Pakistan - Poverty Reduction Strategy Paper and Joint IDA-IMF Staff Assessment of the PRSP

The PRSP presents an informative description of the trends and spatial patterns of poverty. The analysis of diagnostics is grounded in evidence from the last two rounds of the Pakistan Integrated Household Survey/PIHS (1 998-99 and 2001-02), which has been institutionalized as the primary source for poverty and human development data. The poverty estimates in the PRSP use the newly developed official poverty line for Pakistan, and establish baseline figures from the 1998-99 PIHS round, when the survey was revised to combine consumption and social/demographic modules. The diagnostics identify links between poverty and employment patterns, while highlighting regional and provincial differences. In view of the growth-based strategy outlined in the PRSP, the staffs particularly welcome the exploration of linkages between poverty and employment. The focus on human development indicators in the diagnostics highlights the need to expand access to and improve governance of service delivery. Given that vulnerability is a key concern in Pakistan, the staffs also welcome the focus on transitory poverty and its clear links to the fourth pillar of the strategy, namely targeting the poor and the vulnerable. There are areas where the diagnostics could have been linked better to the poverty reduction strategy outlined in the document. While the links between employment and poverty are stressed, the diagnostics do not clearly identify sectors where growth and employment generation would have the greatest impact on poverty. The links between livestock and crop farming and rural poverty should be explored more fully to underpin the stated objective of improving agricultural productivity. While the measures on housing finance emphasize the growth-enhancing aspects of housing construction, its role in reducing vulnerability could have been shown more clearly through relevant poverty diagnostics. The staffs are of the view that future analytical work on these issues will be important for fine-tuning and prioritizing within the broad poverty reduction strategy outlined in this document.