ISLAMABAD, Sept 5: Poverty reduction and lack of implementation capacity remain major challenges to Pakistan and require a lot of effort and strategies in the right direction, according to President Asian Development Bank Haruhiko Kuroda. “The current state of poverty in Pakistan is serious and it concerns the ADB,” he said in an interview with Dawn here on Monday.
Mr Kuroda said that the ADB could provide assistance to any water sector project, like the Kalabagh or Bhasha dam, if there was broad national consensus and the ADB’s safeguard policies were adhered to.
He said although there had been a sufficient improvement in poverty alleviation over the past five years, the issue was still a major challenge.
He said poverty had reduced in Pakistan but it still was a matter of concern which should be addressed by improving governance in the country.
He said the implementation had been a major problem in Pakistan because of multiple reasons.
He said a number of ADB-funded projects in Pakistan had been successfully implemented but yet there was a long list of projects implementation on some of which may have been very slow.
One of the reasons, he said, may have been that a project was conceived, approved and launched many years ago but it became outdated by the time it was completed.
Another problem was that some projects might have multiple objectives in the medium and long term but faced problems because of concerns of donor countries and institutions, including the ADB, he added.
One of the major reasons, he said, was the lack of implementation capacity in Pakistan, sometimes in provinces and sometimes in federal agencies. “Although the World Bank and the ADB have been providing a lot of training and capacity building support but somehow the implementation capacity may not have improved.”
He said Pakistan would have to improve its implementation capacity at various levels and streamline project cycles and procedures. At the ADB level, he said, the project-based loans should be simplified, streamlined and aligned with the country-specific system.
The ADB president, who had met President Pervez Musharraf and some ministers, said there was also a need to improve general investment environment to provide basic necessities of life, including clean drinking water and electricity, to the people.
Reforms, he pointed out, should be implemented in letter and spirit so that ultimately the objective of tackling poverty could be achieved.
Answering a question, he said Pakistan was still suffering from an image problem due to which it could not attract sufficient foreign direct investment (FDI).
Pakistan, he said, should improve its economic conditions and policy framework and ensure improved governance to attract sizable foreign investment. However, he believed that FDI had started picking up in Pakistan.
He said the ADB could support Pakistan by extending enough funding for improving infrastructure facilities like communications, ports and roads.
The ADB president said he had held useful and constructive discussions with the Pakistani authorities aimed at extending increased financial and technical assistance to Pakistan.
Pakistan, he said, was facing many challenges despite achieving outstanding 8.4 percent GDP growth rate last year, the highest in three decades.
He feared that growth process could slow down in 2005-06 due to increasing international oil prices. “But it can be accelerated in 2007 by adopting short and long term policies in the right direction,” he said, adding that the government needed to intensify efforts to ensure that there was no slow down in growth momentum.
The ADB president called for forging increased cooperation in South Asia like East Asia to have economic integration. He said South Asia could have strong cooperation for improving power network, communication, agriculture and tourism sectors.
He said since Pakistan was located at a strategically important position, it could help integrate South Asia and strengthen cooperation among the countries like India, Iran, Afghanistan, Central Asian Countries and Turkey.
He said connectivity was a critical issue which could be resolved by improving infrastructure, roads, power, energy and telecom services through Pakistan and with other South Asian and Asian countries.
Answering another question, he said the ADB believed the three gas pipeline projects from Turkmenistan, Iran and Qatar were useful and his bank could support one of them.
However, he said so far the ADB had not decided to extend financial assistance for any of the projects.
The ADB, he said, was helping in holding technical discussions about the gas pipeline projects.
Answering yet another question, the ADB chief said he was not satisfied with the regional trade and investment cooperation in South Asia.
