PAKISTAN: Bank loan to rescue higher education plan

Pakistan's five-year higher education development plan, which has been languishing in the doldrums for lack of funding, is now expected to be implemented after the World Bank agreed to release US$300 million to the country's Higher Education Commission.

World Bank country director for Pakistan, Rachid Benmessaoud (pictured), informed the Higher Education Commission (HEC) on 22 September that the financing agreement between the bank and government of Pakistan had been approved and would become effective from 21 December this year.

"Our credit [loan] will support implementation of the government's higher education development programme, as outlined in the second medium-term development framework for the higher education sector for 2011-2015," Amit Dar, the World Bank's South Asia education sector manager, told University World News.

Pakistan's plan aims to improve the conditions of teaching, learning and research in order to enhance access to and the quality and relevance of tertiary education.

The US$300 million loan, originally approved by the bank in Washington in September 2010, will be disbursed over three years after being held up for a year.

Pakistan's parliament had opposed the loan saying the HEC, a federal government agency, was not responsible for higher education, which had been devolved to the provinces under an April 2010 constitutional amendment.

Uncertainty over the HEC's future role and responsibilities prevented international donors, including the World Bank, from extending financial aid to the sector. In the event, devolution of the HEC's responsibilities to the provinces was deferred in the wake of popular protests.

Sources in Pakistan now claim the loan was never 'rejected' by parliament. Rather, members of the national assembly had "only raised questions" regarding the loan in the context of devolution.

The government subsequently told the bank in a written clarification that under the April constitutional amendment "standards in institutions of higher education and scientific and technical institutions are federal subjects", paving the way for the loan to be released.

"Parliament has no objection this time, and the government is ready to accept World Bank money not because of any major policy shift, but due to falling foreign exchange reserves - the government itself needs money," Nadeem Farooki, an economist and director of academics at Lahore's University of South Asia, told University World News.

He said the reversal on the bank's loan should be seen against the backdrop of an end to International Monetary Fund borrowing. Pakistan has said it no longer needed funds from the IMF to shore up its finances, in part because it did not want to be held to IMF conditionalities.

This "made the [government's] financial wizards look for other sources of external money," Nadeem said.

Masoom Yasinzai, vice-chancellor of Islamabad's Quaid-e-Azam University, told University World News: "The government has retained the HEC [i.e.did not devolve its functions to the provinces] for some time, and it needs money to fulfil budget commitments."

Given a history of cutbacks to the higher education budget in the last three years, academics and policy analysts believe that even World Bank funding may not prove to be enough to execute the medium-term plan.

Pakistan's higher education budget has dropped from PKR22 billion in 2009 to rupees PKR14 billion (US$160.9 million) in 2011. The estimated cost of the government's plan is around US$2.19 billion over the next three years.

According to details of the plan, the HEC will require PKR20.24 billion (US$ 231.3 million) in 2012, PKR24 billion in 2013, PKR26 billion for 2014 and PKR30.54 billion for 2015.

Former HEC chairperson Atta-ur-Rahman believes external aid should be in addition to commitments to higher education made in Pakistan's budget. "Government support is a must, as we should not rely solely on donor money. Out of US$2.19 billion [for the medium-term plan], where will the rest of the US$1.89 billion come from?" Atta asked.

HEC Chairman Javaid Laghari told University World News: "The current higher education development framework is strategically and technically sound and implementable, provided the level of required funding from the government, from external donors and from local stakeholders [such as industry] is achieved."

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