Playing Social Protection with a new stack of cards!


Published in The News International on September 30, 2006:

We have a history of starting things denovo in this country. Individually and institutionally, we must scrap past initiatives, create silos, never build on efforts underway and whenever the adage “we have never learnt from the past” is referred to it is often with a negative connotation. Why should the case of social protection be any different? But perhaps in the given context of ‘never having learnt from the past’, social protection is unique since the most substantive example of social protection in the country is neither cited nor quoted or referred to in any of the Government of Pakistan documents nor has it ever been referred to by any of the myriad of outputs on the subject by development agencies, with particular reference to World Bank and Asian Development Bank assessments. Furthermore, the example has also been glaringly absent form the recent Social Protection Strategy of the Government of Pakistan released recently by the Ministry of Social Welfare.

But perhaps a discussion of this should be preceded by an articulation of its relevance – not by way of heightening suspense but by way of contextualizing it!

Social protection is a mechanism which mitigates the impact of adverse effects such as illness, unemployment, old age, environmental hazards which push vulnerable households into poverty and the poor into perpetual poverty. However, social protection is not a singular term and consists of both ‘programme approaches’ as well as ‘policy interventions’ and often a combination of both. These either operate and provide assistance through cash transfers or pool resources for providing insurance. Examples of both exist within the country. The current conditional cash transfer programs include the Guzara Program and the disbursements through Zakaat and Bait-ul-Maal whereas examples of in-kind contributions include the Tawana Pakistan Program, where school children are fed nutritional supplements.

Several examples also exist of the other social protection arrangements which pool resources for insurance functions as opposed to cash and in-kind transfers. Most of these are applicable to employees within the formal sector where mandatory salary deductions at source can enable pooling of resources. Examples include the Employee Social Security Scheme as part of which a certain category of employees make compulsory social security contributions for a specific purpose – prepayment to cover health risk and old age benefits. Presently operational in three provinces, and covering more than 1.2 million employees, all private notified industrial and commercial establishments with more than 10 employees under a certain salary scale have to contribute to this scheme. In addition, the Workers Welfare Fund pools resources for providing benefits for housing, schools and health facilities to the formal sector workers earning less than Rs. 5000/- per month, and the Employees Old Age Benefits provides old age pensions in cash, also to the formal sector employees. The programs mentioned herewith as examples of social protection have their own legal policy and institutional requirements, which notwithstanding their gaps have enabled them to provide cover to more than two million individuals within the country. However, sometimes policies can also act as specific instruments for social protection – for example levying Zakaat on bank balances; providing subsidies on food such as in the case of the wheat subsidy, introducing labor laws that mandate social security contributions and institutionalizing old age pensions, etc.

There is ample justification for mainstreaming social protection within the country, even in the face of the recent poverty estimates which have reportedly declined to 23.9%. Constitutional obligations as articulated in Article 37 and 38 in which the relevant rights of individuals are spelt out, make a strong case for placing social protection high on the national development agenda. Official figures quote that currently 0.5% of the GDP is spent on social protection; however if the State’s contribution to health is added to this, the figures would be higher; albeit still less than what is recommended internationally.

In all fairness successive governments since the inception of the country have been introducing various social protection programs. However a number of challenges and issues in the current social protection mechanism are evident. These, inclusive of insufficient coverage of poor households, low spending and the lack of coordination between agencies and possible duplication have also been referred to in the recently tabled Social Protection Strategy. In addition, it is well known that many social protection interventions bypass the poor. The Government of Pakistan’s Social Protection Strategy states that it will attempt to obviate these issues by envisioning better linkages, clearly defining institutional roles and responsibilities, and strengthening existing mechanisms particularly Bait-ul-Maal. However, the strategy is based on the premise that the most effective way of achieving objectives in the short term is to extend existing cash transfer programs to reach the poor 10% of households. And although a number of recommendations have been made to broaden the ambit of the currently existing social protection arrangements, it appears that the strategy hinges on resources from tax funded general revenues or the Public Sector Development Programme Budgets. The strategy does not substantially factor in community contributions or employee schemes given that the introduction of these, though more sustainable on a long-term basis, would involve broader changes in the country’s institutional and organizational frameworks and introduce some form of compulsion to make voluntary contributions – an approach clearly not in political interest in the present situation.

With this as an ode to a context, the most sustainable social protection mechanism within the country merits description – one from which no one has ever drawn any lessons.
Perhaps also the most novel, in addition to being the most sustainable!

Social protection is traditionally funded through tax based revenues or compulsory contributions deducted at source from the salaries of employees in the formal sector.

Perhaps the most novel, way of financing social protection would be to support it through profits generated by commercial ventures. However, there aren’t many examples of social protection arrangements in the world funded through this approach. Pakistan takes the lead in this area with the example of the Fauji Foundation System, a system which provides the social protection to a population of 9 million individuals in the country on a completely sustainable basis. This example is often not highlighted presumably because of the misperception that this is within the ambit of military operations and that citing financing arrangements of military establishments is taboo; this is wildly incorrect. Fauji Foundation is institutionally independent, has never received support from State funding mechanisms and has been running autonomously for the last 50 years as a commercially viable and profitable but non-profit entity which has an unprecedented use for the profits it generates – these go to providing health, education and other social protection services to 7.4% of the country’s population.

Established as a charitable trust incorporated under the Endowments Act of 1890, Fauji Foundation was created after the Second World War out of the Post-War Services Reconstruction Funds in 1942, which were meant to be used for resettling soldiers in civil life after the war. Of the 98 million collected at the end of the war, what was then West Pakistan inherited 35 million in 1947 and in 1954 a balance of Rs. 18 million was placed under the administrative control of a committee with representatives from the three military establishments. The use of paltry Rs. 18 million can be referred to as the most ingenuous and commercially viable as well as the most socially responsible use of moneys in Pakistan.

With a currently estimated tentative market value assets of Rs. 129 billion, Fauji Group has a commercial and a welfare arm; the former consisting of enterprises, which continue to support the extensive infrastructure of the latter. Starting with Jehlum Textile Mills in 1954, Fauji Foundation currently fully owns a range of industrial projects, fully owned commercial plants and generates income from a range of associated companies employing 11632 people – 60% of the workforce is drawn from the civil sector. The welfare side of the group on the other hand was established in 1959. The current yearly expenditures as estimations for last year, stood above Rs. 2.5 billion of which the major chunk was for health (1.6 billion). The Fauji Foundation system has a unique combination of a commercially viably arm that makes profit – profits are used to sustain its administrative arrangements but the major portion goes to serve the welfare arm of the organization and supports the extensive infrastructure through which welfare services are delivered. These include 102 schools, 66 vocational centers, 11 technical centers, 11 secondary and tertiary care hospitals with a bed capacity of 16001 all over the country and 100 other medical care units which fall under the primary health category and 1 artificial limb center which looks after 8000 patients. These provide services on a totally sustainable basis to 9 million individuals in the country which constitute 7.4% of the total population of Pakistan. It is important to note that on no occasion has Fauji Foundation received any state support in terms of public sector program allocations.

Critics argue that this is a military establishment configured solely for the x-military families. And true the beneficiaries covered under this arrangement in various categories are released, retired and discharged personnel of the forces excluding officers and their dependents, as per certain criteria. But it must be recognized that social protection arrangements have to be configured within a ‘given population’ according to ‘some parameter of qualification’ for inclusion. Within these confines, the creation of a commercial establishment and utilization of its profits to cover the risks of 7% of the Pakistani population is an example, which should not be brushed under the carpet within the ambit of social sector policy within the country.

Fauji Group is perhaps one of the few organizations in the country which is truly living up to its mission “to multiply the resources of Fauji Foundation for maximization of welfare activities for the benefit of its beneficiaries”; issues, challenges, and criticism notwithstanding the State’s social welfare institutional mechanisms have much to learn from this experience. However, key to such arrangements is lean and efficient governance and the factoring-in of appropriate incentives and performance based rewards into sustainable administrative arrangements; this is where the extrapolation of this experience to the State’s business model may be problematic – but perhaps also instructive to targeted policy interventions! This is becoming even more important as we see market mechanisms become the driving force reshaping the way the government does business.

Delivering on social sector services is a State mandate – ubiquitously and unarguably!
But then other than the high income Nordic countries with strong overarching social protection mechanisms and huge investments in the social sector where does the assumption apply? Countries such as of Pakistan may never have enough resources for cash transfers to protect risks in an environment where booming market dynamics, vested interests, institutionalized corruption and profit margins play heavily into the delivery of social services. In any case the latter are being made increasingly difficult in a globalized world where access issues emerge in view of liberalization of services, traditionally in the public domain.

The State will have to find new solutions to mitigate the impact of adverse effects on its vulnerable populations; critical to this approach would be the definition of new norms and standards and redefinition of the role of the State in the provision of social services. The State will have to strengthen its ability to regulate and broaden the base of the civil service reform process to a public sector reform process alive to these realities. In addition, it will also have to create frameworks that both regulate and facilitate the private sector as well as create strong institutional frameworks to offset the risk to the poor and disadvantaged in an environment where social services are being increasingly sold for a cost. Clearly we need new solutions; clearly the State needs to play Social Protection with a new stack of cards. After all, in any game you need new antics as the turf changes!

The author is the Founder President of the NGO Heartfile and Pakistan’s Health Policy Think Tank/Forum. E mail:

Health in Executive Committee of the National Economic Council (ECNEC)


Published in The News International on September 10, 2006:

The configuration of the four health projects presented to August the 23rd’s Executive Committee of the National Economic Council (ECNEC) meeting raise some broader issues that need to be the substrate of contemporaneous conceptual thinking with reference to health and health sector allocations in Pakistan. Agreed that there can be no generalizations with respect to the patterns observed in the presentation of health cases to ECNEC; accepted that ECNEC also sees – and approves – the likes of mega budgeted primary health care and preventive interventions and acknowledged that the four projects presented must have been reflective of provincial and district health needs. The purpose here is not to debate the merit of these but to galvanize a thought process and flag the broader questions of priorities for resource allocations in the health sector, the manner in which these priorities are set and the criteria according to which these priorities are determined. Clarity in addressing these questions is a priority now more than ever given the recent increase in budgetary allocations for health.

Is it a matter of chance that only tertiary care focused curative projects gain access into discussion portfolios at ECNEC or is it that such visible and tangible projects have a higher likelihood of being blessed in planning circles; what bearing does this have with respect to the policy positions of prioritizing prevention as part of national health planning; do provincial governments actually sign up to policy positions stated by the Federal Government given that they regard ‘health as a provincial subject’ and most importantly, where does the ideal balance between the prevention-cure-allocation-distribution pitch in Pakistan’s setting and why are questions that need to be debated.
All of the projects tabled at ECNEC were incidentally from NWFP and all of them were deferred. Three out of the four agenda items on the portfolio related to hospitals, which primarily roll out the curative personalized model of health care. When viewed within the context of the State’s mandate to deliver health (at least its priority services) as public goods, this brings to the forefront the debate over the nature of some curative services as qualifying to be termed as ‘public goods’ given that clinical services are thought of as being highly discretionary. The proponents of prevention argue that prevention services, on the other hand are more homogeneous, less discretionary and more cost efficient. Such resource allocation debates are often seen at DDWP and CDWP meetings within ministries and the Planning Commission respectively and are frequently the subject of dialogue between the government and NGO lobbyists. However sadly in such settings, powerful clinicians which make a strong argument for investments in curative care – often tertiary – and the public health community which lobbies for prevention support are often seen as operating within silos with the common denominator being the desire to cut budgets off each others platter. What is infrequently understood is the level of balance that has to be achieved and the reason why it is imperative to do so both within the context of the ‘public health prevention imperatives’ on the one hand and with reference to the States ‘responsibility to deliver curative services at least to a certain segment of the society’, on the other.

Balance dictates that whereas prevention and health promotion need to be delivered as public goods and prioritized, there is also valid justification to invest in hospitals given that if left to the private market, curative care, being cost intensive and rival in consumption would be excludable for the poor creating serious access issues. The State cannot relinquish its responsibility to cater to the needs of those that require curative care particularly the segment of our population which qualifies to be benefited under Article 38 of the Constitution of the Islamic Republic of Pakistan. This realization should also be instructive for the current restructuring arrangements of the State’s infrastructure in health with particular reference to hospital autonomy and BHUs restructuring. Though these are steps in the right direction, there should be a fundamental difference between privatization which is what cannot be recommended for the State’s health infrastructure and mainstreaming the role of the private sector for improved management, and enhancing efficiency, which is what should be promoted. Within these settings, the State’s funding should be used through appropriate waiver and exemption mechanisms to ensure that the poor are not excluded from care. This understanding must also guide the impending GATS-driven liberalization of services, which have traditionally been in the public domain. As curative services are – and will continue to be – mainstreamed on free market principles as a result of the prevailing market dynamics, the States health sector must ensure that access issues for the poor are minimized and mitigated and within this context, a myriad of options can be explored for alternative health financing arrangements and appropriate regulation framed. Health cannot be left to the free market. The fact of the matter is that the State’s hospitals – notwithstanding their gaps and inefficiencies – are the only sanctuary for the poor, at least a certain percentage.

Within this context therefore, what is underlying connotation within the frequent criticism generated in the health sector relating to the sizable chunk of health allocations, which go to serve hospitals particularly in the provinces? Is the undertone one of cutting the budget for hospitals and diverting them to prevention? Perhaps not.

The connotation should be to enhance allocations for prevention and health promotion to achieve a balance that is desirable rather than divert money from hospitals which do play a role in providing affordable care and physical access to clinical services – though of questionable quality – to the excluded vulnerable and difficult to reach populations, which are and should be the prime targets for government subsidy. And with reference to hospitals such criticism should be constitutively directed to ensure that these ‘allocations’ are ‘utilized effectively’ and are not pilfered. It also must be ensured in particular that the high cost services that hospitals can offer do actually benefit the poor, as opposed to the non poor who are likely to use their political influence to ensure that public spending for these expensive hospitals is maintained – often at the expense of services that could have a real effect on the poor. And lastly perhaps the connotation is also one of strongly voicing the need to integrate prevention into the mandate of clinical services, and move away from the silo operations given that these are inseparable – a suggestion of relevance to the Peshawar Institute of Cardiology for which over 1000 million are likely to be allocated in the next ECNEC meeting.

And now with reference to the fourth project tabled at the ECNEC meeting, there can be no argument to support allocations to build infrastructure to support a medical school that has been running without any physical infrastructure for the last five years! But then extrapolated to the broader context of resource allocation priorities in the area of health related human resources, the current doctor to nurse ratio of 2.7:1 and doctor to paramedic ratio of much lower is instructive given that it is clearly opposed to the conventional global norm which advocate a doctor:nurse ratio of 1:4. These qualitative considerations and the established qualitative and deployment related gaps and absence of a continuing medical education program highlights a clear direction to invest in a specific line of human resource from qualitative, quantitative and deployment-related perspectives. At a broader level this underscores the need for decisions on human resource to be based on providing sustainable public health solutions rather than political expediency.

The discussion on priority setting cannot be complete without a reference to the criteria for priority setting within the public health prevention framework. Here if priorities for resource allocations are based on prevailing disease patterns then it may be worthwhile to note that infectious and non-communicable diseases contribute 38% and 37% of the disease burden respectively – an equal disease burden. This criteria alone calls for major shifts in allocation trends even if the other criterion – the potential for preventability – is not factored into the equation, the addition of which would make the argument much stronger. The need is also reiterated if another criterion is applied based on the manner in which health links in with over-arching social sector directions of the country such as poverty eradication. The current health related poverty reduction strategy mirrors the MDG objectives with a focus on maternal and child health and infectious diseases on the premise that these are more frequently encountered in the poor. That is indeed the case. But we also need to be clear on how poverty eradication can link in with the health agenda in economic terms. And in line with this diseases that affect the economically productive workforce; ailments that undermine the income generating power of a household; diseases that have the potential to perpetuate an acute poverty crisis and contribute to major costs of care and put of pocket payments should also merit a consideration. A recently reported population-based cross-sectional survey, has shown that 37.4% of the households spend an average of Pak Rs. 405 on the treatment of communicable diseases whereas 45.2% of the households spend an average of Pak Rs. 3935 on the treatment of non-communicable diseases over the last one year. These data show that a significantly higher percentage of households spend more on treatment of non-communicable diseases compared with communicable diseases.

All said and done in relation to priorities for allocations ‘within health sector’; but perhaps what is more important to deliberate upon in a very broad sense relates to how health factors into the equation of priorities in a much larger picture where there are other competing interests. That will be left to a viewpoint which merits a much richer discussion – one that space will not permit this time round.

The author is the founder and president of Heartfile and Pakistan’s Health Policy Thinktank. E mail: