Background

In 2007/2008, IFAD's Office of Evaluation (OE) conducted a Country Programme Evaluation (CPE) in Pakistan. The main objectives of the CPE were to: (i) assess the performance and impact of IFAD's strategy and operations in Pakistan; and (ii) develop a series of findings and recommendations that would serve as building blocks for the preparation of the new IFAD results-based country strategy and opportunities programme (COSOP) for Pakistan. The COSOP would be formulated by the Asia and Pacific Division (PI) of IFAD in close collaboration with the Government of Pakistan.

This Agreement at Completion Point (ACP) includes the key findings and recommendations contained in the CPE. It also benefits from the main discussion points that emerged at the CPE national roundtable workshop, organized in Islamabad on 17-18 July 2008. This ACP captures the understanding between the IFAD management (represented by the Programme Management Department) and the Government of Pakistan (represented by the Ministry of Economic Affairs and Statistics) on the core CPE findings, and their commitment to adopt and implement the evaluation recommendations contained in this document within specified timeframes.

The main CPE findings

The Fund has made an important contribution to agriculture and rural development in Pakistan, the significance of which is highlighted given the current food crisis. This has been achieved despite IFAD's relatively small level of total investments in Pakistan, and in spite of the lack of a permanent country presence until recently. IFAD's results are particularly noteworthy as several of its operations have covered the most remote and marginal areas of the country which manifest amongst the lowest social indicators in the country, and where infrastructure and services are limited, access to input supply and markets is uncertain and institutional capabilities are often inadequate.

A number of achievements support the aforementioned overarching conclusion of the CPE, for example, the Fund's instrumental role in scaling up the successful Aga Khan Rural Support Programme (AKRSP) model to grassroots development and adapting it to a government implementation model. IFAD has also contributed to strengthening community-based organizations (CBOs), to women's empowerment and to improving agricultural productivity of small farmers. These achievements are the result of IFAD's focus on agricultural-based interventions including the strengthening of research and extension capabilities, promoting pro-poor agriculture technology, and building community infrastructure. However, insufficient consideration has been given to areas such as the environment, market linkages, livestock development and the promotion of high value crops – which offer crucial opportunities for landless and small farmers.

Notwithstanding the above, the CPE concludes that IFAD could have achieved greater results through a wider consideration of and investments in non-farm activities and employment, including attention to the development of rural microenterprises with adequate linkages to financial services.

Enhanced attention in project design to the consequences of migration would have been useful. This is particularly relevant in light of Pakistan's categorization as a transforming country with a modest 40 percent contribution of agriculture to rural incomes.

Good results are to be found in social mobilisation and in building CBOs, both of which are fundamental for promoting country ownership and sustainability of benefits. However, the CPE concludes that the Fund could have taken a more broad-based approach to support decentralization and Pakistan's devolution plan of 2000, particularly the strengthening of local governments. A more proactive approach to seek partnerships with the private sector could have been beneficial in ensuring growth in the agriculture and rural development sector.

IFAD has worked in various remote, disadvantaged and conflict-affected areas including the Federally Administered Tribal Areas (FATAs), parts of the North West-Frontier Province (NWFP) and Azad Jammu and Kashmir (AJK). Despite the difficulties, the performance of IFAD-funded activities in these areas has been moderately satisfactory, and future IFAD assistance deserves serious consideration. While the CPE noted the strong desire of the Government to ensure the Fund's continued engagement in such areas, the Fund cannot continue working in these areas without a differentiated approach. 

Two overarching factors require special attention by the Fund. First, sustainability – an institution-wide issue for IFAD – is of concern also in the Pakistan portfolio. Second, despite various examples of innovations in the portfolio, such as the introduction of new agricultural products (horticulture and fruits), innovation has not been conspicuous in Pakistan.

Moreover, evidence of replication and upscaling of innovations remains weak. The latter can be partly attributed to the inadequate attention to non-lending activities, namely IFAD's engagement in policy dialogue, partnership building and knowledge management, as well as the poor links between grants and loans.

Until 2008, none of IFAD's operations in Pakistan were under direct supervision. Supervision and implementation support by cooperating institutions focused on fiduciary aspects, to the detriment of project implementation. Furthermore monitoring and evaluation systems were weak.  The establishment of a country presence in 2005 has contributed to a better positioning of IFAD in Pakistan. 

Recommendations

Recommendation 1: Better balance between agricultural and non-farm investments

The need to develop a better balance between agricultural and non-farm investments in the rural sector in Pakistan. This is important, as most (57 per cent) of the rural poor are from non-farm households (that derive their income from activities other than crop and livestock production) and more off-farm opportunities are now being offered by the country's growing business environment. The CPE recommends that more resources be devoted to non-farm opportunities, including small agri-businesses and family-based rural microenterprises. It also stresses the importance of promoting wider market linkages for both agricultural and non-farm outputs. In addition, further developing rural financial services and products for agriculture and non-agricultural activities is central to ensuring that the poor have access to financing for rural poverty alleviation initiatives. In terms of agricultural activities, greater attention should be paid to livestock development and high-value crops such as fruit, vegetables and flowers that provide higher returns on investments. Agricultural land investments should be accompanied by measures aimed at improving environmental and natural resource management, such as integrated catchment management and increasing the efficiency of water use under rainfed conditions, and to instituting environmental assessments for infrastructure constructed by projects.

Recommendation 2: Capacity development support to decentralized entities

Provide capacity development support to decentralized entities and other bodies working at the local level to complement the work of other larger development partners. This requires that continued attention be given to social mobilization and the strengthening of CBOs, local NGOs and rural civil society in general.  At the same time, the Fund should take a more inclusive approach to supporting decentralization by establishing the building blocks for a more service orientated relationship between governments and local organizations. This entails building up the capacity both of local governments (at the district, tehsil and union levels) and of representatives of elected bodies (e.g. village councils, local legislative assemblies, etc.) that play an important role in planning and resource allocation for rural poverty alleviations at the grass-roots level and in promoting accountability and transparency of local administrations involved in IFAD-supported projects. Greater participation by private-sector groups of farmers and enterprises is also warranted to ensure better results.

Recommendation 3: Working in disadvantaged, remote and conflict-ridden areas

The CPE recommends that the Fund continue to support the Government in its engagement in disadvantaged, remote and conflict-ridden areas such as the NWFP, AJK and the FATAs. However, this requires a much more differentiated approach which is flexible and adapted to such challenging areas, paying careful attention to the specific social context, culture and priorities of the rural people living there. The importance of ensuring the commitment and ownership of provincial and federal governments to IFAD's efforts in these areas cannot be overemphasized. In addition, it will be also essential to mobilize specific expertise for project design, implementation and supervision. In fact, IFAD could play a complementary developmental role – in support of the rural poor – to the Government's own initiatives and those of other donors working in such environments. The interventions should be given more time in project execution, without having negative impact on country PBAS score

Recommendation 4: Promote innovations

The strengthening of IFAD's capacity to promote innovations that can be scaled up and replicated by the Government, donor organizations and the private sector, merits increased attention and resources in Pakistan. This will include a more systematic approach to identifying and piloting innovative approaches to agriculture and rural development; better documentation; the sharing of successfully tested innovations; greater resources and capacity to engage in policy dialogue (e.g. on local governance issues, rural finance outreach, pro-poor agricultural policies); and carefully selecting partner institutions with a good track record both in introducing and nurturing innovations and in working with the rural poor in similar IFAD priority areas. This will also call for greater synergies between, and the wider use of, the mix of instruments (loans, grants, policy dialogue, etc.) available to the Fund as well as enhanced country involvement in and ownership of grants. Innovative approaches are needed in a number of areas such as remittances (savings accounts, investment opportunities); migration (improving the value of landless people on the employment market through vocational training and helping them find employment in small towns, urban centres and overseas); promotion of local governance; and the use of grants (as opposed to loans) to support efforts by larger development actors in conflict areas such as FATAs.

Proposed Timeframe to implement the recommendations 1-4

The recommendations will be taken into account in formulating the new results-based COSOP and new operations in Pakistan.

Key partners to be involved

Government of Pakistan (especially the Economic Affairs Division), IFAD, and the concerned technical and financial partners at both the federal and local levels.

Recommendation 5: Adjust IFAD's operating model

The Fund's overall development effectiveness would be further enhanced by adjustments to its operating model that take account of the size and specificities of its programme in Pakistan. This includes establishing a more consolidated and permanent country presence in line with Executive Board approved policies and budget allocation (one option to strengthen country presence in Pakistan is to outpost the Country Programme Manager from Rome); undertaking direct supervision and implementation of IFAD-funded projects and programmes which, in fact, IFAD has already started since the beginning of 2008; and making efforts to improve both knowledge management and project- and country-level monitoring and evaluation systems.

Proposed timeframe to implement the recommendations 5

2009 onward.

Key partners to be involved

Government of Pakistan and IFAD.