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How to Create a Safety Net in Rural Balochistan

  • Savaila Hunzai
  • Feb, 2020
  • 168
  • Community-Driven Development

Creating a safety net in the absence of official financial networks and services in rural Balochistan is not as difficult as one would assume.

Khatima is the president of the all woman village organization (VO) Romania in Killi Nazim Abdul Malik of district Killa Abdullah. In her late 20s, she has been married for 15 years and has eight children. Khatima and her fellow community women organized themselves into a VO in April, 2018.

The women of VO-Romania meet on the fifth of every month and put aside approximately 50 Pakistani rupees per month ($0.32) as “bachat money” at each meeting. Khatima and her fellow members of VO-Romania are very proud of their savings and becoming more informed about financial management at the household and community levels. Their total savings so far amount to 28,000 Pakistani rupees ($180.81) which is truly impressive.

Kochai, a teenage girl in the community slipped and broke her shoulder blade and her family did not have money to pay for her treatment. The VO gladly offered the “bachat money” to Kochai's family to help her get proper and timely treatment. Out of the 6,500 Pakistani rupees saved at the time, they happily gave 5,000 to Kochai for her treatment. Kochai is recovering swiftly. She has diligently paid back her loan in 50 small installments. Had it not been for the VO’s readily available savings at hand, Kochai would not have been able to access timely treatment for her injury.

Identifying the Problem

Recent academic literature shows that although globalization has reduced inequality across nations, the gap between the rich and the poor within nations (intra-national inequality or inequality at a local level) is wider than ever. Where high income nations have government financed, managed or subsidized services for the poor, low income nations are unable to protect their most socio-economically vulnerable citizens in the same way. Social protection services in high income nations provide citizens with social services, like pensions, free education, healthcare, insurance, unemployment allowances, and so on.

Pakistan, a developing nation, with 39 percent of its population living in multidimensional poverty has so far struggled to safeguard its citizens socioeconomic wellbeing. The rural poor in the nation are especially vulnerable to natural disasters, health calamities, illiteracy, lack of employment or self-employment opportunities, and more that push them further into poverty.

Balochistan, with its history of military unrest, an influx of refugees in various waves from Afghanistan and a lack of basic infrastructure, has lagged behind in progress and development from the rest of Pakistan. Only 14 percent of Pakistanis are using formal financial products or services. Balochistan is further financially excluded; there are only 314 scheduled banks in Balochistan, most of which are concentrated in a few districts. The available banks are inaccessible to the rural poor, given only one-fourth of the province’s population is literate (the lowest literacy rate in Pakistan) and not everyone is able to understand and use formal banking systems. Furthermore, 71 percent of Balochistan’s population lives in multidimensional poverty and thus the population faces numerous socioeconomic challenges, especially in times of crisis.

An Evidence-based Solution

In such conditions, where financial safety nets are unavailable, a large population of the rural poor in Balochistan have come to rely upon their communities’ collective savings to help them in times of crisis. Under the European Union-funded Balochistan Rural Development and Community Empowerment (BRACE) Programme, the Balochistan Rural Support Programme (BRSP) and the National Rural Support Programme (NRSP) are organizing rural households into a network of three-tiered Community Institutions (CIs).

The CO (Community Organization) comprises 15-20 households living in a close proximity sharing common socioeconomic conditions. Each CO is led by a president and a manager who are elected by the corresponding CO members. COs are then federated into VOs (Village Organizations), with the VO having two representatives from each CO. Once a Union Council (UC) has several VOs, these are further gathered into LSOs (Local Support Organizations), with two representatives from each VO. Members of these organizations meet weekly, monthly or bi-monthly depending on their convenience to discuss community as well as individual socioeconomic problems and potential solutions. Through collective wisdom, they find feasible solutions to their problems and resolve them through self-help approaches. These community institutions form an important social pillar which begins the process of finding a voice and engaging with local authorities.

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