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S Pakistan fought the growing resemblance between youth bulge and manpower skills and demand for labor market, and there is a need to re -consider how the government and development partners fund the development programs. Traditional input -based financing mechanisms have been reduced to providing permanent employment results. Resulting financing models-especially those who add to the distribution to clean up measures such as formal jobs and job retention.
The provision of results based on financing (OBF) funds to achieve the default results. The desired results may include employment space, increase in income or retaining jobs. This change from the results (such as the number of enrolled/passing) by the results connects the financial concessions with the program’s success, which requires that the service providers focus on quality and compatibility rather than mere delivery. This enhances accountability by imposing results based on the results, where the service providers are not only responsible for providing training but also for ensuring that beneficiaries are used meaningful.
This promotes performance, as the funds are distributed only after the results are confirmed, which reduces the risk of waste and promotes efficient intervention at cost. It also promotes a demand -based approach by encouraging service providers to train tailor to labor market needs and encourages innovation in such as education, employer’s engagement and employment combination.
Traditional financing provides funds based on the expected budget and input completion, which sometimes produces poor results in employment results. On the contrary, OBF structures are focused on real success. Although clear investment in design, monitoring and diagnosis may be high, the cost per successful result is usually low.
A comparative study between OBF and traditional skills training programs in developing economies shows that OBF may increase the cost per train by 10-20 %, but employment rate increases by 30-50 %. For example, in a traditional model, if $ 500 per train is spent with a 40 % employment rate, the job space cost is $ 1,250. Under an OBF model, the cost can increase to $ 600 per train but the placement rate increases by 70 %. So the cost per placement is about $ 857 – which is a significantly better return on investment.
Evidence continues to build globally in favor of consequences based financing tools such as impact bonds launched in more than 35 countries. These bonds have supported education, employment, health and social services initiatives, which have directly benefited more than 2 million people worldwide. One such success is the skill India Impact Bond, which began in 2021, which aims to keep 50,000 young Indians in employment and have more than 70 % of the placement rate in the preliminary implementation phase. In Colombia, the development of a manpower is doubled by the control group, targeting the weakest population targeting the social impact bond, while providing cost savings to the government.
Pakistan faces an important difference in funding in the development sector. According to the Ministry of Planning, Pakistan needs more than $ 2 billion annually to meet its capabilities development goals. Less than 30 % of this amount is currently financed.
These examples reinforce the OBF issue that it is not only a modern financing mechanism but also a cost -effective. In the traditional models used in annual development projects, distribution is often based on expected costs and physical goals, such as the number of registered trains or centers are established. This model lacks accountability for employment results, which leads to high levels of incompetence and low investment. In addition, public audit often flags in traditional schemes or flags for misinterpretation of funds.
On the contrary, the OBF ensures that only success is paid on success. This produces hereditary checks on costs. It encourages the direction of results in better performance management, timely delivery and training. This is a threat to service providers and investors compared to taxpayers. Governments can further increase limited financial resources by getting more meaningful results.
The mainstream OBF is required to integrate into the government’s formal planning and budget framework – especially in annual development projects. Administration ensures permanent political and financial affiliation, standard surveillance systems and expansion framework in departments and provinces. OBF alignment with national policies such as Vision 2025 and national skill strategy will strengthen harmony.
In the institutional framework, OBF contracts should be developed in design and management for public sector officials. Strong data collection and a third -party verification system must be embedded in ADPs. Once the institution, the OBF can be molded for other sectors, such as taking advantage of health and education joint administrative infrastructure.
International Development Agencies are rapidly making the result -based financing model a champion as a tool to increase the effectiveness of aid. Organizations like the United Nations, Foreigners, Commonwealth and the UK government and the World Bank are piloting and funding OBF measures. UNICEF has launched development impact bonds to improve education and health results in Africa and South Asia. The UK’s FCDO has invested in several social and development impact bonds to tackle unemployment in Africa and Asia. The World Bank’s global financing facility includes reproductive and maternity health financing. According to the Brookings Institution, more than 200 results have been launched globally since 2010, which mobilized more than 500 million in payment of results and reached millions of beneficiaries.
Pakistan faces an important difference in funding in the development sector. According to the Ministry of Planning, Pakistan needs more than $ 2 billion annually to meet its expertise development goals. Less than 30 % of this is currently financed. The World Youth Development Index has ranked Pakistan at 154 out of 181 countries, which has highlighted the urgency of investing in youth employment. With more than 2 million young people entering the labor market annually, non -practical price is severe. The OBF can help to take advantage of private and donor capital by degrading public funds and generating partnerships that are compatible with the public interest in private.
Financing based on the results represents the approach to the development of the development of skills. The model aligns privileges, improves accountability and ensures that public funds are used effectively to produce real, measurements. As global evidence and domestic experiences suggest, OBF is not just a financial tool but a governance innovation that can significantly increase the effects of development programs. In Pakistan’s annual development projects, making this approach an institution is essential to expand its benefits. The time has come for policy makers to re -imagine how we invest in our human capital.
Author is the Manager of Punjab Skills Development Fund. It has more than a decade experience in the development of modern financial support and expertise and played a vital role in designing Pakistan’s first skill impact bond.
