Preparing a Public Sector Resource Management Program For Balochistan, Pakistan

MANILA, PHILIPPINES (22 January 2004) - ADB has approved US$700,000 in technical assistance grants to help the Government of Pakistan prepare a public sector Resource Management Program for the province of Balochistan.

ADB is funding $450,000 of the TA and $250,000 will be cofinanced by the Government of the Netherlands. The Pakistan Government will contribute $175,000 towards the TA's cost.

Based on the Punjab Resource Management Program, which is currently being processed, the planned Balochistan Resource Management Program (BRMP) will assist the provincial government in the reform of development planning, fiscal and financial management, and public service delivery; and foster an enabling environment for private sector development. Assistance will also focus on reforms in water resource management.

In addition, the program will set reform priorities for the forthcoming ADB assistance to Balochistan in rural development, drought mitigation (to be processed in 2004), and decentralized social services (to be processed in 2005).

"The TA will support technical studies, policy dialogue, and capacity building necessary to design and carry out a program of reforms for poverty-focused development planning and effective use of public resources in Balochistan," says Marshuk Ali Shah, Country Director at ADB's Resident Mission in Pakistan.

Balochistan is Pakistan's largest province, accounting for 44% of the total area of the country, but includes only 5% of the country's population. Only a third of the total land area of the province is productive grazing or agricultural land. The bulk of the labor force is employed in agriculture, which is mainly focused on livestock rearing and dryland farming.

The province has a wealth of natural resources, including minerals and hydrocarbons, which remain largely unexplored. There is little industrial activity, and employment opportunities outside agriculture and mining are also limited.

According to the Balochistan Poverty Reduction Strategy Paper (PRSP), finalized in April 2003, social indicators are poor, there are large gender disparities in the province, and poverty levels are estimated to be as high as 47%.

The government of Balochistan faces severed resource constraints in addressing these development issues. Salaries, pensions and debt servicing absorb the bulk of current expenditures leaving little for non-salary recurrent expenditures needed to improve service delivery and maintain existing infrastructure.

In addition, Balochistan's environment has been severely degraded in recent years, due to drought. Groundwater resources have been severely depleted, rangelands degraded, forests reduced and agricultural land rendered uncultivable. The rate of natural resource exploitation is unsustainable and the continued degradation of the environment is likely to result in further increases in poverty.

The assistance will be organized in two phases:

• In the first phase, the TA will carry out technical studies in support of policy dialogue and design a reform strategy; conduct policy dialogue involving both federal and province governments, local governments, and private sector agencies, including both business and civil society; and prepare the loan program for 2004.
• In the second phase, when the BRMP is in place, the emphasis will be on capacity building, and continuing the reform focused dialogue involving all stakeholders.

The Finance Department of the government of Balochistan is the executing agency for the TA, which is due for completion in May 2005.