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World Bank evaluates Pakistan’s digital income support program

World Bank evaluates Pakistan’s digital income support program

In Pakistan’s continuous battle against socio-economic problems, the Benazir Income Support Programme (BISP) has become a key instrument committed to eradicating poverty and protecting marginalized households with the help of digital technology. A recent evaluation report by the World Bank highlights both achievements and further development. Pakistan has started a drive to strengthen its social protection framework,  utilizing digital identification and biometrics to deliver BISP benefits for poverty alleviation and inequality reduction.

The World Bank report states that before the global financial crisis of 2008, Pakistan’s social protection programs were vulnerable because of their narrow scope and subjective targeting. However, between 2011 and 2019, BISP’s strategic involvements changed the face of poverty alleviation; the proportion of BISP beneficiaries living in poverty decreased from 90 percent to 72 percent, demonstrating a visible effect on the reduction of poverty. A remarkable $1 billion has been added to the economy by BISP, highlighting the program’s important role in strengthening social safety networks and improving overlooked regions.

BISP successes

The report highlights the outstanding accomplishments of BISP in mitigating the negative consequences of poverty on households and protecting them against economic shocks. BISP has improved consumption spending, food security, child nutrition, asset retention, and women’s empowerment through several projects. Due to its financial independence, administrative adaptability, and open accountability procedures, BISP has been able to spend heavily on its systems of delivery and programs. The BISP has become even more important in Pakistan’s social security system, as seen by the rise in budget allocation and coverage from 1.76 million to 9.2 million families.

Challenges faced by the BISP

The World Bank further says that the BISP faces obstacles that reduce its ability to effectively fight poverty. The effect of BISP on reducing poverty has been diminished over time due to the benefit’s gradual loss in value. Urgent revisions are required because the existing benefit level, which accounts for only 10 percent of typical household spending, cannot balance the rising costs of critical needs. The BISP cash transfer’s value was not raised until 2017, which resulted in a progressive decline in the benefits’ sufficiency. In addition, there are difficulties in improving communication and bringing the National Socio-Economic Registry (NSER) to highlight the necessity of deliberate initiatives to guarantee inclusivity and efficacy, particularly among excluded groups.

Data and biometric technology used in BISP

The World Bank report says that due to BISP’s emphasis on technology and data, its delivery methods have undergone a revolution, improving responsiveness and accessibility. Real-time verification and simplified payment procedures have been made possible by the NSER and biometric verification system (BVS) integration. Globally acclaimed for its lightning-fast reaction to emergencies, including the COVID-19 pandemic and the 2022 floods, BISP uses technology to efficiently identify impacted households and distribute assistance, demonstrating its agility and resilience.

World Bank recommendations for improvement

To improve the efficacy of BISP, the World Bank report makes some recommendations. First, the benefit level must be immediately increased to 15 percent of the average household consumption. Furthermore, the NSER and National Database and Registration Authority (NADRA) can make better decisions and run their operations more efficiently by utilizing business intelligence software to release the potential digital identification data of unprivileged communities. An in-depth strategy needs to be given top priority to deal with unfair compensation throughout the process of switching to a new payment method to guarantee beneficiary satisfaction and financial inclusion. underway monitoring and impact assessments are also essential for determining the effectiveness of programs and guiding future initiatives.

World Bank commits $78M for digital economy enhancement

The World Bank commits to the development passage of Pakistan with the approval of $149.7 million in financing for two key projects. The digital economy enhancement project, with an allocation of $78 million, aims to amplify digitally-enabled public service delivery. Simultaneously, the Sindh barrages improvement project amounts to $71.7 million for resilience to floods and enhancing the management of barrages in Sindh.

The World Bank’s commitment to promoting economic growth and inclusivity in Pakistan is demonstrated by its approval of $78 million for the Digital Economy Enhancement Project (DEEP), which concurs with measures to strengthen infrastructure against natural catastrophes. The digital economy and demand for digital government services have been growing across the country, increasing the need for connectivity, digital payments, and secure and trusted digital transactions, said Shan Rehman, the project’s task team leader, to highlight the growing need for these services.

Three primary beneficiary groups in Pakistan are the focus of the project. First, easier digital transactions would benefit locals and citizens by cutting expenses and improving access to services in both the public and commercial sectors, especially for women. Second, as a result of increased service digitization and a decrease in manual and surplus procedures, government agencies will see increases in productivity and data quality. Lastly, fewer regulations and more efficient procedures will help companies-including startups and women-owned businesses encouraging innovation and employment growth. Incorporating digital identification methods would improve efficiency even more and ensure adherence to legal requirements like anti-money laundering laws. To improve Pakistan’s capacity to handle shocks, provide e-government services quickly, and assist regulatory changes in the digital industry, DEEP seeks to create digital authentication and data-sharing platforms. The project aims to guarantee that digital platforms are trustworthy and accessible by strengthening financial inclusion, especially for women, and tackling obstacles like restricted mobility.

The World Bank evaluation report on the Benazir income support program highlights major impacts on social protection and poverty reduction using biometrics and digital identification of vulnerable communities in Pakistan.

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