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Regions and Countries Country Partnership Strategy Document
Country Strategy and Program Update 2006–2008: Pakistan
IV. Country Performance and Assistance LevelsA. Proposed Lending Level25. The proposed 2006-2008 lending program comprises 32 firm loans for $3.72 billion, averaging $1.24 billion annually, and one standby loan. (Appendix 1, Table 1.10). This is higher than the average proposed lending level of $978 million under the CSPU (2005-2006), but is justified on the basis of continued improvements to Pakistan's debt management position and absorptive capacity. As a percentage of GDP, external debt and liabilities had declined from 51.7% at end-June 2000 to 33.1% by end-March 2005. Likewise, as percentage of total foreign exchange earnings, external debt and liabilities declined from 297.3% in 1999-2000 to 145.9% by end-March 2005. In view of the Government's borrowing strategy and its emphasis on higher growth, the strategic focus on infrastructure has been maintained in the assistance pipeline and 14 infrastructure loans have been included for $2.44 billion (including Megacity Project loans I and II), which is 66% of the total proposed ADB assistance to Pakistan during 2006-2008. Assistance for governance and second-generation reforms, social sector development, and livelihood improvements has also been emphasized in the lending pipeline4. Concept papers for 2006 lending products are in Appendix 2. B. Nonlending Program26. The currently identified nonlending program for Pakistan amounts to $14.0 million for 31 projects during 2006-2008. The detailed nonlending program (Appendix 1, Table A 1.11) includes project preparatory and advisory TA in various sectors. The nonlending program will help in designing and implementing ADB-assisted projects and help in building capacity for improved development effectiveness of ADB operations. Concept papers for 2006 nonlending products are in Appendix 3. C. Summary of Changes to Lending and Nonlending Programs27. In close consultation with the Government to ensure it has full ownership of the loans included in the assistance pipeline and to promote greater development effectiveness, a number of changes have been reflected in the proposed program for 2006, the only year of overlap between the previous and the present CSPU. First, four loans that could not be processed in 2005 for various reasons have been moved to the 2006 lending pipeline. These include Sindh Basic Urban Services, Renewable Energy Development, Private Participation in Infrastructure Development, and the FATA Governance TA Loan (Appendix 5, Table A 5.1). Second, one loan, District Roads Resource Management, has been dropped from the 2006 pipeline because of weak ownership. Third, three loans in the 2006 program have been moved to 2007, because of the requirement for further preparatory work and greater consultations with stakeholders. These include Social Health Insurance, Punjab Local Justice Support Program, and Punjab Resource Management Program Subprogram III. Finally, one loan, Microfinance Sector Development Program II, proposed for 2007, has been brought forward to 2006 in view of the faster-than-anticipated utilization of funds under the first phase of the program. 28. Changes have also been proposed in the nonlending program for 2006. Two PPTA projects, previously included in 2006, have been moved to 2007, with the accompanying loans now included in the 2008 program. One PPTA project has been dropped as the loan has been moved to 2006, and one new ADTA project has been added to the 2006 pipeline. Finally, an ADF grant of $5 million for control of HIV/AIDS5, Malaria, Tuberculosis, and Early Childhood Infectious Diseases has been integrated into the NWFP DSSP in 2006. ______________
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