ISLAMABAD, Oct 29: Pakistan increased its debt through foreign-funded development programmes in the last two decades in exchange for economic and social benefits that were less than expected — in some cases much less, according to the Asian Development Bank.

In five, out of eight ADB-funded sector loans, the outcome performance over the last 22 years has been either ‘unsuccessful’ or ‘partly successful’.

Delayed implementation, change in objectives and direction during the course of implementation due to inabilities, both of the bank and the government, also resulted in cost overruns and non-achievement of designed objectives for which loans with heavy repayment costs were obtained from lenders.

In areas that have a direct impact on social standards of the people, like health, nutrition, social protection, water supply, sanitation and waste management, the outcome has been described as ‘unsuccessful’.

Likewise, the outcomes in agriculture and natural resources, education and finance have been rated as ‘partly successful’.

In three major sectors relating to the country’s macro-economy, the performance has been rated as ‘successful’, says Operations Evaluation Department of the ADB in its first ever evaluation in Pakistan of its entire operation during 1985-2006.

“Delayed project implementation and extensions to loan closing dates are a perennial problem in Pakistan operations,” it said.

During this period, “85 per cent of closed loans required an extension, although this improved to 67 per cent for 2001-2006,” it added.

The report “Country Assistance Programme Evaluation for Pakistan” shows that Pakistan projects have a similar level of success as those in Bangladesh and Nepal but lower than those of Bhutan, India and Maldives.

By decade, the success rate of projects in Pakistan has been remarkably static, with no evidence of improving performance. “This should be cause of concern,” said the bank.

The performance of projects in Bangladesh, by contrast, has improved markedly. India is little changed, Sri Lanka is improving and Nepal has deteriorated.

ADB-wide success ratings have trended up from below 60 per cent for the approvals in the mid-1980s to above 80 per cent for those approved in 1999.

“The difficult development context in Pakistan probably contributed to the static performance of its projects over this period.”

The analysis of project success by sector shows major differences in performance for Pakistan projects.

Projects in the water supply, sanitation and waste management sector performed the worst, with only 20 per cent success rate overall, albeit on small numbers, and a 50 per cent success rate for projects approved in 1990s.

The next worst performing sectors were education with a 29 per cent success rate and 50 per cent success rate for projects approved in the 1990s.

Finance sector projects with a 30 per cent success rate overall, influenced poorly performing projects with development finance institutions in the 1970s and 1980s and a 50 per cent success rate for later projects.

Health, nutrition and social protection projects had a 40 per cent success rate, improving to 50 per cent for 1990s.

Although many of the balance projects not rated successful were assessed as partly successful (i.e. desired results were not fully or efficiently achieved, or not sustained), this performance is dismal, it said.

Agriculture sector, the largest group with 33 projects had an overall success rate of 55 per cent with no trend to improvement by decade.

Multi-sector projects had a 56 per cent success rate overall. However, the multi-sector success rate dived from 75 per cent for projects approved in 1980s to only 25 per cent for those approved in the 1990s, influenced by the poor performance of projects supporting the Social Action Programme (of the Pakistan Peoples’ Party).

The ADB’s most successful projects have been in the traditional infrastructure areas, with energy sector achieving 81 per cent success rate overall but with a falloff for 1990s approvals to only 50 per cent.

Transport projects had an 89 per cent success rate and consistently good performance for projects approved in 1980s and 1990s.

For the evaluation, the major sectors of ADB operations were defined as those with more than $1 billion of approved loans over 1985-2006.

During this period, ADB approved 171 loans for 127 projects for a total of $14.2 billion. The Asian Development Fund (ADF) accounted for 89 per cent of the loans but only 44 per cent of the amount.

The balance of 11 per cent of the loans and 56 per cent of the amount came from ordinary capital resources (OCRs).

The average level of lending has approximately doubled since 2001 compared with the previous five years.