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Countries and Regions Country Partnership Strategies Document
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Country Strategy and Program 2004-2006: Pakistan
II. Implementation of the Country Strategy and ProgramA. Progress under the Poverty Partnership Agreement9. As the Poverty Partnership Agreement (PPA) was signed only on 16 September 2002, it is early to comment on the progress on the agreed outcome indicators. However, the data that have become available since the CSP was approved in May 2002 (but which still pertain to the pre-PPA period), suggest that overall poverty increased to 32.1% in FY2001 as against 30.6% in FY1999 (Appendix 1, Tables A1.1 and A1.3). While poverty was estimated to have increased significantly in rural areas, it appears to have remained unchanged in urban areas. The data also show slow progress towards achievement of Millennium Development Goals (MDGs), particularly for the education sector. 10. In FY2003, the Government made significant progress toward achieving the mediumterm PPA target of increasing pro-poor expenditure to 4% of GDP. Following the finalization of the interim poverty reduction strategy paper (PRSP) in November 2001, the Government has made progress in the preparation of the full PRSP, and presented the draft PRSP (summarized version) at the Pakistan Development Forum in May 2003. Under the PRSP, appropriate mechanisms to monitor progress have been established. Besides the quarterly reporting on propoor expenditure, data on four intermediate human development indicators, relating to education, health, and population planning, are currently being reported. In addition, 10 more intermediate indicators have been identified and systems are being put in place to collect data on these indicators. B. Progress in the Country Strategy and Program Focus Areas11. Good Governance. As part of the Government’s ambitious agenda on governance reforms, the devolution process, supported by the ADB-assisted Devolution Support Program, is under way, with local governments functioning at the district, tehsil (sub-district), and union levels. In addition, several important legal and policy reforms in the judicial and police systems have already been introduced under the Access to Justice Program , also supported by ADB. Recognizing that the implementation of governance programs depends on the creation of a broad-based constituency of support and consensus building among government ministries, as well as civil society and NGOs, ADB has also been promoting the creation of coalitions in civil society and their dialogue with government, particularly in the context of devolution, gender, access to justice, and related policies. 12. In line with national and international commitments to promote gender equality, the Government has recently taken steps , which include reservation of a 33% quota for women in three tiers of local government, a 17% quota for women representation in the national and provincial assemblies and the Senate, approval of the National Policy on Development and Empowerment of Women in 2002, and ratification of International Labour Organization (ILO) Convention 100 on Equal Remuneration. ADB has incorporated gender and development as an integral part of its support for the governance reform agenda. The Government expressed strong support for gender reforms articulated under gender reform action plans (GRAPs), being prepared with ADB support. GRAPs, which will include gender reforms in political, administrative, and fiscal domains, will shortly be presented to federal and provincial cabinets for approval. 13. Rural Development. Against the background of high levels of rural poverty, the Government continued with a number of targeted poverty reduction programs in rural areas, including small-scale infrastructure projects through the Khushal Pakistan Program, and rural finance and microfinance programs through the ADB-assisted Rural Finance Sector Development Program and the Microfinance Sector Development Program and the World Banksupported Pakistan Poverty Alleviation Fund. Also, implementation of the three ADB-supported major ongoing rural development projects in DG Khan, Bahawalpur, and Malakand, which are in areas of high rural poverty, has accelerated. In addition, ADB, in 2002, appro ved both the Sindh Rural Development Project, which is to be implemented in four high-poverty districts in the province, and the Punjab Road Development Sector Project, which has a significant component relating to rehabilitation of rural access roads. 14. Inclusive Social Development. The Government has appreciably increased allocations for social sector spending. The LGOs assign the bulk of social service delivery and regulatory functions to local governments at district, tehsil, and union levels. Devolution policy anticipates that these arrangements will improve the efficiency of allocation of public resources in accordance with local needs, and enhance quality, efficiency, accountability, and ownership of such services at the local level. However, international experience shows that devolution does not assure these outcomes, and there is a real possibility, in the absence of supporting measures, that resources will be inefficiently used and may be captured by local elites. Thus, all ADB lending in social sectors aims to incorporate governance dimensions in the project design to reinforce newly introduced measures to improve public access to information and to ensure accountability, audit, and prevention of malfeasance. To support government efforts in the social sectors, ADB, in 2002, approved assistance for investment projects in the areas of decentralized elementary education and water supply and sanitation. In addition, the capacity of local governments is being strengthened to improve quality and access of the poor to basic social services. 15. Decentralization of Assistance. Under the CSP’s emphasis on province-specific interventions and programs, a series of province-wise projects are being undertaken, and more are proposed. These include projects in the sectors of transport, basic urban services, decentralized social services, and water. Province-specific public resource management programs for Punjab and Balochistan are being processed. To ensure that assistance to each province is structured in a coherent manner and guided by the provincial PRSPs, which are currently under preparation, ADB will give consideration to the preparation of provincial-level strategies. ADB is also providing assistance for border areas, such as the Federally Administered Tribal Areas (FATA). 16. Regional Cooperation. The improved political situation in Afghanistan has offered new opportunities for subregional cooperation with neighboring countries to the west (Afghanistan and the Central Asian Republics). To facilitate subregional cooperation, ADB assistance is focusing on two sectors: transportation and energy. In transportation, ADB has proposed projects that will connect Karachi Port and the deep sea port of Gwadar (still under construction), through improved road networks in Balochistan and NWFP, to the borders of Afghanistan and on to Central Asia. In the energy sector, a major initiative is the Turkmenistan- Afghanistan-Pakistan (TAP) Gas Pipeline Project for which a feasibility study is being undertaken under an ADB technical assistance (TA). To explore possibilities of supporting subregional cooperation efforts in other sectors, ADB is undertaking studies on Pakistan and Afghanistan. Based on the findings of these studies, ADB plans to process a regional technical assistance (RETA) for fostering subregional cooperation in west Asia. C. Highlights in Coordination of External Funding and Partnership Arrangements17. ADB has progressively improved coordination with multilateral and bilateral development partners (details of their assistance to Pakistan are provided in the development coordination matrix in Appendix 1, Table A1.5) through greater engagement and partnership in areas of shared strategic priorities. As an important element in this enhanced collaboration, ADB will continue to pursue cofinancing opportunities, particularly from grant and concessional sources, in conjunction with the lending program for 2004–2006. In this regard, various external agencies are already providing or have planned significant amounts in cofinancing with ADB for TA projects, particularly in the area of governance. These include cofinancing by the Department for International Development (DFID), United Kingdom, for the TA on Resource Management and Poverty Reduction in Punjab, and for the supplementary TA on Fiscal Decentralization. The Netherlands Government provided cofinancing for the TA on Gender Reform and supplementary financing for the TA on Support to Implementation of the Access to Justice Program. DFID, Netherlands Government, and Canadian International Development Agency (CIDA) will also provide cofinancing for the TA on Support to Implementation of Decentralization. In the area of environment, the Norwegian Agency for Development Cooperation (NORAD) has approved $1 million for the TA on Industrial Environment Management Capacity Building. Finally, in the area of pro-poor growth, there is a possibility of cofinancing of $7 million from the United States Agency for International Development (USAID) for the Microfinance Sector Development Program. ADB is continuing to explore other cofinancing opportunities with bilateral and multilateral funding agencies and, besides governance, sectors for which there is potential for cofinancing include education and health, agribusiness, rural development, and roads. 18. Regular coordination with multilateral and bilateral funding agencies on strategy and program development, as well as specific project interventions, is being undertaken through various consultative meetings. During 2002, ADB chaired the Forestry Donor Coordination Group, and was also actively involved with the Environment Donor Coordination Group and the Education Donor Coordination Group. ADB also now co-chairs , with the United Nations Development Program (UNDP), the regular meetings of the Donor Governance Forum, and monthly meetings of the Inter Agency Gender and Development Group (INGAD). Given ADB’s emphasis on province-specific lending, cooperation with funding agencies supporting the various provinces in the context of their PRSP commitments will be further developed. In particular, cooperation with the World Bank in province-level strategy development and operations is being strengthened.
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