ISLAMABAD, PAKISTAN - The Asian Development Bank (ADB) and the Government of Pakistan have designed a major new strategic partnership aimed at promoting inclusive and sustainable economic growth through structural reforms and investment in the energy and infrastructure sectors.
Endorsed by ADB's Board of Directors in Manila on March 5 2009, the Country Partnership Strategy (CPS) 2009-2013 provides for a US$4.4 billion lending program that aligns with the government's goal of facilitating structural change, promoting investment, and improving institutional effectiveness.
"The CPS will support Pakistan's fight against poverty and its pursuit of prosperity by tackling binding constraints to inclusive economic growth," said Rune Stroem, Country Director of ADB's Pakistan Resident Mission. "Supporting the government's reform agenda and improving the energy, transport, and urban infrastructure will help reduce the cost of doing business and strengthen the underlying competitiveness of the economy."
The CPS outlines a second generation of economic reforms aimed at reducing distortions, accelerating market creation, eliminating governance and institutional bottlenecks, and strengthening public financial management reform. These reforms will help enhance private sector investment, support diversification of the economy, create jobs, and improve the efficiency of government functioning.
In a country where crippling power outages increase the cost and challenges of doing business, the CPS aims to strengthen Pakistan's energy supply chain. Measures include augmenting and expanding transmission stations and lines, strengthening distribution companies, and developing power generation facilities using renewable sources. These and other improvements aim to contribute to reducing electricity outages by a further 30% by 2012 and increasing the number of grid-connected electricity consumers from 60% in 2008 to 70% by 2013.
Pakistan's transport infrastructure is another area of the CPS's strategic focus. Financial and technical assistance will be supplied to improve connectivity along the National Trade Corridor and other major highways. This will enable export firms to be more competitive by reducing transportation costs and travel time. The CPS projects that by 2017 the road travel time between Peshawar and Karachi will be halved to 36 hours from the 2006 time of 72 hours.
Improving the quality of lives of citizens in cities and towns receives a major emphasis in the CPS. Strengthening water supply and sanitation services and urban transportation systems will not only lead to enhanced economic competitiveness but will also yield health and environment improvement dividends for the benefit of urban citizens.
Strengthening implementation of projects and programs and capacity building is key to obtaining development results. The CPS provides a platform for ADB and the Government to work together to improve the effectiveness of the assistance earmarked under the strategy.
Pakistan has received about $19.8 billion in loans since joining ADB in 1966, with about $14 billion disbursed as of the end of 2008. The lending program in 2008 was a record that included $1.87 billion disbursement and $1.2 billion in newly approved assistance.
As of December 2008, ADB's active portfolio in Pakistan included 62 public sector loans assistance channels amounting to $3.0 billion in the areas of infrastructure, social sectors, governance and earthquake rehabilitation, for a total of $5.1 billion.