Volume 23 Issue 5, May 2019


What is the role of the Asian Development Bank in the development of Pakistan?
Pakistan joined ADB as a founding member in 1966. ADB has since been working with Pakistan to support the country’s key development goals to build a resilient and prosperous nation. Our key focus of support is to strengthen infrastructure, social services and economic growth. We have approved $32.2 billion in project assistance for Pakistan since 1966.

The assistance is channeled through the government and the private sector through loan and technical assistance projects and advisory and knowledge services. ADB works very closely with the federal and provincial governments, other partners, think tanks and the private sector to improve Pakistan’s infrastructure, energy and food security, water, urban and public services deliveries. Our goal is to improve the quality of life of all citizens.

In which area has ADB made a major contribution in Pakistan?
We made our first loan to Pakistan in 1968. It provided finance to small and medium-scale industries to help them grow and expand. These businesses are important because they provide jobs and generate revenue for the government. Assistance like this helps Pakistan develop its economy, reduce poverty and achieve its development targets. Such outcomes are what we seek in most of our projects and program and technical assistance support.

We work in a range of sectors such as energy, transport, agriculture and natural resources, water, and urban development. We actively promote the development of the private sector, financial market development and public sector reforms. Women are at the centre of our work. Many of our projects now have a gender component to help improve the lives of women and girls.

ADB also provides development knowledge and expertise to Pakistan to help the government implement policies, programs and projects that utilize international best practices and learnings.

We are proud of the work we have supported in Pakistan. In the 1970s, we worked mainly in infrastructure and helped to develop the gas pipeline from Sui in Balochistan to Karachi. The Tarbela hydropower plant (one of Pakistan’s largest), was originally supported by ADB in 1974. ADB also extended vital assistance for Mangla Dam and Ghazi Barotha power plant.
In the 1990s, our focus was on education and public sector reform including decentralization of the government.

At the turn of the century, ADB supported the government’s economic reforms to open the economy through privatization and economic liberalization.

In 2005 we helped to restore basic services and livelihoods to millions of people devastated by the 2005 earthquake in northern Pakistan, and by subsequent floods in 2010 and 2011.

We are now actively working to upgrade power generation, transmission and distribution networks, harness clean energy; improve transport infrastructure, connectivity, and regional cooperation; develop public private partnerships; and improve agriculture and irrigations systems, livelihood development, and social security for the poorest and most vulnerable groups, especially women.

Do you think Pakistan needs more resources than what ADB can provide?
There is continued demand for ADB assistance in Pakistan. There are many challenges. Just for infrastructure development alone, the estimated finance gap in Pakistan is about 5% of the country’s GDP.

ADB stands ready to support Pakistan. Under our new business plan for Pakistan, the country’s sovereign operations will increase significantly to $7.1?billion over 3 years. Along with our continued focus on energy, infrastructure development and institutional reforms, ADB has also re-engaged in education and health.

We will also continue to mobilize co-financing from bilateral and multilateral agencies and other financing partners, especially in the private sector, to help address Pakistan’s continuously growing development needs.

How can ADB help in building a better relationship in South Asia and the wider region?
Regional cooperation is critical to accelerate growth and reduce poverty. ADB is the secretariat of the Central Asia Regional Economic Cooperation (CAREC) program. The 11 members of CAREC are Afghanistan, Azerbaijan, the People’s Republic of China, Georgia, Kazakhstan, the Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan and Uzbekistan. Since 2001, CAREC has financed 190 regional projects worth $32.9 billion in the areas of transport, energy and trade in its member countries. Over a third of this amount, or $11.9 billion, has been financed by ADB; $13.4 billion by other development partners such as the World Bank, the Islamic Development Bank, and the European Bank for Reconstruction and Development; and $7.6 billion by CAREC governments.

There is huge potential to expand economic cooperation and economic linkages among countries in South and Central Asia. This region is among the least connected in the world. Pakistan is in a strong position to benefit from closer cooperation with its neighbours in the region. It lies at the crossroads of the rapidly growing South, Central and West Asia regions, and with its over 200 million population and abundant resources, Pakistan has the potential to emerge as a hub and centre of trade and commerce to spur higher growth, create jobs and reduce poverty.

What role is ADB playing in the China-Pakistan Economic Corridor (CPEC) project?
CPEC will benefit Pakistan provided that the country can transform the predominantly road corridors into true economic corridors so that Pakistan’s economy can be parts of global production networks and value chains. ADB is supporting Pakistan in developing the proposed economic corridors in line with the country’s industrial development and frameworks for developing CAREC corridors.

ADB and the United Kingdom’s DFID-funded Pakistan Economic Corridors Programme includes the M4, motorway from Gojra to Khanewal; E-35, connecting the existing M1 at Burhan to Havelian; N50, National Highway from Zhob to Mughal Kot; and N70: National Highway for Qila Saifullah-Loralai-Wagham in Balochistan. The partnership also provides technical assistance for the developments of a national transport policy, road safety, road asset management and economic corridor planning to ensure that future infrastructure investments bring maximum economic impact in Pakistan.

Given the need for more funds for infrastructure development, the People’s Republic of China has established the Asia Infrastructure Investment Bank (AIIB). How does ADB regard this development?
The development needs of Pakistan and the Asia and Pacific region are vast. In 2017, ADB did a study that estimated infrastructure needs in developing Asia and the Pacific will exceed $22.6 trillion through 2030, or $1.5 trillion per year, if the region is to maintain a growth momentum. The estimates rise to over $26 trillion, or $1.7 trillion per year, when climate change mitigation and adaptation costs are incorporated.

These needs cannot be met by ADB alone. We need more partners to bridge the financing gap. AIIB has an important role to play. In March 2019, ADB signed an agreement with AIIB that will guide overall co-financing arrangements between the two institutions going forward, including regular meetings to discuss co-financing matters. ADB and AIIB have co-financed 5 projects, comprising 4 sovereign loans in Bangladesh, Georgia, India and Pakistan and one collaborative transaction in Myanmar through ADB’s Private Sector Operations Department. Further co-financing for sovereign and nonsovereign projects is being actively pursued.

In Pakistan, ADB is cooperating with AIIB in building the 64 km section of the motorway between Shorkot and Khanewal in Punjab. ADB has approved a $100 million loan for the project and AIIB has also approved a $100 million loan.

The ADB’s primary focus has been on infrastructure and connectivity. Perhaps it should also consider projects concerning good governance and promotion of democratic principles. What is your view?
ADB partners Pakistan in a wide range of areas including energy, natural resource management, urban development, transport, regional connectivity, social sector and institutional reforms, which cover good governance and promote democratic principles. ADB also provides innovative knowledge solutions to ensure sustained and inclusive economic development and growth. Together with other development agencies, non-government organizations, and the private sector, ADB is committed to continuing to support the rapid and sustainable development of the country including promoting good governance and democratic principles.


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