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Punjab wasted $409m reforms loan, says ADB
By Shahbaz Rana
Published: December 5, 2015
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Evaluation report pins blame on govt’s disinterest, overzealous agenda. PHOTO: REUTERS
ISLAMABAD:
The Asian Development Bank (ADB) has accused the Punjab government of wasting $409 million in loans acquired for introducing reforms, owing to lack of commitment and an overambitious agenda.
A report by ADB’s Independent Evaluation Department reveals the amount has gone down the drain due to the Punjab government’s disinterest in introducing reforms and an overzealous reform agenda.
Govt fails to utilise ADB’s $2.5b investment in power sector
Pakistan had signed a cluster loan programme of $750 million with the ADB for improving Punjab government’s efficiency through a series of reforms, including civil services, with an overarching goal of increasing the provincial economic growth rate and reducing poverty.
However, an impartial assessment by ADB’s evaluation department shows the programme has failed to achieve its targets after the change of government in Punjab in 2008. The loan period spans over the last two years of former Punjab chief minister Pervaiz Elahi and the five-year term of CM Shahbaz Sharif.
The performance of the provincial government has been rated ‘partly satisfactory’. “The new government installed in 2008 had far less commitment to reforms, which contributed to the cancellation of subprogram (of $250 million),” according to the report.
ADB announces new $1.2 bn annual package for Pakistan
Independent economists are opposed to the policy of borrowing foreign funds in the name of reforms which are actually used for budget financing. The federal government backs the provincial borrowings through sovereign guarantees but keeps the dollars and re-lends the provinces in rupees.
The ADB had provided a mix of concessionary and expensive loans for supporting second-generation reforms. Originally, the Manila-based lending agency had planned to give $750 million in three equal tranches, but the actual disbursements remained at only $409 million.
The findings show the programme lending was less than relevant and less than effective in achieving the goals. The envisaged impact of sustained high economic growth in Punjab, with lower poverty incidence and improved delivery of services, was not achieved.
Pakistan, ADB sign $178m agreement for M-4 section
The annual, average GDP growth during 2007-2011 was 2.5%, significantly lower than the targeted 7%, according to the evaluation department. The poverty rate declined from over 20% in 2007 to 19% in 2012, but still short of the targeted 17%.
A report released by the Institute for Policy Reforms (IPR) on Friday also showed that during the 2008-13 tenure of CM Shahbaz, the provincial economy grew at a pace of 2.9%, which was less than 4.8% achieved during the period of former CM Elahi.
Compared with the other three provinces, the IPR noted, the share of Punjab’s GDP in overall economic growth rate has slightly reduced to 54.1% during the past 15 years.
Despite the unfriendly business environment due to the deteriorating law and order situation, the share of Khyber-Pakhtunkhwa in the overall GDP increased by 2% to 13%.
Development assistance: ADB to lend $225m for flood relief in Punjab, AJK
In its assessment, the evaluation department also criticised the performance of ADB for the programme, terming it less than satisfactory. “The ADB should have designed the programme more carefully,” noted the report.
The programme outputs for public resource management, civil service pension system and greater private sector participation were partly achieved. The budget process was not fully performance-based, the returns on Punjab Pension Fund and General Provident Investment Fund investments did not meet the 30% target of annual pension liability, and the private sector development strategy was developed but not implemented.
The provincial government could not achieve the outputs for civil service efficiency and result-based management.
Published in The Express Tribune, December 5th, 2015.
By Shahbaz Rana
Published: December 5, 2015
21SHARES
SHARE TWEET
Evaluation report pins blame on govt’s disinterest, overzealous agenda. PHOTO: REUTERS
ISLAMABAD:
The Asian Development Bank (ADB) has accused the Punjab government of wasting $409 million in loans acquired for introducing reforms, owing to lack of commitment and an overambitious agenda.
A report by ADB’s Independent Evaluation Department reveals the amount has gone down the drain due to the Punjab government’s disinterest in introducing reforms and an overzealous reform agenda.
Govt fails to utilise ADB’s $2.5b investment in power sector
Pakistan had signed a cluster loan programme of $750 million with the ADB for improving Punjab government’s efficiency through a series of reforms, including civil services, with an overarching goal of increasing the provincial economic growth rate and reducing poverty.
However, an impartial assessment by ADB’s evaluation department shows the programme has failed to achieve its targets after the change of government in Punjab in 2008. The loan period spans over the last two years of former Punjab chief minister Pervaiz Elahi and the five-year term of CM Shahbaz Sharif.
The performance of the provincial government has been rated ‘partly satisfactory’. “The new government installed in 2008 had far less commitment to reforms, which contributed to the cancellation of subprogram (of $250 million),” according to the report.
ADB announces new $1.2 bn annual package for Pakistan
Independent economists are opposed to the policy of borrowing foreign funds in the name of reforms which are actually used for budget financing. The federal government backs the provincial borrowings through sovereign guarantees but keeps the dollars and re-lends the provinces in rupees.
The ADB had provided a mix of concessionary and expensive loans for supporting second-generation reforms. Originally, the Manila-based lending agency had planned to give $750 million in three equal tranches, but the actual disbursements remained at only $409 million.
The findings show the programme lending was less than relevant and less than effective in achieving the goals. The envisaged impact of sustained high economic growth in Punjab, with lower poverty incidence and improved delivery of services, was not achieved.
Pakistan, ADB sign $178m agreement for M-4 section
The annual, average GDP growth during 2007-2011 was 2.5%, significantly lower than the targeted 7%, according to the evaluation department. The poverty rate declined from over 20% in 2007 to 19% in 2012, but still short of the targeted 17%.
A report released by the Institute for Policy Reforms (IPR) on Friday also showed that during the 2008-13 tenure of CM Shahbaz, the provincial economy grew at a pace of 2.9%, which was less than 4.8% achieved during the period of former CM Elahi.
Compared with the other three provinces, the IPR noted, the share of Punjab’s GDP in overall economic growth rate has slightly reduced to 54.1% during the past 15 years.
Despite the unfriendly business environment due to the deteriorating law and order situation, the share of Khyber-Pakhtunkhwa in the overall GDP increased by 2% to 13%.
Development assistance: ADB to lend $225m for flood relief in Punjab, AJK
In its assessment, the evaluation department also criticised the performance of ADB for the programme, terming it less than satisfactory. “The ADB should have designed the programme more carefully,” noted the report.
The programme outputs for public resource management, civil service pension system and greater private sector participation were partly achieved. The budget process was not fully performance-based, the returns on Punjab Pension Fund and General Provident Investment Fund investments did not meet the 30% target of annual pension liability, and the private sector development strategy was developed but not implemented.
The provincial government could not achieve the outputs for civil service efficiency and result-based management.
Published in The Express Tribune, December 5th, 2015.
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