PRSP PUNJAB RURAL SUPPORT PROGRAMME THE FIRST FOUR MONTHS

PRSP PUNJAB RURAL SUPPORT PROGRAMME THE FIRST FOUR MONTHS Report submitted to the Board of Directors By Dr. Akmal Hussain Honourary Chief Executive Officer PRSP December 1998 1 BOARD OF DIRECTORS Mr. M. Shafi Arshad Mr. Shoaib Sultan Khan (Chairman) Dr. Rashid Bajwa Mr. Wasif M. Khan Mr. Aminullah Chaudry Mr. Muhammad Akram Malik Mr. Tariq Farook Mr. Khalil Mian Mr. Humayun Farshori Dr. Zafar Iqbal Qureshi Dr. Akmal Hussain (Honorary Chief Executive Officer) Mr. Tariq Sultan Dr. (Begum) Attiya Inayatullah Mr. Asad Ali Shah Ms. Shazia Khan Mr. Shaukat Tareen 2 OPERATIONS Region Regional Manager Districts Tehsils/ S. Tehsils Where COs Formed Lahore Dr. Amjad Saqib Lahore, Okara, Kasur Lahore Gujranwala Brig. (Retd.) Riaz Ahmad Riaz Gujranwala, Hafizabad, Shaikhupura Wazirabad, Gujranwala, Kamoke Sialkot Mr. Ayub Munir Sialkot, Narowal Daska Faisalabad Col. (Retd.) Javed Murtaza Faisalabad, Jhang, Toba Taik Singh Faisalabad, Jaranwala Sargodha Mr. Nasir Mahmood Sargodha, Mianwali Sargodha, Sahiwal Sahiwal Mr. Basharat Ali Sahiwal, Pak Pattan Sahiwal Multan Ms. Humaira Hashmi Multan, Khanewal Multan Muzaffargarh Mr. Muhammad Darjaat Muzaffargarh, Laiyya Muzaffargarh Head Office (Lahore) Dr. Akmal Hussain Hon. CEO 3 TABLE OF CONTENTS INTRODUCTION MANAGEMENT VISION AND METHODOLOGY OF ACTION I. Language, Literature and Social Change II. Passion, Paradigm and Praxis III. The Participatory Development Paradigm GOALS, OBJECTIVES AND VERIFIABLE INDICATORS IV. Goal V. Objectives of the Programme VI. Verifiable Indicators FIVE YEAR STRATEGIC PLAN VII. Strategic Plan BUDGET 1998-99 AND FINANCIAL IMPACT ASSESSMENT VIII. The Budget and Financial Analysis PROGRAMME PERFORMANCE IX. Programme Performance X. Summary Review APPENDICES 4 INTRODUCTION A programme whose goal is nothing short of overcoming poverty in rural Punjab within a decade, is historically unprecedented in this Province in both the magnitude and complexity of effort. It was therefore clear from its inception that the PRSP would have to bring together a talented team of Managers each of whom could combine creativity with commitment. The challenge was to create a work culture in which this creativity and commitment could be sustained through an intensive work schedule and collective synergy. Since we were facing a unique set of circumstances in each of the eight regions where we started work, it was necessary to develop a management system that permitted sufficient space to each member of the team for independent thought and action, while at the same time, creating an environment for collective reflection and conceptualization through which we could deepen the quality of social action. This report attempts to present the principles underlying the management style and work procedures of PRSP, while also reporting on the strategic plan we devised through initial field visits, the objectives we specified for the program and the remarkable results that were achieved in the first four months. PRSP MANAGEMENT VISION AND METHODOLOGY OF ACTION You are the woof and you the warp You are in a every pore Says Shah Hussain Faqir Naught am I all is you -Shah Hussain – 17th, Century DEPLOYING CONSIOUSNESS FOR SOCIAL CHANGE Six inter-related elements of the Punjabi Sufi tradition may be relevant to the PRSP endeavour: 1. The growth of the self involves a transcendence of the ego through a relationship of love (ISHQ) with the “other”. 2. The practice of ISHQ involves combining passion with rigorous rationality. 3. The true stature of a person therefore is measured not in terms of what he owns, but what he gives to others. 4. By the same token the more developed a person’s consciousness, the more he locates himself in the collective being of the community. 5. The process of growth of the self therefore is progressive integration with the community. 6. Dialogue is conceived by the Sufi as a process of mutually fertilizing reflection, which so enters consciousness, that it becomes the basis for existential choices and action. 5 I. LANGUAGE, LITERATURE AND SOCIAL CHANGE INTRODUCTION Overcoming poverty in rural Punjab is fundamentally a process of empowering the poor to actualize their creative potential. Such a profound social change, if it is to be sustainable, involves tapping into the specific cultural wellsprings of creative consciousness of the Punjab peasantry. The peasants of Punjab may be poor, but they are inheritors of a rich cultural and philosophical tradition, which is reflected in their forms of apprehending social life, their poetry and folklore. Through their forms of love and social action the Punjab peasants express their dreams and sorrows, and make their individual and collective history. The consciousness of the poor peasantry in rural Punjab has been deeply influenced by the Punjabi Sufi saints. This can be seen in the folklore and experiential reference points of contemporary language use in rural Punjab. Six inter-related elements of the Punjabi Sufi tradition may be relevant to the PRSP endeavour: The growth of the self involves a transcendence of the ego through a relationship of love (ISHQ) with the “other”. The practice of ISHQ involves combining passion with rigorous rationality. The true stature of a person therefore is measured not in terms of what he owns, but what he gives to others. By the same token the more developed a person’s consciousness, the more he locates himself in the collective being of the community The process of growth of the self therefore is progressive integration with the community: Dialogue is conceived by the Sufi as a process of mutually fertilizing reflection, which so enters consciousness, that it becomes the basis for existential choices and action. These elements of the Sufi tradition are deeply rooted in the consciousness of the Punjabi peasantry. They lie just below the surface of language use in their silences as much as the cadences of their speech. Najam Hussain Syed, (perhaps the greatest Punjabi Sufi poet of the 20th century) has referred to this subliminal consciousness of the peasantry: Once this counter consciousness of love and relatedness, of integrity and creative action, is brought to the surface, a new recognition and set of values come into play. The challenge in the dialogues undertaken by PRSP was to bring about this gestalt switch in consciousness, through word, gesture and work procedures. 6 The awakening of this consciousness in however nascent a form, was seen in the work of PRSP to be a material force for social change. One of the important factors in the rapid growth and depth of CO formation in the PRSP is that this consciousness was tapped during the dialogues. II. PASSION, PARADIGM AND PRAXIS 1. Consciousness, Organizational Structure and Work Procedures The defining feature of the program is the passion, which impels those who work in it and those for whom we work. It is not just an emotion but a form of consciousness. It comes from transcending the ego and relating with the community through love. Thus, passionate consciousness is both a cohering force of the community and also the synergy through which the PRSP team engages in a process of action and reflection. This principal is the basis of the work culture and the methodology of action of PRSP. It is illustrated by the dialogues that occur between PRSP personnel and rural communities, on the one hand and between the members of PRSP team on the other. The dialogues are designed to identify and actualize the creative potential of individuals. The form of learning and creative growth pursued by PRSP through its dialogues has been called prophetic as, opposed to messianic. 1 The messianic leader/teacher/manager is one who claims to embody the truth and if his followers want to become something they can only be his shadows. By contrast, the prophetic leader/teacher/manager is one who abnegates his own exceptionality and recognizes each individual as the unique origin of change. The participants in the dialogues whether between PRSP and a community or within PRSP itself, are essentially co-equals in a journey of actualizing each other’s creative potential in the context of social change. The organizational structure reflecting the messianic approach is hierarchic and restricts the space for independent thinking. Its work procedures involve issuing instructions or blindly implementing them. By contrast the organizational structure associated with the prophetic approach is non-hierarchic, designed to provide space for thought and action by autonomous individuals in collegial interaction. Its work procedures instead of being a simple dichotomy between instructions and compliance, are designed for mutually fertilizing dialogues, action and collective reflection. 2. Alternative Paradigms and the Methodologies of Action The paradigm of the PRSP is a framework of thought and action, which has been called Participatory Development.2 This is exactly opposite to the paradigm, which has been followed by development practitioners in this country during the last 50 years. Since Pakistan’s independence, the idea behind development actions was that the poor are victims to whom certain goods and services have to be delivered. This is the “top-down” paradigm. In the past, governments at best tried to develop administrative mechanisms through which goods and services could be handed out to the poor. It is now widely recognized that such an approach has not worked because in the process of delivering 1 See, David Cooper: The Death of the Family. Akmal Hussain: The End of Teaching, Weekly Viewpoint, Lahore. 2 Akmal Hussain: Poverty Alleviation in Pakistan, Vanguard Books (Private) Limited, 1994. 7 goods and services, a large part of the resources get lost enroute, while poverty is reproduced after some time. The problem of the lack of goods and services for the poor is the result of the fact that they are locked into a system of dependence at the local and national levels. The dependence of individual members of poor village communities originates in the fact that they are fragmented and alone. They have neither the skills nor the resources to increase their productivity, nor the organizational strength through which to acquire resources from governments, donors and the market. The Participatory Development paradigm by contrast aims to enable the poor to organize, acquire new skills, increase productivity, achieve savings, and develop the ability to access training, technical support and credit from a variety of institutional sources. COUNTERPOSED APPROACHES TO LEADERSHIP/ MANAGEMENT/TEACHING MESSIANIC PROPHETIC Leader/ manager/ teacher claims to embody the truth and if his followers want to be something, they can only be his shadows. Organizational structure is hierarchic in which space for thinking is restricted. Work procedure involve issuing instructions or unthinking implementation. Leader/manager/teacher abnegates his own exceptionally and recognizes each individual as the unique origin of change. Organizational structure collegial (non-hierarchic), designed to provide space, for thought and action by autonomous individuals. Work procedures designed for mutually fertilizing dialogues, action and collective reflection. III. THE PARTICIPATORY DEVELOPMENT PARADIGM3 1. Elements of the Participatory Development Paradigm Participatory Development is a process which involves the participation of the poor at the village level to build their human, natural and economic resource base for breaking out of the poverty nexus. It is specifically aims at achieving a localized capital accumulation process based on the progressive development of group identity, skills development and local resources generation. The essential feature of Participatory Development is social mobilization or the formation of group identity. This is done by initiating a series of dialogues with rural communities, which can result in the formation of community organizations. The beginning of the process is therefore the emergence of a nascent form of community consciousness. This is then deepened as the community identifies and implements projects for increasing income, acquiring new skills and begins to engage in collective savings. 3 Akmal Hussain: Poverty Alleviation in Pakistan, Vanguard Books (Private) Limited, 1994. 8 As the sense of group identity is deepened it gives a new self-confidence through which the community can engage in more ambitious projects involving collective action and management. The concept of Participatory Development has three key elements: (a) Process: It is a process whose moving forces are the growth of consciousness and group identity, and the realization, in practice, of the creative potential of the poor. (b) Empowerment: The process of reconstructing a group identity, of raising consciousness, of acquiring new skills and of upgrading their knowledge base, progressively imparts to the poor a new power over the economic and social forces that fashion their daily lives. It is through this power that the poor shift out of the perception of being passive victims of the process that perpetuates their poverty. They become the active forces in initiating interventions that progressively improve their economic and social condition, and help overcome poverty. (c) Participation: The acquisition of the power to break the vicious circle of poverty is based on participation within an organization, in a series of projects. This participation is not through ‘representatives’ who act on their behalf but rather, the actual involvement of each member of the organization in project identification, formulation, implementation and evaluation. It is in open meetings of ordinary members at the village/mohalla level organization that decisions are collectively taken, and work responsibilities assigned on issues such as income generation projects, savings funds, conservation practices in land use, infrastructure construction and asset creation. 2. The Dynamics of Participatory Development The process of participatory development proceeds through a dynamic interaction between the achievement of specific objectives for improving the resource position of the local community and the inculcation of a sense of community identity. Collective actions for specific objectives such as a small irrigation project, building a school, clean drinking water provision, or agricultural production activities can be an entry point for a localized capital accumulation process. This is associated with group savings schemes, reinvestment and asset creation. The dynamics of participatory development are based on the possibility that with the achievement of such specific objectives for an improved resource position, the community would acquire greater self-confidence and strengthen its group identity. 3. The Implementation Mechanism A rural support system that enables: i) Organizing village communities and rediscovery of community consciousness. ii) Access over credit. iii) Access over skill training. iv) Access over technical support from: - Government line departments, 9 - Donors, - Other NGOs, - Autonomous bodies GOALS, OBJECTIVES AND VERIFIABLE INDICATORS Plant your ideal, The tree of light In your inner courtyard, Be constant in it’s pursuit Remain with the beloved Remain with the beloved -Shah Hussain – 17th, Century IV. GOAL Overcome poverty in rural Punjab within a decade by actualizing the potential of the poor through a regional support system. This system shall be designed to enable organization of poor village communities, through rediscovery of community consciousness, and provide access to skill training, credit and technical support. The purpose of such a support system is to initiate and sustain a process of diversified growth of income and the human, natural and economic resources of the poor. V. OBJECTIVES OF THE PROGRAM Organize approximately 1.63 million households, into approximately 29,681 community organizations with approximately half of them female COs, in 13,629 villages, to achieve 100 percent coverage of the poor population in the target regions. On the basis of a series of dialogues with COs, identify a portfolio of diversified income generation projects in agriculture, livestock, micro enterprises and small-scale infrastructure. Through implementation of these projects, achieve a 50 percent increase in income levels of the poor population in the target region in five years, on a sustainable basis. Enable the provision of training to 107,372, men and women amongst the poor population in the target districts over the five year period, in the following fields: Community Management, Livestock, Agriculture and Forestry, Poultry, Technical/Industrial Training, and Micro-enterprise development. On the basis of social mobilization, skill training and provision of technical support, provide credit of Rs. 6.66 billion to Rs. 486,240 beneficiaries over a five-year period, and achieve 95 percent pay back. 10 Achieve a savings fund of COs of approximately Rs. 428.51million in the target regions. VI. VERIFIABLE INDICATORS In a program whose defining feature is to enable the formation of community organizations and the development of community consciousness, the most important verifiable indicator is the number of community organizations formed. A CO is deemed to have been formed only when it has acquired the ability to hold regular meetings (at least three) with proper documentation of the meetings and to have opened a savings account with contributions from each of its members. The number of CO meetings held (with over sixty percent attendance) becomes the second indicator and the amount of CO savings is the third indicator of program performance. Household level, portfolio of investment are developed by the regional teams through detailed dialogues with communities. These portfolios of investment indicate the income generating activity that households wish to undertake. The obstacles to undertaking such projects and successfully completing them are identified. The number of portfolio of investment completed, thus becomes the fourth indicator of program performance. The basis of the credit appraisal of portfolio of investment is the assessment of their viability first by the CO and then by program staff members. Credit disbursements therefore represent collective evaluation of individual projects and becomes the fifth indicator of program performance. Training needs in the context of both household level projects and collective projects are identified as an essential element in the process of localized capital accumulation. Training needs are identified on the basis of dialogues between program personnel and COs. The number of persons trained in various fields thus becomes the sixth indicator of program performance. Finally, credit payback performance indicates not only the success of income generation projects but also the capacity of the CO to bring to bear its collective identity in ensuring timely payback of borrowed money by the individual households. In the long run the ability of COs to design and implement collective projects and to resolve social conflicts at the CO level would become an important indicator of program performance. FIVE YEAR STRATEGIC PLAN What ever colour I weave 11 I weave deep -Shah Hussain – 17th, Century VII. STRATEGIC PLAN* TABLE SP-1 COMMUNITY ORGANIZATIONS (ALL REGIONS) Sr. No. Outputs 1st Six Months Year 1 Year 2 Year 3 Year 4 Year 5 Total I. Community Organizations (All Regions) 800 2825 4975 6600 7500 6981 29681 Region 1 100 300 600 900 1000 1200 4100 Region 2 100 400 900 1700 2000 2000 7100 Region 3 100 400 600 700 700 600 3100 Region 4 100 400 700 1000 1500 1500 5200 Region 5 150 625 875 800 800 400 3650 Region 6 100 500 800 800 800 581 3581 Region 7 150 200 500 700 700 700 2950 * The Strategic Plan was made in June 1998 for 7 Regions. The 8th Region (Multan Division) was established later in August 1998 12 TABLE SP-2 CREDIT (ALL REGIONS) II. Outputs Ist Six Months Year 1 Year 2 Year 3 Year 4 Year 5 Total II. Credit (All Regions) Amount Beneficiaries Rs. 95.525 M 6900 Rs. 345.276 M 25340 Rs. 711.125 M 51950 Rs. 1075.625 M 85450 Rs. 1786.625M 125050 Rs. 2646.025M 191550 Rs. 6,660.20 M 486,240 Region 1 Amount Beneficiaries Rs. 5.0 M 500 Rs. 21.0 M 2100 Rs. 60.0 M 6000 Rs. 120.0 M 12000 Rs.150.0 M 15000 Rs. 240.0 M 24000 Region 2 Amount Beneficiaries Rs. 6.0 M 400 Rs. 16.5 M 1200 Rs. 45.0 M 2400 Rs. 67.5 M 3600 Rs. 126 M 4800 Rs. 157.0 M 6000 Region 3 Amount Beneficiaries Rs. 9.15 M 750 Rs. 24.0 M 2500 Rs. 36.0 M 3750 Rs. 49.0 M 5050 Rs. 67.5 M 6250 Rs. 79.9 M 7450 Region 4 Amount Beneficiaries Rs. 18.0 M 1200 Rs. 50.0 M 2500 Rs. 100.0 M 5000 Rs. 200.0 M 10,000 Rs. 400 M 20,000 Rs. 800.0 M 50,000 Region 5 Amount Beneficiaries Rs. 24.375 M 1500 Rs. 125.776 M 7740 Rs. 268.125 M 16500 Rs. 298.125 M 24500 Rs. 528.125 M 32500 Rs. 593.125 M 36500 Region 6 Amount Beneficiaries Rs. 10.50 M 1050 Rs. 63.0 M 6300 Rs. 147.0 M 14700 Rs. 231.0 M 23100 Rs. 315 M 31500 Rs. 376.0 M 37600 Region 7 Amount Beneficiaries Rs. 22.5 M 1500 Rs. 45.0 M 3000 Rs. 55.0 M 3600 Rs. 110.0 M 7200 Rs. 200 M 15000 Rs. 400.0 M 30,000 13 TABLE SP-3 SAVINGS (ALL REGIONS) Rupees in Million Sr. No. Outputs First Six Months Year 1 Year 2 Year 3 Year 4 Year 5 Total III. SAVINGS (ALL REGIONS) 3.45 25.14 57.43 88.18 120.1 134.21 428.51 Region 1 0.45 2.70 5.40 8.10 9.00 10.80 Region 2 0.72 5.76 12.96 24.48 28.80 28.80 Region 3 0.90 7.20 10.80 12.60 12.60 10.80 Region 4 0.45 3.60 6.30 9.00 13.50 13.50 Region 5 0.54 3.33 8.73 14.76 20.52 24.84 Region 6 0.16 1.50 7.24 8.74 21.28 27.27 Region 7 0.23 1.05 6.00M 10.50 14.40 18.20 TABLE SP-4 SKILL TRAINING (ALL REGIONS) Sr. No. Outputs First Six Months Year 1 III. Year 3 Year 4 Year 5 Total IV. Skill Training (All Regions) Activist Training Other Skills 1370 2290 3420 9275 5430 13970 7200 17645 5200 18710 7162 17070 28412 78,900 Region 1 Activist Training Other Skills 300 300 900 1200 800 2400 2400 3200 300 4000 3600 4800 Region 2 Activist Training Other Skills 60 50 120 185 180 310 200 525 200 490 200 610 Region 3 Activist Training Other Skills 60 160 200 640 300 960 400 1120 400 1120 300 960 Region 4 Activist Training Other Skills 50 150 100 250 100 300 200 600 300 900 300 1000 Region 5 Activist Training Other Skills 600 1000 1250 3200 1750 4000 1600 4200 1600 4200 800 2100 Region 6 Activist Training Other Skills 200 430 300 1800 1600 3000 1600 3000 1600 3000 1162 2600 Region 7 Activist Training Other Skills 100 200 550 2000 700 3000 800 5000 800 5000 800 5000 14 BUDGET 1998 – 1999 AND FINANCIAL IMPACT ASSESSMENT Everything quantifiable runs out, And everything anticipated is yet to come -HAZRAT ALI (PBUH) Table B-3 MEASURING EFFICIENCY RATIO ANALYSIS RATIO ( I ) Administrative Expenditure Total Expenditure 4,574,632 45,611,292 = 10.030% ( II ) Administrative Expenditure Value of Outputs 4,574,632 3,973,315,194 = 0.115% ( III ) All Expenditure Value of Outputs 45,611,292 3,973,315,194 = 1.148% ( IV ) Administrative Expenditure Interest Income 4,574,632 6,215,000 = 73.606% 15 VIII. THE BUDGET AND FINANCIAL ANALYSIS Table B-17 INCOME STATEMENT 1998-99 BUDGETED INCOME Rupees Surplus before taxation brought from last year 9,995,036 A. INTEREST ON INVESTMENTS 91,620,000 Service Charges on credit (Annex-III) 27,622,080 Total Income 129,237,116 BUDGETED EXPENDITURE B. EXPENDITURE B1. Administrative Costs Rupees B1.1 Capital Expenditure 2,723,000 0.63% B1.2 Administration & Office Overheads 1,195,000 0.28% B1.3 Travel & Vehicle Operation 348,600 0.08% B1.4 Personnel Costs 2,848,572 0.66% Total Administrative Cost 7,115,172 1.66% B2. Programme Costs B2.1 Credit Disbursements 345,276,000 80.36% B2.2 Provision for Loan Losses 17,263,800 4.02% B2.3 Human Resources Development 8,160,000 1.90% Social Mobilization B2.4 Capital Expenditure 21,790,000 5.07% B2.5 Administration & Office Overheads 10,670,400 2.48% B2.6 Travel & Vehicle Operation 4,528,800 1.05% B2.7 Personnel Costs 14,882,080 3.46% Sub-Total of Social Mobilization 51,871,280 12.07% Total Programme Costs 422,571,080 Total Expenditure Budgeted 429,686,252 Less Credit Disbursements 345,276,000 Total expenses excluding Credit 84,410,252 19.64% Add Interest on OD 21,407,112 4.98% G. Total 105,817,364 Income/(Deficit) Before Taxation Carried Forward 95.98% 23,419,752* • Subject to exemption from Income Tax 16 Table B-2 BUDGET & ACTION INPUT VS OUTPUT INPUTS OUTPUTS Number of Present Discounted Number of Present Discounted Value Interest Total Poor With Value of Skills Persons of Income Stream Due To Income New Skills Acquired Organized Social Mobilization 1 Administrative Expenditure (I) Fixed Overheads Rent 60,000 Legal Expenses 72,000 Auditors Fee 110,000 Salaries 2,848,432 Depreciation 236,600 - 3,327,032 - (II) Variable Costs Telephone 240,000 Utilities 180,000 Stationery 60,000 Books & Periodicals 60,000 Publication Training & research 144,000 Furnishing 35,000 Crockery 10,000 Legal Expenses 88,000 Calculators 16,000 Vehicle Pole & Maintenance 165,000 Contingencies 120,000 Daily Allowance of staff 129,600 1,247,600 4,574,632 - 2 Training Expenditure 8,160,000 6,927 2,224,709,955 2,224,716,882 3 Social Mobilization Expenditure (I) Fixed 8,722,000 (II) Depreciation 2,795,660 (III) Variable 11,359,000 32,876,660 55,312 1,742,328,000 1,742,383,312 4 Income Generation - 6,215,000 6,215,000 TOTAL 45,611,292 2,224,709,955 1,742,328,000 6,215,000 3,973,315,194 17 PRSP BUDGET ANALYSIS INVESTMENT AND SOCIAL BENEFITS With an expenditure of Rs. 8.1 million on training in the first year, and social benefit of Rs. 2.224 billion can be generated. With an expenditure of Rs. 32.876 million on social mobilization, a social benefit of Rs. 1.742 billion can be generated. The total social benefits (in terms of discounted present value of future stream of earnings) from the first year’s total budgetary expenditure is 8611%.