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Regions and Countries Country Partnership Strategy Document
Country Strategy and Program Update 2006–2008: Pakistan
II. Implementation of the Country Strategy and ProgramA. Progress in Poverty Reduction12. The Government's poverty reduction strategy paper (PRSP), completed in December 2003, is a holistic strategy, with accompanying targets, to address poverty. However, the most recent systematic data on poverty is from FY2001, although a new survey is underway that will enable an analysis of recent poverty trends in the country. As already noted, social sector indicators have shown a substantive improvement at both national and provincial levels since FY2001. In the education sector, the PSLSM results show that gross and net primary, middle, and secondary enrolment rates, as well as the literacy rate, increased over the past four years. In the health sector, immunization rates among children significantly increased. A larger proportion of children received treatment for diarrhoea, and prenatal and postnatal consultations also increased. Progress towards achievement of PRSP expenditure targets is encouraging. PRSP expenditure increased to 4.7% of GDP in FY2004, compared with 4.3% in FY2003 and 3.8% in FY2002. PRSP expenditures in the first nine months of FY2005 were 23% higher than in the corresponding period of FY2004. The Government has recently published its assessment of progress towards the MDGs. The report concludes that all indicators are "achievable", except for the indicator pertaining to eliminating gender disparity in schools, which has been classified as being unlikely to be achieved (Appendix 1, Table A1.1 and Table A1.3). B. Progress in the Country Strategy and Program Focus Areas13. Good Governance. Under the 17th constitutional amendment passed in December 2003, the Local Government Ordinance (LGO) was formally made part of the Constitution. ADB is committed to designing its projects so they are compatible with the governance structures provided under the LGO. A positive development is that the federal, Sindh, Balochistan, and Punjab gender reform action plans (GRAPs) have all been approved, leaving only approval of the GRAP of North-West Frontier Province (NWFP) outstanding. Approval of GRAPs increases the opportunities for promoting gender equity through institutional and fiscal measures, and capacity building. 14. The DSP, approved in November 2002, made considerable progress on all fronts and ADB released the second tranche in December 2004. The $7 million gender and governance mainstreaming TA loan is expected to become effective shortly. Under the ongoing Local Government Performance Enhancement TA loan1, progress has been made on various capacity development initiatives, preparation of a budget training module, and training for local government officers, and support for provincial finance commissions (PFCs), particularly in preparation of provincial finance commission awards for FY2006. 15. The AJP continued to support justice sector reforms. In August 2004, the Ministry of Law approved a gender affirmative action policy, ensuring increased participation of women in legal and judicial professions. All provinces passed legislation for consumer protection, all high courts implemented delay reduction guidelines, and the federal government agreed to establish centers of excellence in legal education in the public and private sectors. However, utilization of the TA loan and implementation of the Access to Justice Development Fund (AJDF) continued to be a concern. As part of its governance operations, ADB emphasizes cooperation with a broad range of non-government organizations (NGOs) and civil society to support broad based stakeholder participation and improve development effectiveness. In this regard, the Institutional Strengthening for NGO-Government Cooperation TA2, a number of pilot projects were carried out in 2004. New TA projects in the governance area included in the 2005 assistance program reflect ADB's continued commitment to devolution, access to justice, and gender equity. 16. Agriculture and Rural Development. To support the Government in reducing rural poverty, ADB is assisting a number of agriculture and rural development projects. Progress on rural development projects?DG Khan, Bahawalpur, Malakand, and NWFP barani (rain-fed) areas are on track, although the Sindh Rural Development Project is behind schedule because of delays in recruiting consultants and staffing the project management unit (PMU). Processing of the Federally Administered Tribal Areas (FATA) Rural Development Project was affected by delayed approval of its project documents (PC-1s) by the Government. Slow progress on agriculture reforms has delayed release of the second tranche of the ADB-assisted Agriculture Sector Program Loan II by almost a year. A new Sustainable Livelihoods in Barani Areas Project (Punjab) to improve incomes and quality of life of rural population in selected poor districts of the province was approved in 2004. Two new PPTA projects for preparing the Balochistan Rural Development and Drought Mitigation Project (currently being processed), and the Sindh Coastal And Inland Community Development Project, were also approved. ADB's assistance in the sector was strengthened in 2005 with the approval of the Agribusiness Development Project, while a TA loan on Rural Modernization is also being processed for approval in 2005. This TA loan will stimulate rural economic growth in Pakistan through public-private partnerships that create non-farm income and employment opportunities. 17. Infrastructure Sector. In the transport and communications sectors, ADB is supporting medium and long term capacity building for the national and provincial highway network, as well as rural roads, in order to make transport operations more efficient and to generate economic activity and employment. This approach is being implemented through road sector development projects, approved in all four provinces during 2001-2004. In the energy sector, progress has been made on important reforms to create an enabling environment for future public sector investment projects and to promote private sector participation. However, several challenges remain. The privatization of KESC is still to be completed, and the sector continues to face high technical and financial losses, dependence on subsidies, overstaffing, and service deterioration. In view of anticipated needs to strengthen the energy sector, in the short term, ADB is helping the Government conduct sector analysis, capacity building and project identification, development, and implementation. Over the medium term, it is supporting larger infrastructure development projects in renewable energy, and in power transmission and distribution. 18. Inclusive Social Development. The ADB-assisted DSSP approach in the social sectors has been designed to facilitate further administrative devolution of social services, improve social sector financing and flow of funds, rationalize services, and encourage public-private partnerships. In this regard, progress was made under the Sindh DSSP, which was approved in December 2003, and local governments in Sindh for the first time started receiving conditional grants to finance and support specific social sector activities and projects. The Punjab DSSP was approved in 2004 and its major focus is on improving health service delivery. The Balochistan DSSP, for which a PPTA was approved in 2004, is currently being processed. The ADB-assisted Decentralized Elementary Education Project in Sindh, approved in 2002, has experienced implementation delays. C. Highlights in Coordination of External Funding and Partnership Arrangements19. ADB further reinforced its partnership and cooperation with development partners (Details of their assistance to Pakistan is in Appendix 1, Table A1.5), and strongly pursued cofinancing possibilities with them. The Department for International Development of the United Kingdom (DFID) provided $50 million in grant assistance for the ADB-financed Punjab Devolved Social Services Program approved in December 2004. The DFID-funded Poverty Reduction Cooperation Fund (PRF) also provided assistance for another four technical assistance projects in 2004 for a total of $2.25 million. The Netherlands Government provided $1.9 million in grant assistance for the water-related components of the ADB-financed Balochistan Resource Management Program (BRMP) loan, approved in 2004, and additional cofinancing for the PPTA for BRMP. The Government of Denmark provided cofinancing for the PPTA for Balochistan Rural Development and Drought Mitigation and the ADTA for Capacity Building for Alternate Energy Development Board. The Canadian International Development Agency (CIDA) committed $3.6 million for the 2005 TA on Support to Implementation of Gender Reform Action Plans. In view of the synergy between DFID's strategic priorities in Pakistan and the ADB-supported governance programs, DSP and AJP, DFID committed cofinancing of $35 million to support the implementation of devolution and justice reforms. Of this amount, $27 million is to finance an ADTA project Support Demand Mobilization for Governance Reforms and the remaining $8 million would finance an ADTA project Support to Implementation of Decentralization III. The Government of Japan, through the Japan Fund for Poverty Reduction (JFPR) will support two projects-Capacity Building to Support Flour Fortification and Enhancing Road Improvement Benefits to Poor Communities in NWFP- in 2005. The Japan Special Fund (JSF) supported four TA projects approved in 2004: Sindh Basic Urban Services, Transport Policy Support, Sindh Coastal and Inland Community Development, and Renewable Energy Development. In conjunction with its lending program, ADB will continue to pursue cofinancing opportunities from official and commercial sources. It will continue to discuss with the Government appropriate financing for the projects it will support during 2006-2008, specifically the use of its credit enhancement products. 20. Effective coordination with key multilateral and bilateral donors was ensured through consultative meetings organized during the country programming mission, as well as through coordination meetings on specific topics. ADB actively participated in various donor groups, including chairing the interagency gender and development group (INGAD) during the first half of 2004 and co-chairing the governance group. ADB also took the initiative to establish a donor poverty reduction working group to provide the Government with coordinated policy recommendations and technical inputs on poverty and is acting as the secretariat for the group. ADB, DFID and the World Bank prepared a coordinated working approach to social protection in Pakistan, worked together on a three-volume study Devolution in Pakistan on the devolution processes, and collaborated on an economic report for Punjab province. The World Bank and ADB are also collaborating on an economic report for Sindh province. Finally, ADB continued to participate in various donor coordination meetings organized by the Government, and supported the Government in organizing the Pakistan Development Forum (PDF).
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