Less than one-third of the total amount was utilized

June 30 - July 06, 2003



Both the Prime Minister of Pakistan and some donor agencies have expressed concern over the "extremely poor utilization of the development funds" by the concerned departments in Pakistan. It sounds unbelievable, but it is a fact that from actual utilization of Rs.134 billion Public Sector Development Programme (PSDP) for fiscal year 2002-03 only Rs.39.7 billion has been utilized, almost 29.62 per cent of the total, which means less than one-third of the total amount was utilized.

Total PSDP projects were 260, out of which 5 were sick, 124 were slow, 75 were satisfactory, 9 were completed, 48 were new, as described by the progress report of PSDP issued by Planning Commission. Now, against the target of Rs.120 billion for utilization, Rs.80 billion has to be utilized in the last quarter of the ongoing fiscal year. The authorities must take firm action to utilize it in remaining three months. However, expectations are that through heavy spending like buying computers and vehicles, efforts will be made to minimise this big gap.

According to the sources in the Asian Development Bank (ADB), the bank has brought to notice of the Pakistan government that in the $100 million ADB Second Flood Protection Sector Project there is complete lack of commitment and action on the part of government as about 70 per cent of loan period has elapsed and project implementation progress is only 4 per cent.

The bank has also conveyed to the government that in case of failure in meeting Phase-I targets, ADB would withdraw the project. It has also been advised that failure to achieve Phase-I targets by due date might result in withdrawal of ADB's support for the project.

ADB's $100 million loan for the project was approved on November 13, 1997, which was signed on February 10, 1999, and declared effective on October 10, 1999. The loan closing date of the project is June 30, 2003, and civil works are required to be completed by December 31, 2004.

Out of the loan amount of $100 million, disbursement is only $1.244 million. The project was 'on hold' for a period of about two years. During this period ADB suspended the loan for about three months in 2001, as the government failed to implement the actions agreed with ADB.

It is not surprising that the Public Sector Development Programme, a key element in building and improving infrastructure, promotion of employment and reduction in poverty has not made any visible impact on either the growth impulses or the lives of average citizens of the country. No wonder, the government gets blamed for not doing enough in this important sector, raising doubts in the public mind about what is seen as a wrong order of priorities, while the policy makers feel satisfied that they have done their part of the job by allocating sufficient funds to PSDP. What a pity that in a cash-strapped economy, such as Pakistan, the major issue is not just how to raise sufficient funds for the Public Sector Development, but how to spend them.



Needless to say, something somewhere is very wrong. That, as even a cursory look at the past will, reveal, is a drastic diminution in the central role that the Planning Commission of Pakistan once played in planning and implementing a long-term (five year) economic policy. It is good to note that Finance Minister Shaukat Aziz has responded to the concern in the national press. He said in a newspaper interview that the government has decided to empower the Planning Commission to conduct physical inspections based on various development projects. The inspections based to immediately divert allocations of slow moving projects to other sectors in order to make maximum utilization of budgetary allocations.

However, there is also an urgent need to improve the competence level of the Planning Commission staff. Its professional standards have suffered gradually and serious deterioration has taken place over the past many years. Either there is not sufficient staff to do the required work, or it is there, those manning it lack the necessary expertise to perform their duties. In the good old days, it attracted some of the highly qualified professionals in the field; Dr. Mahbubul Haq and Sartaj Aziz, to name a few, started their careers from there. It no longer attracts the best and the brightest because of its diminished role in policy making and its monitoring. The situation has to change if the government's plans are to be executed efficiently and effectively. Clearly, the induction of duly qualified staff is in order.

The usual government tendency in situations like this is to go from one extreme to the other, that is, either to work with under-qualified people or to hire the services of highly expensive experts from abroad. That tendency needs to be checked not only for economic reason but also to give a chance to qualified Pakistani professionals to prove their respective talents. With the right kind of incentives there should be no problem in hiring the services of such people. The important thing is to do that as soon as possible so that the country's meagre resources are sensibly used for the objectives for which they are meant.