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UNCLAS SECTION 01 OF 03 ISLAMABAD 003606 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: ECON EFIN ETRD PREL PGOV PK
SUBJECT:  GOP'S PLAN FOR THE BENAZIR INCOME SUPPORT PROGRAM 
 
¶1. Summary.  Details of the GOP plan to create a social welfare type 
program, the Benazir Income Support Program, were presented to 
diplomatic representatives.  Through the program the GOP will 
disburse Rs. 2000 (USD 24.39 at R82 per USD) every other month to 
over 3 million families that have a monthly income of less than Rs. 
6000 (USD 73.17).  Parliamentarians would determine who is eligible 
in their districts and then data would be vetted through the 
National Database Registration Authority.  The Pakistan Post will be 
used to deliver the money to recipients across Pakistan.  Criticism 
that poverty is not equally dispersed across Pakistan despite equal 
representation to all Parliamentarians for nominations to the 
program was a common theme among the donors.  End Summary. 
 
¶2. (U) On November 7, Ambassador was invited to attend a briefing on 
the Benazir Income Support Program (BISP).  The briefing for the 
diplomatic corps was organized by the Government of Pakistan (GOP) 
and chaired by Prime Minister Yousef Gilani.  As the newly appointed 
Chair of the BISP, Mrs. Farzana Raja, Member of the National 
Assembly from Punjab, presented details on the BISP program. 
 
¶3. (U) Noting that the BISP will be a publicly funded income support 
scheme aimed at improving social development nationwide, Raja 
explained that the Pakistan People's Party is committed to helping 
Pakistan's most vulnerable cope with the increasing food inflation 
and the erosion of their purchasing power.  Raja also commented that 
this program was initially conceived over 18 months ago by Benazir 
Bhutto who "expected an economic crisis and wanted a social safety 
net program in place." 
 
------------------------ 
MECHANICS OF THE PROGRAM 
------------------------ 
 
¶4. (SBU) Stating that the GOP is "open to suggestions" and "desires 
inputs" from the assembled donor representatives, Raja emphasized 
that the GOP is "aware of the significant challenges in launching 
this type of program but needed support and was not expecting to see 
changes overnight."  She then explained that through the BISP, the 
GOP will disburse Rs. 2000 (USD 24.39 at R82 per USD) every other 
month to over 3 million families that have a monthly income of less 
than Rs. 6000 (USD 73.17).  For families earning Rs. 5000 per month, 
the Rs. 1000 payout will amount to a 20 percent increase in their 
current purchasing power. 
 
¶5. (U) BISP has been allocated an amount of Rs. 34 billion for the 
fiscal year 2008-09 in the Pakistan Stabilization and Development 
Program budget.  It is the third largest allocation in the current 
budget (after water/ power and highways) and constitutes 0.3 percent 
of GDP.  The GOP anticipates that BISP will cover up to 12-14 
percent of the population in the lowest income brackets across the 
entire country.  The GOP took special effort to note that the 
program includes the FATA, Northern Areas and Azad Jammu and Kashmir 
as well as "special attention.  . . accorded to remote areas such as 
in Balochistan, Chitral, North and South Waziristan, Kohistan, and 
Tharparkar." 
 
¶6. (U) The GOP plans to make payments only to the female head of the 
family.  Raja noted that the government intends to use the BISP as a 
tool for women's empowerment and hopes to "flesh out the invisible 
women."  A typical family is considered to be five members for 
planning purposes.  Raja stated that families in low income brackets 
spend between 50- 70 percent of their income on food. At current 
flour prices, the Rs. 1000 a month amount will be sufficient to 
finance 20-25 days of flour need for a 5-6 member family. 
 
¶7. (U) Disbursement will be made through the Pakistan Post Office, 
delivered by postal money order at the recipient's address so that 
the recipient does not have to incur any cost whatsoever.  Raja 
provided that there are currently over 12,300 branches of the 
Pakistan Post which has a presence in all cities and major towns 
except for about ten.  Work is under way to develop a "smart card" 
system that will ultimately become the medium for BISP disbursement. 
 
 
------------------- 
ROLE OF PARLIAMENT 
------------------- 
 
¶8. (U) The GOP plans to have parliamentarians nominate eligible 
 
ISLAMABAD 00003606  002 OF 003 
 
 
participants for the BISP.  Prime Minister Gilani noted that this 
was the "fairest method for determining who receives the benefits 
since all members of Parliament, regardless of party affiliation, 
have been provided equal opportunity to recommend deserving 
families." 
 
¶9. (U) Raja and Gilani both emphasized that "objectivity has been 
assured by subjecting parliamentarian-recommended families to a 
computer-based verification process."  The National Database 
Registration Authority (NADRA), will apply a pre-designed software 
to screen out those not eligible according to the specified 
criteria.  Minister of Privatization Naveed Qamar noted that 13 
criteria have been given to the Members of Parliament and NADRA has 
prior data on eight of these 13 criteria.   NADRA will directly 
transmit the final list of recipients electronically to Pakistan 
Post. 
 
¶10. (U) The brochure which explains the BISP provides that "neither 
the program management nor parliamentarians will have any control 
over or access to funds, which will be transferred electronically 
from the Treasury to Pakistan Post and which will then [be] 
disbursed according to the list provided electronically by NADRA. 
In fact, the first time anyone will touch the money will be the 
postman as he delivers the amount to the designated female head of 
the family." 
 
¶11. (SBU) Responding to the Canadian representative's concern that 
Members of Parliament will have difficulty in identifying the poor, 
Raja gave the example of Parliamentarians from the FATA who directly 
requested NADRA cards for the women but noted that President Zardari 
refused this request and insisted that the women register.  She 
stated that now NADRA teams are going to the FATA to register women. 
 A representative from the World Food Program noted that poverty 
levels and food inflation vary from region to region in Pakistan and 
asked how the GOP planned to distribute the benefits to the poorest 
of the poor with all Parliamentarians involved.  Salman Faruqui, 
Deputy Planning Commission, noted that the names of all will be 
published and the Pakistani media will be the best watchdog.  He 
further noted that possible criminal sanctions could be enacted for 
any violations.  The World Bank representative echoed comments that 
poverty is not equally dispersed in Pakistan but the GOP has given 
equal representation to all parliamentarians for nominating 
recipients.  Naved Qamar responded by stating that the poverty 
"baseline in Pakistan is so low that every district has people who 
will qualify" and that the program can be expanded to ensure greater 
money goes to the most needy. 
 
-------------------- 
CHECKS AND BALANCES 
-------------------- 
 
¶12. (U) The GOP believes internal monitoring will be addressed 
through three mechanisms: 1) delivery by the Pakistan Post which 
will submit monthly reports on BISP payments to include the list and 
address of each house and the name of the postman making the 
delivery; 2) monthly financial reconciliation; and 3) regular house 
to house checks by BISP to verify the exact amount delivered to 
families.  External monitoring is expected through third party 
validation; by listing recipients on a website for greater 
transparency; and by possibly using the upcoming census to obtain 
data on the economic status of households. 
 
¶13. (U) Noting that the BISP will create a citizens' entitlement 
vis-`-vis the State for the first time in the country's history, the 
GOP admitted that they have yet to flesh out any exit strategy. 
Raja presented several options such as entrance into a micro-credit 
program, skills training program or income generating program but 
noted that any exit strategy "mostly depends on the overall economic 
situation of Pakistan." 
 
¶14. (U) Responding to the Ambassador's question about how this 
program would play into the pending International Monetary Fund 
program, Minister of State for Finance Hina Rabina Khar note that 
this is "a budgeted program going towards the social structure" and 
that the IMF is aware of it.  Prime Minister Gilani stated that 
"whatever program is initiated in the third world, there is 
criticism" but for the "first time in Pakistan, there is no 
discrimination in the use of development funds-- regardless of 
party, all are able to the Bhutto card." 
 
ISLAMABAD 00003606  003 OF 003 
 
 
 
------------------------ 
CRITERIA FOR ELIGIBILITY 
------------------------ 
 
¶15. (U) The proposed criteria for a family's eligibility of benefits 
under the BISP are as follows: 
a) Possession of Computerized National Id Card by female applicant; 
b) Monthly Family Income is less than Rs. 6000.00 (USD 73.17); 
c) Widowed/Divorced women, without adult male members in the 
family; 
d) Any physically or mentally retarded person(s) in the family; 
e) Any family member suffering from a chronic disease. 
 
¶16. (U) The following families will not be eligible for the BISP 
benefits: 
a) Where any of the members of the family is in employment of 
government/semi-government/ authority/department or armed forces. 
b) Where any of the members of the household is drawing pension from 
government/semi- government/authority/department or armed forces. 
c) Where any of the members of the household is receiving any 
post-retirement benefits from any department/agency. 
d) Where any of the members of the family own agriculture land more 
than three acres or residential house/plot of more than eighty 
square yard. 
e) Where any member of the family is receiving income support from 
any other sources. 
f) Where any member of the family possesses Machine Readable 
Passport. 
g) Where any member of the family possesses National Identity Card 
for Overseas Pakistanis (NICOP). 
h) Where any member of the family has a Bank Account (except in 
National Bank of Pakistan, Habib Bank Limited, United Bank Limited, 
Muslim Commercial Bank, Allied Bank Limited, Bank of Punjab, Bolan 
Bank, Khyber Bank, First Women's Bank, Zarai Tarakyati Bank, 
Khushali Bank, and all microfinance banks). (Comment: This criterion 
allows an account with all domestic banks in Pakistan but excludes 
any international banks. End Comment.) 
 
------- 
COMMENT 
------- 
 
¶17. (SBU) It is obvious that the PPP government is proud of this 
concept and wants support to ensure that this idea of Benazir Bhutto 
becomes a reality.  At the presentation, no timeline was given for 
commencing the project or dispersing the funds and no direct donor 
assistance was requested.  World Bank officials have noted the need 
for technical assistance in the administration of the program as 
well as for monitoring and evaluation.  The imminent IMF agreement 
will certainly impact GOP spending on social safety net programs but 
the direct impact on the proposed BISP program is not yet known. 
Funding and technical assistance for this program could be a project 
for consideration in the Friends of Pakistan.  End Comment. 
 
PATTERSON