1. During the late 1990s, severe drought conditions threatened livelihoods and increased poverty levels across Pakistan, especially in rural areas. The drought, which continued over 3 years, aggravated the country's already highly stressed water situation. The drought was worst in rain-fed regions of Baluchistan and Sindh provinces and occurred during a severe economic crisis when the Government was also facing demands to finance a variety of development needs. In addition, rural employment was reported to be moving to nonfarm activities, thereby reducing already difficult agriculture production and increasing migration of affected populations to neighboring regions. Emergency measures were needed to improve conditions for the poor and provide support for poverty reduction and employment generation.
2. In May 2001, the Government initiated a multifaceted approach to address the immediate and medium-term effects of the drought, including a public works program (Khushal Pakistan Programme) to create temporary employment, and promote social protection and the recovery process. The Government promoted labor-intensive public and community works in the most severely affected regions to sustain the incomes and welfare of the poor, and set the stage for postdrought recovery and renewed growth in the affected regions. The Asian Development Bank (ADB) Fact-Finding Mission, fielded in May 2001, assessed requirements to mitigate drought impacts. To support Government efforts, ADB developed the Drought Impact Mitigation and Recovery Component (DIMRC)(1) to (i) improve water resources and water supply sub-projects to support efficient water use, and water conservation and harvesting; (ii) improve accessibility by providing rural roads to rural communities to enhance rural employment; (iii) support a range of services in agriculture, livestock, forestry, and rangelands to help and protect livelihood opportunities for the poor; and (iv) enhance health care and other services with a focus on providing nutrition supplementation and maternal health care services for the rural poor in drought-affected areas.
3. In addition, World Bank and several other development partners provided assistance. The World Bank allocated $130 million for the Drought Emergency Relief Assistance (DERA) program -- $40 million was dedicated to the rural water sector, drought preparedness, and coordination and program management.
II. EVALUATION OF DESIGN AND IMPLEMENTATION
A. Relevance of Design and Formulation
4. The DIMRC design and formulation were relevant to the Government's efforts to mitigate the adverse effects of drought duly aggravated by the economic crisis and severe resource crunch of the late 1990s. The DIMRC was designed as a quick response to an emergency situation. Rural areas were the primary focus.
5. The Government accepted drought as an unprecedented event, which contributed to increasing rural poverty and unemployment, which adversely affected Pakistan's economic development process.(2) The project design and formulation was consistent with the ADB Poverty Reduction Strategy. Consistent with the Government's assessment, ADB identified agriculture as the vital sector for employment generation and poverty reduction. To achieve poverty reduction, the Government and ADB agreed, among other things, on the need for asset creation for the poor, especially women, and rural development; and social safety nets with targeted programs for vulnerable groups. The Pakistan Sector Assessment Review(3) reinforces the emphasis on rural development and employment generation to ensure that growth is pro-poor. The review recommends renewing work in the water resources sector through projects on water conservation, drought mitigation, and rehabilitation of irrigation infrastructure. These priorities are consistent with those of the Government's poverty reduction strategy.
6. The DIMRC was to target the most drought-affected areas and communities through mostly small-scale activities and interventions, based on least-cost technology, managed by communities for sustainability, and designed to conserve scarce water resources. The design provided mechanisms to enhance employment opportunities for local poor to supplement their incomes by building local assets and capital using labor-intensive works for rural infrastructure. It also addressed the urgency the situation, using flexible mechanisms that adopted a decentralized approach for intervention identification and implementation. Project implementation was designed to make use of existing district, provincial, and federal government structures to leverage their roles and capacities to execute and implement project activities. Flexibility was provided for decision-making regarding identification and approval of district interventions, along with regular review of budgeted funds reallocated to appropriate sectors to meet local emerging needs, including nonirrigated dry mountain and barani(4) areas. The DIMRC had national coverage. Funds were allocated to provinces for allocation to districts.
7. The DIMRC clearly identified selection criteria for project activities and placed a few restrictions requiring ADB approval.(5) The approval mechanism ensured work would remain within the agreed activities and sectors. The DIMRC envisaged three measures to ensure transparency and efficient implementation of activities: (i) consulting services, (ii) beneficiary and civil society participation, and (iii) delegation of project management to the Pakistan Resident Mission. Federal and provincial consulting services were to undertake due diligence by supervising and spot-checking intervention selection, implementation, and financial regulation. Effective linkages between the federal and provincial consultants would have recruitment of provincial consultants by provincial authorities. Prior ADB experience incorporated in project design showed a tremendous opportunity for executing and implementing agencies to interact with communities to identify, design, implement, and operate subactivities through formal agreements. Civil work contractor evaluation was based on least-cost bids rather than technical, financial, and human resource capabilities. The DIMRC remained fully relevant throughout implementation in three provinces (Punjab, North-West Frontier Province [NWFP], and Sindh) reflected by about 95% progress in expenditures and achievement of targets where all executing agencies worked in harmony to ensure successful implementation. Baluchistan reflected a major deviation where execution responsibility was with the Irrigation Department as per the decision of the provincial government. Changes adopted in Baluchistan did not impair DIMRC relevance, but rather maintained focus and attention on the emergency situation.
(1) ADB designed the DIMRC as part B of the already operational National Drainage Sector Project (NDSP). The DIMRC differs from the NDSP in objectives, scope of work, project activities, and management, and is based on a separate project approval documents: (ADB. 2001. Report and Recommendation of the President to the Islamic Republic of Pakistan for the Drought Impact Mitigation and Recovery Component. Manila (Loan 1413-PAK-02[SF]).. The loan closing date of the DIMRC is separate and independent of the NDSP (ADB. 1995. Report and Recommendation of the President to the Islamic Republic of Pakistan for the National Drainage Sector Project. Manila (Loan 1413-PAK-01[SF]).
(2) Government of Pakistan. 2003. Accelerating Economic Growth and Reducing Poverty: The Road Ahead. Poverty Reduction Strategy Paper. Islamabad: Ministry of Finance.
(3) ADB. 2003. Pakistan Sector Assessment Review. Islamabad.
(5) The limitations included total cost of individual subprojects (exceeding $200,000), reservoir or dams greater than 15 meters in height and/or for which total cost exceeded $100,000, or interventions with social or environmental risks or resettlement issues.
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