950804

Country operations strategy

$1.5 bn ADB assistance

for social, environmental

sectors likely in 3 years

AZMATULLAH

ISLAMABAD: The Asian Development Bank is expected to lend $1.5 billion to Pakistan under a three-year programme (1995-97), half of it from concessional Asian Development Fund.

The programme reflects growing emphasis on social sectors and environment, leaving infrastructure and energy projects to the private sector, said officials in the Economic Affairs Division which is responsible for negotiations and monitoring of foreign economic assistance.

According to a new 'country operations strategy' formulated by the bank, to be implemented in the next three years, developing human resources through education, health and population projects, improving the quality of life for women, pursuing activities to reduce poverty, protecting the environment and building institutional capability will account for 45 percent of the total lending to Pakistan.

In 1995, four of the bank's proposed loan projects will be in the fields of education and environment. Under education sector, the bank plans to provide $45 million for a technical education project and $60 million for a girls primary education project.

In the area of environment, a $74 million forestry sector loan will be provided for the rehabilitation of degraded forest areas in the NWFP, while a $8 million loan will sponsor a study for a nationwide project to rehabilitate crop land affected by waterlogging and salinity.

Officials say a second important trend in the bank's operation in Pakistan is increased commitment to support structural changes in the economy. Alongwith the World Bank and International Monetary Fund, ADB will support government-initiated reforms, particularly in the financial, industrial and trade sectors. Besides, the bank also plans to make a $100 million financial sector intermediation loan to promote deregulation and capital market development.

Sources said either in 1995 or 1996, the bank will provide a $200 million trade and industry programme loan to support the government tariff rationalization and industrial deregulation programme.

Another important objective of the bank's future planning is to try and improve overall project quality by trimming some projects and weeding out poorly-performing ones.

Currently, there are 82 ADB loans, 57 in the public sector and 25 in the private sector. About $173 million provided for private sector is without government guarantees. It includes $155 million as loan, $14 million as equity participation and $4 million as underwriting. Technical assistance of $51.9 million has also been provided for 146 projects by the bank.