Asian Development Bank &Pakistan FACT SHEET Table 1. Pakistan: 2011 Loan, Technical Assistance, and Grant Approvals ($ million) Loans Technical Sovereign Nonsovereign Assistance Grants Total 1,163.24 97.00 4.00 3.00 1,267.24 Partnerships The Asian Development Bank (ADB) has been working with the Government of Pakistan since the founding of ADB in 1966. Other ADB partners include the European Union (EU), the Islamic Development Bank (IDB), the International Monetary Fund (IMF), the Japan International Cooperation Agency (JICA), the United Nations (UN), and the World Bank. Most recently, ADB and the World Bank jointly completed a damage and needs assessment to quantify damages, losses, and resultant needs caused by 2011 floods in Sindh and Balochistan. Under the aegis of the Friends of Democratic Pakistan, ADB led the Pakistan Water Sector Task Force to assess Pakistan’s water sector outlook. The study, expected to be finalized in the first quarter of 2012, will provide strategies and action plans for water sector development in Pakistan. ADB and the World Bank, in coordination with the EU, the UN, and the government, carried out a detailed post-conflict needs assessment in five districts of Khyber Pukhtunkhwa Province and the Federally Administered Tribal Areas, where more than 2 million people were internally displaced due to conflict. The assessment formulated a framework and action plan to rehabilitate affected areas. Two piloted projects, in collaboration with civil society organizations, on improving the livelihoods of women have been initiated to supplement ADB’s loan operations in Punjab and Sindh. Table 2. Pakistan: Cumulative ADB Lending by Sector as of 31 December 2011a Sector Agriculture and Natural Resources Education Energy Finance Health and Social Protection Industry and Trade Public Sector Management Transport and ICT Water Supply and Other Municipal Infrastructure and Services Multisector Total Total Disbursements Loans Amount (no.) ($ million) 59 12 62 52 11 22 27 23 3,625.41 501.11 4,851.36 3,193.00 779.40 1,119.40 3,015.80 2,178.90 %b 16.36 2.26 21.90 14.41 3.52 5.05 13.61 9.83 17 13 298 724.50 3.27 2,166.00 9.78 22,154.88 100.00 $16,812.6 million Operational Challenges ADB is providing critical support to Pakistan for achieving prospective growth in the areas of energy, transportation, and water, and for reducing poverty. The economy was held back by floods related damages, growing by a scant 2.4% in FY2011, down from 3.8% in the previous year. Higher growth will need faster implementation of structural reforms resulting in stronger revenue generation, no power shortages, and a transformation of the industrial and export sectors. The security environment and continued power crisis weigh down the fiscal situation and hinder recovery. The fiscal situation needs to be improved to sustain public investment and prevent crowding out private investment. ICT = information and communication technology. a b Includes sovereign and nonsovereign loans. Total may not add up because of rounding. Table 3. Pakistan: Cumulative Nonsovereign Financing by Product Number of Projects Loans Equity Investments Guarantees B Loans Total 29 Amount ($ million) 662.90 53.38 175.61 129.90 1,021.79 As of 31 December 2011 Future Directions ADB’s country partnership strategy, 2009–2013, planned assistance of $4.4 billion for Pakistan through 2011, and annual average lending of almost $1.5 billion. The country partnership strategy provides the framework for ADB’s partnership priorities and the future direction of its assistance strategy. Reforms and investments in key infrastructure sectors include support for power and energy, transport and the National Trade Corridor, and water resources. This assistance will reduce the cost of doing business in Pakistan and strengthen the underlying competitiveness of the economy. Support for a new generation of economic reforms will be provided by reducing distortions, accelerating market creation, and addressing governance and institutional bottlenecks. Institutional reforms are needed to strengthen local fiscal and financial management systems, and create a better environment for private sector investments, including through public– private partnerships. Development of urban services through pivotal interventions in Pakistan’s cities and secondary towns will unleash economic potential, while improving the quality of life of poor urban citizens. Table 4. Pakistan: Development Indicators Non-MDG Population in millions Annual population growth rate (%) Adult literacy rate (%) Population in urban areas (%) MDG Population living on less than $1.25 (PPP) a day (%) Population living below the national poverty line (%) Under-5 mortality rate per 1,000 live births Population using an improved drinking water source (%) 177.10 [2011] 2.1 [2009–2011] 55.5 [2008] 37.0 [2010] 21.0 [2008] 22.3 [2006] 87 [2010] 92 [2010] MDG= Millennium Development Goal, PPP = purchasing power parity. Sources: ADB. 2012. Basic Statistics 2012. Manila; United Nations Educational, Scientific and Cultural Organization (UNESCO). 2012. Institute for Statistics Data Centre; World Bank. 2012. World Development Indicators Online. Table 5. Pakistan: Economic Indicators, 2007–2011 Economic Indicator Per capita GNI, Atlas method ($) GDP growth (% change per year) CPI (% change per year) Unemployment rate (%) Fiscal balance (% of GDP) Export growth (% change per year) Import growth (% change per year) Current account balance (% of GDP) External debt (% of GNI) 2007 2008 850 940 6.8 3.7 7.8 12.0 6.1 5.3 (4.4) (7.6) 4.4 18.2 8.0 31.2 (4.8) (8.5) 28.8 29.5 2009 2010 2011 990 1,050 ... 1.7 3.8 2.4 17.0 10.1 13.7 5.2 5.4 5.6 (6.0) (6.3) (6.6) (6.4) 2.9 28.9 (10.3) (1.7) 14.9 (5.7) (2.2) 0.1 30.9 31.4 ... ( ) = negative, ... = data not available, CPI = consumer price index, GDP = gross domestic product, GNI = gross national income. Sources: ADB. 2012. Asian Development Outlook 2012. Manila; ADB staff estimates; World Bank. 2012. World Development Indicators Online. Context Pakistan has received more than $22.1 billion in loans since joining ADB in 1966, with more than $16.8 billion disbursed. A total of 298 loans were provided from the concessional Asian Development Fund and from ordinary capital resources, with $196 million provided in grants for more than 350 technical assistance projects. ADB is working with the government and the private sector to improve the country’s infrastructure, energy security, and basic public services. Aligned with national development objectives, ADB’s partnership priorities aim to attract investment, create industries and jobs, and improve the quality of life of the citizens. ADB maintained a strong lending program to Pakistan in 2011 with about $550 million in disbursement and $1163.24 million in sovereign loans. The public sector portfolio contains 22 active loans amounting to $2.84 billion, 24 ongoing loans of $3.4 billion, and three grants totaling $143.5 million, with most of these supporting initiatives in energy, transport, agriculture and natural resources, and social development. Table 6. Pakistan: Project Success Rates Sector Agriculture and Natural Resources Education Energy Finance Health and Social Protection Industry and Trade Public Sector Management Transport and ICT Water Supply and Other Municipal Infrastructure and Services Multisector Total Year of Approval 1960s 1970s 1980s 1990s 2000s %a 57.78 27.27 81.48 15.79 33.33 60.00 – 76.92 27.27 42.86 50.00 – 57.69 59.26 58.54 22.22 No. of Rated Projects/ Programs 45 11 27 19 9 10 6 13 11 7 158 1 26 54 41 36 ADB-Supported Projects and Programs Pakistan experienced devastating floods in 2010 and 2011. At the request of the government, ADB and the World Bank completed a damage and needs assessment, resulting in the $650 million Flood Emergency Reconstruction Project, approved in March 2011. ADB also provided a $3 million grant to Pakistan for immediate relief of people affected by 2011 floods in Sindh and Balochistan provinces. Similarly, ADB provided $870 million in loans and grants and arranged $97 million in bilateral grant cofinancing for the ADBfunded Pakistan Earthquake Fund, to rebuild areas in the Khyber Pukhtunkhwa Province and Kashmir hit by the 2005 earthquake. – = nil, ICT = information and communication technology. a Based on aggregate results of project/program completion reports (PCRs), PCR validation reports (PCRVRs), and project/program performance evaluation reports (PPERs) using PCRVR or PPER ratings in all cases where PCR and PCRVR/PPER ratings are available. Sources: PCRs, PCRVRs, and PPERs containing a rating circulated as of 31 December 2011. Table 7. Pakistan: Portfolio Performance Quality Indicators for Sovereign Lending, 2010–2011 Number of Ongoing Loans (as of 31 Dec 2011) Contract Awards/Commitmentsa,b Disbursementsa Number of Ongoing Grants (as of 31 Dec 2011)c Contract Awards/Commitments Disbursementsa Projects at Risk (%) Note: Totals may not add up because of rounding. a Includes closed loans that had contract awards or disbursements during the year. b Excludes policy-based lending/grants. c Includes only ADF and other ADB Special Funds. a,b 2010 ($ million) 362.7 799.1 2010 ($ million) 0.6 22.3 24 2011 ($ million) 478.6 529.5 3 2011 ($ million) 3.6 12.7 11.1 Under the project, about 400 schools and 800 kilometers (km) of destroyed roads have been reconstructed. Ongoing infrastructure investments in electricity generation, transmission, and distribution are improving energy efficiency. ADB has also helped build or upgrade over 1,000 km of roads and highways. A multitranche financing facility to support the government’s National Trade Corridor Highway Investment Program is improving key sections of the highways and motorways from the deep sea port of Karachi and Gwadar to the northern tip of the country and beyond into Central Asia. ADB support has helped install or upgrade over 6,000 km of water supply pipes to bring clean water to more than 170,000 households. In finance, ADB support has enabled nearly 500,000 borrowers to start businesses or improve existing ones. Pakistan is one of the largest recipients of ADB’s private sector development assistance, with over $1 billion of equity investment, loans, and guarantees approved. Power and energy infrastructure projects are among the priorities for private sector operations. Other priorities include transport and communication, urban public–private partnerships, and social sectors. Table 8. Pakistan: Projects Cofinanced, 1 January 2007–31 December 2011 Cofinancing Projectsa Grant Official loan Commercial Cofinancing Technical Assistance Grants a No. of Projects 6 1 1 4 3 Amount ($ million) 3,107.99 2.00 25.00 3,080.99 11.98 A project with more than one source of cofinancing is counted once. Table 9. Pakistan: Share of Procurement Contracts 2010 Amount % of Item ($ million) Total Goods and Works 376.31 5.79 Consulting Services 5.88 1.41 2011 Amount % of ($ million) Total 591.36 8.29 17.89 4.21 Cumulative (as of 31 Dec 2011) Amount % of ($ million) Total 10,327.85 9.41 206.92 2.52 Table 10. Pakistan: Contractors/Suppliers Involved in ADB Loan Projects, 1 January 2007–31 December 2011 Contractor/Supplier Limak-ZKB JV Siemens (Pakistan) Engineering Company Ltd. Husnain Cotex, Ltd. Newage Cables Private Ltd. Ghulam Rasool and Company (Pvt.) Ltd. Sparco-Clic (JV) Descon & Tried Consortium Sinotec-Shpe Saadullah Khan and Bros., Pakistan Pak Elektron Limited Sector Transport and ICT Energy Transport and ICT Energy Water Supply and Other Municipal Infrastructure and Services Agriculture and Natural Resources Energy Energy Agriculture and Natural Resources Energy Contract Amount ($ million) 84.51 69.40 55.47 40.65 38.96 31.51 29.37 28.17 22.64 20.72 Cofinancing Cofinancing operations enable ADB’s financing partners, government or their agencies, multilateral financing institutions, and commercial organizations, to participate in the financing of ADB projects. The additional funds are provided in the form of official loans and grants, and commercial cofinancing, such as B loans, risk transfer arrangements, parallel loans, and cofinancing for transactions under the ADB’s Trade Finance Program. By the end of 2011, cumulative direct value-added official cofinancing for Pakistan amounted to $518.7 million for 30 investment projects and $56.5 million for 44 technical assistance projects. A summary of projects with cofinancing from 1 January 2007 to 31 December 2011 is available www.adb.org/countries/ pakistan/cofinancing ICT = information and communication technology. Table 11. Pakistan: Top Consultants (Individual Consultants and Consulting Firms) Involved in ADB Loan Projects, 1 January 2007–31 December 2011 Consultant National Engineering Services Pakistan (Pvt.) National Rural Support Programme Sher Mohammad Mugheri and Co. Mirza Associates Engineering Services MM Pakistan Pvt. Ltd. in Asso. with MM Ltd. (UK) SAEED Khan Construction Company Associated Consultancy Centre (ACC) Indus Associated Consultants (Pvt.) Ltd. Associated Consulting (ACE) Pvt. Punjab Hydropower Consultant Individual consultants Number of Times Contracted 3 2 1 1 1 2 1 2 1 1 315 Contract Amount ($ million) 13.68 11.20 4.58 3.13 2.56 2.34 2.24 2.10 1.85 1.61 3.81 Nonsovereign Operations As a catalyst for private investments, ADB provides direct financial assistance to nonsovereign public sector and private sector projects in the form of direct loans, equity investments, guarantees, B loans, and trade finance. Since its inception, ADB has approved a total of $1,021.8 million in nonsovereign financing for Pakistan, all of which went to 29 private sector projects. Total outstanding balances and commitments of ADB’s private sector transactions in the country as of 31 December 2011 totaled $509.3 million, representing 9.4% of ADB’s total nonsovereign portfolio. Procurement From 1 January 1968 to 31 December 2011, contractors and suppliers were involved in 197,338 contracts for ADB loan projects worth $109.78 billion. During the same period, contractors and suppliers from Pakistan were involved in 18,192 contracts for ADB loan projects worth $10,327.85 million. From 1 January 1968 to 31 December 2011, consultants were involved in 12,179 contracts for ADB loan projects worth $4.81 billion. During the same period, consultants from Pakistan were involved in 988 contracts for ADB loan projects worth $155.11 million. From 1 January 1968 to 31 December 2011, consultants were involved in 24,484 contracts for ADB technical assistance projects worth $3.42 billion. During the same period, consultants from Pakistan were involved in 947 contracts for ADB technical assistance projects worth $51.81 million. Table 12. Pakistan: Top Consultants (Individual Consultants and Consulting Firms) Involved in ADB Technical Assistance Projects, 1 January 2007–31 December 2011 Consultant Hagler Bailly Pakistan (Pvt.) Ltd. HTSPE Limited, Pakistan Shelter for Life International, Pakistan Sosec Consulting Services Rural Support Programmes Network Bearingpoint Pakistan (Pvt.) Ltd. Financial Consultants, The (FinCon) Semiotics Consultants (Pvt.) Ltd. FinCon Services, Inc. Citizen’s Commission for Human Development Individual consultants Number of Times Contracted 2 1 1 2 1 1 1 1 1 1 358 Contract Amount ($ million) 1.15 0.79 0.60 0.54 0.51 0.51 0.41 0.40 0.29 0.27 10.77 About Pakistan and ADB ADB Membership Joined 1966 Shareholding and Voting Power Number of shares held: 231,240 (2.19% of total shares) Votes: 270,730 (2.05% of total membership, 3.14% of total regional membership) Overall capital subscription: $3.55 billion Paid-in capital subscription: $177.54 million Contributions to Special Funds Resources Pakistan has contributed to the Technical Assistance Special Fund (TASF), which provides grants to borrowing members to help prepare projects and undertake technical or policy studies. Contributions to the TASF (committed): $1.88 million Contacts Pakistan Resident Mission Level 8, North Wing, Serena Office Complex Khayaban-e-Suhrawardy, G-5 Islamabad, Pakistan Tel +92 51 260 0351-69 Fax +92 51 260 0365-66
[email protected] www.adb.org/pakistan ADB Headquarters 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines Tel +63 2 632 4444 Fax +63 2 636 2444 Minister for Finance, Revenue, Economic Affairs, Statistics & Planning and Development Pakistan Secretariat, Block C Islamabad, Pakistan Tel/Fax +92 51 920 3439/9214716 Useful ADB websites Asian Development Bank www.adb.org Asian Development Outlook www.adb.org/publications/series/asian-developmentoutlook Annual Report www.adb.org/documents/series/adb-annual-reports Depository Libraries www.adb.org/publications/depositories/pak Siraj S. Shamsuddin is the Executive Director and Gaudencio S. Hernandez, Jr. is the Alternate Executive Director representing Pakistan on the ADB Board of Directors. Werner Liepach is the ADB Country Director for Pakistan. The Pakistan Resident Mission (PRM) was opened in 1989 and provides the primary operational link between ADB and the government, the private sector, and civil society stakeholders in its activities. PRM engages in policy dialogue and acts as a knowledge base on development issues in Pakistan. The Pakistan government agency handling ADB affairs is the Ministry of Economic Affairs and Statistics. About the Asian Development Bank ADB is a multilateral development bank owned by 67 members, 48 from the region and 19 from other parts of the world. ADB’s main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance (TA). In 2011, lending volume was $12.61 billion (104 projects), with TA at $148 million (212 projects) and grant-financed projects at $614 million (23 projects). In addition, $7.7 billion was generated in direct value-added cofinancing in the form of official loans and grants and commercial cofinancing such as B loans, risk transfer arrangements, parallel loans, and cofinancing for transactions under ADB’s Trade Finance Program. From 1 January 2007 to 31 December 2011, ADB’s annual lending volume averaged $11.34 billion. In addition, TA and investment grants funded by ADB and special funds resources averaged $755.3 million and $175.0 million in TA over the same period. As of 31 December 2011, the cumulative totals excluding cofinancing were $179.7 billion in loans for 2,423 projects in 42 countries, $5.0 billion in 186 grants, and $3.3 billion in TA grants, including regional TA grants. In this publication, “$” refers to US dollars. Figures are estimated by ADB unless otherwise cited. Data are as of 31 December 2011 unless otherwise indicated. Fact sheets are updated annually in April. April 2012