ADB, UK Provide Additional $45 Million to Boost Social Services in Pakistan

MANILA, PHILIPPINES - Punjab, Pakistan's most populous province, has received fresh funds of $45 million dollars equivalent for a program that is helping support improvements in the delivery of health, education, water, and sanitation services in the region, Asian Development Bank (ADB) said.

ADB's Board of Directors has approved the release of the third tranche of Punjab Devolved Social Services Program. A total of $25 million comes from ADB's concessional Asian Development Fund and $15 million from its ordinary capital resources. Cofinancing in the form of a $5 million grant is being provided by United Kingdom's Department for International Development (DFID). The first and second tranches of $80 million and $55 million equivalent were disbursed in December 2005 and November 2007 respectively.

Punjab, which contributes more than 50% of Pakistan's gross domestic product and is home to 56% of its population, has suffered, like other parts of the country, from a lack of access to social services in the past, resulting in a high level of poverty, low levels of literacy and school enrolment, and other development problems. In a bid to improve service delivery for the poor, Punjab's government devolved responsibility for education and health to districts, and water supply and sanitation to town municipalities. Recently, Punjab adopted a medium term development framework (2008-2011) to strengthen the allocation of resources and promote fiscal discipline.

ADB's program, which is closely tied to the development framework, set out a challenging reform agenda for improving social services. Achievement of the policy actions was linked to the release of loan funds. To date, the province has made significant progress in complying with key actions including strategic sector planning at the provincial and local government levels, the establishment of minimum standards for social services, the strengthening of accountability, and the promotion of public-private partnerships (PPPs).

Despite facing fiscal constraints, which have been exacerbated by the global economic crisis, the province has boosted per capita health spending in the public sector, progressively since fiscal year 2005 through fiscal year 2008. Reforms in the education sector have increased the number and quality of schools. Punjab has also benefited from an expansion of district inspection in education.

"Over 2 million more children are in school because of these investments with the enrolment rate among females in middle school rising from 43% in 2003 to 53% in 2005 and the share of female enrolment in government primary and middle schools increasing from 45% to 50%," said Linda Arthur, Social Sector Specialist at ADB's Pakistan Resident Mission.

Plans to increase and improve water supply and sanitation services are also on track, while PPP models have been drawn up, paving the way for private sector investments.

"PPPs are expected to improve the quality of services, particularly for the poor, while helping to reduce the cost burden of full public service delivery," said Ms. Arthur.

The program includes a technical assistance grant of $20 million equivalent from DFID to support reforms and boost the capacity of institutions to deliver improved social services. The executing agency for the program is the Punjab Planning and Development Department.