ISLAMABAD, Jan 22: The Asian Development Bank has approved $700,000 technical assistance grants to help the government prepare a public sector resource management programme for Balochistan.

The ADB is funding $450,000 of the assistance and $250,000 would be given by the Netherlands, ADB sources said. The government would contribute $175,000, they said.

The programme will assist the provincial government in reforms in development planning and fiscal and financial management. The reforms also involve public service delivery and fostering an enabling environment for private sector development.

Assistance would also focus on reforms in water resource management, the sources said. The programme would set reforms priorities for the forthcoming Asian Develop-ment Bank assistance to Balochistan in rural development, drought mitigation in 2004 and decentralized social services, to be processed in 2005, sources said.

"The assistance will support technical studies, policy dialogue and capacity building necessary to design and carry out a programme of reforms for poverty-focused development planning and effective use of public resources in Balochistan," says the country director at the ADB's resident mission in Pakistan, Marshuk Ali Shah.

The Balochistan government faces severe resource constraints in addressing development issues. ADB sources said salaries, pensions and debt servicing absorbed the bulk of the province's current expenditure, leaving little for improving service delivery and maintaining infrastructure.

They said the province's environment had been severely degraded in recent years due to drought. Groundwater resources had been severely depleted, range lands degraded, forests reduced and agriculture land rendered uncultivable, they said.

The rate of natural resource exploitation was unsustainable and the continued degradation of the environment was likely to result in increase in poverty, they said.

In the first phase, technical studies would be carried out in support of a policy dialogue for a reforms strategy, involving the federal, provincial and local governments, the business sector and the civil society to prepare the loan programme for 2004, they said.

In the second phase, the emphasis would be on capacity building and continuing the dialogue. The Balochistan finance department is the executing agency for the programme, which is due for completion in May, 2005.-APP