “capturing perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence”. 281 The WGI ranking shows a sharp decline from the 31.4th percentile in 1996 to the 19th in 2007 with a similar ranking in 2009. According to the BTI, Pakistan’s rule of law score dropped from 4/10 in 2008 to 3.3/10 in 2010. This indicates that the decline in the legal and law enforcement systems predates the more recent rise in insecurity. 282 USAID reports, including (USAID, 2008). 283 (UNODC, 2009) and other reports of UNODC on the subject provide valuable information. 284 My land, my right, 149 Oxfam briefing paper, June 2, 2011, www.oxfam.org “The government of Pakistan needs to change the way it approaches land issues to ensure comprehensive land rights for poor farmers, especially women, across the country. Current recovery and reconstruction plans by the Pakistani government and the international donor community, including the World Bank (WB) and the Asian Development Bank (ADB) as well as the government of Pakistan inadequate mention of land issues. There are no plans to conduct a comprehensive review of land issues and no clear strategy or programs that address land inequality issues for poor and landless women and men”. 285 (USAID, 2008) 286 By WBI it is defined as “capturing perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development” 287 (World Bank Governance Indicators) Regional Trend 288 ibid 289 The WB’s Doing Business Index is based on the following sub indicators: starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and closing a business. 290 These include the WGI’s Control of corruption index and Transparency International’s Corruption Perceptions Index (CPI) and Global Corruption Barometer (GCB). The WGI corruption dimension of governance is defined as “capturing perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests”. 291 The 2010 corruption perceptions survey by Transparency International reported that people considered the police and power supply companies to be the most corrupt services followed by land administration, education, local government, and the judiciary

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292 Worldwide Governance Indicators http://info.worldbank.org/governance/wgi/sc_chart.asp, accessed 27 July 2011 293 (ICG, 2010b) 294 (GOP, 2010d) 295 page 36, BTI 2010 Manual for Country Assessment 296 This is the statement in the BTI 2010 Manual for Country Assessment (page 37) that would warrant a score of 6 to 8 297 (Azad & McElhinney, 2011) 298 Influx of retired and serving military officers in civil services by Z.A. Bhutto, Zia ul Haq and lately by Pervez Musharraf, Reforming Pakistan’s civil Service, Crisis Group Asia Report No. 185, February 16,2010 299 (Askari, 2006) 300 (Husnain, 2005) 301 The Management Index ranking fell from 90th in 2008 to 112/128 countries in Pakistan. In 2010 Nepal had a level of difficulty of 7.9 and an MI ranking of 93/128. Afghanistan had a level of difficulty rating of 9.8 and an MI ranking of 105/128. 302 Peace and Conflict 2010 Executive Summary, Center for International Development and Conflict Management at the University of Maryland, J. Joseph Hewitt, Jonathan Wilkenfeld, and Ted Robert Gurr. PCIL identifies five risk factors; countries with the poorest performance on these factors are at the greatest risk for instability in the near-term. One of these factors is infant mortality rate which serve as a key indicator of socioeconomic well-being and “a proxy for a country’s overall economic development, its level of advancement in social welfare policy, and its capacity to deliver core services to the population”302. The Ledger notes that research findings show a strong relationship between high infant mortality rates and the likelihood of future instability, although the link is not certain; many countries with high infant mortality rates such as Saudi Arabia have not experienced instability and some with a low rate, such as Israel, do. 303(GOP, 2010b) 304 Chapter 3 “Everyone and no one in control” in (Azad & McElhinney, 2011) 305 Subjects like Education, Health, Labor, Food and Agriculture, Environment, population, livestock and dairy development, industries, local government and rural development, sports, textile, women development, youth, natural resources, labor and manpower, social welfare, Zakat, Auqaf, tourism, print media and cinematograph films, culture and archeology, ensure sanctity of contracts and clarity of property rights and levying additional taxes which are no more with Federal government.

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