OneWorld.net (U.S.)

ISLAMABAD: The Asian Development Bank (ADB) will decide to extend financial assistance for mega water reservoirs once the government of Pakistan achieves a complete consensus and ensures comprehensive compensation to the people affected by the dams, said Peter L Fedon, country director ADB resident mission.

"We have informed Pakistan about our stand to offer financial assistance for the proposed dams. If the two conditions are met, we will be ready to look into the issue," said Peter at a briefing on Monday. "This is a huge job. We cannot stay aside," he added.

Peter said that despite good economic indicators the current account deficit and rising inflation were the two big challenges Pakistan’s economy is confronted with.

Giving an update on ADB’s cooperation with Pakistan in 2006, Peter said the bank will provide $1.458 billion as lending assistance to Pakistan for around a dozen projects. The main areas of ADB’s assistance this year are renewable energy development, power transmission enhancement, basic urban services, mega-city renewal and development, and support for irrigated agriculture development.

The programme also includes $31.1 million in grant assistance for 10 technical assistance projects. He said the bank shares the government robust GDP growth. "From around 6.5 to 7 per cent growth is still achievable in the GDP in the current financial year."

However, other officials of the bank flanking Peter said agricultural and industrial growth would remain lower that what was achieved in the last fiscal. The officials of the bank, on the other hand, said the services sector has been the most attractive sector so far this fiscal.

Peter said the ADB was fully cooperating with the government on rehabilitation and reconstruction of the earthquake-hit areas. "There is no reason of not cooperating with the government on this important issue," he said.

However, he admitted that the magnitude of disaster is very big and the degree of response is not matching. "We have requested the Earthquake Rehabilitation and Reconstruction Authority (ERRA) to give us policy guidelines in education and health sectors."

He said the ERRA definitely needed additional staff to give befitting response to the challenges. He said out of $1 billion for the reconstruction and recovery work in the earthquake-hit areas, $400 million were approved in 2005. So far, $185 million has been disbursed. He said availability of funds is no more an issue. There must be an active response to the challenge.

He said the level of disbursements in 2005 totaled $563 million while contract awards totaled $734 million. As of end 2005, 71 ADB loans for 48 projects were under implementation in Pakistan for total amount of $5.53 billion in addition to 69 technical assistance projects for total of $69 million.

Meanwhile the Asian Development Bank said here on Monday that most of the economic data compiled by the Federal Bureau of Statistics (FBS) is not reliable and there is a need to make the data based on facts so that future line of action could be drawn more realistically.

"The economic data of FBS is, often, not based on facts. It is often contradicted by senior officers of the government," said an ADB senior official Ghulam Qadir while responding to a question at a briefing in the presence of the bank country director Peter L Fedon.

He said the FBS had given data recently, which had suggested that the country exports were growing by 28 per cent. While the fact is that Pakistan’s exports are growing at around 13 per cent in the first six months of the current financial year, he said. Qadir hoped the government will take notice of this serious flaw and everything will be streamlined by December 2006.

Source:The Jung