With $2.0 billion, or 20 percent of the total loans ADB extended last year 2007, Pakistan was the largest borrower, said Asian Development Bank Annual Report 2007, released here on Monday. The ADB Annual Report 2007 said that Pakistan continued to be the main client of the Bank with six sovereign loan projects and one non-sovereign loan project in total valued at $2.0 billion.
It said that lending to Pakistan targeted greater inclusiveness and access to financial services, policy reforms for capital market development, and improved government efficiency. It strengthened accounting and auditing standards in Pakistan and supported provincial reforms under the resource management programs in Balochistan and Punjab in major objective.
Lending was also directed at providing $400 million in long-term investment financing to clear bottlenecks in transport and to support energy, irrigation, and earthquake rehabilitation projects.
According to the report, two multi-tranche financing facilities (MFFs) for $1.4 billion were approved--one for the Azerbaijan road network development and another for the Pakistan trade corridor highway program. The second tranche of a Pakistan power transmission MFF was also approved. These projects represented ADB's continuing effort to adopt a programmatic approach to doing business.
About 66 percent of sovereign approvals (70 percent, including non-sovereign approvals) involved ordinary capital resources (OCR), and the other 34 percent (30 percent including non-sovereign approvals) were Asian Development Fund (ADF) loans and grants. ADF grants totalled $247.4 million.
Lending operations started in Armenia in the transport and water supply sectors. The transport, finance, and energy sectors have the biggest share of the program.
In the Central and West Asia, department consolidated and expanded operations. Sixteen sovereign loan, eight non-sovereign loan, and 12 grant projects totalling $3.0 billion were approved for nine countries (Afghanistan, Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, Pakistan, Tajikistan, and Uzbekistan). The total was twice the annual average of $1.5 billion in 2002-06.
Commenting over the 'Portfolio Management', the report said that ADB spent much time and resources managing its 129 ongoing loan projects in the region. A hugely important 'spring cleaning' exercise in Pakistan resulted in the closing and cancellation of loans for slow-moving and problem projects. ADB stepped up work on contract awards and disbursements and kept a watchful eye on projects at risk. By year-end, it had exceeded the year's targets for contract awards ($1.4 billion, or 113 percent) and targets on time and within budget; a division workload audit to clarify accountabilities and responsibilities, maintain transparency, and plan the delegation of projects to resident missions; and a joint venture of headquarters and resident missions that builds on the synergy between sector expertise and local knowledge for effective loan supervision.
According to the Report, ADB promoted sustained, inclusive, and private sector-led economic growth to create jobs and reduce poverty in Pakistan. Key priority areas were second-generation reforms to improve competitiveness, governance, and financial services; the development of the urban and the rural economies in support of inclusive growth and balanced development; reforms and investment in major infrastructure sectors; and implementation for development effectiveness and results.
ADB strengthened aid effectiveness by leading a capacity-building working group established by the government and by supporting the harmonisation and alignment of approaches to development assistance. A new country partnership strategy was being prepared for Board consideration in 2008 to further strengthen ADB's longstanding development partnership with Pakistan.
Disbursements were a record $990.5 million and contract awards $1.1 billion, with about 95 percent of the loans expected to either exceed or meet most of their development objectives.
The Second Science Education Project, completed in June, improved access to secondary school science and mathematics facilities, especially for girls. A women's health project, completed in October, gave women and children better access to health workers, supported the vaccination of women of reproductive age, and improved physical and other facilities for maternal and child health.
The flood protection sector project was supported to improve policy and build capacity to plan, design, and implement flood protection works, and improve flood forecasting, warning, and preparedness systems.
The Access to Justice Program, completed in August, engaged civil society in improving justice delivery, strengthening public oversight over the police, and establishing specialised and independent prosecution services.
According to the report, given the scale of the disaster/earthquake and with a brutal Himalayan winter fast approaching, the Pakistan government appealed for immediate help in a bid to avert even more loss of life. Responding to the challenge, ADB pledged $1 billion for reconstruction and rehabilitation. To date, ADB has committed about $740.0 million in Asian Development Fund loans and grants, while leveraging another $180 million in the form of bilateral grant funds for the ADB-funded Pakistan Earthquake Fund and through co-financing.
"We mobilised support swiftly, assembling a dedicated team which has since been working with the Earthquake Reconstruction and Rehabilitation Authority and counterpart regional and provincial bodies to assess the extent of damage, identify priority areas, and to channel funds for the rehabilitation process," says ADB country director Peter Fedon.
To rebuild more than half a million destroyed or badly damaged rural houses, more than 400,000 rural grant beneficiaries each received 150,000 Pakistan rupees (about $2,400). "The decision to let people take charge and build their own houses has paid off,"
Shaukat, senior ADB project implementation officer, says. ADB has also set aside a total of $163.5 million for rebuilding more than 1,000 kilometers of roads. To rehabilitate the power sector, about $9 million worth of contracts for equipment and civil works have been awarded and most of the power and grid stations have now been rebuilt.
Rehabilitation work is also ongoing in education and health. ADB is investing $110 million to rebuild 454 primary and middle schools. It will provide another $33.2 million to rebuild hospitals and rural health centers.
Topping up these efforts, ADB is also supporting the restoration of government institutions such as the judiciary and the police, and others that provide special assistance to the earthquake victims.
According to report, ADB's vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries substantially reduce poverty and improve the quality of life of their people. Despite the region's many successes, it remains home to two thirds of the world's poor. Nearly 1.7 billion people in the region live on $2 or less a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration.
Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. In 2007, it approved $10.1 billion of loans, $673 million of grant projects, and technical assistance amounting to $243 million.
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