ADB approves $300 million to support Pakistan’s Public Sector Enterprises Reform

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ISLAMABAD, June 22 (APP): The Asian Development Bank (ADB) and
Pakistan here on Thursday signed a $300 million loan to support
Pakistan’s efforts to implement major structural reforms and
efficiency initiatives to improve the performance, transparency, and
financial sustainability of the country’s federal government-run
public sector enterprises (PSEs).
Xiaohong Yang, ADB’s Country Director for Pakistan and Tariq
Mahmood Pasha, Secretary Economic Affairs Division (EAD) for the
government of Pakistan signed the loan agreement here, said
a press release.
“Pakistan’s state-owned enterprises provide vital services to
the people and country’s economy,” said Xiaohong Yang.
“ADB is proud to support the government of Pakistan’s commitment to
implement reforms that will ensure financially sustainability of these firms while improving efficiency and cost-effectiveness.”
The financial performance of many federal government PSEs in
Pakistan-which employ more than 400,000 people have been weak in
recent years, despite significant budget support from the federal
government.
The Program will support government’s efforts to improve the
performance of the PSEs by improving corporate governance and
accountability, identifying and reducing financial burdens arising
out of direct budgetary transfers to PSEs. This will strengthen
fiscal sustainability and freeing of finances for priority
development projects.
ADB’s assistance is the second sub program under the PSEs
Reform Program, bringing total ADB financing for critical reforms in
PSEs to $600 million since June 2016.
With ADB’s assistance, under the Public Sector Enterprises
Reform Program, the government of Pakistan has carried out
significant structural reforms and efficiency initiatives to help
improve financial sustainability and operational efficiency of PSEs,
and helped improve the compliance to the Corporate Governance Rules
2013.
Many policy actions have been introduced under the program to
improve the financial transparency, monitoring, and corporate
governance in PSEs.
A critical target under the program’s second subprogram is to increase
the compliance rate of companies to Corporate Governance Rules to 50%. The restructuring and reform of selected public sector enterprises, particularly Pakistan Railways, have also been initiated. Under the program, government has started publishing the financial performance report of all federal PSEs
which will be available on its website.
ADB, based in Manila, is dedicated to reducing poverty in Asia
and the Pacific through inclusive economic growth, environmentally
sustainable growth, and regional integration.
Established in 1966, ADB is celebrating 50 years of development
partnership in the region. It is owned by 67 members-48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in
cofinancing.