ADB report

That Pakistan’s economy is in bad shape is no more a revelation, but the Independent Evaluation Department (IED)’s report of the Asian Development Bank (ADB) is revealing in its contents. In its latest report, the ADB has disclosed that Pakistan’s project performance dropped to just 58 percent in the duration of 2018-20, from 70 percent in 2017-19. This decline is the result of the country’s poor performance in the Public Sector Management (PSM) and water sectors. A corollary of this was the fact that Islamabad had to pay millions of dollars on account of commitment charges under the PTI-led government in the two-year period ending in 2020. When implementation slows down to such an ineffective level, the penalty the country has to pay surges to higher levels compounding the financial crunch the country is already facing. Pakistan’s country partnership strategy final review validation (CPSFRV) has rated the country programme as less than successful. This does not bode well for the country as Pakistan is facing challenges in its economic cycles that have been hampering development on various agendas.

To prevent such downslide, the country needs to tackle the succession of boom-and-bust cycles in the economy. The ADB has been a long-term partner of Pakistan and its Country Partnership Strategy is a useful tool that contributes to the country’s development and gathers data of significant value for the country. Infrastructure development is one of the main targets of the ADB’s strategy as it helps the country to improve its economic connectivity. As a result, the aim is to provide better access to some basic public services so that job prospects for the youth improve. Though the ADB has been helping Pakistan in its administrative systems, unless some crucial policy and regulatory reforms take place, public financial management (PFM) is not going to enhance its performance. In the reporting period, the ADB has noted wide gaps in government commitment that cause implementation delays. Most of all, these delays have badly affected energy projects in the country. This observation about the energy sector in the country is understandable as we have witnessed multiple alterations in the top management in the sector.

Sustainability is another cause of concern as perpetual fiscal instability causes uncertain cost-recovery arrangements that in turn make the energy sector unsustainable with increasing circular debts. When the ADB report terms the overall development impact as ‘less than satisfactory’ it should serve as a wakeup call for the government. In the period from 2016 to 2018 the assessment of country programmes placed them at the 87 percent rate of success. This went down to just 78 percent in 2018-20. The government must take this report seriously. All project activities must align with proper objectives because according to the report there is a weak causal link. For environmentally sustainable economic growth, institutional capacity needs enhancement at a rapid pace.