Through low-interest loans and grants, IFAD works with Government of Pakistan to develop and finance programmes that enable rural poor people to overcome poverty themselves. IFAD has been a major development partner in Pakistan since 1978. To date, IFAD has provided Pakistan with 25 loans with a total approved commitment of USD 511 million. Nineteen of these investment programmes are closed; three ongoing while one (CMSP) could not start for implementation related issues. The total cost of IFAD’s projects/programme in Pakistan, till date, amounts to USD 4.09 billion.
IFAD set up its Field Presence office in 2005. During 2009, IFAD initiated a process of establishing a formal/accredited Country Office. Concurrence of the Government of Pakistan (from Foreign Affairs) is awaited for the proposed Country Office.
IFAD’s Strategic Framework
IFAD’s activities are guided by the Millennium Development Goals and by a Strategic Framework 2007 - 2010 approved by the Fund’s Executive Board. The Strategic Objective of IFAD aims to ensure that, at the national level, poor rural men and women have better and sustainable access to, and have developed the skills and organization they require to take advantage of:
(a) Natural resources (land and water), which they are then able to manage efficiently and sustainably;
(b) Improved agricultural technologies and effective production services, with which they enhance their productivity;
(c) A broad range of financial services, which they use for productive and household needs;
(d) Transparent and competitive agricultural input and produce markets, with which they profitably engage;
(e) Opportunities for rural off-farm employment and enterprise development, which they profitably exploit; and
(f) Local and national policy and programming processes, in which they participate effectively.
IFAD Country Strategy
A new Country Strategic Opportunities Programme (COSOP) for Pakistan for 2010-2014 has been developed in consultation with the Government of Pakistan and other stakeholders. The COSOP 2010-2014 was approved by IFAD Executive Board in April 2009.
The COSOP 2010-14 will support the government’s strategies and initiatives for rural poverty reduction. Two strategic objectives have been proposed: (i) enhancing the access of poor rural men and women to productive assets, skills, services and improved technologies and (ii) strengthening the capacity of institutions operating in rural areas for effective delivery of technical, financial and enterprise development services to poor households. These strategic objectives are in full alignment with IFAD’s Strategic Framework 2007-10 and its concern with gender issues.
During the proposed COSOP period, the indicative total country allocation available for Pakistan is approximately USD 70 million. This allocation can fluctuate upward or downward depending on a series of performance indicators, a main aspect of which is the performance rating of the ongoing projects.
IFAD Pipeline Projects
At the request of Government of Pakistan, IFAD initiated Project Design process for Southern Punjab Poverty Alleviation Project and the Balochistan Coastal Areas Development Project in October 2009. Both the Projects, identified by the respective provinces in COSOP 2010-2014 and with some modifications, have been approved by the Executive Board.
Partnerships, Harmonization and Donor Coordination
To ensure the development effectiveness of its poverty reduction operations and to enhance complementarities, IFAD has made efforts to consolidate existing and create new partnerships and to broaden its outreach. The Fund maintains strategic partnerships with a number of Multilateral and Bilateral Donors. In respect to Pakistan, 13 out of IFAD’s 25 loans to date have been co-financed by major development partners. IFAD also partners actively with the UN system for UN Reform efforts and One UN Programme in Pakistan and has recently prepared two partnership agreements with FAO and WFP to ensure joint work programming. IFAD regularly participates in the Pakistan Development Forum. IFAD also participates in donor thematic groups in areas of its comparative advantage such as poverty and microfinance. IFAD through it country office, contributed actively to the preparation of an issue paper on Harmonization, Alignment and Aid Effectiveness for the PDF 2006.
In comparison to institutions such as World Bank and AsDB, IFAD’s annual contribution to Pakistan is modest. IFAD therefore adopts an operating model focused on innovation. Some examples of recent innovation programmes include:
• A new Microfinance Innovation and Outreach Programme
• Pilot testing of public-private partnerships to develop capacity for small scale agribusiness and processing enterprises in Sindh(approved in December 2004);
• A Programme for Increasing Sustainability in Microfinance
IFAD aims to engage in policy dialogue with the Government of Pakistan on a wide range of rural sector issues, and currently undertakes biannual review meetings with EAD. Particular areas of interest include: financial sector reforms, rural sector diversification and investment, improved governance and decentralisation, institutionalisation of grass roots institutions, and improved access for the poor to physical and natural resources.
Evaluation and Impact
IFAD programmes are subject to independent external evaluation. A Country Programme Evaluation was completed in 2008. The Country Strategy (COSOP 2010-2014) was prepared based on the lessons from the Country Programme Evaluation. In terms of impact, IFAD programmes are reported to have contributed to:
• improved household food security in remote rural areas,
• technology generation and transfer;
• greater access to credit and rural infrastructure;
• adoption of improved soil and water conservation and environmental management practices, particularly in the rainfed areas;
• empowerment of rural women; and,
• promotion of community-driven development, including formation of village organizations/community organizations and their linkages to formal institutions.
IFAD’s Current Portfolio (On-going Projects)
AJK Community Development Project (AJK)
IFAD financing of the Project consists of a loan of USD 21.8 million which became effective on 2 September 2004 and is due to be completed on 30 September 2011. The AJKCDP’s objective is to (a) strengthen the role and capabilities of existing community organizations COs, and establishing new (CO’s) to extend decentralized development benefits to IFAD’s target groups on a sustainable basis; (b) establish the basis for successful devolution process by promoting effective governance, transparency and accountability through improvements in operational, financial and relationships between central and local institutions; (c) improve natural resource management and expand social and economic infrastructure necessary to increase income and employment opportunities and reduce the conditions of poverty for the vulnerable segments of the communities.
The project completion review mission has concluded the programme as successful in achieving it objectives and appreciated over-accomplishment of targets in community infrastructure, NRM, and micro-credit interventions. CDP will be closed on 30 September 2011 with expected 100% utilization of loan resources.
Microfinance Innovation and Outreach Programme (MIOP)
A loan of USD 26.5 million was approved in December 2005. The overall objective of the programme would enable active rural poor to increasingly access a wider range of sustainable financial services and products that respond to their needs. The Project is being implemented by Pakistan Poverty Alleviation Fund (PPAF) and is an integral part of PPAF’s most important operation - its credit and enterprise development programme.
The programme is being implemented through 20 Partner Organisations (POs) including Young Partner Organisation (YPO) and Linkage Partner Organisation (LPO), and progress on these innovative products is considerably good. Almost 80% of MIOP funds have gone to the rural areas and 20% to peri-urban areas of these districts. MIOP will be closed on 30 September 2011 with expected utilization at 100 % of loan resources
Programme for Increasing Sustainable Micro Finance (PRISM)
A loan of USD 46.6 million was approved by IFAD Executive Board in April 2007. Micro-financing is in great demand throughout Pakistan, but at present only a small part of the population has access to financial services. Donor funding for microfinance is declining, and it is crucial that microfinance funds now be provided by the commercial sector. The programme will help forge partnerships between commercial banks and microfinance organizations to help the microfinance sector continue to grow sustainably and expand its outreach. This in turn will help stimulate economic growth in rural areas and create better livelihoods for rural households. The programme became effective in June 2008.
The project is being implemented by Pakistan Poverty Alleviation Fund through its Partner Organisations/MFIs and commercial banks. IFAD has conducted Mid-term Review of the PRISM (Mar/Apr 2011). Utilization of loan as of June 2011 is 44%.
Crop Maximisation Support Project (CMSP)
IFAD Approved a loan of USD 18.33 in November 2009 in response to a government request, to provide additional support to the government-funded CMP-II.
The proposed CMSP activities will contribute to food security and rural poverty reduction in a rapid but sustainable manner and provide fast disbursing support to the current activities of CMP-II. The goal of the project is to contribute to food security and poverty reduction among the targeted small farmers and poor rural families through productivity enhancement and income diversification. The specific objectives are: (a) increased crop production in the target districts through improved input supply financing; (b) enhanced food security for the rural poor through increased production and income generation; (c) empowerment of small farmers and disadvantaged villagers through support to self managed community organizations that enable them to manage their resources more efficiently and gain greater market access; and (d) a sharper focus on gender and poverty mainstreaming to ensure direct benefits to women and the landless.
The project could not start implementation mainly failing to meet the conditionalities for disbursement of funds by the executing agency.
Click here to read the Pakistan country factsheet, Enabling poor rural people to overcome poverty in Pakistan.