The NWFP government's intended plan to execute an all-time high Rs14.7 billion annual development programme (ADP) during the current financial year has apparently nose-dived before it could be implemented.
The government appears to be in no position to fulfil its desire to spend the amount on development works in a year because of the paucity of funds and the dictates by certain international donor agencies.
The province had set an ADP for the current fiscal year involving a total estimated cost of Rs14.7 billion of which only an amount of Rs2 billion was to be contributed by the provincial government from its own resources.
In addition to that, an amount of Rs3.8 billion was to be diverted from the World Bank's loan instalment - which has yet to come with eight months of the fiscal year having passed. Whereas, over Rs5.7 billion were to be raised jointly by the international donor agencies to help the province execute development works listed as the 'foreign funded projects'.
The development programme, however, started experiencing hiccups soon after it was provided smooth passage by the Muttahida Majlis-i-Amal (MMA) dominated provincial assembly, in June last year.
For all cogent reasons, the ADP remains far from getting implemented in totality and its provincially-funded component stands to have lost relevancy under the prevalent situation.
The government had to restructure the original ADP in fulfilment of a pre-condition set for the release of the second tranche of $90 million by the World Bank under its structural adjustment credit (SAC) facility.
The provincial government's decision to include some 970 new development schemes in the ADP made several to raise eye brows, particularly, its major lending agency - the World Bank. The MMA government's expediency to include so many new schemes, apparently, to gain political advantages, particularly, in the home constituencies of its top leaders cost it heavily.
It provided opportunities to its opponents to take it to task and they exploited the situation to their utmost benefit causing considerable dent to the religious parties' conglomerate's standing in the masses.
The province, too, faced the music due to the follies committed by the provincial government as a result of ill-planning committed at the time of putting the provincial ADP in place for the current financial year.
The government underwent the situation because of its own follies after it did not pay heed to the recommendations put forth (at the time of preparing the ADP) by the development planners against incorporating such a large number of schemes in the ADP.
However, the government came to terms only after pressed hard by external factors - mainly its donor agencies. The World Bank, which is extending budgetary support to the NWFP government to implement its three-year provincial reforms programme (PRP), moved the government against incorporation of so many new schemes shortly after the ADP was approved by the provincial legislature.
It made the government to re-prioritize the ADP by slashing insignificant new schemes and part of the on-going development schemes to qualify for the second tranche.
The government's move was opposed on the ground that it would have increased the province's throw-forward liability (the total amount of funds the government would need in years to come to complete the schemes covered under the current fiscal year's ADP) to an unprecedented level of Rs45 billion.
The throw-forward liability's growth to such a level was seen detrimental to the future ADPs and was suspected to minimize the Frontier province's development planning options for many years to come.
Besides, incapacity on the part of the departments concerned to effectively handle execution of so many new schemes was also among several other factors which made the officials concerned and donor agencies to resist the MMA leadership's endeavours to incorporate an all time high number of schemes in the ADP.
Cognizant of the importance of the lending agency's pre-condition for the release of the second instalment, the development planners of the province trimmed the number of new schemes by shelving insignificant development works to avoid suspension of the World Bank's financial assistance.
Eventually, the exercise has changed the complexion of that part of the ADP, which was to be executed with the help of the provincial resources. Under the new scheme of things, the reduced number of development schemes would get greater amount of funds during the current financial year after several of new schemes were shelved.
The exercise to 're-prioritize' the ADP has already been completed and appears to be satisfactory for the lending agency, negating the MMA's stated position that it will never accept dictates from the international monetary agencies. Under the re-prioritization drive, several number of schemes have been declared insignificant and were allocated 'zero' funds under the revised estimates of the current financial year's ADP, seemingly to avoid reaction from the MMA's members of the provincial assembly and its supporters.
This would help the government to give an impression to its supporters and legislators that the schemes with zero allocation have not been dropped out from the ADP and these would be taken up for execution at a later stage - in the next financial year or after that.
Though the province has managed to satisfy its donors by transforming its ADP in accordance with their wishes, the government's ability and chances to arrange funds in proportion to the original size of the current financial year's ADP leave it with little chance to implement even the revised development programme.
While the number of schemes has experienced reduction, the fundswise total size of the ADP remains unchanged leaving a daunting task for the government to arrange the required funds (Rs14.7 billion) and ensure its 100 per cent utilization by the end of the current financial year.
Besides, the re-prioritization drive made government's pursuit to materialize its plan much more difficult to achieve by giving birth to a host of new issues. It made the development planners of the province to carry out the exercise (ADP preparation under the reprioritization drive), which they had already done before the start of the current financial year. In this way, they wasted couple of months to redesign the plans of their respective sectors.
Similarly, the drive gave birth to uncertainty and confusion among the departments as for most part of the first half of the current financial year they were not sure which one of the new schemes would stay and how many would get scrapped.
Physical work on majority of the new schemes, specifically those which were to be provided funds under the provincially funded component of the ADP, could not commence even after the culmination of the first half of the fiscal year due to the delay caused by the re-prioritization exercise.
Even if we set aside the in-built problems contained under the ADP and those attached with it, the chances of ADP's getting implemented in totality appear to be slim due to financial squeeze the successive governments have been experiencing for quite some time.
At the first instance, a cash strapped province, like the NWFP, has never been in a position to arrange funds as high as Rs14.7 billion to enable MMA-led provincial government turn its 'over-ambitious ADP' into a reality.
The World Bank has not yet released the second SAC tranche to the province, jeopardizing the government's plans to divert Rs3.8 billion from it to carry out social sector schemes.
As the bank is expected to release the second instalment shortly before the fiscal year comes to an end, it would not be possible for the government to utilize the same amount.
This would leave several schemes to remain un-funded, causing the government to fall short of implementing its plans as far as launching the anticipated number of new schemes was concerned. In such an eventuality, the government would have to carry forward the unspent funds for executing these works during the next financial year - as has been the case this time round.
The development funds lapsed last year were re-appropriated at the start of the current financial year to carry out development works of which some had been planned for the last financial year. Similarly, in view of the financial crisis faced by the province, the government does not appear to be in a position to arrange the amount of Rs2 billion it had projected to raise for the ADP from its own resources.
To add insult to injury, the Rs867 million earmarked for the district governments to help them execute the districts' ADP has also landed in the dock leaving no chance for the provincial government to ensure 100 per cent utilization of the funds allocated to the district governments.
By the end of the first five months of the current financial year, district governments had spent around five per cent of the total funds earmarked for the entire year.
The funds utilization position at the provincial level is also not much different than the ground realities haunting the provincial government as far as the districts' ADP were concerned.
Beyond that, majority of the departments started preparing PC-Is of the new projects while the first six months of the fiscal year have already passed. This would lead the province to end up with a large unspent amount at the close of the current fiscal year.
In such a situation the government is set to brace for a tough time at the hands of its foreign donors. They are jointly contributing about 40 per cent of the total estimated cost of the current financial year's ADP and usually they get upset when their funds remain unspent at the end of the year.
The government's bids to record the highest ever development expenditure in a year are likely to cost the province and its people dearly. The province's total debt liabilities are likely to stand close to Rs100 billion at the end of the current financial year.
In this heavy amount of debt, the current ADP would have its share of over Rs12 billion, the amount the province is not free to spend on its own free will by determining its needs and areas of interest.
Rather, this amount, like all other foreign loans extended in the past, has to be utilized in line with the priorities set out for the province by the donor agencies. This leaves little scope for the provincial government to underline its own agenda of change for the people of the province. The MMA government appears to be a no different than its predecessors as it, too, could not break the ice in its first year of rule.
