ISLAMABAD, Oct 1: As Pakistan opened policy discussions with the International Monetary Fund, a group of international multilateral lenders expressed concern over Pakistan’s inability to achieve millennium development goals perhaps even 10 years after the target year, 2015.

At a consultative session with the country’s economic managers led by Finance Minister Dr Abdul Hafeez Shaikh, the D-10 members, including the World Bank and the United Nations agencies, noted that social sector spending and its pace to provide quality nutrition to the people had gone down instead of improving.

They discussed a joint framework to make progress in achieving the millennium development goals by 2015, particularly when the role of provincial governments has increased with the devolution of social sector responsibilities to provinces.

The UNDP and Unesco said that the outlook of social sector spending in Pakistan was “scary” and needed improvement. Both the agencies also questioned the government’s efforts to increase the spending on social sector over the last three and half years.

The World Bank pointed out that the methodology used by the government to assess the poverty situation was not in line with an undertaking given to the Bank for defining the pro-poor expenditures. It said the factor of food subsidy alone was to be included in the pro-poor expenditure, but now the government had included all kinds of subsidies including those for the power sector in the pro-poor expenditures.

The WB also said that there should be some sort of synchronisation between the previous and the new mythology in assessing the poverty figure.

As the criticism from D-10 members continued, the finance minister led an introductory session with a visiting IMF delegation on post-programme monitoring. The dialogue will continue over the next couple of days during which the two sides would review sector-wise details of the country’s economic situation.

On poverty situation, the Deputy Chairman of Planning Commission, Dr Nadeemul Haq, said that the new poverty figure would be assessed as per new and previous methodologies. He said the academia had been given the responsibility to come up with poverty numbers based on official surveys.

A presentation by the planning commission put poverty in the country at 22.3 per cent, based on Pakistan Social and Living Standard Measurement (PSLM 2005-06)

Dr Hafeez Shaikh said that social spending figures presented by the World Bank may not be depicting a realistic picture and appeared to be based on the pre-NFC situation, arguing that NFC Award diverted over Rs800 billion over the last two years to the provinces. “So expenditures by the provincial governments on social sector should have naturally risen.”

The minister asked the development partners to suggest a development plan with common priorities in consultation with the government and insisted that donors should also respect the right of the government while evaluating of the project and its results when it came to the allocation of funding to NGOs. “The joint evaluation mechanism would help bring transparency in the implementation of the project by NGO too.”

The World Bank had highlighted its concern that progress on health and education indicators in Pakistan had slowed down because the real growth in pubic expenditure haf decelerated sharply. It said that the government seemed focused on protection of wage expenditure and insufficient allocations were made for non-wage expenditure; for example, school related non-wage expenditure was very low (between Rs15–20 per school per day)

Development expenditure, the bank said, had not led to any improvement in social indicators for example in Punjab correlation between primary education development spending and changes in primary GER (gross enrolment rate) was equal to 0.06. Using the unit cost of the best performing district as a reference, the bank reported the present primary school GER in Punjab could be achieved with 46 per cent less expenditure The bank also pointed out that since social sector resources were being inefficiently used, it was feared that Pakistan would be unable to achieve the MDGs by 2025. It stressed the need for a better alignment of budgetary expenditures with the development priorities of the government.

The Planning Commission, in its presentation, however said the official position is that poverty is estimated to be around 22.3 per cent.