Poverty reduction partnership agreement with ADB



Sep 23 - 29, 2002


Pakistan and the Asian Development Bank signed in Islamabad on Monday last "Poverty Reduction Partnership agreement" in which both sides have affirmed their commitment to halving the incidence of poverty in the country by 2011.

Under the agreement signed here by Dr.Waqar Masood Khan, Secretary Economic Affairs Division and ADB's Country Director, Marshuk Ali Shah, the Bank will provide $2.4 billion credit to Pakistan during the period 2003-05. The signing ceremony was also witnessed by Shaukat Aziz, Minister for Finance and Myoun-Ho Shin, Vice President, Asian Development Bank who came to Pakistan specially for this purpose.

Under this important "Poverty Reduction Partnership Agreement" the Government of Pakistan and Asian Development Bank (ADB) would work together to reduce the incidence of poverty to less than 15 per cent by the end of the Government's Ten-Year Perspective Development Plan from present 38 per cent in rural areas and 32 per cent in urban areas. The agreement between the government of Pakistan and ADB sets out a shared vision for reduction poverty in Pakistan, and outlines key priorities for joint development cooperation between the Government and ADB to realise this vision.

This Agreement also reflects the government's vision and goals for poverty reduction and key priorities of the ADB's country strategy and programme (CSP), which has been formulated and based on the findings of ADB's poverty assessment for Pakistan, released earlier in August this year. The Government and ADB aim to accelerate Pakistan's economic growth, and improve the distribution of its benefits in favour of the poor. Addressing the press conference after signing the agreement Finance Minister Shaukat Aziz highlighted the effort of the government to reduce poverty emphasising that government's policies were primarily aimed at achieving pro-poor growth.

In this regard, he cited the Devolution Plan of the government which is designed not only to empower the people at grass-root level politically but also to ensure their participation in the development process which would keep reduce poverty.

Shaukat Aziz said that ADB is financing the feasibility of gas supply from Turkmenistan through Afghanistan to Pakistan and beyond. This project will have a major impact on getting low cost energy into Pakistan, reducing the cost of electricity and making more power available to industrial and private sectors. He said that ADB is also looking at the regional roads, linking Afghanistan, Pakistan and Central Asian states in order to help exploit full potential of this region. "We need infrastructure of roads and transportation to carry on commercial links and economic ties in this regard" he added.

About agreement signed between Pakistan and ADB, the Finance Minister said that this is poverty reduction partnership agreement and ADB has signed this agreement with several other countries mostly in South Asia. He said that objective of this agreement is to support poverty reduction strategy of the government which requires the poverty reduction level to reduce by half by 2011.

Finance Minister said that government was aiming to go below 15 per cent poverty level by 2011, reducing infant mortality to less than 30 per 1000 births, increasing life expectancy from 62 years to 69 years, increasing primary level enrollment from 42 per cent to 100 per cent, increasing adult literacy from 53 per cent to 78 per cent and with achieving gender balance in each category and increasing economic growth by 6.5 per cent while bringing down the population growth rate to 1.6 per cent.

The Finance Minister said ADB was the largest creditor this year for Pakistan with a total loan of US $ 1 billion and he expressed the hope the bank will maintain this average in the next few years because "we need these funds for growth and development". He assured the donors (development partners) that President of Pakistan General Pervez Musharraf believes in the consistency and continuity of policies and the government would ensure that the economic reforms to be continued. He said the best way to fight poverty is to consistency of the economic reforms, Pakistan's macro economic indicators are pointing well, he remarked.

On the occasion, ADB Vice President Myoung-Ho Shin reiterated ADB's commitment to growth and development in Pakistan. "The Poverty Reduction Partnership Agreement sets out our shared vision of drastically reducing poverty in Pakistan, The Agreement sets a medium term target of reducing the incidence of poverty to 25 per cent by 2006 and raising GDP growth to over 5 per cent. It supports the government's objective of reducing poverty below 15 per cent and raising GDP growth to 6 per cent by 2011.

The Agreement also supports the Government's long-term goals of attaining universal primary school enrollment, reducing the population growth rate to less than 1.6 per cent and the infant mortality rate to less than 30 per 1000 births, and increasing the average life expectancy to at least 69 years.

In the medium-term the Agreement aims to promote good governance, generate productive job opportunities and provide adequate physical infrastructure for faster economic growth, Support human development by improving the access of the poor to literacy, education and health programmes, promote gender equity, support the development of small and medium-size enterprises, Encourage private sector development; and promote regional cooperation.