ADB President Announces Significant Increase in Annual Assistance to Pakistan

ISLAMABAD, PAKISTAN (6 September 2005) - ADB President Haruhiko Kuroda reaffirmed ADB's long-term partnership to supporting Pakistan's economic growth with an increase in assistance to $3.7 billion over the next three years. This is nearly a 50% increase in annual lending to Pakistan compared to the past four years.

A large portion of this assistance is earmarked for infrastructure development in the areas of water, power, transport, and urban development. In addition, ADB is planning assistance in a number of innovative areas, including support for the Karachi mega-city project, a rural modernization project to enhance livelihood opportunities.

During his first two-day state visit to the country, Mr. Kuroda met and held discussions with President Pervez Musharraf, Prime Minister Shaukat Aziz, Adviser on Finance, Dr. Salman Shah and other high-ranking government officials.

"Pakistan has seen rapid economic progress in the last five years, which is a result of the pursuit of sound and pragmatic reform policies," Mr. Kuroda said. "We have been a strong supporter of the Government's reform agenda during this period, and share the excitement over the results achieved."

The ADB President also noted the achievements in the quality of life of the citizens of Pakistan, citing reduced levels of unemployment and improvements in education and health indicators, which indicate progress in meeting the Millennium Development Goals.

At the same time, Mr. Kuroda reiterated the importance of maintaining macroeconomic stability and consistency in the implementation of governance reforms to sustain the country's development.

"Much has been achieved under these reforms, but the momentum needs to be maintained for the reforms to have their full impact," Mr. Kuroda said. "It is particularly critical to complete the devolution program through ensuring federal to provincial devolution, strengthening the functioning of local governments, and civil service reforms."

ADB has supported Pakistan's core governance programs through the Access to Justice Program and the Decentralization Support Program. ADB is also providing assistance for fiscal and financial management reforms and decentralized delivery of social services at the provincial level through the resource management and devolved social services programs.

ADB has approved over $14 billion in total assistance to Pakistan over the past three decades, and currently has an ongoing project portfolio of over $5 billion in the country.

The ADB President also visited Khushali Bank, the country's largest microfinance bank which was established with ADB's pioneering assistance for the sector.

"ADB is pleased to support the creation of Khushali Bank, which has brought financial and social benefits to more than 200,000 households, especially poor women in remote and inaccessible parts of Pakistan," said Mr. Kuroda.

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