Punjab Education Sector Adjustment Credit

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The purpose of this Education Sector Adjustment Credit for Pakistan is to provide financing for the Province of Punjab, which has embarked on a wide-ranging reform agenda to improve fiscal management, promote devolution and improve service delivery starting with education. The credit is the first of a series of three adjustment credits to support the Government of Punjab's medium-term sector-wide reform program to enhance access and quality of education. Punjab is reallocating public expenditures towards education and other pro-poor programs, and implementing national initiatives on decentralization and the accompanying public finance and management reforms, using the education sector as the leading sector. The Government has developed a Punjab Education Sector Reform Program (PESRP) Strategy that is consistent with the National Education Sector Reform Program. The Punjab ESRP has three pillars: (A) public finance reforms to realign expenditures at the provincial and district level toward education and other pro-poor expenditures; (B) devolution and public sector management reforms; and (C) education sector reforms to improve quality, access, and governance of the education system. These reforms will be fully implemented over a three-year period. The first two pillars of the reforms are also supported by the Asian Development Bank (ADB) under the Punjab Resource Management Program (PRMP). The Punjab Government has also developed a Provincial PRSP, which, among other things, supports the devolution of decision making and finances to districts and provides the impetus for public finance and management reforms. These reforms are being undertaken concurrently. As earlier experience in Pakistan shows, education sector reforms cannot be successful without reforms in public finance management and governance. While significant actions were taken prior to the first IDA Credit, this reform program envisages completion of future actions by FY06. The main benefits come from reversing the slide in education indicators, bringing more children (particularly poor children and girls) into school, up to grade 8 sooner than previously expected, and providing them with better quality education. Another indirect but important benefit is that the program would help strengthen decentralization by increasing the role of districts and promoting accountability between service users (parents and students) and service providers (schools and teachers). The credit will be disbursed in a single tranche upon credit effectiveness.