Govt, ADB ink pact for $500 million loan

ISLAMABAD - The government on Friday signed an agreement with Asian Development Bank (ADB) to get a
programme loan to the tune of $500 million for economic transformation and strengthening of financial sector.
The loan agreement entitled Accelerating Economic Transformation Programme (Subprogramme-2) is second
part of $1.5 billion four-year programme to support Pakistan in dealing with the challenges created by the
unprecedented international food and energy crises, Economic Affairs Division (EAD) officials stated.
Secretary EAD Farrakh Qayyum and Country Director ADB Rune Stroem inked the agreement on behalf of
respective parties. The programme will help the government remove fundamental distortions to support
economic transformation and strengthen the financial sector. The programme aims to help Pakistan achieve and
sustain higher economic growth in the medium-term, expand its social safety nets, adopt structural reforms in
agriculture sector, and take measures to address the energy crisis.
In Benazir Income Support Programme (BISP), a cash grant of Rs 2,000 is provided every alternate month to
qualifying families based on means tested selection criteria using Computerised National Identity Card. The
BISP helps empower women by paying benefits to the female head of the family who is required to have a
Computerised National Identity Card.
According to the EAD statement, formula based scheme has been established with the introduction of market
based pricing system for setting the support price for farmers, taking into account the cost of production,
regional prices, import export prices, domestic and global market conditions. The price of wheat for flour millers
should reflect all related costs. In this way, wheat subsidies will be reduced to the minimum.
The government has adopted the power sector circular debt resolution plan which includes: confirmation of the
amount of overdue debt owed by government and others; development of a financing plan showing when and
how the government will pay its debt; tariff adjustment and other measures to prevent reoccurrence of circular
debt; measures that will improve finance, accountability and corporate governance of public sector entities in the
power sector; and implementation of timetable and monitoring framework.
According to the officials, amendment has been made in the Anti-Money Laundering Law to improve the
financial market governance. To ensure the sustainability of these reforms and promote transparency in the
implementation, the government shall provide quarterly progress report to the ADB on the status of
implementation to promptly and proactively address any implementation issue that may arise. An action plan is
prepared in this regard and first quarterly review mission will be held at the federal and the provincial levels in the
first week of July 2009. Slow moving projects, which are causing cost to the government, will be reviewed to
clean up the portfolio and bring a number of projects to manageable level.