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Dr. Vaqar Ahmed
Planning Commission
Pakistan Institute of Development Economics
15 Feb. 2010
Planning & Planning Process in Pakistan
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Contents
Current Economic Milieu
Planning Myths
Planning in International Context
Approaches to Planning
Planning Process & Machinery in Pakistan
A Path Forward 2
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Current Economic Milieu
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Planning Myths
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Myth 1: Planning is useless because policies lack consistency
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Myth 2: LDCs including Pakistan have not
completed the tenure of their economic policies
The discontinuity was not in policies but projects.
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Myth 3: Pakistan Vs. South Korea Model Myth
Aid Received
Model Focus
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Planning for Growth
Financing for Growth
Debt Funding
Equity funding
Public Sector Funding :
PSDP
Assistance
Equity
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GDP Investment Savings
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Planning for Income Distribution
Can growth & distribution be achieved simultaneously?
Is growth necessary for distribution?
Is it economic growth that leads to reduction in poverty or the
process of distribution?
Case of Trade Liberalization ?
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Planning in International Context
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Changes in Planning Paradigm
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From Planning to Policy
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Policy Implementation Stages
1. Data Collection
2. Analysis
3. Planning & Prioritizing
4. Implementation
5. Monitoring
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Approaches to Planning
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Approaches to Planning
Reactive Past oriented
Inactive Present oriented
Preactive Predicting the future
Proactive Create the future
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Planning Process and Machinery in Pakistan
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Objectives of Economic Planning
1. To increase per capita and national income
2. Higher level of employment
3. Price stability
4. Reduction of inequalities in income distribution
5. To remove BOP difficulties
6. Reducing regional disparities
7. Self-sufficiency in food
8. Redressing imbalances in the economy
9. Increase in savings10. Reducing population growth
11. Reducing poverty levels
12. Provision of social services
13. Long term economic growth 17
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Conditions or Requirements of Successful Planning
1. Realistic goals of the plan
2. Appropriate policies and instruments
3. Adequate information
4. Rational institutions
5. Suitable administrative and technical apparatus
6. Public cooperation
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Main Instruments of National Planning
1. Policies
2. Plans
i. Perspective Plan 10-25 Years
ii. Mid Term Plan 04-07 Years
iii. Rolling Plan 03 Years
iv. Annual Plan 01 Year
3. Transformation of plans into projects/programmes
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Pl P i d i P ki t
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Plan Periods in Pakistan
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Plan Period
1. Colombo Plan (Six Year Plan) 1951-57
2. 1st Five year Plan 1955-60
3. 2nd Five year Plan 1960-65
4. 3rd Five year Plan 1965-70
5. 4th Five year Plan 1970-75
6. 5th Five year Plan 1978-83
7. 6th Five year Plan 1983-88
8. 7th Five year Plan 1988-93
9. 8th Five year Plan 1993-98
10. 9th Five year Plan 1998-2003
11. 10 Year Perspective Development Plan 2001-11
12. Medium Term Development Framework (MTDF) 2005-10
13. Vision 2030
14. 10th Five year Plan (under construction) 2010-15
Ch l f Pl i M hi
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Chronology of Planning Machinery
1. Development Board established in 1948 in the EAD
2. Planning Board set up in 1953. First 5 year planprepared for 1955-60
3. National Planning Board established in 1957
4. Planning Commission setup under the Chairmanshipof President in 1959
5. Second five year plan prepared for 1960-65 followedby the third five year plan for 1965-70
6. Fourth Five Year Plan (1970-75) prepared but remaineddormant due to separation of East Pakistan
7. 1970-77 non plan period: Development on basis ofAnnual Plans
8. Fifth Five Year Plan 1978-83 21
Ch l f Pl i M hi
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Chronology of Planning Machinery
9. Sixth Five Year Plan 1983-88
10. Seventh Five Year Plan 1988-93
11. Eighth Five Year Plan 1993-98
12. Ninth Five Year Plan (halted due to changed ingovernment)
13. 10 Years Perspective Development Plan 2001-11
14. MTDF 2005-10 July, 2005.
15. Planning Commission restructured on 20 April 2006
with P.M. as Chairman.
16. Vision 2030 launched in August, 2007 22
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Functions of Planning Commission
Consultation with:
Federal Ministries / Provincial Governments
Donors
Civil Society
Formulation of National Plan
Annual Plan
Five Year Plan
Rolling Plan
Perspective Plan (15-25 Years)
Project Management
Approval of Development Projects
Monitoring of Major Projects
Evaluation of on-going and completed projects
Association with EAD in matters of Foreign Assistance 23
Pl i P
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Planning Process
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Planning Commission
Preparation of approach paper
Formulation of technical workinggroups in all sectors
Preparation of sectoral chapters by
working groups
Consultations with allFederal Ministries for
input
Consultations with allProvincial Govts. for
input
Sent to all Fed. Ministries
and Dev. Partners forcomments and input
Sent to all Provincial
Govts. for comments andinput
Finance Division
(Resource Availability)
Economic Affairs
Division
(Foreign aid availability)
Finalization of draft plan by PC and
its presentation before
President/Prime Minister
Submission to National EconomicCouncil (NEC)
Circulation of approved plan to all
Provincial Govts. And Federal
Ministries for implementation
Transformation of plan into viableprojects/programmes
Draft
FiveYear
Plan
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How Planning Leads to Development
Plans are transformed into viable project
programmes
Relationship: Projects and Plans
Ensure Desired Objectives of Development Plan
Crowding
in phenomenon:
Investment Coefficient
Which modes of public investment?
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Project Management Life Cycle
1. Identification and Formulation
2. Appraisal and Approval
3. Implementation
4. Completion and Closure
5. Ex-post Evaluation
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How are Projects Identified in Pakistan?
National Economic Council
Planning Document (Annual / Medium Term Plan)
Assistance and partnership strategies with donors
Line Ministries / Public Sector Corporations
Based on their sectoral strategies / work plans
Public Representatives/NGOs/Pressure Groups
Policy Debates
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Project PreparationPC I Performa
History
Introduced in September 1952
Revised by Group of Experts 1995 including World Bank.
14 Forms of Various Sectoral Projects
Present
Only 3 sectoral PC-I Performa (Infrastructure, Social
Sector and Production Sector)
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Project PreparationPC II Performa
Need for Feasibility Studies
Projects costing Rs. 300 million and above
Financing the Cost of Feasibility Studies Provision under PSDP
Proposal to be submitted in the form of PC II Performa
Highly Technical Projects
Request donor for Technical Assistance Grant
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Project PreparationProject Formulation
Overall Objective
Financial and Economic Viability of the Project
Indicatorsover the life of project
Inputs Baseline data
Output
Expected Outcomes
Sustainability aspect after completion
Yielding the required outcomes
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Project Appraisal & Approval
Appraisal involves a careful check of:
Basic data
Assumptions and methodology used in project
preparation
In-depth review ofwork plan, cost estimates and
proposed financing plan
Assessment of organizational and management aspects
Validity of financial, economic and expected socialbenefits
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Project Appraisal & Approval
Approving Authority
Departmental Development Working Party (DDWP)Up toRs. 40 million
Central Development Working Party (CDWP)Up to Rs.500 million
Executive Committee of National Economic Council
(ECNEC)More than Rs. 500 million Provincial Development Working Party (PDWP)Up to Rs.
5000 million
Corporations and Autonomous BodiesNo Limit*
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P j A i l & A l
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Project Appraisal & Approval
PC III, PC IV, PC V
PC-III: Designed to furnish information on the programme of
on-going projects on quarterly basis
Any Changes in Scope of Design
Any Revisions
Any Changes in Management of Project
PC-IV: Project History (Physical Completion of Project)
Accounts Closed/amount unaccounted
Employment generated by the project
Suggestions for future planning
Name of the operating agency
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P j A i l & A l
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Project Appraisal & Approval
PC III, PC IV, PC V
PC-V form is to be furnished on annual basis for a period of
five years by operating agency
Review of costs
Review of financial results
Arrangements for maintenance of project
Difficulties experienced in operation, marketing etc.
Repercussion of scheme
General observation of Federal Ministry
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The Need for Monitoring
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P j t M it i
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Project Monitoring
Internal Monitoring
Sponsoring Ministry
External Monitoring
Provincial P & D Dept.
Projects Wing at Planning Commission
Monitoring Cells
Establishment of Planning and Monitoring Cells in
ministries as directed by ECNEC.
Monitoring Methodology
Results Based Monitoring36
P j t M it i
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Project Monitoring
Stages of Monitoring
Starting Phase
Investment / Execution Phase
Completion / Operating Phase
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P j t M it i
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Project Monitoring
E-connectivity through Project Monitoring and Evaluation
System (PMES)
Project Director Provincial P & D DepartmentsLine Ministries Planning Commission PrimeMinister Secretariat Funding Agencies
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Pending Weaknesses
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Weaknesses Need for F rther Reform
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Weaknesses Need for Further Reform
Weaknesses in Project Management
Financial
. Unrealistic cost estimates
. Delay in financial arrangements (Local/FEC)
. Proper cash plan not prepared
. Inadequate allocations/funding
. Late release of funds, lengthy procedures
. Cost over run
Monitoring & Evaluation. Need for more effective monitoring
Political Intervention
Others 40
Weaknesses Need for Further Reform
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Weaknesses Need for Further Reform
Planning Issues
o Management
o
Human Resource Development
o Lack of Policy Formulation and Analysis
o Depleted Physical Infrastructure
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Path Forward
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9-Point Program for Economic Reform and
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9-Point Program for Economic Reform and
Sustainable Development
Achieve Macroeconomic Stabilization Establish Social Safety Net
Develop and mobilize human resources (HRD)
Expand agriculture production and galvanize Agro-Business
potential Galvanize industrial competitiveness with supporting strategies
Integrated planning for Energy Development
Deepen and diversify domestic Capital Markets
Establish Public-Private Partnership as major method for
infrastructure development
Administrative Reform: Consolidation, Specialization and
Devolution
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Final Message
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Water for agriculture
Energy for industry
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http://www.pc.gov.pk/
http://www.pc.gov.pk/http://www.pc.gov.pk/