Pakistan: Punjab Government Efficiency Improvement Program (Subprogram 1)

Public sector management - Public administration

Building on the PRMP and other programs, PGEIP will support the GoPb in realizing the long-term goals expressed in Vision 2020, through which the government has committed itself to significantly improving the standard of living of the people of Punjab, especially the poor and vulnerable. The PGEIP will improve the overall functioning of the provincial, district, and municipal governments and the quality of public services. The improvements will take the following forms: (i) greater performance-oriented planning and budgeting; (ii) a more efficient civil service, with adequate incentives and merit-based appointment and career progression; (iii) a funded and well-managed pension system, which increases the

confidence of civil servants and the public, and generates fiscal space for high-priority investments in the social sectors; and (iv) greater private sector contribution to growth and facilitation of public-private partnerships.

As reforms in these areas are complex and take time to filter through the bureaucracy, PGEIP will be processed as a program cluster comprising three single-tranche SPs. This modality provides adequate flexibility to meet emerging reform needs and use program conditions genuinely for policy reform, rather than as rigid prescriptions. ADB's Management and Board will also have greater involvement in recommending measures for future operations within a cluster, in a way that is not possible in traditional multiple-tranche operations. Separate reports and recommendations of the President (RRPs) will be prepared for each subprogram. The policy matrix developed thus far for SP1 has indicative actions for SP2 and SP3. In addition, detailed action plans will be developed in combination with policy matrices to guide reforms. In order to ensure that all the six pillars of the Vision 2020 are in place,

the GoPb has also sought ADB's support for accelerating the attainment of the MDGs and implementation of provincial-level judicial reforms, in addition to the government efficiency improvements under PGEIP. In line with this request, ADB will also prepare two additional program clusters, namely the PMDGP and PAJP, in an integrated manner along with PGEIP over 2007-2011. The integrated approach and the preliminary details of the PMDGP and PAJP. The integrated approach will improve program coordination, reduce duplication, minimize inconsistency in policy advice and measures, and focus resources for desired outcomes.

The reforms under the three program clusters will accelerate and sustain economic growth, improve the delivery of public services, create more employment opportunities, and reduce poverty.

The Punjab is the most populous province of Pakistan and has the largest provincial economic base in the country, accounting for 56% of the total population and over 50% of gross domestic product (GDP). The province has achieved robust economic growth and significant poverty reduction, matching its structural reforms, since early 2000. Yet reforms in many areas are only partial, poverty is still high at over 20%, and social indicators lag behind those in comparable low-income countries.

The government of Punjab (GoPb) has laid down an ambitious Vision 2020 aimed at doubling per capita income over the next decade. This will require sustained broad-based economic growth, which in turn demands large efficiency improvements in both the private and the public sectors, accompanied by better public resource management.

Through the Asian Development Bank (ADB) supported Punjab Resource Management Program (PRMP), implemented during November 2003-August 2007, the GoPb has introduced wide-ranging reforms in public resource management. It has enhanced revenues, rationalized expenditures, improved planning and budgeting, and developed the private sector and the civil service. In parallel, the GoPb has also implemented reforms in service delivery, through the ADB supported Punjab Devolved Social Services Program (PDSSP), and in

the judiciary, through the Access to Justice Program (AJP). Having laid down a broad foundation for reforms through these three major ADB interventions, and support from other development partners in the governance, education, and infrastructure sectors, the GoPb launched its second-generation reforms at the fourth Punjab Development Forum in April 2007. These reforms are centered on creating an effective public sector and fostering a dynamic private sector to achieve the Vision 2020 goals.

The key pillars of the second-generation reforms are the following: (i) efficient public financial management, to increase the fiscal space for higher pro-poor spending;

(ii) a fully funded and well-governed civil service pension system, to support prudent fiscal management and ensure retirement income security for civil servants;

(iii) civil service reforms, for a responsive, efficient, and effective civil service; (iv) broad measures supporting private sector development, for economic growth, job creation, and poverty reduction; (v) attainment of the Millennium Development Goals (MDGs) by 2015; and (vi) improved access to justice, for greater legal and regulatory certainty and enforceability in all economic spheres.

Public resource management modernized and made more efficient

Civil service pension system made financially sustainable

Civil service efficiency and motivation enhanced

Greater private sector participation in economic activity, and a redefined role for the Punjab public sector