Attachment-14_Sindh_Background_Paper.docx

Overview

Sindh is Pakistan’s third largest and second most populous province with an estimated population of 42.4 million in 2010, growing at an annual rate of 2.8 per cent. It has a dual economy consisting of a highly developed urban center, Karachi, and a mostly agrarian rural hinterland. Economic growth in 20 secondary cities lags that of Karachi and cities in Punjab.

Sindh’s development indicators are not only low in absolute term, but are growing less rapidly relative to the rest of the country. Sindh’s poor are worse off than the poor in Pakistan’s other provinces due to highly and increasingly unequal ownership of land and resources. .

Impediments to Growth in (Non-Karachi) Urban Sindh

Amongst the business community there is consensus that the secondary cities of Sindh are the most challenging in Pakistan from an investment point of view. The problem of shortage of skilled labor has been cited as a perennial source of frustration for investors operating outside Karachi. Poor state of water supply, sanitation, and solid waste systems is also a barrier to growth. Urban services in secondary cities fall short against three basic targets of quality, continuity, and coverage.

1. Impediments to Growth in Rural Sindh

Fifty per cent of Sindh’s population is rural, with 70 per cent deriving their livelihood from agriculture, livestock, forestry, or fishing. Even during periods of high growth, poverty has increased due to the impact of large land-owners being the principal beneficiaries of government subsidues and donor progams..

In addition small and medium farmers are exploited by money-lenders(Arthi’s), who advance loans in exchange for portion or the crop. Farmers are often forced to sell their crop at low prioces due to lack of storage facilities. Post-harvest losses range between 30 and 40 per cent.

Main crops grown across the Province are rice, wheat and cotton while horticulture produce comprises mostly bananas, dates, mangoes, guavas and vegetables. Production fluctuates each year but is declining generally due principally to the availability of water, water-logged and saline land, as well as poor farming practices involving excessive use of pesticides and fertilizers.

Infrastructure in the province is weak and most villages are not linked to main cities and rural areas.

In lower Sindh, some of the poorest communities are involved in fisheries but the sector has been ignored for years, resulting in depleting fish stock, inadequate infrastructure and decreasing exports.

Processing industry is a big source of employment. Marble extracted in Khyber-Pakhtunkhwah, FATA, and Balochistan is processed in Karachi but there is little value-addition for exports.

The province has a vast wind corridor as well as potential for solar energy solutions. At present, most industries in urban centers are running on generators which cost up to 50 cents a unit.

Impediments to growth in rural Sindh, the ones that threaten its economy include:

· Rapidly deteriorating water situation in the province;

· Inadequate diversification due to poor connectivity, inefficient logistics; and

· High degree of land inequality, ambiguous land titling laws, and low/unequal access to credit.

· Poor delivery of basic social services

Sindh’s public service delivery system, especially in rural areas, is in a state of crisis. The problem with service delivery is not in under-provisioning of key “inputs” (teachers, doctors, schools, hospitals, budget outlay), but in their low productivity.

4. Intra-Sindh Socio-Economic Differences

The province can be seen as comprising three regions: upper or northern Sindh, central Sindh and lower or southern Sindh, where districts in north and central Sindh are relatively better off, economically and developmentally, than those in southern Sindh.

A different socio-economic characterization is along the lines of districts located on the right and left bank of the river Indus. Districts on the left bank of river Indus tend to be richer, with more fertile land, better infrastructure, better social indicators, better market linkages and a more developed service sector. Districts on the right bank tend to be poorer, with less availability of water and less productive land, a tribal social structure akin more to neighboring Balochistan than the rest of Sindh, poorer socio-economic indicators, and less developed market linkages and a small service sector. All but one Sindh district on the right-bank fall in the bottom one-third of all districts in Pakistan Northern Sindh districts on the left-bank rank in the top two-thirds of all districts in Pakistan, while those on the right-bank fall in the bottom one-third

5. Local Government

The structure of local government in Sindh is in a state of flux. The on-going deliberations center on the types of local government system favoured by different political actors in Sindh. Local government, particularly municipalities, constitutes important delivery vehicles for key public services. Despite their crucial role, local governments have long suffered from a lack of clarity regarding lines of authority, division of responsibilities, under-funding, and political interference.

The low quality of municipal service delivery contributes to Pakistan’s poor social indicators and lack of citizen confidence in government. Most municipalities lack transparency and accountability in their operations, and rarely solicit citizen input into decision-making.

The incidence of poverty in Sindh – measured by the number of people falling below the poverty line – was estimated at almost 31 per cent in a 2001-02 survey, and this was 2 per cent higher than the national average. Rural poverty was higher, at 38 per cent, though in some small towns and cities, urban poverty registered at around the same or even a higher level.

6.2 Land ownership and tenure

Most of the farms in Sindh are self-cultivated while owner-cum-tenant cultivation occupies the smallest proportion. Sindh has the highest proportion of landless persons and the largest landholdings in Pakistan. Landholding patterns in Sindh are highly skewed from national norms, with a median farm size of around 11.33 hectares, as compared with 2.83 hectares in Punjab. Skewed landholding and land-use patterns have a direct (negative) bearing on the well-being of children and women in poor households.

Land-size structure has deteriorated severely over time, with the proportion of medium landholdings decreasing and small landholdings increasing. More equitable land distribution could increase the productivity of 83 per cent of the farms. The trend of rising number of small landholdings has been accompanied by a persistently high per centage of landless households. This has serious repercussions for poverty levels in rural areas.

In rural Sindh, poverty incidence is highest in the landless class. While landless households are the most susceptible, it is the women and children residing in these landless household who are the poorest of the poor.

Large landowners have easy access to irrigation water, fertilizer, pesticides, loans, and government subsidies, which makes it profitable to cultivate their land themselves, regardless of productivity levels. High cost of rent and inputs have made it untenable for tenants to continue cultivating; therefore, many leave tenancy and migrating to large cities for non-farm employment.

6.3 Food availability and Accessibility

Seasonality is an important characteristic of food security in Pakistan. Households, particularly farmer households, are most vulnerable just before the harvest season and least vulnerable just after.

The international food price hikes of 2008 moved many households into the depths of poverty as food became too precious a commodity. Around 3.2 million people in Sindh – 17 per cent of the rural and 16 per cent of the urban population – were made food insecure in the aftermath.

For districts that are net importers of food, existence of a transport system is vital to food security. Excluding the major cities, road density in Sindh is low and in the network is in a very bad shape. Absence of roads worsens the food security situation. Tharparkar, Badin, Jacobabad, Kashmore and Thatta had the lowest level of access to food. The coastal belt of the province, including Thatta and Badin, were the most deprived.

6.4 Gender Dimensions of Inequity and Underdevelopment

Even though women are entitled to own land, legally and according to Islamic law, they are usually denied this right due to cultural norms. Lack of access and control over important economic assets of the households weakens the position of the woman and helps explain her limited participation in the decision-making process of the household. Given the importance of access to land in determining the socio-economic status of a household, Government of Sindh’s land redistribution program targeting landless women is revolutionary.

7. Education

Sindh performs second best to Punjab in terms of literacy and enrolment rates. However, there is substantial variation between children from differing backgrounds. Enrolments are much higher among high-income groups; and student enrollment in rural areas is four boys to one girl. Approximately four million children of school-going age are not attending school in Sindh.

Gender disparity in education attainment is most evident for adult literacy rate for population older than 15 years: female literacy for rural Sindh is 17 per cent, compared to 30 per cent for rural Pakistan.

Per centage of population that has completed primary or higher level for rural Sindh (34 per cent) is 15 per centage points lower than for the whole country and six per centage points lower than rural Pakistan. Only 16 per cent of women in rural Sindh have completed primary or higher level of schooling compared to 39 per cent for Pakistan and 28 per cent for rural Pakistan.

The Net Enrollment Rate (NER) is 47 per cent for rural Sindh as a whole, and 39 per cent for females in rural Sindh. Enrollment in government schools (93 per cent), as a per centage of total school enrollments in rural Sindh is second only to Balochistan, and higher than for the country and Punjab and KPK. This shows that in spite of the myriad problems with government school system, parents continue to send their children to government schools, probably due to lack of alternatives in small towns and far-flung areas.

7.1 Reasons why children do not attend or complete primary school Cultural factors: Often play a major part in influencing the enrolment and retention of children in school in Sindh, particularly among girls. The allocation of resources within the household, primarily determined by tradition and norms set out by patriarchal mindsets, discourages expenditure on education, especially for girls.

Access-related factors: Proximity to school has been identified as a key determinant of primary school enrolment and retention: the further a child lives from a school, the less likely they are to attend.

In-school factors: The non-availability of basic school facilities (classrooms, water, toilets, electricity, furniture, etc.) is one of the causes of low enrolment and high dropout ratios, and the low quality of education in Sindh is often reflected in the lack of physical state of school infrastructure

Economic factors: The common deployment of children as labourers, especially for informal work or work in the fields, also keeps children away from school. Even children who attend school may not attend regularly at harvest time. The direct costs of education are cited as a major barrier to children enrolling and staying in school.

7.2 ‘Ghost schools’ Non-functionality of public schools has been a big issue in the education sector, with the presence of “ghost schools” that exist only on paper, although there are teachers on the rolls who draw salaries for work at such non-functional entities. Sindh has a very high incidence of non-functional schools. Almost all of the non-functional schools (92 per cent) across all districts of Sindh were primary schools (5,244 out of 5,700).

7.3 Gender disparities in enrolment

Overall gender parity for primary public education in Sindh stands at 0.81, i.e., for every 100 boys 81 girls are attending school. Gender disparity is quite widespread in less-developed districts. The disadvantage of girls is slightly less pronounced in major cities or urban centers compared to rural areas where the parity index for primary schools drops to 0.61. Barriers to gender inequality are due to: family attitudes concerning co-education; proximity of schools to home; school infrastructure (boundary wall, toilet facilities, drinking water); access to textbooks and trained female teachers, so that parents don’t object to sending girls to what is seen as a male dominated environment. Girls are also often burdened with household chores, and care of siblings, which accounts for their high absenteeism.

7.4 Education Index for Sindh

The ranking of districts in Sindh, according to the Education Index indicates that Thatta, Jamshoro, Jacobabad, Shahdatkot and Gothki are the districts lagging the most in terms of educational attainment, while Sukkur and Khairpur are amongst the better performers. Eighteen of the 22 districts fall below the half-way point (0.5).

7.5 Sector Budgetary Allocations

The overall provincial expenditure on education is just under 1.2 per cent of the provincial GDP.

Fifty-eight per cent of the overall spending is on elementary level of education (of which 95 per cent is on recurrent expenditures.

7.6 Observations on Current Issues and Challenges

Education performance across Sindh continues to be marked by deep disparities based on gender and wealth. Access to education is characterized by significant gaps between rural and urban areas, boys and girls, and rich and poor households. The gender gaps in Sindh remain substantial.

There are deep concerns about the quality of the education that is provided. There are large deficiencies in basic infrastructure and teaching materials, and fundamental weaknesses in the systems for training, engaging, and managing teachers. Overall, there is a very poor level of learning attainment. There is also very limited attention to the educational needs of children with disabilities.

The July 2010 floods had a devastating effect on the education system in Sindh. Over the years floods, rain and internal displacement have affected a number of schools across Pakistan, with almost 6,847 schools being affected in Sindh alone.

Certain districts of Sindh were hit particularly badly, including, Jacobabad (1247) and Kashmore (571). Floods are said to have decreased number of children completing primary school (grade 5) in light of destroyed/damaged schools, missing teaching staff and lost resources, and especially due to family income constraints. Children who were currently enrolled were unlikely to continue, with families prioritizing survival today over gains tomorrow. Girls are said to have borne the brunt of this fall in school completion rates.

8. Health

8.1 Infant mortality

UNICEF’s Multiple Indicator Cluster Survey (MICS) 2003-04 gives an overall IMR of 71 deaths per 1,000 live births, compared to 110 per thousand reported in the Pakistan Integrated Health Survey (PIHS) for 1996, a decrease of some 35 per cent over seven years.

8.2 Under-5 mortality

Important predisposing factors for mortality in children aged below five years are malnutrition (40 per cent of children) and recent acute illness such as diarrhea, cough or fever (30 per cent). Further, 55 per cent of infants aged 6-11 months receive inadequate quantities of complementary foods. Some of the underlying causes of under-5 mortality in Sindh are:

· Low birthweight

· Poor immunization coverage

· Diarrhea

· Neonatal mortality

· Malnutrition

· Acute respiratory infection

8.3 Pre-natal consultations

Pre-natal consultations for Sindh overall are 65 per cent, 85 per cent for urban and 49 per cent for rural areas. An important alternative indicator of pre-natal consultations can be tetanus toxoid injections; these are crucial in reducing infant mortality by lowering the risk of infection among newborns due to unsanitary conditions. The tetanus toxoid per centage rate is an excellent authentication of a thorough prenatal consultation. The figures for tetanus toxoid closely match prenatal consultation figures, which is a good indication that pre-natal consultations are taking place

8.4 Post-natal consultations

For Sindh, post-natal consultations were 34 per cent, with 40 per cent for urban and 29 per cent for rural areas. Post-natal consultations show a sharp drop from the rates of pre-natal consultations. Figures show that women are not seeking medical attention after childbirth, a behaviour that could help explain the poor maternal mortality rates in the Province. Data shows 16 per cent of post-natal consultations take place in the home; the majority of post-natal consultations (71 per cent) are at private hospitals and clinics in urban Sindh.

8.4 Lady Health Workers

According to latest estimates there were 22,767 LHWs working in Sindh province at the end of the last fiscal year, and they were estimated to be covering about 46 per cent of the population on average which does not compare favourably with the national average of 83 per cent coverage.

8.5 Traditional Birth Attendants/Midwives

TBAs continue to dominate the delivery of children in Sindh. The least case of delivery by TBAs also seems to correspond with access to hospitals and clinics (public and private) in Karachi and Hyderabad.

8.7 Diarrhea

Dehydration caused by diarrhea is a major cause of mortality among children. Both rural and urban areas show an alarmingly high rate of diarrhea cases for children under 5, and these rates are rising. Urban populations continue to have high diarrhea incidence for young children. Sindh shows the highest incidence of diarrhea in last 30 days throughout survey period, and this incidence exceeds national average. Interestingly, there is almost no gender disparity (males: 12 per cent; females: 13 per cent), which would indicate similar conditions in households, with access to similar care and nutrition for both boy and girl children.

8.8 Nutrition

Sindh appears as the most food deprived province of Pakistan where only 28 per cent households were food secured and the rest, 72 per cent, were found to be food in-secure, including 33.8 per cent food insecure with moderate hunger and 16.8 per cent food insecure with severe hunger. In surveys of flood affected communities, almost 59 per cent of children under five were found to be malnourished. These surveys showed global acute malnutrition rates of up to 22 per cent. Not only was this rate higher than the prevailing 13-19 per cent nationwide levels, it is also much higher than the South Asian average of 19 per cent, even rivaling existing levels in Sudan.

8.9 Immunization

The number of children fully immunized between the ages of 12-23 months (and whose family have a record of it) is estimated at 40 per cent, 27 per cent for rural and 60 per cent for urban areas, compared to a national average of 53 per cent, with 49 per cent for rural Pakistan and 62 per cent for urban Pakistan. Overall results in immunization across the province are varied.

8.10 Polio eradication

As of the end of December 2011, there were 30 new reported cases of polio in Sindh – about 17 per cent of the total of 175 cases nationwide. Monitoring of immunization rates, using finger markings, in connection with the renewed outbreak of polio in the province showed that Sindh had a 98 per cent coverage rate as of November 2011. However, a number of districts were identified as having less than 95 per cent coverage, which include Thatta, Badin, and Tharparkar.

8.11 Health-seeking behaviour: Health consultations

Nearly 78 per cent of survey respondents in Sindh indicated that they sought medical attention from a private dispensary or hospital, which is 7 per centage points above the national average. The highest rural rate for use of public medical facilities for giving births is only 27 per cent (Umerkot). Overall usage of government facilities remains a paltry 12 per cent, and the highest incidence of birth (52 per cent) is in the home. In rural areas, 73 per cent births take place in at home.

Unlike most qualitative studies which suggest that distance, culture, and transport are the major reasons for not going to a facility, most women (44 per cent), according to one survey, simply feel it is not necessary. This could be remedied through information and community education campaigns.

The other perception is that health care is too expensive for many families.

8.12 Health policy

The Sindh Health Policy (2005) prioritizes improving the Expanded Program for Immunization, indicating a continued need for National Immunization Days until MDG and WHO targets are achieved. Improving maternal and newborn child health receives minimal attention, with only cursory attention paid to implementation strategies. The highest “burden of disease” in Sindh remains communicable diseases (at 38 per cent), followed by reproductive health problems (13 per cent), and non-communicable diseases (11 per cent). (Accidents and injuries account for 11 per cent of the “burden of disease”, whereas the Policy makes “safer roads” a priority).

8.13 Human resources: Doctors, nurses and midwives

The number of doctors working under the Sindh Department of Health has actually decreased, from 7,580 in 2003 to 6,804 in 2007. There was a slow increase in the number of nurses (from 1,549 to 1,865) in the same period; however, current levels do not meet global standards. The doctor-to-nurse ratio was 3.6:1 in 2007, compared with a recommended ratio of 1:3.

8.15 Effects of the 2010 floods

Health indicators and the healthcare infrastructure in Sindh suffered a huge setback as a result of the floods of 2010. An estimated 3 million children under five years of age (including 600,000 newborns) and 780,000 pregnant women were affected in the flooded regions of the country, of which Sindh was the worst-affected. Health facilities were damaged and health staff, including community health workers, were displaced along with the general population. Almost 12 per cent of total health facilities in Sindh were affected by the flooding.

Nearly half of Sindh’s population lives in urban settlements, groundwater rather than piped water is still the main source of water supply and it is rapidly depleting because of extensive pumping and low recharge. Almost two-thirds of Sindh’s urban dwellers have access to piped water supply via direct connections to distribution networks. The connection rate reaches 85 per cent in Karachi but is 3 per cent for Larkana and 4 per cent for Kashmore and Shikarpur.

As in other provinces, residents of rural settlements in Sindh mostly must rely on distant sources of unsafe, brackish and polluted groundwater, resulting in poor health conditions. As throughout much of Pakistan, women and children, particularly girls, have to spend much of their day fetching water. There is a consistent trend toward tap water as the main source of drinking water in urban Sindh, while hand pumping is the most common source for the rural population. Seventy two per cent of the urban population has access to tap water, compared with only 13 per cent of the rural population.

9.2 Water Quality

A national water quality study carried out by the Pakistan Council for Research in Water Resources (PCRWR) in 2001 and 2004 reported that in Sindh almost 95 per cent of shallow groundwater supplies are bacteriologically contaminated. There is no regular monitoring program to assess the water quality of the surface and groundwater bodies

9.3 Sanitation

Ninety five per cent of the urban population has access to flush toilets, and only 26 per cent of rural households have the same – 1 per centage point higher than 2008-09. Around 8 per cent of the population is without any form of toilets and these are mainly rural households –this figure is down from 10 per cent in 2008-09.

9.4 Effect of floods

In Sindh as in other provinces, there was a significant drop in the use of household latrines in the wake of the 2010 floods, while the use of communal latrines and the practice of open defecation remained widespread. Overall water and sanitation use was negatively affected, with toilet usage dropping from 70 to 12 per cent after the floods. Improved water source access also fell, from 75 to 55 per cent. Sixty-four per cent of households have proper disposal of waste water (sewerage connected with main line, sewerage connected with open drain or septic tank), ranging from 96 per cent in urban areas to 42 per cent in rural areas.

9.5 Hygiene practices

Provision of water and sanitation is only partly important as the ability to use these services also play a critical role. Tharparkar, Ghotki, Jacobabad and Khairpur are the worst performing districts, with between 73 and 96 per cent of households whose members do not wash hands after using latrine facilities. Similarly, a mere 29 to 46 per cent of households in Ghotki, Khairpur, Larkana, Naushero Feroze and Badin report washing hands before meals.

9.8 Sewerage treatment

Apart from Karachi, no other city in Sindh has a sewerage treatment plant. As a consequence raw sewage, both domestic and industrial, is discharged directly into water bodies.

10. Impact of 2010 Floods

Sindh was most heavily affected by the 2010 floods, with huge tracts of land left submerged for more than six months in some cases. Almost half of the rural population of the province was affected, and reconstructing the damage to the province is expected to cost up to US$3 billion, accounting for 44 per cent of national costs. It is estimated that 32 per cent (2,760) of the total villages affected in the country were in Sindh. The impact of the flood on the agricultural productivity of the province was extensive, with damage amounting to US$137 million to the irrigation network alone. Destruction was widespread, with 11 per cent of health facilities and a significant 18.5 per cent of educational facilities in the province damaged or destroyed.

10.1 Food Security

The once-in-a-century floods had a severe and devastating impact on food security status throughout Pakistan, most notably in Sindh province, where 47.9 per cent of the population were food insecure as of April 2011. In all the flood-affected areas, households belonging to the low income group in the rural areas were the hardest hit.

10.2 Shelter

It is estimated that before the floods, 72 per cent of the rural population of Pakistan was residing in mud-walled houses, many of which were damaged in the floods. Around 58 per cent of national damage was sustained in Sindh. Inflation made it difficult for people to reconstruct their houses.

10.3 Extent of Damage

In the aftermath of the floods, the Sindh government budgeted an increase from Rs. 120.8 billion to Rs. 135 billion in 2011 for local government funding, highly critical in light of the fact that the federal government would only be footing the bill for 17 per cent of reconstruction and leaving the rest to the provinces. Sindh, like Punjab, had planned to build 1,000 model villages, each with 200

10.4 Affected Districts

While the flooding in Sindh was not violent, it was protracted and wide-spread, affecting 17 out of 23 districts and 7,277 villages. The district of Kashmore was the worst hit in the north, while in the south, Thatta bore the brunt of the damage. Six districts of northern Sindh were severely affected, including Ghotki, Jacobabad, Kashmore, Larkana, Shikarpur and Shahdadkot.

10.5 Crop Production

The silver lining to the devastation wrought by floods of 2010 and 2011 are the bumper wheat, rice and cotton crops in Sindh. It is too early to assess but anecdotal accounts suggests a positive impact of bumper crops (and high government support prices) on rural incomes and food availability.

11. Militancy and Extremism in Sindh

Notwithstanding rural Sindh’s low developmental indicators, any attempt to establish a quantitative relationship between the prevalence of poverty and recruitment into militant organizations is precluded by the lack of data on the latter variable.

Deobandi madrassa’s have been increasing in number throughout Sindh, but there is no evidence linking students from these seminaries to ‘Jihadi” activity within or outside Pakistan. Limited evidence suggests that madrasah students more strongly support jihad than those of public or private schools—but public school students, who comprise 70 per cent of Pakistan’s enrolled students, also have high levels of support for violence. Madrassa’s in Sindh are fostering a more conservative religious outlook, along the lines of Saudi Wahabism, in a land known traditionally for its tolerance, pluralism and a more gentle version of Islam.

According to other accounts, religious militant groups have been expanding their influence and maneuvering space in the Sindh. One report stated that Sindh was emerging as a recruitment center for militant groups such as Lashkar e Taiba, or Jamat ud Dawa (JuD) as it is known now, and Jaish e Muhammad (JeM). Recruitment centers are said to be operating in Sukkur, Khairpur, Jacobabad, Larkana, Mirpurkhas, and Hyderabad.

Out of 83 most wanted terrorists in Pakistan, 21 belong to Sindh province. Although it is not known whether all or some of these 21 individuals are Sindhi speaking or non-Sindhi settlers in the province.

It is alleged that the Pakistan Army’s Panu Aqil cantonment, located 40 kilometers from Sukkur, is an important hub for support for JuD activities in Northern Sindh. It has also been reported that during floods in 2011 which hit lower Sindh, JuD was one of the most active relief providers on the ground in the district of Badin.

According to anecdotal accounts, Salafi or Ahl-Hadith oriented Madrassa’s are being established with the support of LeT/JUD in many parts of Sindh, focused on Northern Sindh. It is an open secret that the Pakistan Army, and intelligence agencies working under it, provides active and covert support to JuD and some other proclaimed extremist outfits.

12. Directions for USAID Sindh Strategy

Sindh faces a myriad of developmental problems and it is evident that at the core, the issue is poor governance. The history of Pakistan’s health and population, education and other social sectors is full of programs that failed to deliver or sustain benefits after donor funding ended.

For sustainability to be a genuine concern, maintenance costs of facilities and equipment, staff salaries, procurement of supplies and day-to-day operational costs must be borne government. It is rare, however, that government takes this responsibility seriously; and donors seldom insist on it.

There is no silver bullet that can solve the governance problems of Sindh in one go. It will require sustained effort and concerted action spread over different sectors of the government and deep commitment and ownership of the political class.

Raising the institutional capacity of government is fundamental to long-term success of any reform program in the province. USAID’s strategy for Sindh should be predicated on meaningful commitments from government to institute reforms and support for sector reforms. For instance, in the absence of clarity on the future local government system, robust arrangements should be agreed upon with Government of Sindh to ensure adequate resources and capacity are deployed at the local level for adequate O&M of projects built using USAID funds.

USAID strategy for supporting increased economic activity, jobs creation, incomes and vocational training in Sindh needs be based on each area’s comparative advantage, resource constraints, and market dynamics. Exact policies and interventions will need to be formulated and implemented in partnership with different tiers of government, with strong participation of private sector, other donors, and philanthropic sector.

The proposed Sindh strategy will have two elements consisting of on-going and planned programs which will work in some or all the thirteen districts identified in this background paper and a CVE program to be implemented through OTI, concentrating on some or all of the north Sindh districts identified in this paper, and Karachi. Aforementioned USAID programs will support and complement OTI work in northern Sindh.

Notwithstanding the need for sector reforms which would need to accompany USAID funding for different programs, and which will need to be agreed in detail with GoS, and the need to target interventions where there is greatest need, some of the activities that could be supported are outlined in the section below.

12.1 Suggested Interventions Under Planned USAID Programs

Economic Growth and Jobs Creation

· Vocational training – which may include supporting reform of existing vocational training schools in conjunction with philanthropic organizations and the private sector.

· Provision of seeds and fertilizer for vegetable gardening for poor rural women.

· Provision of chickens and livestock to poor rural women.

· Support for post-harvest loss reduction, scientific processing, and marketing of dates

· Promotion of water-efficient crops, e.g., sunflower plantation along the lines of USAID Sindh Agriculture Recovery Project.

· Promotion of micro-entrepreneurs through extension of grants and micro-credit.

Education

· Introduction of voucher scheme, conditional cash transfer, or school-feeding programs targeting under-served and excluded population

· Constructing or rehabilitating latrines, provision of furniture and teaching aids in non-SBE government schools.

· In-service teacher training

Health and WASH

· Provision of basic equipment to and repairs of (esp. flood damaged) BHUs/RHCs.

· Support for immunization

· Support for Sindh Strategic Nutrition Response Plan

· Health education: behaviour change/awareness raising ref. hygiene and disease pathways

· Training support for nurses and peripheral health workers

· Build/rehabilitate water supply and sanitation systems in key towns

12.2 CVE Program for North Sindh and Karachi

While it not possible for USAID to single-handedly reverse rising extremism taking hold in districts of north Sindh, strategic investments - in services deemed critical by the public - can reduce space for extremists; build confidence in the GoP and by extension earn goodwill for the US; and empower those who are opposed to extremist ideologies.

While there is no straight-forward link between lack of services and support for violent extremism and connections between the two are complex, lack of services is relevant when service delivery has actually been deteriorating, as is the case in Sindh.

Counter-services provision also matters where extremists are providing services to gain members and support as was evident during floods of 2010 when banned extremist outfits were effective in delivering aid to flood affected people. The key to such a strategy would be a development program which responds to immediate needs and grievances of people at the local level and selection of geographical areas at high and low risk – so as to preclude the appearance of only being concerned with violent extremists and not welfare of ordinary Pakistani’s.

12.3 Key Elements of a CVE Strategy

· Respond to most urgent needs of communities: livelihood support (including farm-to-market roads, and skills acquisition), basic education, basic health, and water and sanitation services.

· Target key Northern Sindh towns and large rural centers in high and low-risk – developmental challenged – areas/districts. Clearly defined metrics would need to be developed for purposes of targeting specific areas and success.

· Focus on quick impact (6-12 months) activities with visible outcomes

· Align efforts, wherever possible, with existing USAID, Donor, Government, and civil society/NGO initiatives.

· Foster activities which strengthen links between small towns/large villages and bigger urban centers

· Where feasible, promote activities which diversify beyond existing sources of livelihoods.

· Carry through robust joint GoS/USAID branding and media outreach related to programs.

· Design program interventions which are flexible and agile – so as to make any course correction necessary for program improvement in a quick and speedy manner.

· Target poor communities, especially women and children, and avoid investments in area with high possibility of elite capture.

Suggested Activities under a CVE program for north Sindh

· Construction of farm-to-market roads

· Small/medium W&S Schemes

· Farm to market roads

· Sports facilities

· Laser land leveling on small farms

· Credit and training for micro-entrepreneurs

· Agricultural and livestock inputs for women/small rural households

13. Reforms Efforts Underway in Sindh Two significant nationwide reforms pertaining to constitutional and fiscal relationship between the provinces and the federation of Pakistan have taken place since 2010, namely, passage of the 7th National Finance Commission Award (NFC), which allocates a higher share of national revenues to the provinces, and the 18th Constitutional Amendment bill of 2010-11, which makes provinces solely responsible for education, health, and other social and developmental sectors within their domain.

13.1 Economic Growth

The Government of Sindh has a well-structured PPP law and PPP unit within the Ministry of Finance. The law has provision for viability gap funding to make rural projects more attractive for investors. Sindh has already launched two PPP projects (i) the Hyderabad-Mirpurkhas highway which is scheduled to be operational in 2012 (ii) grain storage (silos) facilities – the technical advisory for the grain silos was funded by USAID through the International Finance Corporation (IFC).

The GOS has prepared another package of rural roads to be constructed under PPP mechanism. Promoting PPPs will generate more resources for productive investments, while reducing GOS’s direct engagement in commercial activities, allowing the private sector to manage assets efficiently. This must be coupled with building GoS’s capacity in public expenditure management since private sector investment cannot completely replace Government investment.

Storage facilities and agriculture markets provide an avenue for greater private sector participation in agriculture service delivery. The GoS has recently revised its agriculture markets law to allow the private sector to set-up markets. USAID is drafting subsidiary legislation for the GOS which will help in effective implementation of this law.

13.2 Education

Government of Sindh (GoS) has initiated a broad-base education sector reform program. The program has four components.

First, fiscal, financial management, and procurement reforms aimed at strengthening provincial finances and the effectiveness of public expenditures.

Second, strengthen functioning, capacity, and accountability of provincial and district education management; to provide incentives to district governments to improve service delivery; and strengthen the role of school management committees in school development and monitoring.

Third, improve access to quality schooling, focusing on rural areas and girls, by improving the quality and utilization of school physical infrastructure and the implementation of incentive programs (free textbooks and girls’ stipends), and forge partnerships with the nongovernment/private sector to increase access and quality.

Forth, improve quality of teaching and learning, through instituting merit-based recruitment and improved accountability of teachers, establishing a competency-based system of teacher education and continuous professional development, and strengthening assessment of student achievement in the system.

13.3 Health

The Health Sector Reforms Unit (HSRU) will be an established permanent institutional Advisory Body in Health, which will act as a think tank to develop policy and sectoral strategy; it will provide technical support / backstopping to DOH for implementation and quality assurance; it will assist Health Department in organizational development, re-structuring and smooth transition after 18th Amendment. It will also act as Donor-Coordination Unit for the DOH for harmonization. USAID through its Technical Assistance Unit for Health (TAUH) supported development of the PC-1 of HSRU. The PC-1 is approved from PDWP and is now waiting for approval from the CDPW. Meanwhile USAID TAUH is providing support for operationalization of the HSRU for initial one year.

13.4 Water and Sanitation

A key element of reforms efforts is establishment of an independent and autonomous public utilities corporation, the North Sindh Urban Utilities Corporation (NSUSC). NSUSC has been established under the Companies Ordinance 1984 for the secondary cities of Northern cluster of Sindh Province. Similar corporations are planned for lower and central Sindh cities. This Urban Services Corporation aggregates participating TMA's water supply, waste water and solid waste management operation in a single institution to leverage economies of scale, introduce new skills and management, and increase focus on operations, maintenance and financial management.

1. Overview of Sindh: Key Challenges

SINDH, Pakistan’s third largest and second most populous province, occupying 17.7 per cent of the landmass of Pakistan, accounts for over a quarter of the country’s estimated population of 180 million. Sindh’s population was estimated at 42.4 million in 2010, growing at an annual rate of 2.8 per cent[footnoteRef:1]. With a population density of 216 persons per square kilometer, Sindh is Pakistan’s most urbanized province: nearly half the population lives in cities, mainly Karachi and Hyderabad, compared with a national average of 35 per cent. Sindh is the home of Pakistan’s largest urban center, Karachi, with a population of approximately 18 million. A September 2011 report said that Karachi, currently the 14th largest city in the world, would grow to become the world’s fifth largest city, with over 28 million inhabitants by 2030[footnoteRef:2]. [1: Development Statistics of Sindh, 2008.] [2: UNICEF, 2010]

Sindh has a dual economy consisting of a highly developed urban center (Karachi) and a mostly agrarian rural hinterland. Economic growth in 20 secondary cities lags that of Karachi and cities in Punjab. When provincial figures are adjusted for Karachi, the relative stagnation in economic growth in Sindh’s second-tier cities is clear. While the annual per capita income in Karachi is about $2,000, the figure for secondary cities in Sindh hovers around $200. That is far below the national average of $925 per annum[footnoteRef:3]. [3: ADB, 2008. ]

Sindh is endowed with many of the characteristics of a high growth region. It has a strategically located coast with the potential to become one of the largest logistical and business hubs in South Asia. It is the most industrialized province in Pakistan, accounting for forty per cent of large scale manufacturing output in the country. It is resource rich, holding nearly one-third of all the mineral deposits of the country; and has been the nation’s most efficient cereal producer with the highest crop yields. It is endowed with a strong entrepreneurial class, a large pool of educated labor force, relatively low wages and home to many institutions of higher learning and skill development. With these attributes, Sindh should be on a fast growth track, the reality, regrettably, has been different. Instead of building on the initial advantages to become the country’s growth engine, Sindh, particularly rural areas, have been gradually losing their position of preeminence.

Poverty and Social Indicators. Sindh’s development indicators are not only low in absolute term, but are growing less rapidly relative to the rest of the country. For instance, with a 41 per cent net primary enrollment rate, Sindh underperformed the country by 1 per centage point in 1998-99; the gap widened to 3 per centage points by 2010-11. Per centage of households with access to roads in Sindh exceeded the national average by 2 per centage points in 1998-99; it fell below the national average by 7 per centage points in 2004-05. Sindh’s poverty headcount ratio increased from 23.4 to 40.4 per cent between 1995-96 and 2001-02, while the corresponding numbers at the national level were 30.1 and 36.4 per cent, respectively[footnoteRef:4]. [4: World Bank, 2006.]

Inequality, and Social and Gender Gaps. Sindh has the highest incidence of absolute landlessness, highest share of tenancy, and the lowest share of land ownership in the country, according to latest agricultural census. The wealthy landlords in Sindh with holdings in excess of 100 acres, who account for less than 1 per cent of all farmers in the province, own 150 per cent more land than the combined holdings of 62 per cent of small farmers with landholding less than 5 acres. With 99 per cent gross primary enrollment, a 72 per cent literacy rate, and 87 per cent of babies fully immunized, urban Sindh’s social indicators are comparable to other developing countries with similar per capita incomes. On the other hand, with 58 per cent gross enrollment at the primary level, a 38 per cent literacy rate, and 62 per cent of babies fully immunized, the level of human development in rural Sindh is arguably one of the worst in the region. It has the worst gender ratio among all Pakistani provinces and the development indicators of its rural females have remained stubbornly low[footnoteRef:5]. [5: World Bank, 2006.]

Although its per capita income is higher than the national average, Sindh’s poor are worse off than the poor in Pakistan’s other provinces due to highly and increasingly unequal distribution of income and assets in the province. Sindh’s labour force subsists on starvation wages, suffers oppressive, unhealthy, and dangerous working conditions and has virtually no market bargaining power[footnoteRef:6]. In terms of Human Development Index ranking, Sindh urban has the highest rank, higher than the HDI for Pakistan as a whole, while Sindh rural has the lowest HDI. This suggests a larger urban rural disparity in Sindh compared to all other provinces (see Table 1). [6: DAWN EBR, Feb 20-26, 2012.]

Table 1: Ranking of Provinces by Urban/Rural and Overall HDI

Source: Pakistan Human Development Report, 2003.

2. Impediments to Growth in (Non-Karachi) Urban Sindh

While urban Sindh is the least deprived area nationally, this is largely due to the predominant effect of Karachi. One fourth of Sindh’s urban areas fall into the category of high deprivation, which is indicative of the development gap between Karachi and Sindh’s secondary towns. Urban poverty in Sindh is multifaceted, ranging from deficiencies in basic urban services to unemployment. The poverty levels of participating towns range from 40 per cent to 50 per cent. Significant disparities exist between more developed neighborhoods and the katchi abadis (or slum areas)[footnoteRef:7]. [7: ADB, 2008.]

According to the World Bank report, amongst the business community there is consensus that the secondary cities of Sindh are the most challenging in Pakistan from an investment point of view. Businesses in the Sindh interior face many of the same governance problems, but lack Karachi’s business cluster advantages. So it is not surprising that when Pakistani businessmen were asked to rank the best and worst cities for doing business, Hyderabad and Sukkur were voted as two of the least attractive places to do business in Pakistan. Unlike Sindh, most second-tier cities and towns of Punjab were, however, viewed as considerably attractive.

Although the problems affecting the non-Karachi urban centers are broadly similar to those affecting Karachi (for example, the high cost and low quality of electricity and infrastructural services), a number of city-specific issues have also been highlighted. For example, firms in Hyderabad and Sukkur seem to be less concerned with issues affecting formal enterprises such as tax administration, access to finance, and corruption and more concerned with issues such as informal practices, access to skilled labor, and business licensing. Similarly, the local administration and entrepreneurs view the deteriorating law and order situation as the number one barrier to doing business in the interiors of Sindh. In fact, nearly 62 per cent of firms surveyed in 2004 indicated that law and order was a deterrent to investment in Sindh, compared to 40 per cent in Punjab. As throughout Pakistan, reliability of and access to electricity are concerns for firms in the interior of Sindh. The problem of shortage of skilled labor has been cited as a perennial source of frustration for investors operating outside Karachi[footnoteRef:8]. [8: World Bank, 2006.]

Shortage of skilled labor in Pakistan in general and Sindh in particular is a direct outcome of the acute problem facing the vocational training and higher education sector in the country. Pakistan has one of the lowest tertiary education enrollment rates in the world, estimated to be fewer than 3 per cent of the eligible age cohort (ages 17-23). In Sindh, there are a total of 27 inter-colleges, 165 degree colleges, and 8 post-graduate colleges in the public sector. There are an additional 80 colleges in the private sector. There are only six professional colleges offering vocational and technical training in the public sector in Sindh, which are run by the Sindh Education Department[footnoteRef:9]. [9: Ibid.]

Problems facing this sector are well known…