Introduction 

Genesis of NCS

Environment Planning & Foreign Assistance

Public Sector Participation 

NGO/Private Sector Participation

Analysis and Results 

Conclusions

References 

Annexure Tables 

3. Environmental Planning and Donors Assistance 

During the last decade of the past century Pakistan was seen as one of the few countries of the developing world where environmental considerations were given significant weightage in its planning process. Though still far from achieving the desired goals of improving the environmental conditions, the country continues to engage itself through a process that focuses on the achievement of desired changes in the precipitation and attitudes towards environmental factors. 

In the process, the role of donor countries/agencies has also remained supportive in building an institutional framework conducive to environmental sustainability of the national resources. However, it is not surprising to note that whereas the country moved rather rapidly in placing environment on the agenda of planning, it has remained weak on the effective implementation of the environmental legal framework primarily caused by the ineffectiveness of the public sector delivery system. The rapid growth of NGO's can in part be a consequence of the ineffectiveness of the public sector institutions. 

At the same time, a closer interaction between trade and environment at the world level also gave birth to an effective compliance with environmental laws and regulations which impacted on the policies and actions of the public and private sectors and the donors. 

The volume of foreign assistance in Pakistan during the period 1992-96 has been dominated by multilateral arrangement which accounted for nearly 65 percent of the total inflow (Table 2). The remainder was made available through bilateral arrangements. The international NGO's accounted for less than one percent. This inflow of resources from NGO's also accounted for less than one percent of the NCS plan of Rs.150 billion. Given the fact that the NGO's may also be working outside NCS framework, the foreign assistance though NGO's seems negligible. 

* includes planned assistance for 1996 

Of the total foreign assistance to Pakistan during 1992-96 of US$ 8.81 billion, the specific sub sectors directly or indirectly related to NCS accounted for little over 18 percent (Table 3). Of this, nearly two-third was related to water resource planning. Using the average exchange rate during the period, the NCS related investments was nearly Rupees 56.40 billion. 

The total inflow of foreign assistance showed some peak during the middle of the period after which it has tended to decline. 

* includes planned assistance for 1996 

b: Actual allocations made 

c: Actual utilization of funds 

4. Public Sector Participation

4.1 Investment Planning

The NCS financial plan shows an indicative investment allocation of Rs.150.722 billion for the period 1992-2001 (Table 1). The public sector approval accounted for a total Rs.214.47 billion for the period which was itself 42 percent higher than the plan figure. Of this, nearly 31 percent was for the federal level schemes. The province of Punjab had an allocation of nearly 28 percent, followed by NWFP (23 percent) and Sindh (9 percent). The remaining 10 percent of the allocations were made for Baluchistan, northern areas and the AJK (greater details in Annexure 1). 

Of the total allocations, those to be financed jointly by the government and the donors accounted for nearly 79 percent whereas the rest were to be financed directly by the government (Annexure 8). Those activities to be financed jointly by the government and the donors were, on average, nearly 7 times costlier than those to be financed directly by the government. The major contributors to such variations were schemes related to the maintenance of soil in crop land and increasing irrigation efficiency. 

Another interesting variation was observed with respect to the foreign exchange component in the total cost. Whereas for all 664 schemes, the foreign exchange component was 32 percent, the schemes to be financed by the federal government and Baluchistan government had 41 percent and 47 percent foreign exchange requirements, respectively (Annexure 7). Across schemes, the higher foreign exchange component was observed with those related to increasing irrigation efficiency, protecting watersheds, preventing/abating pollution, supporting institutions and integrating population and environment. 

4.2 Actual Allocations

In relation to total allocation (in the light of approved projects) discussed above, the actual allocations were drastically different (Charts 1&2). As compared to the total allocation of Rs.214.47 billion, the actual allocation made for 664 schemes was of Rs.73.7 billion (Table 4). In re-allocating the funds, the federal schemes had retained over 42 percent of the total, whereas Punjab province was given 21 percent. The province of NWFP had 12 percent and Sindh had 8 percent of the total. In the process, the schemes related to maintaining soils and increasing irrigation efficiency jointly accounted for nearly 57 percent of the total (Annexure 2). 

Based on individual schemes, which have extremely high variations among themselves (indicated by the standard deviations), the annexure tables provide greater details on the subject. The annexure tables provide estimates on individual schemes which vary substantially from each other even within a category or sub-category. As a result, the ratios presented in annexure tables are somewhat different from the ratios of aggregate figures presented in the main text tables, primarily due to the differences of weighted and simple averages. Annexure 4 shows ratios of actual allocations to planned allocations across regions and core areas of NCS. 

These variations in the ratios across schemes that were to be financed directly by government, and those to be financed jointly by the government and the donors, show a higher ratio in case of government financed projects (Annexure 9). 

4.3 Utilization Pattern

Given an actual allocation of Rs.73.7 billion, the public sector managed to utilize a sum of Rs.53.78 billion (i.e. 73 percent) by the end of 1992-99 period (Table 4). The schemes financed by federal government has the lowest utilization ratio of 56 percent. The next lowest ratio of 62 percent is related to Baluchistan. All other regions show a utilization ratio of over 80 percent on average. 

Across core areas, the highest average utilization per scheme of Rs.313 million was observed in case of improving irrigation efficiency, and the lowest average of Rs.14 million was related to the core area of preserving the cultural heritage (Annexure 3). 

However, the ratio of utilization and actual allocation was fairly high across all core areas (Annexure 5). It implies that on the whole, 83 percent of the actual allocations under NCS was utilized. 

The ratios of utilization to actual allocations show a mixed pattern across schemes financed by government only and those jointly financed by the government and international donors (Annexure 10). 
 

As mentioned earlier, the overall review of NCS must also look at the participation of the private sector and NGO's since they had to contribute a higher share of 58.5 percent in the plan. Despite the fact that there exists no effective institutional mechanism for monitoring and evaluation of private sector/NGO activities at the sector level, it is nevertheless encouraging to note that the private sector and NGO's have taken steps to participate in conserving natural resources. 

The Federation of Pakistan Chamber of Commerce and Industry (FPCCI) established an environmental programme called Environmental Technology Programme for Industry (ETPI) to address the environmental issues related to trade and industry. Though starting late, FPCCI has so far managed a total sum of Rs.140 million for training and dissemination of technical information to different industries. This awareness building programme is a first step towards effective coverage of NCS related activities. However, there is a greater need to encourage as well as regulate the existing legal and institutional arrangements to accelerate the pace of participation which as present is quite slow. In addition to that, there is a greater need for preparation of NCS data bank at the level of private sector and NGO's. 

The global agreement on trade and environment have also emphasized on the change in the orientation of the private sector to account for environmental measures in the production process. The increasing levels of compliance with these agreements by the private sector has started taking some shape in Pakistan. Some of the industries e.g. tanneries have begun to show their interest in addressing issues related to pollution treatment, solid waste management from within their own resources. Another compliance is reflected through increasing number of firms acquiring the status of ISO-9000 and ISO-14000. During the past three years the number of firms acquiring the status of ISO-9000 has increased several folds. Though starting from a zero base, continuos progress in this regard will help to achieve the NCS goals in future. 

The NGO's network in the country has expanded quite rapidly during the 1990's. Most of their activities are, however, related to the provision of social services and little in terms of direct investments in the core areas of NCS. The core area of population planning in actively taken by some NGO's e.g. FPAP (Family Planning Association of Pakistan). On the whole there seems a reluctance on part of NGO's to reveal financial implementation of their work whether related to NCS or otherwise. The existing arrangement of NGORC (NGO Resource Center) can play a larger role in this regard. 

There is also limited information available on the donors direct contributions towards the private sector and NGO's. For example DFID provided a sum of Rs.1,410 million during the period 1992-99. Of this 44 percent was allocated for NGO's and 56 percent for the private sector. These were allocated for supporting institutions common resources and integrating population and environmental programmes. Another allocation of Rs.1,383 million was provided by GEF. Of this 58 percent was allocated for the public sector and 42 percent for NGO's. These allocations were primarily for core areas like maintaining soils, conserving biodiversity and improving energy efficiency. 

The available information thus shows that during the period 1992-99, the total aid provided by the private sector and international donors towards NCS amounted to Rs.4.193 billion. The proportion of the private sector was thus less than one percent. 

The scheme-wise and core area-wise results discussed above show drastic reductions in allocations to NCS related activities as compared to planned targets which were duly approved through PC-1. This indicates the pressure caused by financial gaps experienced by government in the 1990’s. In addition to the domestic resource gap, the donors also seem to have slowed down their contributions during the period of the study. Nevertheless, the public sector utilization pattern has not been so disappointing. 

The performance of the private sector and NGO’s is largely not known yet. A meager amount of Rs.4.19 billion so far available seems a highly under reported amount. 

At the sector or aggregate level, a total sum of Rs.60.61 billion was contributed by both public and the private sectors towards the implementation of NCS during 1992-99. Since year-wise information on allocation and expenditure for each of the scheme was not available, it was not possible to impute annual expenditure or allocation. In the context of NCS financial plan of Rs.150.72 billion for the period 1992-2001, the actual contribution of Rs.60.61 billion so far accounts for nearly 40 percent of the total. 

However, given the fact that NCS is not a financial investment mechanism, rather it is a strategy that aims at bringing shifts in the development policies of the government with regard to conservation of resources, it is essential to check whether the performance shown so far (largely by the public sector) reflects a policy shift or not. 

Table 5 tends to provide a comparative picture of the levels of GDP, gross fixed capital formation (both by public and private sectors) and the expenditure so far on NCS, during the period 1992-99. 

Given the non-availability of year-wise estimates on expenditure on NCS, the aggregate level comparison for the period was made. It shows that, on average, the expenditure on NCS accounted for 0.47 percent of the GDP. As per NCS financial plan, it should have been nearer to 1.71 percent of GDP. It further implies that in order to remain consistent with the plan, the expenditure on NCS should have been in the neighborhood of Rs.220 billion, which is closed to the planned target of Rs.214 billion approved for the public sector. As obvious, the difference of Rs.164 billion (i.e. difference between Rs.220 billion and Rs.56 billion) can not be expected from the private sector and NGO’s. So it is obvious that both the sectors have not been instrumental in meeting the NCS target. It further reflects failure of the government in bringing effective policy changes in order for the NCS to succeed. 

A similar picture also emerges, when the expenditure on NCS is related to gross fixed capital formation. The resulting ratio of 3.0 percent is less that half of 6.91 percent which was the planned average ratio of NCS expenditure and investments during the period. 

On the whole it can be argued confidently that whereas there seems to some headway towards expenditure on NCS, the levels of achievement are significantly low as compared to the targets set under NCS in 1992. It further implies that the government neither on its own nor with regard to its impact on the private sector viz-a-viz NGO’s has not succeeded in bringing effective changes in its development policies. 
 
 

7. Conclusions

Although this study has attempted to cover all the sources that were relevant to the implementation of NCS, a general lack of information on the flow of financial resources had tended to restrict its coverage. 

Whereas all the public sector information was available, there were scanty pieces of relevant information on the private sector and NGO's resourcing under NCS. 

The donor have played a major role in the implementation of NCS so far. A declining trend in their participation is likely to hamper the efforts being made by the public and private sectors. There is also a need for greater flow of information on the implementation under NCS across public and private sectors and NGO's. 

Though it took longer for the private sector to respond to their contributions towards NCS, it is encouraging to note a greater cooperation and compliance towards conservation of resources. 

It may safely be concluded that whereas the public sector has so far been contributing towards NCS despite severe economic crisis, the private sector and NGO's have to move rather rapidly in meeting out their obligations towards NCS implementation. 

On the whole it is clear that the government, in terms of its own contribution and in terms of its impact on the private sector and NGO’s, has not succeeded in bringing effective policy changes required under NCS. The low levels of NCS expenditure to GDP or investment levels provide ample evidences towards this failure. 

The mid term review of NCS should also look into the adequacy of shifts in the relative allocation within core areas. 

Lastly it goes without saying that mere compliance to given financial targets of expenditure does not necessarily mean progress on that front. These may only be indicative of the progress made so far. An effective assessment of the impact will be more helpful in deciding about the future actions.