Saturday, August 21, 2010

A Trust Fund By ADB to Attract Donnars

ADB director general Juan Miranda has said on Friday while addressing a press conference that Pakistan needs more fund and ADB is planning to launch a Trust Fund for Pakistan for flood related reconstruction & rehabilitation programme in order to make it sure that funds would be transparently utilized in right directions.

In the absence of trust & transparency, A special trust Fund would be established by the Asian Development Bank that eventually attract International Donors for rehabilitation & reconstruction of flooded areas.

Through the trust fund, the ADB would extend an invitation to international and individual donors for grant finances to co-finance development projects using ADB’s “fiduciary capabilities”, he said.

Paper work would be completed in a much professional way and we will certify work before make final payments. The DG has said that we would make it sure that reconstruction & rehabilitation would be completed in 2-3 years with the help of donors money.

"A formal request to the international community would be made to contribute funds for reconstruction after completion of Damage Need Assessment (DNA) by October 15, 2010, he maintained. "Our team will continue reform agenda that would be good for economy," Miranda said while replying to questions on elimination of electricity subsidy and implementation of reformed GST programme under economic reforms.

Terms and conditions of the loan programme were yet to be negotiated with the Pakistan government but depending on projects, it would be a combination of soft and commercial loans.

Pakistan could make an international appeal for debt relief, adding that Pakistan's debt situation was not so bad and it would rely on the bilateral response to their appeal. Juan Miranda, DG, Central and West Asia Regional Department of the ADB after completing his visit, briefed the media on the bank's proposed lending of $2 billion for rehabilitation of Pakistan's flood victims. "We are here to help Pakistan in rehabilitation and reconstruction phases of flood victims, he said, adding that $2 billion lending would be disbursed in 12 to 30 months. He said reconstruction of flood-hit areas would take around two years.

He said the bank appreciated that reconstruction job was going to be mammoth and hence it has initially earmarked $2 billion new financing for the reconstruction. “This is the minimum that we have committed to get the people back to hope and dignity”.

Answering to a question that the ADB had only reallocated its already committed portfolio under the medium-term country assistance programme for Pakistan, Mr Miranda said the amount was kept for Pakistan but it had not been allocated for specific projects so far.

“This is new money” meant only for flood related reconstruction and rehabilitation”, he added. He said to ensure transparency in the utilisation of funds, the ADB would adopt similar procedures that were adopted during the reconstruction phase in 2005 earthquake in Pakistan.

It is to intricate at current stage to determine the overall economic losses unless damage assessment is completed however short term impact of flooding on Pakistan GDP is significant, he added.

Countering to a question, Mr Miranda said the multilateral agencies expected Pakistan to go ahead with the long-term economic reform agenda despite damages caused by the floods.

“We expect the economic reforms agenda will not be derailed because of short-term reconstruction work. The reforms should continue for long-term national goals”.

He warned winter season is fast approaching which should be taken into account as a large portion of the population is homeless. There is big task ahead to provide shelters, food, health facilities and sanitation. Miranda stressed the donor community to help for humanitarian relief. "We need to put back hope and dignity into people's lives and this is not the time to let them down," Miranda added.

The two billion dollars will be for emergency rehabilitation and reconstruction work. The funds will be released in accordance with the findings of DNA, which will examine damages in 16 core areas. ADB will take the lead in eight sectors, including transport and communication, energy, health, water and sanitation, irrigation, social protection and public administration services. ADB has already mobilized a team of over 100 experts to prepare the DNA [Damage Need Assessment].

Responding to a question if Pakistan should seek international debt forgiveness, Mr Miranda said Pakistan was not under terribly bad debt situation like many other countries were and hence it should not take such an option.

Meanwhile, the World Bank has agreed to enhance the amount of $900 million earlier committed through “reprogramming” to $1 billion for relief and reconstruction work.

A World Bank mission led by Xian Zhu, operations director of the bank, had a meeting with Finance Minister Dr Abdul Hafeez Shaikh and said that out of this amount, $700 million shall be available for floods related early recovery and reconstruction projects, while an amount of $300 million shall be used for financing flood related imports.

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