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While there is consensus about the critical need for increasing investment in Pakistan, the lack of trust among the four provinces over the allocation of water resources and toward the federal Government must be overcome for substantive progress. But even with these challenges, Pakistan has laid out the welcome mat for ADB’s new Water Financing Program (WFP). |
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| Katsuji Matsunami Director, Central and West Asia Department |
In Pakistan, the expansion of water-sector investments is hindered by the lack of capacity for sector planning and strong management to take on new projects, and the frequent disagreement among the federal and four provincial governments over the best way to proceed.
According to Katsuji Matsunami, a Director in ADB’s Central and West Asian Department: “Sometimes it seems as if Pakistan is not one country, but several under a weak federal organization.”
The country has a long history of developing its infrastructure for water resources management, and is home to the largest contiguous irrigation system in the world. Irrigated land is responsible for about 80% of agricultural production. Agriculture represents 25% of Pakistan’s gross domestic product, employs over 50% of the rural labor force, and provides 60%–70% of exports. The Indus River canal system not only supplies agricultural water but is also a primary source of rural, municipal, and industrial supply.
Clearly, water resources are vital to Pakistan’s economic well-being, and their improved management is vital to poverty reduction. There has been a longstanding call for better water resources management to exploit fully water’s productive benefits, says Mr. Matsunami.
Yet the irrigation system urgently needs rehabilitated and stronger institutional arrangements: the rate at which groundwater resources are being tapped is unsustainable; the coverage, quality, and reliability of urban water supply are grossly inadequate, especially in light of the burgeoning urban population; and urban wastewater treatment is nearly non-existent. Pakistan’s drainage network collects agricultural drainage along with mostly untreated municipal and industrial effluent and expels it into rivers. |
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| Pakistan Country Dialogue at the Water Financing Program Conference, September 2006 |
Officials in Pakistan “are quite aware that they need major water-sector investments and institutional reforms,” Matsunami says. He notes that there has been progress under the government of President Pervez Musharaff, and that the current Government has begun an ambitious program of governance, administrative, and economic reforms which have the potential to bring major benefits to the water sector.
Motivated by the need for energy and water storage as the country posts economic growth rates above 8%, President Musharaff has also committed to the building of five new mega dams. Provincial governments have also shown a strong commitment to reforms and are undertaking major water-sector investments.
ADB’s WFP “is music to their ears,” says Matsunami. There is interest in the new financing modalities, including the flexibility of ADB’s new Multitranche Financing Facility (MFF), and there is talk of the need for greater private-sector participation.
Programmed lending under the WFP would raise loans to Pakistan to over $1.5 billion over the 3 years 2006-2008, from roughly the same amount in the 10 years ending in 2005.However, to proceed there needs to be greater capacity at the federal, provincial, and local levels for managing water resources; for designing and implementing projects; and better coordination among the provinces and the federal Government.
ADB’s assistance to Pakistan in the water sector, therefore, puts an emphasis on capacity building. For example, the technical assistance (TA) grant, Water Sector and Irrigation Development, will help develop a TA program (TAP) in collaboration with the Government suitable for financing by ADB or other donors. The TAP will provide significant capacity development at the provincial and federal levels for investment planning, policy analysis, and water resources management. This emphasis on strengthening institutions and capacity development for water is fundamental to support the desperately needed sector investment and ensure that it provides sustainable economic growth.| © 2008 Asian Development Bank Privacy | Terms of Use |
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