The Asian Development Bank (ADB) is extending three loans totalling $300 million to three provinces of Pakistan in support of local government programs to boost sustainable growth, reduce poverty, and improve the health of women and infants.
ADB is providing $100 million for the Second Balochistan Resource Management Program, $100 million for the Punjab Millennium Development Goals (MDG) Program, and $100 million for the Sindh Growth and Rural Revitalisation Program. The Balochistan and Sindh programs will also receive technical assistance grants.
The loans are helping the provincial governments address key constraints that hinder growth, poverty reduction and health gains. In the case of Punjab - which has the largest provincial population and economy in the country - funding for improving health care services will help it meet the MDGs for reducing maternal and infant mortality rates.
"The Program could potentially save the lives of up to 11,000 women and 235,000 infants by 2015 compared to a scenario without such support. It will also help Punjab improve public financial management in the health sector," said Rie Hiraoka, Senior Social Sectors Specialist for ADB's Central and West Asia Department.
The loan to the Sindh provincial government will help improve management of public spending and boost investment in rural areas, where poverty levels are high and economic opportunities are low. It will also promote private sector participation and public-private partnerships (PPPs) that can increase investment in much-needed infrastructure and social services. Technical assistance of $800,000 will be used to conduct studies and draw up options for PPPs. "The large rural-urban divide is a serious concern. Accelerating growth and improving the income of the rural poor are essential for economic and social stability in Sindh," said Xiaoqin Fan, Senior Public Resource Management Specialist at ADB's Pakistan Resident Mission.
In Balochistan - the country's largest but sparsely populated province - the loan will strengthen the provincial government's management of public finances, create a more sustainable and affordable civil service pension system, and help improve governance in the lucrative but largely-untapped mineral resources sector. A technical assistance grant of $800,000 will help the provincial government implement the Program.
"The Program will address some of the binding constraints on economic growth by allowing for more efficient use of public resources, while paving the way for greater private investment especially in the minerals sector," said Jose Antonio Tan III, Public Finance Economist in the Central and West Asia Department. The three loans will cover funding requirements for the first phase of each of the provincial programs, with ADB likely to provide further substantial funding for subsequent stages.