ADB to double assistance up to $3bn To finance Diamer-Basha dam

[LahoreEstate]

Friday, February 27, 2009
By Mehtab Haider

ISLAMABAD: The Asian Development Bank (ADB) has offered to double its annual assistance to Pakistan from earlier planned $1.5 billion up to $3 billion in order to help it improve infrastructure and overcome budgetary difficulties.

“We can double our annual assistance to Pakistan for the next three years provided funds availability with the Bank increases,” ADB Vice President Xiaoyu Zhao told reporters after holding a meeting with a Pakistani delegation, led by Minister of State for Economic Affairs Hina Rabbani Khar, on Thursday.

The ADB is currently preparing a three-year Country Partnership Strategy (CPS) for 2009-10 to 2012-13 under which assistance to Pakistan could be jacked up to $9 billion from earlier planned $4.5 billion. “The ADB on Thursday offered Pakistan to double its annual assistance up to $3 billion from earlier envisaged $1.5 billion from 2009,” a senior official of the ADB said.

An ADB delegation, headed by its Vice President Xiaoyu Zhao, called on Prime Minister Syed Yusuf Raza Gilani here at the PM House on Thursday afternoon, and agreed in principle to finance Diamer-Basha dam project.

“We can double Pakistan’s assistance up to $3 billion per annum provided Islamabad makes a request in this regard as well as funds with the ADB increases,” the Bank’s vice president told reporters. On the most critical issue of tight monetary policy, he said the inflation was showing a declining trend and easing of monetary and fiscal policies could be done to give an impetus to sluggish economic activities.

It is relevant to mention here that under the IMF prescription the government is reluctant to decrease discount rates that have resulted into choking the whole economic activities and slowed economic growth.

Pakistan and the IMF during recently concluded talks at Dubai agreed to review the monetary policy in future line of Pakistan but the central bank will not ease down its monetary stance unless the core inflation comes down.

When the ADB Vice president was asked about financing facility of the bank for mega water projects, he said the ADB was ready to extend its financing facility for construction of mega water projects in the country.

The PPP-led government is making plans to construct over $12 billion Basha dam on which the work will be started within the ongoing calendar year 2009.

He said the major challenge for Pakistan’s economy is lack of state of the art infrastructure, resulting into creating difficulties for achieving sustained growth.

On this occasion, the minister of state for economic affairs hoped that the ADB would extend its $500 million budgetary support under Economic Transformation Programme before June 2009. However, during the meeting with the prime minister, the premier expressed the hope that this cooperation would continue for helping the country to overcome the shortage of energy, water and food through construction of new dams and other related projects. He said construction of farm to market road network, development of urban and rural areas, provision of equitable economic opportunities as well as improving the social sector particularly the health and education facilities are the foremost agenda before the government.

The premier said the government is fully committed to reducing poverty, increasing per capita income, generating more jobs and improving the living standard of the people. He said owing to prudent economic policies undertaken by the government, the economy is now started showing positive results.

http://www.thenews.com.pk/daily_detail.asp?id=164698