ISLAMABAD, Jan 21: The Asian Development Bank (ADB) has decided to increase by 20 per cent its annual assistance for social sectors with a view to alleviating poverty substantially.

“We have decided to enhance our present annual level of 10 per cent assistance to 30 per cent for social sectors so that the spread of poverty could be contained in Pakistan,” said ADB Country Director for Pakistan, Mr Marshuk Ali Shah.

Speaking at a news conference here on Monday, he also said that the ADB had decided to keep the present level of $1 billion annual assistance to Pakistan for another three years.

“We had increased our annual assistance from roughly $600 million to $1 billion in 2001 which will continue for 2002 and 2003 as well,” he said, adding that the purpose was to take part in alleviating poverty from Pakistan in a big way.

In this regard, he said the bank will sign an agreement with the government of Pakistan in March to implement poverty reduction strategy to boost social sectors effectively. “Our increased level of assistance for three years is to effectively improve the lot of the common man in Pakistan.”

But he made it clear that the government will also have to match the funding so that the issue of poverty could be addressed adequately.

The international donors have been assured by the government of Pakistan that political and economic reforms agenda, which was undertaken by Musharraf government in 1999, will continue beyond October this year, Mr Shah said.

“Assurances have been given to us at the highest level that nobody will be allowed to undo the government’s political and economic reforms agenda even after the general elections in October his year,” the ADB Resident chief said.

He, however, warned that the bank will withdraw from financing in case undue project delays were not stopped by the government. “The government needs to be efficient in removing unnecessary delays in undertaking projects,” he said, adding that the failure in the appointment of professionals, especially projects directors, was causing delays in project execution and thus depriving the people of development’s benefits.

He was of the view that the Planning Commission and the provincial departments concerned should work to improve portfolio management so that the bank could disburse funding on time.

“I think the government should remove procedural weaknesses in development projects which could otherwise force us to withdraw our finding,” he warned.

Mr Shah, nonetheless, believed that the government had started realising this and that it all happened, “when we told them that we were withdrawing from flood protection and national drainage projects.”

He also stressed the need for completing the restructuring of the Central Board of Revenue (CBR) so that corruption and leakages could be removed. “Tax evasion is a big problem in Pakistan,” he noted.

Giving the details of ADB funding, he said that $250 million will be offered to Pakistan as part of the capital development loan this year. Earlier, he said, $200 million had been disbursed for the first phase.

Of the $1 billion assistance lined up for 2002, $300 million will be extended for carrying out devolution process aimed at increasing capacity building and undertaking reforms, both at the federal and provincial level, he said. “Then we have also decided to provide $100 million for undertaking civil service reforms.”

Responding to a question, Mr Shah said that ADB had offered $350 million for the restructuring of the Karachi Electricity Supply Company (KESC) and accelerating the process of privatisation in the country. He expressed his satisfaction over government’s various measures for improving the functioning of the KESC.

“But you have to have a confidence of the investors for accelerating the process of disinvestment,” the ADB’s local chief remarked. He called for improving the environment to improve the process of privatisation.

He did not believe that international donors were responsible for serious economic crises in the development countries like Argentina.

Talking about Pakistan, he said its foreign debt had reached $38 billion due to excessive borrowing for consumption purposes. The governments in 1990’s went for huge borrowing to cover up their fiscal and current account deficits which, he claimed, had nothing to do with donors, including the IMF.

“Resources have been used recklessly in Pakistan,” he remarked, adding that the country like Pakistan had been borrowing short term loans that increased their overall debts.