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Poverty-related projects face closure




  • The Asian Development Bank’s (ADB) total loan commitment to Pakistan since commencement of its operations in 1968 and up to December 31, 2006, comprised 239 public sector loans amounting to $16.3 billion.

    The sectoral composition of this assistance was: 21.5 for energy sector, 20.9 for the agriculture/natural resources, 13.2 per cent for finance sector, 11.3 for transport/communications, 9.4 for multi-sector, nine per cent for industry/trade, 6.9 for law, economic management/public policy, 3.5 for education, 2.7 for water supply, sanitation/waste management and 1.6 per cent for health/nutrition and social protection.

    A cumulative of 293 technical assistance (TA) projects has been approved with a total amount of $138.65 million as of 31 December 2004. Presently, there are 62 TAs under implementation with a total amount $53.6 million. This cumulative assistance in the form of public sector loans amounts to over $12.45 billion, and the country programme has been significantly enhanced over the last few years, averaging over $1 billion in 2002-03.

    However, the negative side of the picture is that 37 social sector developments and poverty-related projects worth more than $2.2 billion face closure after the ADB refused to grant extension on the present loan closing dates of these schemes. . Official documents reveal that seven projects are being closed down immediately while in case of the remaining 30, the concerned authorities are being asked to complete them before their respective closing dates.

    What is really hurting is the fact that a total of $1,434 million has already been disbursed against the endangered projects while $790 million remained un-disbursed. The huge amount disbursed would add to the country’s ever-mounting foreign debt to be paid back by taxpayers, while there is no accountability of those responsible for the delay or non-execution of these projects.

    The projects on the hit-list include the high-sounding Access to Justice Programme, Gender/Governance, Local Government, Agriculture Sector Programmes and other schemes in the education and health sectors. Adviser to the Prime Minister on Finance, Dr Suleman Shah confessed that the government in consultation with the ADB is interested in closing down projects which could not run on the right lines.

    There are also some projects which are more or less complete so the government does not want to invest more on them. He said this is a joint review meant for saving the committed foreign loan and diverting it to some new projects. But the spokesman for the Economic Affairs Division (EAD) said that the basic idea of the whole exercise is to rationalise the portfolio and ensure efficient implementation of foreign-funded projects.

    An official letter while referring to the recent visit of ADB’s director-general and deputy director-general to Pakistan, communicated to the concerned federal and provincial authorities, “EAD and Finance Division, as part of annual Country Portfolio Review (CPR) are undertaking a spring cleaning exercise of ADB loans. The executing agencies (EAs) with slow moving or poorly performing loans are required to give justification for continuation of these loans within loan closing date. The ADB is not ready to grant extension on the present loan closing date.”

    According to the documents, the following seven loans are being closed immediately: $260 million Fin Markets/Governance project of finance ministry ($77.4 million un-disbursed); S$225 million Rural Finance Sector project (S$72.7 million un-disbursed); $25 million Rural Finance Sector Project, ($ 22.9 million un-disbursed); $42.4 Reproductive Health project being implemented by multiple federal and provincial authorities ($36.4 million un-disbursed); $45.5 million Malakand Rural Development project, NWFP P&D Department ($24.882 un-disbursed); $84.1 million Decentralised Elementary Education project (Sindh) ($79.5 million un-disbursed); and $53.911 million Sindh Rural Development project ($52.1 million un-disbursed).

    The following are the 30 loans closing in 2007: $11.5 million Forestry Sector project (NWFP); ($4.17 million un-disbursed); $33.4 million Bahawalpur Rural Development project, ($1.8 million unutilised); $109.9 million Agriculture Sector Prog II, ministry of finance ($26.8 million un-disbursed) ; $229.156 million Agriculture Sector Prog II, ($98 million un-disbursed); $2.3 million Agriculture Sector Prog II, ministry of agriculture ($1.4 million unutilised); $89 million Microfinance Sector Development project, ($7.4 million un-disbursed); $3.3 million Strengthening Pension Insurance project, ministry of finance ($2.6 million un-disbursed); $3.3 million Strengthening Finance Markets, SECP-($1.7 million un-disbursed); $142 million SME Sector Development Programme, ministry of finance- ($54.4 million un-disbursed); $108.7million Balochistan Resource Management project, ($68.1 million un-disbursed); $20 million Balochistan Resource Management project, ($10 million un-disbursed); $108 million Sindh Devolved Social Services project, ($4.8 million un-disbursed); $102.4 Sindh Devolved Social Services programme, ($35.4 million unutilised); $34.4 million Middle Schools project, multiple federal/provincial authorities-(all amount disbursed); $36.96 million Technical Education project, multiple federal/provincial authorities ( all amount disbursed); $37.6 million National Drainage Sector project, multiple federal/provincial authorities ($13 million still unutilised); $37.2 million Second Girls Primary Education project, multiple federal/provincial authorities ($2.1 million un-disbursed); $37.7 million DG Khan Rural Development project, ($8.6 million); $41.6 million Second Science Education project, multiple federal/provincial authorities ($17.6 million un-disbursed); $64.1 million Second Flood Protection project, Federal Flood Commission ($15.4 million un-disbursed); $46.2 million Women’s Health Project, multiple federal/provincial authorities ($7.64 million un-disbursed); $75.9 million Road Sector Development (Sindh) project ($57.8 million un-disbursed); $88 million Road Sector Development) project, Sindh W&S Deptt ($72.1 million un-disbursed); $254.1 million Access to Justice Programme, ministry of Law ($77.8 million un-disbursed); $92.7 million Access to Justice Programme, (all amount disbursed); $25.9 million Local Government project, finance ministry ($21.3 million un-utilised); $7.88 million Gender/Governance project, ministry of finance ($7 million un-disbursed) and $55.9 million Punjab Community Water Sup project ($6.7 million un-disbursed).

    In 1993, an international policy analyst of the US-based environmental defence, Shannon Lawrence prepared a document titled, “The Asian Development Bank: In its own words”, in which he said that more than 70 per cent of the Asian Development Bank’s failed projects in the country are potentially the equivalent of $4.6 billion that Pakistan owes to the bank out of a total debt of $6.5 billion.

    The document said these unsustainable projects failed to produce lasting economic or social benefits for the country. Sharing the findings of an analysis of project audit reports from a study Ms Lawrence said the same mistakes were being repeated again and again in different ADB projects over the years at the expense of taxpayers who had to bear the ultimate consequences of badly executed policy initiatives and programmes.

    According to the report, Indonesia and Pakistan are ADB’s first and second largest cumulative borrowers having received more than one third of total funds disbursed during the 36-year history of the bank.

    “A striking number of the ADB-financed projects in Pakistan suffer from design flaws and lack of attention to thorough project preparation.” In the execution of projects, the report noted a pattern of absence of Benefit Monitoring and Evaluation (BME) systems and baseline data, lack of consultation with prospective beneficiaries and user groups, lack of community participation, adverse impacts on social equity and income equality that have fostered ethnic instability in certain ADB projects.

    Moreover, the report said, even projects considered ‘successful’ by the ADB auditors benefited large landholders at the expense of small farmers and terminated five years behind schedule like the South Rohri Fresh Groundwater Irrigation Project.

    Similarly, the Balochistan Fisheries Development Project ignored local customs and preferences in project design while failing to account for environmental impacts, the report said.

    In the Third Health and Population Project, the ADB failed to assess the impact of project or ensure that benefit monitoring and evaluation systems were implemented as required by loan conventions. In the Chashma Right Bank Irrigation Project, the ADB failed to conduct any comprehensive analysis of socio-economic and socio-cultural conditions in the nearly 30- year implementation time of various stages of the project. According to recent estimates from organisations working with communities in the project area, more than 50,000 people have been or will be negatively impacted by the extensive irrigation project, the report added. . The major reason of the failure of ADB projects is breakdown of ADB’s fundamental principle of consultation with civil society and community. In 40 years history not a single project got this principle implemented.

    This year in May ADB has started a so-called limited civil society consultation for its next five years’ “Pakistan Country Strategy” Plan but arrangements of the consultation shows that ADB is doing photo sessions with the people to have a “ Consultative Face” on their “user-friendly” website. There is a little hope for sustainable and equity-based delivery.

    Courtesy: The DAWN

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