$3.2bn ADB business plan for Pakistan

Discussion in 'Pakistan' started by Neo, Mar 8, 2014.

  1. Neo

    Neo Senior Member Senior Member

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    $3.2bn ADB business plan for Pakistan



    ISLAMABAD: The Asian Development Bank has decided to allocate $3.25 billion under a new lending programme for next three years (2014-16), focusing on reforms in the energy sector and the challenges faced by the state-owned enterprises.

    According to the ‘Country Operations Business Plan’ made available to Dawn on Monday, the total firm lending programme amounts to $3.2 billion for 27 loans, an annual average of $1.061bn.

    About 26 per cent of this will be provided through multi tranche facilities. The non-lending technical assistance programme for 2014-16 currently stands at $15.6 million for 16 technical assistance projects.

    Efforts will be made to mobilise co-financing for both investment and technical assistance projects, document reveals.

    The current environment in the power sector, in which receipts do not cover costs, means that every unit of power is sold at a loss that is either covered by a government subsidy or becomes part of the continuously accumulating arrears of the state-owned power companies.

    The new government settled outstanding arrears in the sector in July 2013, but there are indications that debt will build up again unless structural reforms are undertaken in the sector.

    The business plan has allocated a major part of the available resources to address energy sector needs, both through investments and policy reforms. Planned interventions aim at a more efficient system for generating, transmitting, and distributing electricity; improving collection, adjusting pricing mechanisms; and improving management.

    Other sector allocations for 2014–2016 are spread relatively equally to address infrastructure needs in transport, including regional connectivity, irrigation, and urban services.

    In the business plan, ADB will introduce policy-based lending to support the government’s medium-term reform agenda agreed with the IMF, and the addition of a project pipeline for 2015–2016.

    In addition to focusing on energy reforms and challenges being faced by SOEs, Punjab and Sindh, interventions have been proposed for the provinces of Balochistan and Khyber Pakhtunkhwa to broaden the geographic coverage of ADB assistance for development in these two regions, subject to prevailing security considerations.

    The work on a new Country Partnership Strategy (CPS), 2014–2018 for Pakistan has been initiated following the installation of new government in Pakistan as well as completion of the CPS, 2009-2013.

    With the approval of a new CPS by ADB targeted in 2014, the country operations business plan for Pakistan functions as a bridge between the CPS, 2009–2013 and the new CPS.

    $3.2bn ADB business plan for Pakistan - DAWN.COM
     
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  3. Known_Unknown

    Known_Unknown Devil's Advocate Stars and Ambassadors

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    What is the point of this article? It should be embarrassing for Pakistanis. No one I know publicizes to the world that he is getting yet another loan from the moneylender despite drowning in debt already!
     
  4. Neo

    Neo Senior Member Senior Member

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    Even the richest countries including USA are indebted.
    There is no pride nor shame in this as long as it is used to develop the country.
     
  5. Known_Unknown

    Known_Unknown Devil's Advocate Stars and Ambassadors

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    Richer countries are generally more indebted because their GDP growth rates are miniscule compared to their spending on social security and a host of other benefits for their citizens. In simple terms, they spend more than they earn.

    Poorer countries generally are less indebted because their their high GDP growth rates (not applicable to Pak) outpace their social spending leading to lower current account deficits.

    Pak is stuck in the unenviable position of being a developing country with high debt levels and no easy path to a high growth trajectory.
     
  6. Neo

    Neo Senior Member Senior Member

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    Partly agree with you here, true that richer countries have different requirements. In Pakistans case you have to look into the different dimensions and dynamics which are reponsible for our current economic malaise.

    Pakistani economy was healthy till mid seventies when India went nuclear and we had to direct all our funds into our nuclear programme which left us with very little money to develop. International embargoes that caused due our nuclear ambitions did the rest of the damage and the country was forced to look into closer ties with arabs which again led to the influx of wahabism and later radicalisation of our society to some level.

    Eighties and nineties were golden era's for global economies where countries like China, Singapore and Hong Komg were growing in double digits. We missed that opportunity since our costly nuclear programme and multiple delivery systems still required all our funds. Pakistan saw four democratic governments between Gen Zia and Gen Musharraf, unfortunately all fell due high corruption leaving us with an empty treasury every single time. Then finally Musharraf took over and that was the best thing that happened to Pakistan in a long time. He inherrited an empty treasury with only $400 million in forex and oil imports from KSA on deferred payments. Pakistan was also suffering from the worst embargoes and sanctions in history for her 1998 nuclear tests. But those eight hears under Musharraf were an eye opener. Not only did he stabalise the economy but transformed it knto second fastedt growing economy in the word after China in FY 2004/05 with 8.4% growth, later revised to 9.2%!!

    Zardari killed all that and the ongoing WoT did the rest of the damage causing us economic loss of between $60-100 billion.
    Current government is doing much better and with new development strategy with China the focus is on solving the power generation and loadshedding problems. First quarter of current FY has already shown positive trend with economic growth exceeding 5% and will most probably be sustained.
    Economy has to grow at atleast 7% for next five years to come out of problems and I believe if this government doesn't fall, we can achieve that easily.

    China's plan to invest $22 billion in energy and infrastructure and another $30 billion in various sectors will transform the country if we can tackle se urity concerns.

    In this light, ADB or any foreign government granting soft loans should be seen as a positive development.
     
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  7. Blackwater

    Blackwater Veteran Member Veteran Member

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    All money goes to army why need business plan @ neo kyo phaaji me ki joooth bolya:p:p:p
     

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