A spokesperson of the Punjab Finance Department has strongly contradicted the news report appearing in a section of the press “Punjab wasted $409 million Reforms Loan” given by the Asian Development Bank.
Clarifying the facts, the spokesperson stated that Punjab Government Efficiency Improvement Programme (PGEIP) was a $750 million programme of the Asian Development Bank. It was started by the provincial government in Pervaiz Elahi’s tenure. It comprised three sub-programmes, each with related financing of $250 million. The Asian Development Bank’s report clearly states that programme’s premature closure in 2011 was the foremost reason for its failure.
This premature closure was the result of the failure of the last PPP federal government which failed to meet conditionalities of the IMF programme and as a result of this, IMF refused to issue the country assessment letter for Pakistan which is a pre-requisite for ADB’s programme loans.
Prior to closure of the programme, the ADB had undertaken four reviews of the Punjab Government Efficiency Improvement Programme which were all rated as ‘highly satisfactory’ or ‘satisfactory’ by the review teams of the Asian Development Bank. It was clearly the abrupt closure of the programme which led to a lower rating under the final review after the closure of the programme.
As far as failure of the programme to meet its goals such as ‘7 percent economic growth’ or ‘reduction in level of poverty’ are concerned, these were higher level objectives which are achieved in the longer run. One cannot possibly achieve such goals in the short run especially if the programme was closed prematurely. Further, there were a number of other exogenous factors beyond the control of provincial government which led to lower growth and littler reduction in poverty in the province.
A total of $407 million was disbursed by ADB under PGEIP. This included budgetary support of $400 million which was deposited to provincial government’s account and used to increasing the size of development budget in Punjab. How can anyone term the amount used for ADP of the province to be wasted? We were able to increase allocation for important sectors such as school education, health, infrastructure development etc.
There were four major areas of reform targeted under the programme. These included public resource management, management of pension liabilities of the Government, public private partnership and civil service reforms. A number of important reforms have been implemented under PGEIP which include:
The government initiated the process of introducing performance orientation to budgeting through this programme. A medium term focus was introduced. Seven departments started preparing output based budgeting which helps improve accountability in service provision. This reform is being further rolled out as part of the current PFM reform strategy of the Government.
A pension fund was created by the government to provide income to partially set of the pension liabilities of the Government. Through this initiative we are trying to manage pension liabilities created by the successive governments. We have not only created a very impressive governance system for this fund but the size of the Fund has also reached Rs.36.0 billion and we intend to continue to fund it so that in the medium to long term it could start to achieve its objectives.
Public private partnership mode of creating public infrastructure was introduced by the Government under as an important reform. A significant progress has further been made which has led to a big pipeline of PPP projects for the province of Punjab.
In short this was a successful programme until it was prematurely closed due to mistakes of the last PPP government. Nonetheless, spokesperson concluded
that we are continuing to implement the reforms initiated under PGEIP and will make them successful.