Economics of Rural Support Programs (RSPs). By Mohammed Akmal Pasha

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Contrary to the universality of trickle down effect as is drummed up in development economic theory, the RSPs deliberate other way round and tend to strike the tunnel so as to tune up macro economic positivities and reverse the adversaries. Through micro interventions, these RSPs are persist in being optimal on the social cost and benefit tier and are inspired to undercut the Vicious Circle of Poverty addressing thereby issues like sanitation, water, energy, education, transport, health and housing (abbreviated as SWEETHH).
The Rural Support Programs (RSPs) represent a group of financially and economically stuffed programs
meant for socio-economic development of rural regions of Pakistan through the handle of ‘micro-interventions’; a theoretical contradiction with Big Push Theory. The Big Push Theory necessitates robust and hefty injections into the economy. Well, today the notion ‘RSPs’ implies existence and functionality of different ‘institutions’; an operational nomenclature for ‘programs’; serving to support rural communities through ‘social mobilization’ so as to ultimately promote them on the scale of Human Development Index. Not at the expense of other community member’s degeneration, RSPs improve everybody’s plight hence they maintain both Pareto Efficiency and Pareto Optimality. So the social mobilization is materialized through upward spiraling hierarchical channels like Community Organizations (COs), Village Organizations (VOs) [also known as Village Development Organizations (VDOs)] and Local Support Organizations (LSOs). These ‘institutions’ instinctively are Not-For-Profit (NPOs) or Non-Government-Organizations (NGOs); collectively ‘Civil Society’ funded chiefly by foreign donors. These community members lack capital, if they don’t, they lack mettle or at least the opportunity. So they are scared of uncertainty about outcomes which is a subject of Game Theory. These RSPs help them get out of this quagmire and ultimately render stakeholders worth increased. This however, seems contradicting with Milton Friedman’s notion that enterprises must always tend to increase stakeholders’ worth. At the very outset, there is no business enterprise in its truest sense, thus there is no rivalry. To generalize it, every community member is a stakeholder and his worth is certainly and amazingly increasing constantly.
Nine in total, these ‘institutions’ (RSPs) stand interwoven through a web called Rural Support Programs Network (RSPN) which was registered in 2000 under Companies Ordinance 1984. While these RSPs intervene with the coordination of Union Councils (UCs), RSPN supports them through its core instruments like policy guidelines, capacity building, strategic development and experience-sharing. However, novel initiatives keep on embracing the ambit of RSPN interventions where the stakeholders may range from private individuals, RSPs, corporate entities and the government. A recent step has been the identification of gender focal persons within RSPs and motivation for membership of Gender Think Tank (GTT).
Since RSPN is not just an umbrella organization but also the only and hence the biggest network of Pakistan , it sounds logical to say a word about its structure. In line with esteemed principles of transparency and good governance, its operations are executed through a well-formulated board of some 20 directors. The board is chaired by Mr. Shoaib Sultan Khan (SSK-as referred to); a well-reputed guru of the development sector. His meticulous and altruistic service towards alleviation of poverty from Pakistan has garnered him several domestic and international accolades. The government of Pakistan awarded him with Sitara-e-Eisar, Hilal-e-Imtiaz and Sitara-e-Imtiaz. Internationally he has been studded with Magsaysay Award (Philippines), Man of the Year Gold Medal (Rotary International Pakistan), World Conservation Medal (Duke of Edinburgh) and United Nations’ Environment Program Global 500 Award.
As of March 2009, RSPN had its spread in 97 districts (www.rspn.org.pk). Out of total 5,375 potential Union Councils (UCs), it had coordination with 4,767. Potentially there are some 6, 10,000 COs out of which 5, 80,000 COs are some-how-or-the-other members of various RSPs which in turn are members of RSPN. These COs consist of mighty 12 million community members essentially inhabitants of rural Pakistan. So far, RSPN has imparted training to 1.2 million individuals, hence enhancing human capital. The total savings of these RSPs equal to Rs. 2 billion. In view of the famous Harrod-Domar equation, GDP growth is directly proportioned to savings and inversely proportioned to interest rate (g = s / k). So this saving must contribute to GDP growth by some sizable measure (for our own convenience here we keep interest rate constant or ineffective since we are not concerned with it given Pakistan ’s capital markets vis-à-vis RSPs). Since according to Okun’s law, when GNP decreases by 2 %, unemployment increases by 1 %; an increased GNP must lower unemployment.



As we will see in AKRSP’s case, the incomes and per capita income both rose in Northern areas; however they worsened in the beginning as signified by Kuznet’s curve that says, when per capita income increases, income distribution first worsens and then improves. Later on, this ameliorated income distribution also corrected Lorenz curve to near equal distribution of wealth in Northern Areas. Naturally, the increased disposable incomes of inhabitants must have redoubled their absolute spending and not the relative one following Engel’s curve. Again increased incomes give rise to investment to allow Accelerator Principle to operate. The whole exercise of AKRSP has not cast Crowding Out effect since government investment was scarcely present there. On the other hand, the total credit disbursements of RSPs equal to Rs. 43 billion, now this must serve as an injection into the Circular Flow of Income Model. In concomitance, these RSPs address 84 million rural inhabitants; the pool which consists of 12.5 million households.
Following table gives the list of nine RSPs and the number of districts they are covering. In descending order of number of districts they are: Nation Rural Support Program (NRSP), Punjab Rural Support Program (PRSP), Serhad Rural Support Program (SRSP), Sind Rural Support Organization (SRSO), Aga Khan Rural Support Program (AKRSP), Balochistan Rural Support Program (BRSP), Thardeep Rural Development Program (TRDP), Ghazi Brotha Taraqiyati Idara (GBTI) and Sind Graduate Association (SGA).
RSPN’s contributions have been diverse which range from collaborating with government, corporate enterprises and of course the NGOs. With respect to the government of Pakistan, RSPN provided a key input into the Poverty Reduction Strategy Paper I & II (PRSP-I & II) and Rural Development and Devolution chapter of Pakistan’s Medium Term Development Framework [MTDF (2005-10)] which helped streamline ‘social mobilization’ as a core strategy as highlighted in Rural Poverty Reduction through social mobilization (2005-10). Again, the nation-wide project Participatory Development through Social Mobilization will initially mobilize some one million rural households. Yet beyond 2010, RSPN has had the privilege of chairing the Government’s Vision 2030 Committee on Just and Sustainable Society. Despite its FATA Program, RSPN has special outreach in the world’s one of the most terrible terrains of Northern Areas. RSPN effectuates the latter through its member AKRSP. AKRSP, basically a project of the Aga Khan Foundation has idiosyncrasy as a pioneer and torch-bearer RSP for the other eight members of RSPN. Established in 1982 and led by SSK, AKRSP especially by accomplishing community-managed micro-hydropower projects received Ashden Award for Sustainable Energy in 2005. It also achieved Japanese Award for Most Innovative Development Project for 2006. Earlier on; on qualitative terms AKRSP’s Fourth Evaluation from the World Bank declared: “the efficacy of the AKRSP is substantial: incomes have increased greatly, certainly beyond the original target of doubling in real terms.”
Again, with a view to make devolution plan more effective, RSPN contributed for National Reconstruction Bureau so as to set up Citizen Community Boards (CCBs) under Local Government Ordinance 2001. RSPN also imparted training to CCBs partnering with Devolution Trust for Community Empowerment (DTCE) in 13 districts. Coming back to government, in collaboration with Ministry for Food, Agriculture and Livestock (MINFAL), RSPN has provided trainings to 7,500 workers in 79 different districts. By the same token, under Crop Maximization Project, RSPN has mobilized 4,000 Farmers’ Organizations in 26 districts; which must lead to Green Revolution in the respective regions. Yet, in collaboration with PRSP, RSPN has piloted Community Investment Fund (CIF), and along with Adamjee Insurance Ltd; RSPN has undertaken country’s first and largest health micro-insurance scheme with an outreach of 1,89,000 clients. Here a meager premium of Rs. 100 to 200 per annum will fetch a hundred times cover to the tune of Rs. 15,000 to 20,000 per individual.
Historically, the idea of rural development took birth out of the ovum of rural deprivation and marginalization of villagers in 1953. During the last sixty-plus years, various programs were initiated. Here we can scarcely list them out but in brief they are: Village Agricultural and Industrial Development Programme (V- AID) 1953-59, Basic Democracies (1959-70), Integrated Rural Development Programme (IRDP) 1972-80, Peoples Works Programme (1972-77), Local Govt. and Rural Development Programme 1979, Prime Ministers Five Point Programme (1985-88), Peoples Programme (1988-90 & 93-97), Tameer-e-Watan Programme (1991-93 & 1998-2000), Social Action Programmes [(SAP ),(1922-93 & 1993-96)], Khushal Pakistan Programme [(KPP), (2000-2002)], Tameer-e-Pakistan Programme [(TPP), (2003)] and Khushal Pakistan Programme-I [(KPP-I), (2003)]. Though these programs reversed the plight of the rural poor in general, but by and large they were manipulated and maneuvered in the light of political agenda of the respective ruling lobbies.
Since NGOs were non-political hence non-government; and chiefly non-profit; and again hugely funded by foreign donors; so they were found more agile and productive. Mr. Akhter Hameed Khan’s (AHK) Orangi Pilot Project in Karachi has been a model accomplishment in this regard. AHK who was also a mentor of SSK, had already marveled by performing at Rural Development Academy in Camilla ( Bangladesh ) and the Daudzai Integrated Rural Development Program (IDRP) in NWFP.
To conclude, the economics of RSPs under the cover of RSPN has largely created enterprising men and women or converted them into ‘economic men and women’. The silent revolution, despite inadvertent minor financial misappropriations which prove enticingly mandatory like a little degree of inflation is in macroeconomic framework or that of madness for a genius is; would potentially fructify.

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