Regions and Countries

	Table of Contents
p. 23 of 25 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Pakistan

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VII. ADB’s Operational Program

A. The Proposed Program

94. The ADB's program for the 2001-2003 period is consistent with the framework of the COF, 1999-2000. The guiding principles for the intermediate term will be the need to address problems of weak governance, lack of absorptive capacity, the high external debt, and poverty reduction. The loan and TA program for the 2001-2003 period is presented in the tables below.

95. Pakistan's total IPF for the 2001-2003 period is $2.5 billion comprising $1 billion for ADF ($350 million per year) and $1.5 billion ($500 million per year) for OCR. The planned total lending over the period is approximately $2 billion ($0.9 billion OCR and $1.1 billion ADF) or $0.5 billion (20 percent) below the IPF. Due to Pakistan's urgent need for assistance to address poverty and human development concerns, governance and the environment, ADF has been currently programmed at 10 percent above the IPF. ADF loans will primarily focus on poverty alleviation, social sectors, and governance-related operations. With the exception of governance, quick disbursing assistance will be on OCR terms. OCR lending has been conservatively programmed at only 60 percent of the IPF at this stage, allowing for further programming for 2002 and 2003 and ensuring a favorable concessional blend of loan funds for Pakistan.

96. The sectoral allocation of the 2001-2003 program, in terms of loan amount, is social infrastructure 21.7 percent, agriculture 14.6 percent, transport 17.6 percent, finance and industry 21.7 percent, energy 15.4 percent and other sectors 9.0 percent. In terms of loan amount, 57.2 percent are other development intervention (ODI) projects, 16.6 percent are core poverty intervention (CPI), and 26.2 percent are poverty intervention (non-core). Of the 19 proposed loans in the 2001-2003 Program, 7 are core poverty intervention, 5 are poverty intervention (non-core) and 7 are ODI projects. Of these projects targeted at poverty (PI and CPI), 43 percent in loan amount are targeted at 70 to 80 percent of the poor who live in rural areas. See Appendix 5.

97. The main focus of the ADB's TA program in 2001-2003 is on a blend of advisory work with respect to developing strategies for continued reform, including poverty assessment, energy sector reform, institutional support for the State Bank of Pakistan and for Quetta water supply, provincial level and public sector financial reform, the small and medium enterprise sector, provincial level agriculture and improved agribusiness opportunities. The TA program will also strengthen economic and policy analysis in key sectors and ensure timely preparation of high quality projects. The 2001 TA program consists of 10 TAs (6 PPTAs and 4 ADTAs) amounting to about $7.3 million. Further review with the Government will be required to ensure that the planned work can be achieved on time, and processing delays in Pakistan can be reduced. The program for 2002 is for 9 TAs (7 PPTAs and 2 ADTAs) for approximately $5.9 million, whereas 6 TAs (5 PPTAs and 1 ADTA) have been tentatively programmed for 2003 for $4.1 million and scope for further programming is still to be determined. Details of the Loan and TA program are provided in Appendix 4.

98. Despite the clear need for the ADB's continued assistance during the program period, Pakistan's implementation performance, which is being closely monitored and is receiving additional inputs to achieve the desired reforms, requires that a cautious approach be followed to minimize risks. In addition, the anticipated shortage of counterpart funds over the medium-term will require the ADB to follow a conservative and increasingly strict performance-linked approach in determining allocations for Pakistan. Taking these factors into account, achieving the currently programmed lending levels will depend upon actual achievements and sustained high-level Government commitment to key economic and social reforms including public resource management. In addition, all new projects will have strong participatory characteristics and carefully designed benefit monitoring and evaluation components where appropriate, and include the means to monitor governance issues and development impact. The ADB's program in Pakistan will continue to strongly reflect an emphasis on poverty reduction throughout the Program period. Thirteen of the 15 listed loans (including 2 stand-bys) in 2002 and 2003 are categorized as PI and CPI loans.

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