The success rate of completed investment operations of Asian Development Bank has declined to 67 per cent from 69 per cent in 2008 partly because of realignment and closure of slow-moving projects in Pakistan.

In its 2009 Development Effectiveness Review (DEfR), the ADB has held Pakistan mainly responsible for unsatisfactory project performance and failure to achieve completion targets.

The bank has classified four projects of $373 million--- Pakistan Decentralised Elementary Education Project in Sindh ($75m), Rural Finance Sector Development Programme ($250m), Supporting Public Resource Management Reforms in Balochistan ($3m) and Reproductive Health ($45m)----- as unsuccessful.

The failure of projects funded by multilateral donors is not a new phenomenon. The mega Social Action Programme (SAP), started in early 1990s, ended up without desired outcome. A World Bank funded programme to bring reforms in the education sector by introducing schools management committees also failed to deliver.

Ordinary citizens and taxpayers never come to know about the reasons for failure of foreign-funded projects and why not a single institution is held responsible by the government and what policy measures are under way to minimise the rate of failures.

The lending agencies admit failures by terming them “unsuccessful” but never apportion any responsibility on execution agencies, departments or individuals.

Policies in this regards vary donor to donor, but most of IFIs stop funding projects which are seen not performing well.

For example, the Rural Finance Sector Development Programme was declared a failed project by the ADB in 2009. The project was expected to generate rural income and reduce poverty and intended to assist the government by addressing key constraints in rural finance. It was to ensure access to institutional financial services for a majority of middle- and low-income rural households at minimal transaction cost and to encourage private participation in the rural finance sector.

The Ministry of Finance was the executing agency for the loans and the State Bank of Pakistan (SBP) and Zarai Taraqqiati Bank Limited (ZTBL) were implementing agencies. But even a combination of these institutions failed to bring desired results. No one was held responsible by the government, the designers, the implementers or the policymaking institutions. The IFIs do not have a clear policy to avoid such mishaps.

Accountability and transparency in the public sector is still a far cry. Annual economic surveys, budget documents, parliamentary proceedings and discussions, performance reports and government websites never reflect any information about failure of projects and programmes.

The government finance managers see weak project management, poor coordination among line agencies and delayed release of funds as priority problems which need to addressed. But they agree with the donors that regular transfer of project management staff puts the project's performance at stake.

Joint Secretary Economic Affairs Division Zafar Hussain is of the view that the $45 million ADB-funded Reproductive Health project failed only because of poor coordination of line departments such as ministry of health, population welfare and provincial departments.

Citing an example of weak management, Mr Zafar said “The projects and programmes in Punjab and Sindh are performing better than in Balochistan, Khyber-Pakhtoonkhwa and Azad Jammu and Kashmir just because of comparatively better project management and supervision.”

Dr Samia Altaf, Woodrow Wilson Centre Pakistan Scholar, observes that in spite of the large inputs, the outputs have not been commensurate, particularly in the social sector.

In a study on aid effectiveness, Dr Samia says that between 1950 and 1999, the international donor community contributed nearly $58 billion to Pakistan.

“Because effectiveness is not prioritised, the same results are generated year after year, failing to achieve success in social service development programmes. The government donors, contractors, and NGOs all benefit from this current revolving door arrangement, despite the lack of progress for the people they serve,” she argues.

But she remains optimistic “To me, from the smartest country in the world with the most resources at its disposal, the repository of technical expertise - certainly we can put our heads together and come up with a solution to this problem.”

A Pakistan Country Portfolio Review in 2007, revealed a large number of non-performing operations in a portfolio of 81 projects. This led to a comprehensive “spring cleaning” exercise and the introduction of a “no automatic extension” policy for projects and technical assistance with a low probability of success. The “spring cleaning” resulted in 28 loans closed as scheduled or approved, four loans closed ahead of schedule, and three loans extended.