December Issue 2016
BISP: Wasting the Taxpayer’s Money?
In the 2008 general elections, the Pakistan People’s Party (PPP) came to power riding on the slogan of helping the under-privileged sections of society. After taking control of the government, the PPP administration launched the Benazir Income Support Programme (BISP) in October 2008. The stated aim of the BISP was to “cushion the negative effects of slow economic growth, the food crisis and inflation on the poor, particularly women, through the provision of cash transfers.” Between October 2008-March 2016, Rs. 387 billion had been disbursed through the BISP, but it is generally believed that the programme has failed to economically empower the under-privileged sections of society.
The BISP was established as the third cash transfer social security net in Pakistan, after Zakat and the Pakistan Baitul Maal. The BISP started with an annual budget of Rs. 34 billion and today it is the largest social security net of Pakistan.
The modus operandi of the BISP is that it provides Rs. 4,700 per household, every three months. These cash transfers are non-conditional and all households graded poor according to BISP standards are paid these amounts.
Apart from that, the BISP had initiated other programmes such as Waseela-e-Haq, Waseela-e-Taleem and Waseela-e-Rozgar, which provided soft loans for education and business ventures. However, these programmes formed a negligible portion of the entire BISP structure and some of them are either non-functional or they have been scrapped.
In its first year of operations, the BISP provided cash transfers to 1.7 million households and this figure rose to 4.7 million in the year 2014. According to the 2010-11 poverty census conducted by the BISP, there are 7.7 million households in Pakistan who are eligible to receive BISP cash transfers.
In the first year, the BISP disbursed Rs. 16 billion to deserving households and this figure rose up to Rs. 102 billon in 2016. As of March 2016, a massive amount of Rs. 387 billion has been disbursed in cash transfers. That’s Rs. 55 billion per annum on an average and makes up 0.23 percent of Pakistan’s GDP (Gross Domestic Product). Have these huge amounts been effectively used, is a question that needs to be answered.
The 11th Five Year Plan of Pakistan for 2013-18 states that the poverty headcount has reduced from 17.2% to 12.4% between 2007-08 to 2010-11. The plan credits the BISP with the reduction in the poverty headcount. Apart from this, there are 17 third-party evaluation reports on the BISP website which claim that BISP has been doing a commendable job in reducing poverty. The Benazir Income Support Programme Second Impact Evaluation Report by Oxford Policy Management in December 2015 also praises the BISP for the improvement in the lives of people but it does not take into account the efficient utilisation of resources disbursed by the BISP over the years. There has been a general reduction in the poverty levels in Pakistan over the course of the last decade. The Multidimensional Poverty Index report launched by UNDP and the Ministry of Planning and Development claims that poverty has gone down from 55% to 39% in the last 10 years. There has been a general reduction in poverty, but to what extent the BISP should be credited for it is hard to ascertain.
Former Senator Enver Baig, who served as Chairman BISP from November 2013 to November 2014, told Newsline that all the money disbursed by BISP over the course of the last eight years was nothing more than a waste of the taxpayer’s money. He stated that the claims made about the success of the BISP in third-party evaluations are not credible and cannot be trusted. In response to a question about the role of the World Bank and foreign donors, Mr. Baig said “I never subscribed to the plans of the World Bank when I was heading the BISP. They [World Bank and foreign donors] are not interested in ending poverty and want people to remain dependent on dole-outs.”
Some financial experts maintain that the cash transfers provided by the BISP are just dole-outs, which are disbursed every quarter without any conditions. Such transfers can never empower the under-privileged sections of society economically and will only keep them dependent. Even if the cash transfers are working out for some households, this approach is not sustainable as the BISP might not be able to provide them cash forever. There needs to be an alternative approach, which is clearly missing.
Shoaib Sultan Khan, head of the National Rural Support Programme and one of the pioneers of rural development programmes in Pakistan who has been working in the field for 40 years, said in a seminar that the BISP can never alleviate poverty because of the flaws in its basic structure.
Mehfooz Ali Khan, former finance secretary of Balochistan and an analyst, told Newsline that the BISP was supposed to work as a social security net, but if a survey were to be conducted one would find out that it didn’t impact the poorest segment. He further added that “the BISP has resulted in the pauperisation of society and paltry dole-outs don’t change poverty levels. Had this amount been used to create enabling environments, it would have had a far-reaching effect.”
Mr. Baig also held the same view. He said that if the hundreds of billions of rupees wasted as cash transfer had been used for technical training then the economic impact would have been far greater for the under-privileged sections of society. In fact, Baig claims that he resigned just after one year in office because the administration of the BISP did not allow him to implement technical training programmes within its ambit.
Moreover, there is another flaw in the BISP, and it is related to the human resource structure. At the moment, the BISP is virtually under the control of officers of other departments who have joined the BISP on deputation. These officers hold all the positions in the BISP on grades above BPS-17. Officers on deputation are paid double the amount of salary in the BISP as compared to their parent departments. As a result, people from an assorted range of organisations, including universities, join the BISP on deputation to make a quick buck. Allegedly, these postings are mostly politically motivated and the officers have no permanent interest in running the affairs of the BISP. Consequently, the organisation suffers.
Likewise, the BISP is one of the biggest heads in the annual fiscal budget of Pakistan. Even so, it receives a negligible amount of criticism in the mainstream media. The reason is the staggering amount of resources which the BISP spends on advertisements, thus ensuring that there is no criticism from media outlets. Till January 2014, Rs. 3.15 billion had been spent on running ad campaigns of the BISP on television channels and in newspapers. Baig told Newsline that one of the reasons he had to quit the BISP was that he moved a case of corruption in BISP advertisements to NAB and the interest groups within the BISP started opposing him.
Moreover, the use of the BISP to gain political mileage has been criticised from the outset. The use of the name ‘Benazir’ as the title of the programme amounts to using the taxpayer’s money to buy political clout. In the past, the PPP was accused of using the BISP to manipulate elections in Gilgit-Baltistan, and this time the same allegations are being levelled against the ruling PML-N. It was alleged that disbursements were increased just before the elections on the instructions of PML-N candidates and that helped them win the elections in Gilgit-Baltistan.
Given the criticism being hurled at the BISP, the need of the hour is to depoliticise BISP and get rid of all those staffers who are on deputation. The programme must be managed by professionals; furthermore, there is also the need to change the basic outlook of the programme. Gradually, the cash dole-out system must be wound up and replaced with technical training programmes and all cash transfers must be conditional.
Interview: Marvi Memon, Chairman BISP
Critics of the BISP maintain that the programme has failed to economically empower the underprivileged sections of society. The cash transfers are characterised as dole-outs that will keep them dependent forever. Is that a fair criticism?
BISP is a social safety net programme, meant for the most under-privileged, marginalised and vulnerable sections of society living in abject poverty, and like any other social safety net programme, it is aimed at providing regular and predictable support to these people. To achieve the supplementary objective of women’s empowerment, BISP provides support exclusively through women. SSN (Social Safety Net) programmes have become more prevalent globally in recent years with the expectation that they have an immediate impact on poverty reduction. As a social safety net programme, BISP ensures that the beneficiaries stay afloat economically, and they do not die of hunger. The amount that BISP provides, may be meagre, but provides the families a slight cushion against inflationary shocks. This is the whole idea of any SSN programme that, while the beneficiaries have the predictability of a certain amount of cash every month/quarter, they are still expected to try and earn their own livelihood. This programme is supplemented by other initiatives of the Pakistan Government for alleviation of poverty.
A former Senator, who was associated with BISP, argues that the money disbursed by the BISP over the last eight years was a waste of the taxpayer’s money. And that all third-party evaluations of the programme’s successes are not credible. How do you counter that?
BISP is the first ever comprehensive, universal, objective, and transparent social safety programme initiated by the government of Pakistan. It is one of their major instruments to achieve the targets set by the United Nations’ Millennium Development Goals (MDGs).
The World Bank and DFID (Department for International Development) have assessed the performance of BISP using standard indicators of transparency and targeting. According to its findings, the World Bank ranked the BISP satisfactory in the overall implementation of the programme in 2016. Furthermore, DFID’s Annual Review Report 2015 acclaimed A+ performance of the programme. According to the State of Social Safety Net Report 2015, published by the World Bank, the BISP is internationally acclaimed as number 5 in the world in targeting the performance of SSNs. This is some of the international acknowledgement which the programme has received for its operational effectiveness. BISP was also mentioned in an Oxford University Press book, Candles in the Dark, which talked about successful organisations in Pakistan, despite the challenges in governance structures.
As far as the credibility of third-party evaluations is concerned, these evaluations were carried out by some of the best and renowned organisations such as Oxford Policy Management (OPM) and Mott MacDonald (MM). The World Bank and DFID are directly involved in these evaluations and regular follow-up takes place in the areas of improvement identified by these reports. The expertise of these organisations was hired to evaluate not only the processes but also the impact of the interventions made by the BISP. The reports thus generated, assist the management in making policy-decisions based on solid evidence.
Some critics even go so far as to say that these ‘dole-outs’, which are unconditional, have led to the pauperisation of society. Your comments.
Such criticism is only made when there is lack of understanding of the disabilities and deprivations that poverty brings with it. Social safety net programmes are always based on cash and in-kind transfers targeted at the poor and vulnerable households, with the goal of protecting families from the impact of economic shocks, natural disasters and other crises. BISP, since its inception, has been serving this very purpose. Pauperisation is only possible if a dependency syndrome is created, and BISP has sound evidence against it. BISP was paying Rs. 4,700 per quarter till the last instalment in September 2016, and the amount is to increase to Rs. 4,834 per quarter from December 2016. This unconditional amount, received by the ‘poorest of the poor,’ is spent by them on critical additional food calories especially for the children, helps pay for school fees and family illnesses and contributes towards ownership of small assets. The best part about the unconditional cash transfer is the choice that it gives to households to spend on their most pressing need without making any unilateral trade-offs on other necessities. It is reiterated that the BISP cash transfer is only to ensure a certain level of certainty in these vulnerable households and is in no way making them dependent or paupers.
Can the BISP keep providing cash well into the foreseeable future? Is this approach sustainable?
Social safety net programmes continue till the most poor graduate out of their poverty. Such programmes also have the support of international donors such as the World Bank itself. The amount of cash transfer has seen a considerable increase over the past two years, which shows the government’s resolve in not only providing this facility to the poor, but bringing improvements in the system. Thus, it can safely be assumed that cash transfers will continue as a poverty reduction strategy through a diverse set of safety net interventions and will always be the topmost priority of all governments, regardless of political affiliations.
Shoaib Sultan Khan, head of the National Rural Support Programme, contends that the BISP can never alleviate poverty because of flaws in the basic structure. If so, have you thought of restructuring the programme?
As mentioned earlier, BISP is a social safety net initiative, which remains limited to poverty management, rather than poverty alleviation. It is serving the mandate assigned to it in the best possible way, supported by empirical evidence as well. The third party report on impact evaluation clearly shows that BISP continues to have an impact on reducing poverty for households and that the BISP has caused a 19 percentage point reduction in poverty for the RD (Regression Discontinuty) treatment group as compared to the RD control group. However, it will not be out of place to mention that once the BISP is mandated with a graduation policy intervention, it will play its due role in poverty alleviation as well.
Do you agree that setting up vocational/technical training institutes would have had far greater economic impact, as some believe?
One has to understand that the BISP is a social safety net programme and is neither designed for nor mandated to disseminate skill development. Additionally, evidence exists that vocational training institutes do not necessarily cater for the poorest of the poor, which the BISP is mandated with and is successfully doing. The constraints faced by the poor are manifold, ranging from distance to affordability and, the most important of all, educational entry requirements. This means that such opportunities cannot be availed by those at the bottom of the pyramid. The importance of vocational training notwithstanding, cash transfer programmes are globally hailed as interventions that have shown impact whereas the evidence for training is not as promising. However, to re-align the policies of such specialised vocational training institutes with the objective of serving the poorest of the poor, BISP in collaboration with a few technical training organisations, has imparted vocational training to around 57,000 beneficiaries or their nominees. BISP also shares its National Socio-Economic Registry data with various public and private sector entities which provide skill development facilities, under its policy of ‘Graduation through Collaboration.’
The BISP has a professional and dedicated workforce which was selected through a transparent process as per government rules. The deputationists in the organisation belong to various service groups, who bring with them their rich experience. These deputationists are selected by higher management after being interviewed by a panel, and then placed in various wings keeping in view their area of expertise. It needs specific mention that identification of the poor is done through a poverty survey and disbursement of the cash transfer is done through instruments and partner banks. No one at the BISP enjoys any discretion or power to include anyone or arbitrarily exclude anyone from the programme.
It is alleged that the phenomenal amount spent on advertising in the print and electronic media is intended to blunt any criticism of the BISP? Allegations of corruption in the way the ads are distributed are also rampant. Surely the Rs 3.15 billion rupees or so spent on advertising could help support some more families?
The amount mentioned above is the total expenditure of advertising, spent between 2008-2012. However, the matter is also under investigation by the National Accountability Bureau. Therefore, no further comments can be given. Furthermore, under the current regime, BISP is not spending any amount on display advertisements or media campaigns in both the print and electronic media. The only classified advertisements in the print media are those which cover tender notices or EOI’s (Expressions of Interest). The public service messages being run on PTV are free of cost. The BISP spends less than 2 per cent of the budget on administrative expenditure, as the maximum of the allocations go directly towards income support and related expenditures.
If the BISP is a sincere effort to help the underprivileged, why is it seen mainly as a political tool? Earlier, it was alleged that the PPP used the BISP to manipulate elections in Gilgit-Baltistan. This time the PML-N was accused of doing the same — pumping more money in Gilgit-Baltistan through the BISP, just before the elections began. How do you respond to that?
It is reiterated that no one at BISP enjoys the prerogative of adding or arbitrarily excluding beneficiaries. This allegation seems based on outdated facts of the first phase of targeting in 2008, when all the parliamentarians were given the prerogative of identifying the poor and the needy in their respective areas. To establish an effective and scientific targeting system, a house-to-house survey was initiated in 2010-11, across the country. The information was collected from the households through a specially designed targeting form — the BISP Poverty Scorecard. Based on the same, 7.7 million eligible households were identified and a National Socio-Economic Registry was thus generated. Since then, the entire database is controlled systematically and electronically and no manual entry can be made in the database. The beneficiaries in Gilgit-Baltistan have also been identified, using the same targeting technique. Furthermore, since payments are also generated electronically, there is no question of paying a ‘non-beneficiary’ nor paying more to one beneficiary than the others. The payments are generated quarterly; hence they cannot be timed or compromised to meet the timing of any political activity or campaign.
Whatever happened to the Waseela-e-Haq, the Waseela-e-Taleem and the Waseela-e-Rozgar programmes initiated under the BISP? Reportedly, they are scrapped or are non-functional.
Waseela-e-Taleem is still running successfully and has enrolled more than 1.3 million children of the poorest households in primary schools. As far as Waseela-e-Haq and Waseela-e-Rozgar are concerned, these were initiated as part of the graduation programmes for BISP’s Unconditional Cash Transfer (UCT) beneficiaries. The higher management was of the view that the government has specialised agencies for such programmes which have better design and implementation plans. Therefore, at this stage, instead of running these programmes independently, BISP should benefit from the expertise of these organisations by forming linkages.
Where does BISP get its funding from?
BISP is currently working in partnership with the World Bank, DFID and the ADB (Asian Development Bank), who have provided funding to support BISP operations.