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1- MICRO-FINANCING THROUGH MOBILE BANKING
2- TRADE OFF BETWEEN INDIGENOUS SAVINGS & FDI 
3-
IMPERATIVES OF PAKISTAN'S INFRASTRUCTURE FUND
4- ADB's FINANCIAL ASSISTANCE FOR PAKISTAN
5-
PETROLEUM PRICES
6- IRAQ SITUATION: CALL FOR OIL SUBSTITUTES.

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ADB'S FINANCIAL ASSISTANCE FOR PAKISTAN

 

Pakistan has successfully implemented the agreed economic reforms during the past three years

 

     From SHAMIM AHMED RIZVI, Islamabad
Feb 24 - Mar 02, 2003 
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The Asian Development Bank is emerging as a major partner in Pakistan's economic development because of its continued assistance or large number of projects as well as under technical assistance committed to Pakistan in the form of 191 public sector loans totaled $12.36 billion out of which $8.7 billion had already been disbursed.

The ADB provided a total amount of $3.2 billion, which covered a broad range of economic reforms from 1999 to 2002. The successful implementation of the reforms process encouraged the bank to progressively increase its assistance to Pakistan's development efforts. This was illustrated by a record amount of $1.41 billion approved by the ADB for different projects/programme in 2002 alone which was the largest amount of loan assistance offered so far by the ADB to any country. Recently the ADB agreed to provide $250 million for Gwadar-Chaman road project, which will provide access to Afghanistan and the Central Asian States. Another 150 million dollars have been committed for construction of roads in the NWFP including the tribal belt apart from $40 million exclusively for provision of infrastructure in the tribal areas.

Addressing a press conference jointly with Shaukat Aziz, Advisor to the Prime Minister on Finance and Economic Affairs, the visiting Director General of South Asia Development of the Asian Development Bank, Yoshihiro Iwasaki declared that Pakistan has successfully implemented the agreed economic reforms during the past three years. He also affirmed that the Bank would continue its assistance to Pakistan for sustaining the development efforts on a broad front, including the process of poverty reduction in the coming years. Shaukat Aziz describe the Asian Development Bank as a partner in Pakistan's economic development and expressed the hope that annual assistance from the ADB would increase to one billion dollars from the existing average of $800 million for launching the second phase in the ongoing economic reforms. Yoshihiro Iwasaki also emphasized that the target of reforms should now be promotion of greater measure of participation by the private sector because, in his view, capital investment in development activity would have to be generated increasingly in the private sector.

Speaking on the occasion D.G. ADB, said "we are going lack with complete satisfaction over the achievements of Pakistan as far as economic reforms are concerned and hope that the reforms would continue so that Islamabad should consolidate its present level of economic achievement". He said that his bank will continue providing Pakistan with a soft loan of about $800 million till 2005 as part of Poverty Reduction Strategy of the Bank. He hailed the last three years economic policies of President General Pervez Musharraf and was of the view that, the new Prime Minister Mir Zafarullah Khan Jamali would take up the same reforms for the betterment of the people of Pakistan. "We will fully cooperate with the democratic government of Mir Zafarullah Khan Jamali", he added.

 

 

He said that over the past three years, Pakistan has embarked on a series of wide ranging economic and governance reforms, which are to be implemented over the medium term. These reforms are critical to ensuring economic growth, macroeconomic stability, institutional reforms, and improved public sector and corporate governance, for sustained reduction in the level of poverty in the country. ADB has supported this significant reforms effort through enhanced levels of assistance and sectoral reforms and targeted investment projects with the objective of poverty reduction and employment generation, totaling more than 3.2 billion over the 1999-2002 period, of which 2.2 billion dollars was provided through policy based lending operations, he said.

The principal sector reform programs included Trade, Export Promotion Industry Programme (TEPI), approved in March 1999 for 300 million dollars, Micro-finance Sector Development Programme, approved in December 2000 for 150 million dollars, Energy Sector Restructuring Programme (ESPRL), approved in December 2000 for 355 million dollars, Agriculture Sector Programme Loan II, approved in December 2001 for 350 million dollars, Access to Justice Programme, approved in December 2001 for 350 million dollars, Decentralisation Support Programme, approved in November 2002 for 300 million dollars, Rural Finance Sector Development Programme, approved in December 2002 for 250 million dollars, and the Financial (Non blank) Markets and Governance Programme, approved in December 2002 for 266 million dollars. Earlier, in November 1997, the capital Markets Developments Programme had been approved for 255 million dollars.

As of 31 December 2002, 57 public sector loans (43 project loan and 14 programme loans) covering 51 projects were under implementation in Pakistan, of these, the Pakistan Resident Mission (PRM) directly administered 18 projects besides two co-financed projects, for a total of 20 projects in the public sector. In addition, 52 TAs were under implementation of which PRM was directly administering 7 TAs.

During 2002, the stabilization of the political situation in Afghanistan offered new opportunities to explore sub regional efforts with the neighbouring countries in the west (Afghanistan) and the north (Central Asian States). In this context, two sectors were actively pursued to provide the necessary opportunity transportation and energy. In transportation, the Government supported the inclusion of two road projects with sub regional dimensions. The first, the Balochistan Road Development Sector Project, (the preparatory technical assistance for which was approved in July 2002) will connect the Balochistan road network to the borders of Afghanistan and the major deep-sea port of Gwadar in Pakistan. The second, the north West Frontier Province Road Development Sector Project. (The preparatory technical assistance for which will be processed in 2003) will connect the NWFP road network to Balochistan and to Tajikistan. In the energy sector, a major effort was put in Project.

In 2001, 2001 ADB also initiated the preparation of a new medium term Country Strategy and Program (CSP) for Pakistan for the period 2002-2006. This was finalised and approved by the ADB Board in May 2002. The CSP envisages an overall lending level of $2.4 billion for Pakistan for the 2003-2005 period. The focus of the CSP is to support poverty reduction in Pakistan through specific interventions in the following three area; supporting good governance; employment generation; and inclusive social development with a major focus on good governance. The CSP also addresses crosscutting concerns related to gender environment, regional cooperation, and private sector development.

The CSP was preceded by a comprehensive Poverty Assessment for Pakistan, undertaken by PRM during 2001 in consultation with the government, civil society, and other stakeholders. The assessment, titled. "Poverty in Pakistan: Issues, Causes and Institutional Responses", was published in August 2002, and received extensive coverage in the national print and electronic media.

The ADB Director General agreed with Mr. Shaukat Aziz that target of future programme of ADB should be on promotion of greater measures of participation by private sector. The situation now demanded that capital investment in development activity must be generated increasingly in the private sector.

There can be no two opinions that while financial assistance from the Asian Development Bank and other multilateral institutions mainly targets development of social sector and rural development programmes, the contribution of private investment is essential for the development of a wide range of productive sectors. The second base of reforms, therefore, would be expected to take care of necessary policy measures for the widening of investment activity in the private sector including the inflow of foreign investment. However, the ADB official emphasized that the ongoing structural reforms, including good governance in the public and corporate sectors, must be adhered to by the new government in order to achieve the desired results on the economic front.