ISLAMABAD: The Deputy Chairman Planning Commission, Sardar Aseff Ahmad Ali has called for better alternatives to debt to ease Pakistan ’s fiscal problems and meeting macroeconomic challenges being faced by the country. He expressed these views while chairing the meeting of Asian Development Bank representatives, and government officials of the Planning Commission and other relevant ministries.

Sardar Aseff Ali urged the donors that grant not debt was the need of the time. He said that given the existing economic situation, the country should be looking at other alternatives to debt, adding that even soft debt needed careful review because it had to be returned unless written off.

He said that the public-private partnership and direct foreign investments needed to be encouraged, considering poverty statistics of the country and a situation where painful exercise of rationalization of public sector development programme had to be undertaken.

The ADB fact finding mission led by Jesus Felipe gave a presentation on ‘policy implications of structural transformation in Pakistan,’ with the purpose of the consultation being ‘accelerating economic transformation programme in Pakistan in the context of Pakistan’s fiscal and external problems compounded by the international economic situation.’

The delegation explained that ADB’s role was to contribute to the development of a program that led to upgrading and diversification i.e., structural transformation of economic base in partnership with the country’s public and private sector.

It focused on the need of structural transformation, particularly in the industrial and exports sector. He emphasized that Pakistan should pay attention to increasing the level of sophistication of exports particularly in textiles.

Sardar Aseff Ahmad Ali in his concluding remarks thanked the ADB mission and underscored the need for increased value addition in view of insignificant value addition in exports. One participant suggested that the fastest way to value addition was to bring technology through joint venture as it would have low gestation period but significant impact. Another stressed on the need for ‘indigenous industrialization.’ Ms. Hina Rabbani Khar, Minister of State for Economic Affairs also attended the meeting.

MANILA: Emerging East Asia’s local currency bond markets are expected to expand this year with several governments likely to sell debt to pump-prime their economies. Companies are also expected to turn to local markets to refinance or raise fresh funds, said in Asian Development Bank’s Asia Bond Monitor (ABM). However, there are risks. Increased sovereign bond sales could raise yields, making issuance costlier. Also, investor concerns over sustained fiscal deficits could push up risk premiums and hurt sovereign credit ratings of some economies.

Companies face greater financing risks with borrowing costs remaining high and may get crowded out by higher debt issuance by governments. With Asia’s financial firms huge buyers of government’s bonds, debt sales need to be managed carefully to maintain financial stability.

“The economic outlook remains gloomy,” said Jong-Wha Lee, Head of the ADB’s Office of Regional Economic Integration. “Several Asian nations will rely more on local currency bonds to finance their fiscal stimulus packages. This provides an excellent opportunity for the region to further develop a more dynamic domestic bond market.”

Overall, emerging East Asia’s local currency bond markets held up well in the face of the global financial storm, continuing to expand throughout 2008. By end-December, total outstanding local currency bonds were US$3.7 trillion, 14.9% above the end-2007 level. The increase, however, was below the 17.6% annual growth rate in the third quarter of the year.-SANA

ISLAMABAD: Government of Pakistan, Government of Sindh and the Asian Development Bank have signed a $US 300 million loan, multi- trench financing facility (MFF) FFA to improve quality, continuity and coverage of urban services (water supply and sanitation, drainage and solid waste management) in the second-tier cities of the province of Sindh by incentives and supporting effective management and sustainable financing of urban service providers.

Over the next 10 years, the multi-trenches financing facility will finance improved basic urban services for nearly 4 million people across about 20 towns in Sindh. Loan for 1st trench amounting to $ 38 million has been signed today on 6th February, 2009 by Mr. Farrakh Qayyum Secretary, EAD and Mr Rune Stroem, Country Director, PRM, ADB.

Sindh’ second-tier cities (Khairpur Mirs, Sukkur, Shikarpur, Larkana, Nawabshah, Mirpur Khas, Thatta, Badin and other cities in centre and south Sindh) are under increasing stress of population growth and continuing urban poverty. The provision of urban infrastructure and services falls short of targets for quality, continuity and coverage. On average, some 55% of urban population in Sindh outside Karachi has access to piped water, but the water is of poor quality and flows intermittently. Only 37% of the population is served by garbage collection system. No sanitary landfills exist, and waste collected is disposed of by either burning or dumping into open spaces illegally or the drainage channels.

In addition to poor coverage, inadequate institutional infrastructure for planning and management of urban services keeps quality low, cost high and impedes the economic competitiveness of these cities, hence it results in: higher business and household costs, poor urban environment and the low potential investment. All this contributes to a downward spiral of development and push for migration to bigger cities which are already under pressure to cope with rising population.

Government of Sindh (GoS)‘s resolve and commitment to improve quality, continuity and coverage of urban services in the second-tier cities of the province on sustained basis thrust upon the government to explore alternative sources of financing, including private sector and new ways of providing infrastructure services and innovative partnerships. These goals to be achieved require a set of sequenced institutional reform actions and sector investment to bring about lasting improvements in the service delivery.

This current initiative with enhanced investment and innovative institutional arrangement will improve health and quality of life while creating more economically competitive secondary cities in Sindh. More than a half million households will also benefit from reforms that deliver a more reliable water supply, wastewater and solid waste management.-SANA

MANILA: A $400 million multi-tranche financing facility (MFF) approved by the Asian Development Bank (ADB) will contribute to the Afghan Government’s plan to construct about 2,900 kilometers of national roads and repair and maintain 1,500 kilometers of existing paved roads. The MFF, delivered in grant form, will contribute to the Road Network Development Investment Program, which is part of the Afghanistan National Development Strategy (ANDS) the government’s strategic platform for development for 2008 – 2020.

ANDS places a high priority on the establishment of better planning and project management, greater transparency and efficiency in the way contracts are awarded and handled, and stricter fiduciary oversight. This will partly be achieved by the creation of a new agency to oversee Afghanistan’s roads.

Roads are essential to Afghanistan’s economic development. The country has a challenging terrain and a widely-scattered population. As a landlocked country, it depends on roads for trade with neighboring countries.

An improved and expanded road network will raise inter-city travel speed, create better conditions for inter-city freight and passenger services, cut operating costs, develop a more secure road travel system, and make road transport more attractive, safe, and timely for people and goods. This will benefit the Afghan economy, creating jobs, and bringing investment to regional and rural areas. Roads can also contribute to stability and security in remote parts of the country.

One special feature of the overall investment program is the inclusion of small but vital works, such as rehabilitation or construction of village access road, footpaths, and footbridges. Schools and medical clinics in the road construction areas will also be built.

“More than 40% of ADB’s lending to Afghanistan so far has gone into transport development,” said Juan Miranda, Director General of ADB’s Central and West Asia Department. “We recognize the vital importance of this contribution to rebuilding Afghanistan and its roads, which have suffered from neglect due to other priorities. The value of roads to the economy can only be sustained with improved links, new roads, and a continuing repair and maintenance system. We are aiming for that goal with this investment program.”

ADB has, to date, financed the improvement of nearly 1,100 kilometers of regional and national roads in Afghanistan, mainly in the north and northwest part of the country.

ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2007, it approved $10.1 billion of loans, $673 million of grant projects, and technical assistance amounting to $243 million.-SANA

ISLAMABAD: Oxfam launched ‘We Can’ campaign to end violence against women to mark the ‘International Day for Elimination of Violence Against Women’. Country Director of Oxfam, Iftikhar Khalid said that Oxfam is launching the campaign that would spread over 127 days (Nov 25, 2008 to Mar 31, 2009) by holding1,000 events per districts covering two dozen districts consist of seminars, rallies, fun fairs, interactive dialogues and meetings with community members, theatrical performances, debates in educational institutions and many other activities aimed at promoting ‘violence-free’ society in Pakistan.

He said that according to the Asian Development Bank, 85% of women in Pakistan have experienced violence at some time in their lives, which mars all aspects of their well-being. “Although our message touches every one, but its focus is the rural or semi urban population which needs to be mobilised to undo those taboos and customs which promote anti women attitudes”, he added.

There will be more then 24,000 events arranged by the change makers themselves. It is expected that about 500,000 people will be directly or indirectly touched by these events in Pakistan. The objective is mass awareness and engagement on the issue of violence against women.

The 1,000 events per district are a part of Oxfam’s nation wide campaign called ‘We Can End Violence Against Women” campaign, which was initiated in 2005. ‘

We Can’ campaign is about change in the attitudes and beliefs of a critical mass of ordinary people through simple and small actions in their daily lives to end violence against women. Currently, there are 144,000 volunteer change makers engaged with the campaign in 1,036 union councils, 90 tehsils in 29 districts of Pakistan.

The target is to reach 700,000 change makers by the year 2011. Change makers represent all strata of the society; they are students, teachers, lawyers, farmers, housewives, clergy, police, media, traders, policy makers and many others.

The campaign is steered by 400 national allies, while Oxfam supports their initiatives and participates as an alliance member. This campaign is a regional level initiative and these 1,000 events are being launched simultaneously in six South Asian Countries. Across the region, the campaign has engaged over 1.2 million change makers through 1,800 alliance members.

Explaining the strategy Dr. Farhat Sheikh, Oxfam Programme Manger said that the strategy is not to isolate the perpetrators, but to engage them. She added, “If the Domestic Violence Bill gets approved by the parliament, it will play a significant role in protecting those who experience domestic violence”.-SANA

MULTAN: Foreign Minister Makhdoom Shah Mehmood Qureshi on Sunday said that the political wing of the ISI was disbanded and termed it a positive development. While talking to the media persons at the local airport Sunday, Qureshi pointed out that ISI is a precious national institution and it wants to focus fully on counter-terrorism activities.

He said that the government was making all out efforts for repatriation of Dr. Aafia Siddiqui from US to Pakistan and expressed the hope that these efforts would bear fruit. He announced that her son has already been brought back to Pakistan.

He dispelled the impression that agriculture income tax was among the conditions for IMF bailout plan, neither was it a condition nor this tax was under consideration these days, FM said adding that this tax was a provincial subject. He said that IMF package was meant to fill the immediate resource gap and to pursue an economic stabilization plan. He reiterated resolve to improve ties with India saying that his visit to the neighboring country will help remove misunderstandings between the two countries.

He said that he would meet his counterpart Pranab Mukherjee and Indian leadership and bilateral issues will be discussed during the interaction. He hoped that his visit to India will help bridge the gulf and end trust deficit between the two countries and will prove fruitful in strengthening ties with India.
Foreign Minister said that it is our desire that both countries should live like friendly neighbors. He said that he will talk to the Indian leadership on water issue and added that Kashmir issue, already being a part of the composite dialogue between the two countries, will also be discussed.

About the Indian cricket team’s forthcoming tour to Pakistan, he said that the government wishes that Indian cricket squad should visit Pakistan. He added that government wants to improve people-to-people contact with India and exchange of delegations such as cultural delegations and sports teams will help improve relationships. He said that intellectuals, authors and sports persons of the two countries should have frequent interaction through exchange of delegations. Chief operating officer PCB Saleem Altaf said that Chairman Pakistan Cricket Board (PCB) Ijaz Butt will visit to India this month.

To a question, Qureshi categorically said there was no possibility of martial law in the country stating that the government, the parliament and the armed forces have unanimity of views on national issues. People may have this view but we do not agree with it, FM said adding that we are moving forward to combat challenges with consultations and understanding.

Mehmood Qureshi disclosed that after the Jan 13-16 expert level meeting scheduled to be held in Islamabad, he will invite FoDP Foreign Ministers to Pakistan in February next to move ahead with the plan to combat economic and security challenges confronting Pakistan.

About the IMF bailout package that is expected to be approved on Nov 24, Shah Mehmood Qureshi said its approval will pave the way for more assistance from other international financial institutions like World Bank, Asian Development Bank (ADB), Islamic Development Bank besides the Friends of Democratic Pakistan (FoDP) Group and other countries.

It was interesting and heartening to note that our home-grown plan prepared by 16-member panel of country’s economic experts headed by Dr. Hafeez Pasha that has also been discussed by the federal cabinet and the talks with IMF had similarities in approach and experts believe it was the best suitable option Pakistan could avail under the given conditions, FM said.

He said that Rupee was gaining strength against dollar and capital flight has stopped and hoped that capital flight phenomenon will soon witness a reverse trend with the arrival of foreign remittances. FM said that an expert level meeting will be held in Islamabad from Jan 13 to Jan 16 during which projects will be identified and discussed in four sectors with the assistance promised by FoDP in its Nov 17 meeting in Abu Dhabi.-SANA

MANILA, PHILIPPINES – The Asian Development Bank (ADB) has approved a $500 million loan to support Pakistan’s efforts to address harm done to poor families and the country’s economy by unprecedented international food and fuel price hikes.

The ADB loan will support ongoing changes in the energy and agriculture sectors, and will help lay the foundation for a radical transformation of the economy by diversifying, deepening and expanding a competitive industrial sector, and creating much-needed jobs for Pakistan’s young and growing labor force.

ADB support comprises a key part of a global financing plan underpinning the government’s economic stabilization program. The stabilization plan includes actions to shore up and manage foreign reserves, improve monetary policy, trim the fiscal deficit and its financing gap, and cut back on government borrowing from the State Bank of Pakistan. The stabilization plan is focused on protecting the poor through special safety net programs, and reassuring financial markets through fiscal and monetary discipline.

“Addressing the impact of fuel and food price increases unleashes immediate benefits to Pakistan’s people and to markets,” said Juan Miranda, Director General of ADB’s Central and West Asia Department. “The fiscal space created by reforms will cut financing gaps, generate conditions for a better deal in the sectors down the road, and provide much-needed cash flow to pay for safety net programs that protect the most vulnerable. ADB’s support balances the need for addressing the needs of Pakistan’s people while reassuring markets that the government is on the right track with its ongoing economic stabilization program.”

The stabilization plan was formulated by the Government, with technical advice from other parties. “ADB financing takes place within the context of this stabilization framework,” added Mr. Miranda. “We are one of several parties contributing to the financing of this plan; others will soon follow with their own financing and programs.”

Pakistan will strengthen the legal and regulatory framework of its financial sector through the ADB program. The State Bank of Pakistan, working closely with the government, has undertaken a series of actions to improve risk management in the sector, strengthen payment systems and protect consumers. This will create stability at a time when international markets are in turmoil. “The measures supported by ADB’s program will benefit ordinary Pakistanis, directly as well as indirectly,” said Mr. Miranda. “Timing is of the essence here.”

ADB is a major financing partner of Pakistan. Its strategy focuses on three areas: infrastructure (roads, irrigation and logistics), utilities (power, energy, urban services) and reforms (including social service provision and finance, public financial resource management, financial sector intermediation and capital markets development).-ADB Media Center

ISLAMABAD: Federal Board of Revenue (FBR) has exempted the Asian Development Bank (ADB) from payment of all taxes, including payment and collection of withholding taxes, says an official statement issued here Saturday. It said the exemption was already being enjoyed by the ADB under a proviso to section 54 of the Income Tax Ordinance, 2001.

However, the proviso was withdrawn following an amendment made through Finance Act, 2008, leaving no cushion or protection to the ADB income from levy of taxes w.e.f. tax year, 2009 and onwards.

The ADP however took up the matter with the Ministry of Finance, requesting for continuation of exemption to the bank as allowed earlier on under Article 56 of the Asian Development Bank Ordinance, 1971, which deals with the implementation of international agreements for establishment and operation of the bank and protects the bank’s income from levy of all taxes, including payment and collection of withholding taxes.

The FBR, therefore, has again allowed the exemption to the ADB by amending the Second Schedule to the Income Tax Ordinance, 2001 and adding new clauses vide SRO No. 1012(I)/2008 dated 23.09.2008 whereby the ADB’s income has been exempted from all taxes as “under the Asian Development Bank Ordinance, 1971 (IX of 1971)”.-SANA

Asian Development Bank (ADB) will help Pakistan with a multi-tranche financing facility to cope with growing demand of energy and will provide a $810-million to Pakistan. ADB’s funding will support the Government of Pakistan ongoing power sector reform program that is designed to provide reliable and unhindered supply of power to people and to meet an estimated annual 8% rise in GDP growth from 2005-2015, and to expand power coverage in rural areas. Read the full story

KARACHI: Asian Development Bank has taken the initiative to improve bilateral trade relations between Pakistan and India. The bank allocated US$7, 50,000 for preparing a technical report on the Regional Cooperation in South Asia for year 2030. South Asia is the most disintegrated region in the world, according to the ADB. Read the full story