Social spending to be increased

Pakistan has bolstered its annual development plan with its main focus on poverty alleviation to US $2.3 billion from $2.12 billion for the current fiscal year, a move hailed by economists.

Deputy chiar of Pakistan's planning and development ministry Shahid Amjad Chaudhry told IRIN in the Pakistani capital, Islamabad, that the increase of $217 million had accrued from aid which the United States had provided Pakistan with recently.

Washington gave Pakistan about $600 million in quick aid after 11 September in return for Islamabad's cooperation in the fight against terrorism.

Chaudhry said the money was given for social spending and it was therefore added to the Public Sector Development Plan, which had stood at $2.12 billion at the start of the fiscal year in July. The annual development plan earmarks funds for water, health, education and social projects across the country.

Economists have said this addition brings total development funding to the unprecedented level of about 4.2 percent of the Gross Domestic Product (GDP). "This compares very positively with the past when the government had been underspending on development," a private-sector economist, Saqib Sherani, told IRIN.

Average annual spending on development and poverty alleviation in Pakistan had previously been restricted to below four percent of the GDP. Sherani said $2.3 billion was a lot of money if in fact the government succeeded in spending the entire amount on stopping leakages and on building capacity. "It's certainly a very positive step, a step forward," he added.

Corruption, weak implementation and political interference have all served to curb the pace of development in Pakistan in the past. President Pervez Musharraf has vowed to end corruption and spur economic growth to improve the living standards of ordinary Pakistanis.