Punjab is truly blessed with a great untapped potential. Its land, water, weather and people if harnessed properly can yield large gains and lift the country out of its poverty; its human resources can lay the foundation of high value addition not only in agriculture but also in industry and services.
The Punjab Resource Management Program (PRMP) has been initiated by the Government of Punjab (GoPb) with the assistance of the Asian Development Bank (ADB) as a comprehensive reform package with an aim to strengthen provincial finances, institutional development and incentive mechanisms for public service delivery with particular emphasis on pro-poor sectors and the creation of an enabling environment for private sector development to make it an engine of growth for the economy.
The overarching objective of the program is to assist the Punjab Government in reducing poverty through good governance including improved public sector resource management. Despite many initiatives aimed at developing Pakistan’s economic and social sectors, the country’s level of development remains below its potential and social indicators are lagging. Incidence of poverty today is higher than a decade ago. Punjab mirrors these national trends and is further constrained by the fact that fiscal space available to the Government of the Punjab is limited.
Furthermore, traditionally expenditures are allocated in a way that does not adequately reflect medium term policy priorities. Allocations are inadequate to cover the growing needs for operation and maintenance of public services. As a result, quality of public service is generally perceived to have deteriorated and unable to meet the needs of a growing population and increasing environmental pressures. Research has identified a crisis of governance as a central element in the sub-par service delivery and development spending at all levels. There is ample evidence that improvement in public sector governance and resource management yields considerable development gains. The investment through the PRMP will further strengthen the reform process and help in poverty reduction.
- Strengthening of provincial revenues;
- Rationalization of provincial expenditure;
- Improvement of effectiveness, predictability and accountability in financial management;
- Improvement in strategic programming of investments for poverty reduction;
- Restructuring, and strengthening of government, administration and human resource management;
- Undertaking regulatory reforms for private sector development and public-private partnership;
- Reducing direct public sector involvement in economic and/ or commercial operations; and
- Undertaking capacity enhancement of relevant government departments, district governments as well as public sector organizations.
The overall result of the achievement of the above objectives will be the raising of living standards and reduction in the severity and incidence of poverty.
Formulation and design of the PRMP Program is anchored in the following principles:
- Strong leadership and participation: The program enjoys full support at the political level, including the Chief Minister of Punjab. Program formulation was ‘home-grown’ with broad stakeholder participation from the private sector and non-government organizations (NGOs). The first Punjab Development Forum was held prior to program finalization to allow wide consultation on its content.
- Output focused medium term approach with flexibility for adjustment of targets: The program takes a medium term view beyond the short-term horizon of traditional program loans, and by adopting the cluster modality allows for adjustment of design parameters based on actual progress and effectiveness.
- Emphasis on strong implementation support and monitoring mechanism: A program monitoring unit (PMU) was established and staffed early during program formulation, and involved in the design of a comprehensive monitoring framework.
- A holistic approach and coordination and complementarity with other governance activities anchored in the PRSP
- ADB program financing allocated for financing of measures that create fiscal space within a defined medium-term budget framework rather than financing incremental sector spending that may not be sustainable.
The structure of the program cluster and the key result areas in each component are as follows:
COMPONENT-1: Reforming Provincial Financing through Fiscal Structuring and
Financial Management by:
- Strengthening provincial revenues;
- Rationalizing provincial expenditure;
- Improving effectiveness, predictability and accountability in financial management.
COMPONENT-2: Reforming Processes and Institutions for Pro-Poor Service Delivery through:
- Improving strategic programming of investments for poverty reduction;
- Restructuring and strengthening government, administration and human resource management.
COMPONENT-3: Creating Opportunities for Growth and Income Generation through Private Sector Development by:
Undertaking regulatory reforms for private sector development and public-private partnership; Reducing direct public sector involvement in economic and/ or commercial operations.
The executing agency (EA) for PRMP is the Punjab Planning and Development Department (P&D). The implementing agencies (IAs), to be supported by the scheme, will include P&D, Finance Department, Excise & Taxation Department, Board of Revenue, Services and General Administration Department and the other departments of the Punjab Government as indicated in the policy matrix. As agreed in the MOU, the EA has established a Program Management Unit (PMU) prior to loan negotiations, funded by the Punjab Government. In addition to the PMU, each IA will set up a core team which will coordinate with the PMU in its mandated areas. The core team will be responsible for preparing progress reports as required, for their onward submission to the PMU. The core team notified by each department will also be responsible for preparing terms of reference. The core team would interact with the consultants hired by the PMU and would certify the progress of the consultants to the PMU for the purpose of contract payments. Consultants would be hired through the Consultant Selection Committee of the Government.