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Poverty-related projects face closure
By Zulfiqar Halepoto
 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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Pakissan.com;
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