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Cut In Aid To S Asia Due To Slowdown In Reforms: Ibrd


The failure of several South Asian economies to meet World Bank (WB) standards on reforms processes has led to a drastic cut in lending by the Bank and the International Development Association (IDA) to the region during the 1996-97 (July-June) fiscal, the World Bank has said.

New loan commitments in the region were down by nearly one billion dollars from 1995-96 mainly due to failure of policy reform and implementation in some sectors in meeting the Banks new higher standards, the Bank said in a release here.

Annual fluctuation, more emphasis on preparation of projects so as to achieve higher quality-at-entry, particularly in complex sectors such as resettlement of those affected by the projects and environment, were also cited by the Bank as other factors for the low level of commitments. Though the Bank release did not mention the specific sectors where the reform policy has not been upto its standards, in press briefings during the year officials have expressed concern over the state of the electricity sector and subsidy on fertilisers.

Disbursements to the region, however, increased sharply by more than 400 million dollars compared to the previous year. They totalled 2.668 billion dollars as against 2.253 billion dollars in 1995-96, with 1.563 billion dollars going to India, 644.6 million to Pakistan and 314.56 million to Nepal. India got 1.309 billion dollars in 1995-96 while Pakistan 521.1 million, Bangladesh 225.6 million and Sri Lanka 103.9 million. The Indian projects which got the IDA aid include a rural womens empowerment project, a tuberculosis control project, and eco-development projects.

Bangladesh was extended assistance for a poverty alleviation project and micro-finance, Pakistan for financial reporting and auditing project, Sri Lanka for an energy services delivery project and Nepal for a rural water supply and sanitation project, the release said.

First Published: Thu, July 17 1997. 00:00 IST