[1]

EN

THIS ACTION IS FUNDED BY THE EUROPEAN UNION

ANNEX

of the Commission Implementing Decision on the financing of the annual action programme

in favour of Pakistan for 2020

Action Document for ‘Poverty Alleviation and Inclusive Development Across Rural

Sindh’ (PAIDAR) programme

ANNUAL PROGRAMME

This document constitutes the annual work programme in the sense of Article 110(2) of the

Financial Regulation and action programme/measure in the sense of Articles 2 and 3 of Regulation

N° 236/2014.

1. Title/basic act/

CRIS number

Poverty Alleviation and Inclusive Development Across Rural Sindh

(PAIDAR)

CRIS number: 2020/042-312

Financed under the Development Cooperation Instrument

2. Zone benefiting

from the

action/location

Asia, Pakistan

The action shall be carried out at the following location: Sindh Province

3. Programming

document

Multi-annual Indicative Programme (MIP) 2014-2020 – Pakistan

4. Sustainable

Development

Goals (SDGs)

Main SDGs:

Goal 1: No Poverty,

Goal 5: Gender Equality,

Goal 8: Decent Work and Economic Growth,

Goal 9: Industry, innovation and infrastructure,

Goal 10: Reduced Inequalities,

Goal 11: Sustainable Cities and Communities,

Goal 17: Partnership for the Goals

5. Sector of

intervention/

thematic area

Rural Development DEV. aid: YES

6. Amounts

concerned

Total estimated cost: EUR 50 000 000

Total amount of EU budget contribution EUR 50 000 000

7. Aid

modality(ies)

Project Modality

[2]

and

implementation

modality(ies)

Indirect management with the entity (ies) to be selected in accordance with

the criteria set out in section 5.3.1

8 a) DAC code(s) 43040 - Rural Development

32130 - Small and Medium sized enterprises (SME) development

25010 - Business support services and institutions

8 b) Main Delivery

Channel

12 000 - Recipient Government

or

41000 - United Nations agency, fund or commission (UN)

9. Markers

(from CRIS DAC

form)

General policy objective Not

targeted

Significant

objective

Principal

objective

Participation development/good

governance ☐ ☐ X

Aid to environment X ☐ ☐

Gender equality and Women’s

and Girl’s Empowerment ☐ X ☐

Trade Development X ☐ ☐

Reproductive, Maternal, New

born and child health

X ☐ ☐

Disaster Risk Reduction X ☐ ☐

Inclusion of persons with

disabilities

X ☐ ☐

Nutrition X ☐ ☐

RIO Convention markers Not

targeted

Significant

objective

Principal

objective

Biological diversity X ☐ ☐

Combat desertification X ☐ ☐

Climate change mitigation X ☐ ☐

Climate change adaptation X ☐ ☐

10. Internal

markers

Policy objectives Not

targeted

Significant

objective

Principal

objective

Digitalisation X ☐ ☐

Migration X ☐ ☐

COVID response ☐ X ☐

[3]

1. BACKGROUND AND CONTEXT DESCRIPTION

Pakistan has a population of over 216.5 million in 20191 , giving it a nominal Gross Domestic

Product (GDP) per capita of USD 1,388 in 2019, which ranks 151st in the world

2. Pakistan’s

economy has been experiencing high growth rates (up to 5.8% in Fiscal Year (FY) 2018),

however growth has not been inclusive and poverty persists as a deeply entrenched problem.

According to the Pakistan Economic Survey 20183, percentage of people living below the

national poverty line stands at 24.3%. The poverty head-count using the USD 1.90

international poverty line is estimated at 3.9% for the FY 2019, while poverty at the USD 3.20

poverty line is 34.7% and an estimated 75.4% of the population live on less than USD 5.50 a

day4.

With the population of 47.89 million Sindh is the second largest province of Pakistan with its

capital, Karachi, being the most populous metropolis of the country, as well as a commercial

and economic hub. The province overall registers high GDP per capita, nevertheless, there is a

big gap between urban southern Sindh (Karachi, Hyderabad) and mostly rural northern Sindh

which has 23 million inhabitants. Continued rapid population growth and urbanization in

Sindh increases pressure on the basic dimensions of poverty, which are largely the same in

both rural and urban areas – with the same basic issues of access to clean water and sanitation,

poor nutrition, poor housing, etc.

Corruption is widespread in Pakistan, which increases multiple forms of vulnerabilities and

impacts the access to basic services. Transparency International’s 2019 Corruption Perception

Index ranks the country 120th

place out of 180 countries.

The current outbreak of coronavirus (COVID-19) is expected to have an overwhelming

impact5 on human lives and on the social and economic wellbeing of the people of Pakistan. It

is likely that the economy will contract and the real GDP growth is projected to be -0.4% for

FY 2019 primarily through a slowdown in the services and manufacturing sectors. The

COVID-19 pandemic is expected to undo many of the gains Pakistan has made in poverty

reduction and on social indicators, and current estimates by International Monetary Fund

suggest a sharp rise in poverty rates, from 24.3% up to 40%. As the country is emerging from

a macroeconomic crisis, the Government has limited fiscal buffers to actively respond to the

pandemic. Sindh and Punjab will experience greater economic difficulties due the pandemic,

as they are relatively more urbanized and they have a combined share of 90% in manufactured

exports. Both these provinces are likely to see negative growth rates in their respective GDPs

in both FY 2019 and FY 2020. In Sindh the industries sector will be hit the hardest (-3.66%),

followed by the services sector (-1.39%)6.

Pakistan lags far behind the rest of the world in gender equality. The World Economic

Forum’s 2020 Global gender gap index ranked Pakistan as 153 out of 155 countries based on

economic, educational, health-based and political indicators. In rural Sindh, deep-rooted

systemic and cultural impediments to gender equality continue to prevent women from

1 World Bank, https://data.worldbank.org/indicator/SP.POP.TOTL?locations=PK

2 World Economic Outlook – IMF – 2019

https://www.imf.org/external/pubs/ft/weo/2019/02/weodata/weorept.aspx?pr.x=68&pr.y=12&sy=2017&ey=202

4&scsm=1&ssd=1&sort=country&ds=.&br=1&c=564&s=NGDPD%2CPPPGDP%2CNGDPDPC%2CPPPPC%

2CPCPIPCH&grp=0&a= 3 http://finance.gov.pk/survey/chapters_19/Economic_Survey_2018_19.pdf

4 World Bank, Macro Poverty outlook South Asia April 2020

5 COVID-19 – Pakistan Socio-economic Impact Assessment & Response Plan (Draft Ver. 1 May 2020)

6 Sindh COVID-19 Socio-economic Assessment and Response (May 2020)

[4]

reaching their full potential and exercising their rights as full and equal citizens. For instance,

child marriage and honour killings do still occur7, and discriminatory customs prevent from

inheriting or acquiring land and other property. 75% of rural women and girls work as

agricultural labourers in Pakistan an average of 34 hours per week in addition to their

responsibility of caring and domestic work8. In the current crisis, many women, including

domestic workers and those working for small and medium businesses, may also be laid off

due to the inability of employers to continue paying wages during an economic downturn.

Home-based workers, daily wagers and domestic workers are even more vulnerable to

gender-based violence in this pandemic. According to the Global Entrepreneurship and

Development Institute, Pakistan ranks last out of 77 countries as regards the country’s

conditions conducive to female entrepreneurship. In addition, rural women face inequality in

gaining access to health care and other basic services, and to education and decision-making

processes at the community level9.

Small and Medium Enterprises (SMEs) play a primary role in driving economic growth,

employment creation and poverty alleviation10

in Pakistan. Around 70% of all non-

agricultural SMEs are not formally registered and operate informally. Some organisations

have reported labour rights abuses, especially in SMEs, which are less likely to be inspected

than larger companies. Women may experience verbal and physical abuse, sometimes of a

sexual nature11

. The Human Rights Committee has expressed its concern about the situation

of child labour especially with respect to the high number of children engaged in labour under

hazardous and slavery-like conditions, and the insufficient labour inspections of child labour.

People with disabilities (PwD) constitutes another group in vulnerable situation as according

World Bank estimated 71% PwDs are unemployed in Pakistan.

The total number of SMEs in Pakistan is 2.96 million, of which 18% are located in the

province of Sindh. There is potential for local value addition and for economies of scale,

especially in the area of sustainable processing and packing facilities. If improved, labour

productivity would lead to enhanced economic empowerment, especially for women. The

provision of business development and financial services is weak. A number of constraints

limit the micro-finance institutions’ suitability to service the informal SMEs sector: limited

outreach, high risks, excessive rates, and the requirement for a formalisation of the businesses.

COVID-19 is likely to impact micro, small and medium enterprises in Pakistan.12

The main

challenges are to comply with directives of retaining employees during lockdowns and the

high degree of uncertainty in all aspects of the businesses (constraint on manpower –

restriction of movements and infections by COVID-19, timely supplies and price hikes,

production, distribution and cash-concentrated markets) and respecting at the same time their

fundamental rights and labour rights.

7 Human Rights Committee, Concluding Observations on the Initial Report of Pakistan, 2017,

https://tbinternet.ohchr.org/_layouts/15/treatybodyexternal/Download.aspx?symbolno=CCPR/C/PAK/CO/1&La

ng=En 8 UN Women, 2018 report

9 CEDAW Committee, Concluding observations on the fifth periodic report of Pakistan, 2020

10 Government of Pakistan, SME Policy: SME Led Economic Growth – Creating Jobs and Reducing Poverty,

11 “No Room to Bargain. Unfair and Abusive Labor Practices in Pakistan”, Human Rights Watch, 2019,

https://www.hrw.org/report/2019/01/23/no-room-bargain/unfair-and-abusive-labor-practices-pakistan 12

See “The Impact and Policy Responses for COVID-19 in Asia and the Pacific” UNESCAP, April 2020

(https://www.unescap.org/resources/impact-and-policy-responses-COVID-19-asia-and-pacific)

[5]

With an already low representation of women in SMEs, i.e. only 1% women entrepreneurship,

6% firms with female ownership and 2% women-only employers, COVID-19 and the

subsequent lockdown measures present additional risks for female unemployment and to

women-led businesses as these are less resilient to the impact of adverse economic shocks. It

is estimated that in Sindh 2.4 million people (23% share of employment) will be temporarily

out of employment and 2.8-4.3 million people will be unemployed on a permanent basis as a

result of COVID-19.13

Context and problem description 1.1

The proposed action is fully in line with the Strategic Engagement Plan signed between the

EU and Pakistan in 2019 and the current Multiannual Indicative Programme (MIP) 2014-

2020. Moreover, it has a prominent place in the EU’s response to the effects of the COVID-19

crisis in Pakistan.

Pakistan has ratified the main international conventions on Human Rights14

. The country’s

overarching development vision is articulated in Vision 2025. The proposed intervention

aligns with the key pillars of Vision 2025: private sector and entrepreneur-led growth;

competitiveness through a cluster-based approach; value chain development; and the

formalisation of undocumented sectors.

At the provincial level, the Government of Sindh has its own ‘Sindh Vision 2025’, which is

based on the federal ‘Vision 2025’. Sindh’s strategy seeks to achieve a “synchronised and

integrated development strategy for inclusive and participatory economic growth which

provides equal opportunities to all”.

A key challenge to achieving this vision and tackling poverty in Sindh effectively is the

fragmentation of planning and budgeting, and inadequate delivery of services to the

geographically dispersed poor population of rural Sindh. Due to this fragmentation, the

Government of Sindh struggles to effectively address the multiple and interconnected

challenges related to basic survival (e.g. lack of access to basic services including sanitation,

drinking water, and health facilities) and barriers to raising income (such as lack of education,

lack and inappropriate quality of infrastructure, market access, lack of jobs, weaknesses in

businesses).

Based on lessons learned from a number of programmes intended to address these core

challenges, the Government of Sindh adopted in October 2018 a Poverty Reduction Strategy

(the ‘Strategy’) to improve the efficiency and effectiveness of planning and budgeting

processes and service delivery. The Strategy15

is aligned with the Sustainable Development

Goals (SDGs) and aims to strengthen the coherence, complementarity, coordination, and

consistency of the Government’s policy-driven budget planning for improved service

delivery, and to complement it by catalysing economic development.

The Poverty Reduction Strategy consists of the following three inter-linked sub-strategies,

which address different dimensions of urban and rural poverty:

1) Urban Economic Clusters – to boost employment;

13

Sindh COVID-19 Socio-economic Assessment and Response (May 2020) 14

E.g. Convention on the Right of the Child ratified in 1990, CEDAW in 1996, International Covenant on

Economic, Social and Cultural Rights in 2008, International Covenant on Civil and Political Rights in 2010, and

Convention on the Rights of People with Disabilities in 2011. 15

The Poverty Reduction Strategy was designed with the strong technical support of the EU under the EU-

funded action SUCCES.

[6]

2) Rural Growth Centres – to increase service delivery, and

3) Community Driven Local Development – to ensure inclusive development.

The concept of Urban Economic Clusters targets ‘urban within rural’ areas – its focus is on

employment creation in the small towns or villages of largely rural districts. The Urban

Economic Clusters will target the same geographical area as the Rural Growth Centres.

The approach is based on the principle of agglomeration and targets actual or potential

businesses that use similar inputs or produce related outputs. This includes the provision of

facilities and services such as micro-finance units, common technical service centres, and

business incubation services. This concept of SME clustering also underpins both the

Community Driven Local Development and Rural Growth Centres sub-strategies, as follows:

For the Community Driven Local Development sub-strategy, the existing community

mobilisation modalities – as already used by civil society organisations to strengthen

rural entrepreneurship in the rural districts of Sindh – should be fine-tuned. It may

require the grouping together of household-based enterprise efforts to improve

income-generating capacity and linkages to markets.

The sub-strategy of Rural Growth Centres aims to increase opportunities for business

development for existing small to medium sized enterprises and firms already located

in their geographical area. This sub-strategy focuses in particular on the establishment

of improved facilities, infrastructural connection to common market places and

operating space for existing businesses for cluster development.

A Rural Growth Centre is a small town or village located strategically within a cluster of

villages, with economic growth potential and where facilities are upgraded or created. These

facilities may include schools (upgrading to secondary or higher level); health facilities (also

reinforced to respond to epidemics which may occur); roads; market places; women business

centres; storage areas; etc. in order to increase the quality and quantity of complementary

services to be accessed by the population living in the locality. Line departments prioritise

investments and service delivery for the Rural Growth Centres through their development and

recurrent budgets, thereby increasing the integration and targeting of scarce resources and

services.

The entire Poverty Reduction Strategy is underpinned by the Community Driven Local

Development approach. It enables local communities to articulate their priority needs to

different levels of local government to influence the planning, budgeting and delivery of key

services. Communities are consulted and involved in the development of the Rural Growth

Centres and the Urban Economic Clusters. The approach endorses a women-centred approach

to empower women and to reduce poverty at household level, as a key to wider poverty

reduction. The Community Driven Local Development sub-strategy is implemented by the

Government of Sindh People’s Poverty Reduction Programme (PPRP), one of the

programmes providing the foundation for the rollout of the Strategy (see page 11).

In the context of the current outbreak of COVID-19, mobilising prompt support for the

implementation of the Poverty Reduction Strategy of the Government of Sindh has become

more relevant and urgent than ever.

The country has witnessed a significant increase in its confirmed cases to above 110,000 (as

of 10 June 2020) and that number grows with above 5000 new cases daily since beginning of

June. Sindh has experienced the second highest number of cases among Pakistan’s provinces.

As an immediate response to COVID-19, the Federal Government of Pakistan has announced

[7]

a fiscal stimulus of PKR 1.2 trillion (EUR 6.5 billion), and the provincial governments

announced various fiscal measures for their respective provinces.

In April and May 2020, the Federal Government prepared a comprehensive COVID-19 Socio-

economic Impact Assessment and Response Plan, covering all the provinces, that reflects both

a short-term immediate response along with medium to long-term measures. The Government

of Sindh has also developed a provincial COVID-19 Socio-economic Impact Assessment and

Response plan that is in line with the document of the Federal Government.

Overall, Sindh’s Poverty Reduction Strategy provides a comprehensive response to the socio-

economic challenges that the population will face due to COVID-19.

Among the stakeholders in this action, the Government of Sindh is the primary duty bearer.

While the Planning and Development (P&D) Department has the role of overall coordination

in design, planning and budgeting of all interventions in the province, multiple line

departments are involved in the implementation of the Strategy. The private sector will also

be an important partner and beneficiary. It may be involved through Public Private

Partnerships to set up service provision facilities in the Rural Growth Centres and Urban

Economic Clusters and will benefit from business development and relevant service delivery

to businesses under the Urban Economic Clusters. The direct beneficiaries of the Poverty

Reduction Strategy are the right holders, such as the rural population (women, men, and

children) of Sindh, who are currently living in multidimensional poverty and are deprived of

their basic socio-economic rights and living without access to basic services.

A number of crosscutting themes will be addressed in this action. Gender and women

empowerment is at the heart of the action. All the sub-strategies of the Strategy will be

working with the Department of Women Development and community organizations in the

province, which in Sindh mainly consist of women. The action will also target women and

youth entrepreneurs and aim for the employment of women and youth, including those in the

most vulnerable situations (e.g. people with disabilities). Furthermore, the action will promote

decent working conditions. Also, as malnutrition is both a cause and effect of poverty in

Sindh, it is highly pertinent that the Strategy incorporates nutrition-specific and nutrition-

sensitive interventions through the provision of increased multi-sectoral service delivery. This

basic service delivery is also critical to community preparedness and resilience to climate

extremes and disasters to which Sindh is particularly vulnerable. Finally, the action will also

target greening the businesses and help with the compliance of international standards

including labour and environmental.

2. RISKS AND ASSUMPTIONS

Risks Risk

level

(H/M/L)

Mitigating measures

Political priority shift L Policy dialogue to ensure that poverty

reduction and socio-economic development

remain within the Government of Sindh

priorities.

Poor quality of services by the

line departments in rural and

peri-urban areas

H Strong involvement of the community

organisations in the monitoring of the services

will increase accountability. Technical

support to improve and respect environmental

norms when building / rehabilitating

[8]

infrastructures and investments.

Deterioration of the security

situation or occurrence of

natural disaster

M The Delegation will conduct policy dialogue

around the need for contingency plans and

programme implementation will be discussed

to respond to the emerging new context.

The service delivery under the Strategy will

continue the current good practice of the

Government of Sindh that small schemes are

designed to be resistant to external shocks.

Deterioration of COVID-19

situation in Pakistan and

prolonged lockdown and its

consequences on employment

and working conditions

H Monitoring of the situation and dialogue with

the Government on the short to medium term

response.

Support local businesses and the

creation/consolidation of social dialogue

amongst the stakeholders.

Raise-awareness and promote commitment of

the private sector to the UN guiding principle

on human rights and business

Poor governance and weak

accountability mechanism

H Monitoring and Evaluation (M&E)

framework will be integrated into the

provincial M&E system and its linkage with

annual planning and budgeting processes will

be ensured.

Corruption and fiscal leakage

is high in the Government of

Sindh at both provincial and

district levels

H The EU and other development partners are

investing significant coordinated efforts in

programmes to support the reform of the

Public Financial Management (PFM) and

improved governance. Policy dialogue will

also support to achieve results in this area.

The use of public private partnerships to

manage the involvement of CSOs and private

sector will bring an increased level of

accountability.

Credit provider who see

business at risk

M Intensive consultations and support to micro

credit institutions in the targeted geographical

areas.

Low skills level of workforce

in rural areas may constrain

value addition and investments

in rural SMEs

M Synergies with EU-funded Technical

Vocational Education and Training (TVET)

provincial programmes for skills

enhancement and sourcing skilled personnel

for SMEs.

Product commercialization and

distribution

M Support to businesses for improved

production (quality and / or quantity),

[9]

identification of marketing channels, and

establish distribution channels and linkages

with relevant markets.

Lack of strong political will,

and capacity gaps to

mainstream gender and barriers

for women at the work place

M Policy dialogue to ensure that women’s rights

and empowerment is kept amongst priorities

and set in the implementation of the Strategy.

The M&E framework of the Strategy will

produce data by vulnerable groups (women,

age and disability). Promote women

entrepreneurship and employment in

supported business, and support the

development of shared work places/facilities

of women-led businesses

Assumptions

- The Government of Sindh remains politically stable during the period of

implementation of this action.

- The Poverty Reduction Strategy remains among the priority among the poverty

reduction programmes and policies in the rural Sindh.

- The spread of COVID 19 is contained.

- Institutional arrangements remain in place for strategic policy dialogue as well as

mechanisms for technical issue resolution.

- Public and private sector stakeholders are willing to participate in the public and

private partnership fora and develop a shared vision for the cluster development.

Improved technology and human resources of sufficient calibre are available to

support programme interventions locally.

3. COMPLEMENTARITY, SYNERGY AND DONOR COORDINATION

In the EU response to the crisis, synergies are sought between this programme and several EU

supported programmes, which improve service delivery and economic empowerment

outcomes in rural Sindh. Most of these ongoing programmes have integrated elements to

mitigate the impact of the pandemic and meet their original objectives.

The programmes targeting economic growth and business development are:

The ‘Growth for Rural Advancement and Sustainable Progress’ programme (EUR 50

million) focusses on sector and value chain development while this action will have a

geographical focus to boost the local economy and businesses in a sector neutral

manner;

The ‘Accelerate Prosperity’ programme (EUR 3 million for Pakistan) aims to improve

self-employment and employment of women and men in supported businesses and

targets Hyderabad city only, while this action will focus on rural districts;

The ‘Switch Asia’ (EUR 1,8 million) regional programme enhancing resource

efficiency of the sugar sector through adoption of Resource and Energy Efficiency

(R&EE) technologies;

The action will also collaborate with the PFM II programme (EUR 13 million),

particularly at district-level. The aim will be to ensure implementation of an associated

[10]

PFM framework, aligning the priorities and direction of the Strategy with the

provincial Budget and enabling tracking of the Strategy and pro-poor related

expenditure to assess the effectiveness of the Government of Sindh’s investment

against expected results.

The TVET programme (EUR 62.5 million) provides technical advisory and support to

the Pakistani partner National Authority for Vocational and Technical Training

Commission.

Currently, out of a total of 28 districts in Sindh, 18 are supported through the

Government ‘People’s Poverty Reduction Programme’ (PPRP) and the EU-funded

‘Sindh Union Council and Community Economic Strengthening Support’ programme

(SUCCESS, EUR 82 million). The SUCCESS programme is due to end in 2021 and

until then, both programmes will contribute to the continuing preparations of the

foundations for the implementation of the Poverty Reduction Strategy.

The project will also be complementary to programmes in the key sector ‘Governance’ of the

EU targeting women’s and children’s rights and women empowerment, such as the Promotion

of Human Rights programme, the European Instrument for Democracy and Human Rights16

and the Support to Parliament programme.

Furthermore, close coordination will be ensured with the followings:

Development partners, which are coordinated by the UN Resident Coordinator and the

WB in support of the response of the Government to the COVID-19 crisis.

The Provincial Disaster Management Authority of Sindh in charge of the coordinated

response to COVID-19.

4. DESCRIPTION OF THE ACTION

Results chain Indicator17

Source of data

IMP

AC

T

Impact

(overall

objective)

To mitigate the socio-

economic impact of

the COVID-19 crisis

on the people living in

poverty in the rural

areas of Sindh

province

Per capita income of

Sindh disaggregated by

urban/rural and by sex

Pakistan Social and

Living Standards

Measurements Survey,

Pakistan Bureau of

Statistics

Outcome 1

(specific

objective)

1 Public services in

rural Sindh are

increasingly available

and accessible to the

less privileged

population

1.1 Number of students

enrolled disaggregated

by sex, age, disability

and level in project-

supported educational

establishments **(EU

RF 2.07)

1.2 Number of patients

treated in project-

1.1 to 1.3

Reports and surveys

produced by

Directorate of Urban

Policy and Planning

1.1 to 1.3 Monitoring

and Evaluation system

of the Poverty

Reduction Strategy,

16

https://ec.europa.eu/international-partnerships/topics/human-rights_en 17

Formulation of the indicators has to be in a neutral form starting with the measurement unit as in the example

(number of; percentage of; status of). Please note it is NOT required to specify baselines and targets.

[11]

Results chain Indicator17

Source of data

supported health

facilities disaggregated

by sex, age, type of

patient (including

COVID-19) and type of

health facility

1.3 Number of

households availing (a)

potable water, (b)

improved sanitation

with support of the

project, disaggregated

by source type **(EU

RF 2.08)

once fully functional

1.1 to 1.3 Project

Surveys during

inception, mid-term &

end

Outcome 2

(specific

objective)

2 Increased (self-)

employment in the

Urban Economic

Clusters, with specific

focus on women and

youth, in the (post-)

COVID-19 context

2.1 Number of Small

and Medium Enterprises

(SMEs) that have

embedded the support

provided by PAIDAR in

their processes,

disaggregated by size of

business, sector and sex

of SME owner/head

2.2 Number of SMEs

that have increased

productivity,

disaggregated by size of

business, sector and sex

of SME owner/head

2.3 Number of SMEs

that have re-generated

and / or increased

demand for their goods

or services following

COVID-19,

disaggregated by size of

business, sector and sex

of SME owner/head

2.4 Number of new

(formal or informal)

SMEs linked to new

value chains (national or

international),

disaggregated by sector

and sex of SME

owner/head

2.5 Number of

employees in supported

2.1 to 2.5 and 2.7

Employment data of

the Sindh Bureau of

Statistics , and Project

Surveys during

inception, mid-term &

end

[12]

Results chain Indicator17

Source of data

enterprises (by sector,

sex, age, disability,

region and employment

status – i.e. part-time,

full-time, self-

employed, employed)

**(EU RF 2.11)

2.6. Participation of

women and youth from

communities in

decision-making

2.7 Number of SMEs

comply with labour,

environmental and

safety measures

standards of ILO

(disaggregated by type

of standards)

2.6 Minutes of

meetings of

Government of Sindh

OU

TP

UT

(S)

Output(s)

related to

Outcome 1

1.1 Pro-poor policies

and programmes are

supported by the

action to ensure that

they are in line with

the Poverty Reduction

Strategy

1.2 Poverty Reduction

Strategy performance

management system

developed

1.3 Established Rural

Growth Centres are

capable of providing

increased, accessible

and quality services.

1.1.1 Status of

development of

inclusive and gender-

responsive Poverty

Reduction Strategy

guidelines for sector

level planning

1.2.1 (a) Number and

(b) Percentage of pro-

poor programmes of

GoS that integrate the

innovative approaches

of the sub-Strategies

1.2.2 Extent to which

the Strategy’s

performance

management system can

provide accurate and

timely information

1.3.1 Number of

business support

services18

available in

the targeted

geographical area

(disaggregated by type

of services)

1.1 to 1.3.7 Reports

and surveys produced

by Directorate of

Urban Policy and

Planning on increased

number of services and

access

Monitoring and

Evaluation system of

Poverty Reduction

Strategy once fully

functional

18

The type of services developed will be based on the needs identified during the inception phase, and

potentially include mentoring, support for improving production, logistics etc.

[13]

Results chain Indicator17

Source of data

1.3.2 Number of

targeted business

support services

available for women,

youth

1.3.3 Number of shared

work spaces developed

for businesses with the

support of the action,

disaggregated by sector

and sex of SSME

owner/head

1.3.4 Number of

educational

establishments (a)

established or (b)

upgraded with the

support of the action,

disaggregated by level

and location

1.3.5 Number of health

facilities (a) established

or (b) upgraded with the

support of the action,

disaggregated by

location

1.3.6 Number of water

schemes (a) constructed

or (b) upgraded with the

support of the action,

disaggregated by type

and location

1.3.7 Square meters of

market places (a)

constructed or (b)

upgraded with the

support of the action,

disaggregated by

location

1.3.8 Kms of road (a)

built, (b) rehabilitated

with the support of the

action, disaggregated by

type of road **(EU RF

2.16)

1.3.8 Minutes of

consultative meetings

with community

organizations,

including organization

of women, youth

[14]

Results chain Indicator17

Source of data

1.3.9 Number of

consultations involving

Community

Organisations including

women and youth

1.3.10 Level of

satisfaction of the users

of services provided by

the Rural Growth

Centres, (disaggregated

by age, sex)

Output(s)

related to

Outcome 2

2.1 Increased capacity

for entrepreneurs with

specific focus on

women and youth to

make use of business

facilitation/support

services

2.2 Increased number

of SMEs clusters in

the targeted rural areas

2.3 Increased number

of supported

businesses connected

2.1.1 Number of

entrepreneurs

completing incubation,

acceleration and training

programmes supported

by the action, with

increased knowledge on

subject of the training

(disaggregated by sex,

age, type and size of

enterprises)

2.1.2 Number of (a)

individuals and (b)

SMEs with access to

financial services with

EU support:

(disaggregated by sex of

SME’s owner/head and

type of enterprise)

**(EU RF 2.13)

2.1.3. Number of

Memberships in

professional

organizations/networks,

(disaggregated by sex,

age of SME

owner/head)

2.2.1 Number of

businesses producing

linked products and / or

services (disaggregated

by type of

products/services and

sex of SME

owner/head)

2.3.1 Number of

2.1.1 to 2.4.2 Regular

Project Progress

Reports compiled from

the Project’s

Management

Information System

(MIS)

2.1.1 pre and post

training tests

2.1.2 EU intervention

monitoring and

reporting systems:

annual and final

reports from

implementing

organisations, ROM

reviews

and evaluations

[15]

Results chain Indicator17

Source of data

2.4 Increased

investment in

supported businesses

by the programme

businesses share

facilities

workspaces/utilities

(disaggregated by type

of facilities shared and

by sex of SME

owner/head)

2.4.1 Number of

businesses with

additional investment

supported by the

programme

(disaggregated by size

of investment, sex of

SME owner/head, type

and size of enterprises)

2.4.2 Amount of the

investment in supported

businesses by the

programme

The action will consist of

Outcome 1 Policy support to the Government of Sindh in the overall implementation of

their Poverty Reduction Strategy, including all three inter-linked sub-strategies, with a

rights and gender based approach; and

Outcome 2 Implementation of the ‘Urban Economic Clusters’ sub-strategy with the aim

of mitigating the impacts of COVID-19 on the private sector to maintain and (re)create

additional jobs and income generating opportunities while also strengthening their

compliance with international labour, production and environmental standards.

Related to Outcome 1, the main activities will focus on assisting the Government of Sindh in

integrating the comprehensive poverty reduction approach into the planning and budgeting

processes. This will include providing policy advice, strengthening the implementation of

services and building capacity of relevant government levels. The action will focus in

particular on:

1. Capacity building of the relevant departments at provincial and district levels of the

Government of Sindh to identify and improve their pro-poor planning budgeting, financial

management and monitoring and evaluation capacity.

2. Development of a performance management system for the Strategy seeking to provide

robust data and information for improved and more strategic decision-making on poverty

reduction, local governance and service delivery.

3. Assistance to the overall implementation of the Strategy. Support the update and

refinement of the Strategy also based on in-depth analysis of the impact of COVID-19 on

poverty levels. Design and implementation of the Rural Growth Centres and Urban

Economic Clusters, assisting with the feasibility assessments and working on their costing

and their integration into the Government of Sindh’s Annual Development Plan and

budgeting rounds. Support identification of further potential Rural Growth Centres and

[16]

Urban Economic Cluster sites in the target districts. Conduct environmental study (e.g.

environmental impact assessment) to ensure that climate change concerns will be taken

into consideration while planning and executing the identified infrastructures needs (e.g.

climate proofing, use of High Intensity Manpower Approach, use of renewables).

Related to Outcome 2, the main activities will focus on protecting and (re)creating jobs and

will mainly target the implementation of the ‘Urban Economic Clusters’ sub-strategy of the

Strategy with the aim of boosting the private sector and income generation opportunities in

the rural context. The action will focus in particular on:

1. An in-depth analysis of the targeted geographical areas will provide the basis for

comprehensive intervention. In particular, the intervention will target the identification of

specific local economic characteristics; potential for growth; enterprise development

options/potential and relevant approaches. It will assist with methods of

facilitation/incubation support; market and resource requirements; targeting of vocational

training to specific enterprises and/or market opportunities including support for green

entrepreneurship possibilities; access to renewable energies and sustainable water for

production; access to micro-credit; and identification of options to promote women’s

entrepreneurship.

2. A comprehensive SME cluster identification to recognise and develop clusters that can

function together co-operatively to achieve economic objectives and develop joint projects

complementing each other. Develop differentiation and specialisation in different areas of

a value chain within a common sector or set of similar objectives and invade

untapped/different markets collectively to develop clusters that could function both

horizontally and vertically. This will include tailored support to businesses, including

women and youth businesses.

3. Identification and scoping of infrastructural and other requirements for shared facilities to

support potential development of enterprise clusters. The infrastructural investments may

be resource-intensive and will be covered by the Government and/or private sector.

4. Support to access to credit and potentially linking credit to market viability of enterprise

products; linking businesses with potential investors.

5. IMPLEMENTATION

5.1 Financing agreement

In order to implement this action, it is foreseen to conclude a financing agreement with the

partner country.

5.2 Indicative implementation period

The indicative operational implementation period of this action, during which the activities

will be carried out and the corresponding contracts and agreements implemented, is 72

months from the date of entry into force of the financing agreement.

Extensions of the implementation period may be agreed by the Commission’s authorising

officer responsible by amending this decision and the relevant contracts and agreements.

[17]

5.3 Implementation modalities

The Commission will ensure that the EU appropriate rules and procedures for providing

financing to third parties are respected, including review procedures, where appropriate, and

compliance of the action with EU restrictive measures19

.

5.3.1 Indirect management with an International Organisation

This action may be implemented in indirect management with an entity that will be selected

by the Commission’s services using the following criteria:

Extensive experience in SME development, including agribusiness and value chains;

Experience in implementing projects of a similar scale as PAIDAR;

Entities that have the necessary authorisation to operate in the Sindh province;

Ideally, the entity implements other development interventions that would

complement PAIDAR.

The implementation by this entity entails that it will be entrusted to carry out all outcome and

outputs described under section 4 Description of the action. The organisation will be

responsible for the overall coordination and implementation of the programme (including any

relevant procurement procedure, call for proposals and subsequent contracting) as well as the

communication and visibility aspects of it.

5.4 Scope of geographical eligibility for procurement and grants

The geographical eligibility in terms of place of establishment for participating in

procurement and grant award procedures and in terms of origin of supplies purchased as

established in the basic act and set out in the relevant contractual documents shall apply,

subject to the following provisions:

The Commission’s authorising officer responsible may extend the geographical eligibility on

the basis of urgency or of unavailability of products and services in the markets of the

countries concerned, or in other duly substantiated cases where the eligibility rules would

make the realisation of this action impossible or exceedingly difficult.

5.5 Indicative budget

EU contribution

(amount in

EUR)

Indicative third

party

contribution, in

currency

identified

Section 5.3.1 - Indirect management with a pillar

assessed Organisation (One contribution agreement)

49 200 000 0

Evaluation (cf. section 5.8)

Audit (cf. section 5.9)/Expenditure verification 600 000 0

Contingencies 200 000

19

www.sanctionsmap.eu Please note that the sanctions map is an IT tool for identifying the sanctions regimes.

The source of the sanctions stems from legal acts published in the Official Journal (OJ). In case of discrepancy

between the published legal acts and the updates on the website it is the OJ version that prevails.

[18]

Totals 50 000 000 0

5.6 Organisational set-up and responsibilities

The Steering Committee for Poverty Reduction in the Sindh province is the apex governance

mechanism for strategic direction and oversight of interlinked pro-poor interventions

including the Poverty Reduction Strategy. It was set up in July 2019 and is chaired by the

Chairperson of the Planning and Development Department with members from relevant line

departments.

It is expected that this committee will also oversee the implementation of the relevant

chapters of the Provincial socio-economic COVID-19 plans. Monitoring and evaluation of

progress is informed by technical Working Groups and a robust Management Information

System (MIS) is being developed to capture data on service delivery and poverty reduction in

collaboration with the Sindh Bureau of Statistics.

At the technical level, the ‘Community Driven Local Development’ sub-strategy is being

coordinated by the ‘Pakistan People’s Poverty Reduction Programme’s’ Program

Management Unit. The piloting and implementation of the Rural Growth centres and Urban

Economic Clusters are being managed by the Directorate Urban Policy and Strategic

Planning, both part of the Planning and Development Department.

As part of its prerogative of budget implementation and to safeguard the financial interests of

the Union, the Commission may participate in the above governance structures set up for

governing the implementation of the action.

5.7 Performance and Results monitoring and reporting

The day-to-day technical and financial monitoring of the implementation of this action will be

a continuous process, and part of the implementing partner’s responsibilities. To this aim, the

implementing partner shall establish a permanent internal, technical and financial monitoring

system for the action and elaborate regular progress reports (not less than annual) and final

reports. Every report shall provide an accurate account of implementation of the action,

difficulties encountered, changes introduced, as well as the degree of achievement of its

results as measured by corresponding indicators, using as reference the simplified Logframe

matrix (for project modality) available in section 4 or the partner’s strategy.

The Commission may undertake additional project monitoring visits both through its own

staff and through independent consultants recruited directly by the Commission for

independent monitoring reviews (or recruited by the responsible agent contracted by the

Commission for implementing such reviews).

5.8 Evaluation

Having regard to the nature of the action, a mid-term and final evaluation(s) will be carried

out for this action or its components via independent consultants contracted by the

Commission.

The mid-term evaluation will be carried out for all complement for problem solving, learning

purposes, in particular with respect to specific aspects that can be highlighted such as the

intention to launch a second phase of the action.

The final evaluation will be carried out for accountability and learning purposes at various

levels (including for policy revision), taking into account in particular the fact that

complement with specific aspects that can be highlighted such as an innovative action or a

pilot being tested, etc.

[19]

The Commission shall inform the implementing partner at least 3 months in advance of the

dates foreseen for the evaluation missions. The implementing partner shall collaborate

efficiently and effectively with the evaluation experts, and inter alia provide them with all

necessary information and documentation, as well as access to the project premises and

activities.

The evaluation reports shall be shared with the partner country and other key stakeholders.

The implementing partner and the Commission shall analyse the conclusions and

recommendations of the evaluations and, where appropriate, in agreement with the partner

country, jointly decide on the follow-up actions to be taken and any adjustments necessary,

including, if indicated, the reorientation of the project.

Indicatively, two contracts for evaluation services shall be concluded under a framework

contract in 2022 and in 2024 (end of the programme).

5.9 Audit

Without prejudice to the obligations applicable to contracts concluded for the implementation

of this action, the Commission may, on the basis of a risk assessment, contract independent

audits or expenditure verification assignments for one or several contracts or agreements.

Indicatively, one contract for financial verification services shall be concluded under a

framework contract in 2024.

5.10 Communication and visibility

Communication and visibility of the EU is a legal obligation for all external actions funded by

the EU.

This action shall contain communication and visibility measures which shall be based on a

specific Communication and Visibility Plan of the Action, to be elaborated at the start of

implementation.

For the purpose of enhancing the visibility of the EU and its contribution to this action, the

Commission may sign or enter into joint declarations or statements, as part of its prerogative

of budget implementation and to safeguard the financial interests of the Union.

In terms of legal obligations on communication and visibility, the measures shall be

implemented by the Commission, the partner country, contractors, grant beneficiaries and/or

entrusted entities. Appropriate contractual obligations shall be included in, respectively, the

financing agreement, procurement and grant contracts, and delegation agreements.

The Communication and Visibility Requirements for European Union External Action (or any

succeeding document) shall be used to establish the Communication and Visibility Plan of the

Action and the appropriate contractual obligations.