950809

IMF glitch blocks

ADB projects

assistance

IKRAMUL HAQ

ISLAMABAD: The suspension of IMF assistance to Pakistan under Esaf, following deviations in the budget from certain conditionalities has impacted ADB's $200 million trade and industries sector programme, it is learnt from informed sources.

Another programme which came under its dark shadow is the ADB's co-financing of National Drainage Programme being structured by the World Bank.

Sources stated that holding back of the $300 million tranche by IMF meant that the macroeconomic position was not wholly good.

Nonethless, sources stressed, the important factor in delaying the trade and industries programme was that Pakistan urgently sought assistance for the $2.5 billion Ghazi Barotha hydel power project for which the ADB has now pledged $300 million. This assistance displaced the one sought for the trade and industry programme which was under negotiations for more than a year, and due for approval in the current year, if IMF programmes were in place.

It is further learnt that the National Drainage Programme for which the ADB is to co-finance $150 million is kept pending because it has a strong policy agenda like collection of new irrigation fee and recovery of costs which cannot be met in the absence of IMF's programme. A number of targets for macroeconomic stability and sustained growth in the IMF programme are simultaneously incorporated in the assistance programme of the World Bank and the ADB.