Pakistan showed disappointing performance during the1993-2003 period for improving poverty reduction, social sector development, agriculture, natural resources management, power sector, rural development, taxes, public expenditure management and governance, says a World Bank report. The government has largely disagreed with the opinion of the Bank's evaluation department report.
In a brief, Pakistan Country Assistance Evaluation, finalised by end-June, says that in order to improve its efficiency the Bank needs to carry out additional analytical work in advance of project design (including a better understanding of the impact of political economy and governance issues), scale projects to the capacity of implementing agencies, and focus on institution-building.
The report says that although the recent data indicates that poverty may be decreasing, poverty remains at levels higher than at the beginning of the review program.
It says that during the review period of FY94-03, Bank's assistance contributed to good progress in the financial sector, trade, some infrastructure areas and macroeconomic stability. However, progress was not achieved on other objectives of Bank assistance, including poverty reduction, social sector development, rural development, and governance.
The World Bank was a major source of funding between 1993 and 2003, contributing about 22 percent of total donor aid and multilateral loan flows. During the review period of FY94-03, commitments were US$4.7 billion for 35 projects.
The Bank's programs in social sector development helped make progress in immunisation, literacy, child mortality control, fertility, and school enrolments. However, the country still lags behind other countries, and much work remains if Millennium Development Goals are to be attained, the report said.
The Bank had difficulty defining a clear strategy to improve governance. It has evolved towards a program focusing on improving administrative governance and strengthening institutions, particularly those focused on social services delivery. It is difficult to monitor outcomes, but at this time, indicators do not show appreciable improvements, leading to an unsatisfactory outcome rating for governance.
Portfolio performance was uneven. Problems of government commitment and institutional capacity appeared consistently as major impediments to project implementation and sustainability. Yet, project design did not do enough to take these problems into account.
The Bank's analytical work was generally of good quality. However, its relevance and timeliness could be improved, especially through more strategic work in rural development, the social sectors, and power.
GOVERNMENT RESPONSE: Bank management concurs with most of the conclusions and recommendations of the Bank's evaluation department. However, while management agrees that it is appropriate to move away from multi-province umbrella operations, it disagrees that economy-wide adjustment loans should be abandoned.
The government commented that it thought that the Bank's evaluation department needed to clarify that it was focused on evaluating outcomes of Bank programs, not development outcomes in Pakistan. The Government agreed with the Bank's evaluation department analysis in some areas, including the Social Action Program and the lack of support for rural development, but the Government stated that the Bank's evaluation department could be more forceful in assessing the Bank's role in areas such as the program to develop Independent Power Production.
The Government also commented that the Bank's evaluation department did not emphasise adequately the recent improvements in outcomes, particularly in the area of macro stability and poverty, and was too critical of outcomes in areas such as agriculture and privatisation.
The Government disagreed with the Bank's evaluation department's assessment of Bank lending, commenting that the Bank (i) was not correct in supporting the closure of problem projects to improve the portfolio, but should have focused instead on improving the underlying problems; and (ii) the Bank should not have cut back on lending, particularly infrastructure lending, during the 1990s.
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