(ii) More than 53% of the target population depends on casual labor as their major source of incomeit is insecure and risky. Health insurance for the poor that covers catastrophic risks and major costs such as births can provide significant financial relief and protection to the most vulnerable families, while improving access to health facilities. In addition to income loss from being unable to work, medical costs alone can push households into poverty. Unexpected severe health problems are the most prevalent shock for families. (i) Almost 70% of total health expenditures are paid out-of-pocket by families, driving about 4% of the population into poverty every year. The first two of these graduation initiatives are of special relevance for social protection: These programs aim to support human development and economic opportunities for beneficiaries, and reduce the likelihood of intergenerational transfer of poverty. The BISP piloted several graduation initiatives for health insurance, skills development training, small business development loans, and primary education co-responsibility cash transfers. A well-managed targeting system will enable the replacement, over time, of other inefficient social safety net programs and untargeted subsidies that are still pervasive in Pakistan. The introduction of a national safety net program and the availability of the poverty scorecard database can potentially lead to more efficient use of resources and better targeting and coordination with the provincial social safety net programs. Pending families are the most difficult to reach and likely to be the most destitute.
However, 2.4 million eligible poor families are not yet receiving the cash transfer because the female head does not hold a CNIC, which is the key eligibility criterion. Initial evaluation findings demonstrate that it is a credible targeting system, covering a substantial number of the poorest in Pakistan. It identified 7.2 million eligible poor families (23% of the total population) on the basis of a nationwide poverty scorecard survey using a proxy-means test approach. The BISP uses a transparent and objective methodology to select beneficiaries. The government's social safety net spending increased from 0.3% of GDP in FY2004 to 0.9% in FY2011 after introducing the BISP. The main BISP intervention is a cash transfer program providing PRs1,000 per month to the female head of the family. The broader goal was to implement the government's redistributive policy by providing regular cash income support to the poor. The immediate objective was to decrease the adverse impact of food, fuel, and financial crises on low-income families. In October 2008 the government launched the BISP as the national social safety net program. Starting in 2007, the government significantly increased its spending on social protection, established a new institutional framework, and approved the National Social Protection Strategy.
A recent study, using district-based poverty profiles, estimated poverty incidence for all households in the country at 33%. Annual gross domestic product (GDP) growth rates post-2007 averaged about 3%, while inflation averaged 13.8%, resulting in lower living standards. Since 2007 the Government of Pakistan has faced difficult challenges, including external and domestic economic shocks, economic uncertainty, and security problems.
The last official estimates of poverty incidence were released in Pakistan in 2005/2006, with the headcount index for poverty reported at 22.3%. Project Rationale and Linkage to Country/Regional Strategy The substantial fiduciary risk of the project will be mitigated through the strengthening of BISP financial management systems and capacity. The project will provide technical support and finance part of the scaling-up costs of both programs using a performance-based allocation. In addition, it will support the strengthening and phased expansion of the pilot health insurance and skills development programs to increase income and good health for targeted families. The project will enable the expansion of the cash transfer program (paid to the female head of targeted poor families) by registering an additional 2.4 million eligible families and financing the first few quarters of their cash transfers. The project will support the Government of Pakistan's national social safety net program, the Benazir Income Support Program (BISP). Health insurance and subsidized health programs
Technical and vocational education and training Loan 3837-PAK: Social Protection Development Project - Additional Financing Loan 3049-PAK: Social Protection Development Project