Speeches: Marshuk Ali Shah, Country Director for Pakistan, Asian Development Bank, Manila, Philippines

"Transport contributes to poverty reduction by enabling the productive activities that create pro-poor economic growth, and by providing poor people, especially those living in rural areas, with access to economic opportunities and social services, and means of participating fully in society. Since the utility of transport requires the complementary roles of infrastructure and services, ADB assistance increasingly involves support for both infrastructure and services improvement to ensure the whole transport package works effectively. "

(click on photo to enlarge)

by Mr. Marshuk Ali Shah
Country Director, Pakistan Resident Mission, Asian Development Bank

Support for Road Network Development

A. Introduction

Honorable Minister of Roads and Transportation for the Islamic Republic of Iran, President of International Road Transport Union, distinguished guests, ladies and gentlemen,

It is a great pleasure for me to be here today to attend this High Level Forum on Euro-Asian Transport. First on behalf of ADB, I would like to thank the International Road Transport Union for organizing this Conference. We will discuss the ADB's Strategic Objectives and its linkage with 'Support for Road Network Development' and provide an example of regional connectivity and its importance in the context of Pakistan and the Central Asian Region.

B. ADB Focus and Strategy

In November 1999, the Poverty Reduction Strategy (PRS) of the Asian Development Bank was launched to make poverty reduction the overarching objective of ADB's support for economic and social development in the Asia and Pacific region. The PRS is framed in terms of three mutually reinforcing 'pillars', namely, pro-poor sustainable economic growth, social development, and good governance.

The PRS requires ADB to support a wide range of initiatives, based on the assumption that all three pillars - pro-poor sustainable economic growth, social development, and good governance - if supported simultaneously, would promote the 'socially inclusive development' deemed essential to reduce poverty in its many dimensions.

Transport contributes to poverty reduction by enabling the productive activities that create pro-poor economic growth, and by providing poor people, especially those living in rural areas, with access to economic opportunities and social services, and means of participating fully in society. Since the utility of transport requires the complementary roles of infrastructure and services, ADB assistance increasingly involves support for both infrastructure and services improvement to ensure the whole transport package works effectively. In some countries, ADB is promoting the development of feeder roads alongside investment in primary roads, for ensuring that the poverty reduction gains from both efficiency and accessibility are realized.

ADB emphasizes sustainable transport development through sectoral reforms on improving governance, establishing more efficient and effective sector agencies, introducing regulatory reforms, and increased participation by the private sector, and improving road sector financing and cost recovery. In several countries - including Cambodia, India, Pakistan and Sri Lanka - ADB has supported the restructuring of sector institutions responsible for road sector management. ADB has also provided assistance to improve provincial roads that serve rural communities, study options to improve public transport operations, and prioritize future national road investment requirements.

C. Supporting Regional Cooperation

By acting jointly, countries can improve their development prospects and strengthen their ability to reduce poverty, increase private sector investment, promote peace and security, and achieve sustainable development. Together, they can mitigate the adverse effects of negative externalities and create an environment where common services and development programs can be shared.

ADB's support for regional cooperation revolves around three related dimensions; facilitating the economic development of participating countries through cooperation and integration; providing key regional public goods that address shared constraints and opportunities and encouraging regional stability through processes associated with broader and deeper cooperation.

As a regional institution, ADB has a clear comparative advantage in promoting regional cooperation in Asia and the Pacific, and has done so since opening its doors in 1966. In 2002, ADB joined DMCs from other regional groups in furthering their shared development goals. ADB hosted the first ministerial meeting on economic cooperation in Central Asia for the Central Asia Regional Economic Cooperation program in March 2002 and helped organize a meeting of country advisors for the South Asia Sub-regional Economic Cooperation initiative in October 2002. Another transport conference was held in Manila in July 2003 with high level Government representatives from Afghanistan, Central Asia, Iran and Pakistan.

ADB also supports cooperation initiatives in several thematic and sector areas. ADB's technical assistance supports the East and Central Asia Regional Trade Facilitation and Customs Cooperation Program. ADB loans to the Kyrgyz Republic and Tajikistan aim to strengthen governance and transparency and develop an effective mechanism for regional cooperation among customs organizations in Central Asia, and the PRC and Mongolia.

D. Pakistan: An Example of Supporting Road Network Development and Subregional Cooperation

1. Introduction

Against the backdrop of the opening up of the Central Asian States and the onset of peace in Afghanistan, Pakistan, with its strategic location, improved macroeconomic fundamentals, and socio-economic stability, is well placed to play to an important role in promoting subregional cooperation through providing a link between land-locked Afghanistan, Central Asia, and South Asia. Pakistan provides the shortest route to ports for Afghanistan and most countries in Central Asia.

To assist the Government of Pakistan to make use of its potential to promote sub-regional cooperation for the benefit of all the countries in the subregion, ADB has two major road development sector projects included in its Pakistan country program. These include the Balochistan Road Sector Development Project, which is in the country program for the current year, and the North-West Frontier Province (NWFP) Road Development Sector Project, which is proposed for 2004. Both of these projects, aside from its importance of connecting the poor rural population with progressive economic centers, are located in provinces that share borders with Afghanistan, have important subregional components.

2. Balochistan Road Sector Development Project

ADB approved a preparatory technical assistance for the Balochistan Road Development Sector Project in July 2002 for $550,000. During its subsequent preparation, at the request of the Government, the size of the investment Project has been increased from the earlier proposed $150 million to $188 million to include a larger national highways component for subregional cooperation. The Project has been appraised and is scheduled to be considered by the ADB Board in November/December this year.

The Project supports subregional cooperation through both physical and non-physical improvements of critical sections of national highways and supporting infrastructure in Pakistan, which form part of the Central-Asia-Afghanistan-Pakistan transport corridor, which passes through Balochistan. Apart from providing improved access to ports in Southern Pakistan, the Project will also facilitate the economic and social development of the transport corridor area through improved access and easier movement of people and goods, and thereby help reduce poverty and support pro-poor economic growth.

The proposed Project includes four main components which include (i) a provincial institutional development component; (ii) a provincial access component comprising rehabilitation and construction of about 1,100 kilometers of provincial roads; (iii) a cross border development component; and (iv) a national highway component comprising rehabilitation of 247 kilometers of national highways. Following a sector approach, the Project will rehabilitate and construct 6 provincial highways totaling about 662 kilometers and 13 rural access roads totaling 468 kilometers, which collectively pass through 20 of Balochistan's 26 districts. Most of the provincial roads are located in poor and deprived districts. The following map shows the layout of the proposed roads.

3. Project Components for Subregional Cooperation

(i) National Highway Component: The National Highway component will facilitate regional traffic through rehabilitation and widening of two sections: Kalat-Quetta (130 km); and Quetta-Chaman, 117 km. The Project includes installation of weigh stations at the Chaman border crossing along with equipment and civil works.

(ii) Provincial Highway Component: This includes two critical roads (Nag-Panjgur: 85 km; and Panjgur-Hoshab: 90 km), which are part of the road connection linking Quetta to the Gwadar Port.

(iii) Cross-Border Development Component: The cross-border development components include both non-physical and physical sub-components. Under the non-physical component, a detailed review will be undertaken of current cross-border practices covering immigration, customs, security, and other cross-border functions and procedures. The review will provide the basis for a detailed analysis and preparation of an action plan aimed at simplifying and removing non-physical and non-tariff barriers within the existing legal and regulatory framework. The review will also provide input for the development and design of a new cross-border facility at Chaman to improve efficiency, reduce transaction cost, improve service, and reduce waiting time at the border crossing.

Under the physical component, a new cross-border facility at Chaman will be designed and constructed. This facility, equipped with modern systems, will perform all the functions required for efficient cross-border movement of goods, vehicles, and passengers. Training will also be provided to various staff at the border-crossing, handling immigration, security, customs, weight stations, and other related functions, focusing on modern and efficient practices. The private sector will be invited to provide services and establish complementary storage and other facilities.

In addition to the roads Project, ADB is also financing a study to assess the feasibility of establishment of a Free Economic Zone (FEZ) in Gwadar, which could have important subregional implications. First draft of the report of the study is already completed and is under review by the Government and the ADB.

4. NWFP Road Development Sector Project

At the request of the Government, ADB in, May 2003, approved a technical assistance grant of $490,000 to the Government of Pakistan to prepare the NWFP Road Development Sector Project. The Project is in ADB's 2004 pipeline of assistance for $250 million. The Project also includes a national highways component for subregional cooperation.

Given the strategic location of the province, NWFP has the potential to act as a hub for subregional transport and cooperation between Afghanistan, Pakistan, and the Central Asian region. Increased trade, facilitation, and transit traffic, will also raise the incomes of the rural poor residing along the major transit routes in NWFP, and will provide better access to economic opportunities.

The proposed Technical Assistance for the Project, which will assist the Government to prepare an integrated road development project, will (i) identify prevailing policy constraints and institutional shortcomings in the sector; (ii) assess prospects and impediments for increased subregional trade and traffic; (iii) identify, screen and prioritize about 2,500 kilometers of candidate roads; (iv) update existing feasibility studies and prepare new ones as appropriate; (v) update and carry out, as appropriate, detailed design and engineering for the selected highways; (vi) carry out social and poverty analyses as well as environmental impact assessments for selected roads; (vii) confirm economic viability and poverty impacts of selected roads; (viii) propose suitable contract packaging; (ix) prepare complete civil works bidding documents and (x) propose Project implementation arrangements. The proposed Project will link NWFP more closely to the province of Balochistan in the south-west and also to the country's southern ports, including the new Gwadar port in Balochistan.

With the expected increase in subregional trade, rehabilitation and expansion of the road network, along with improved trade facilitation and streamlined cross-border arrangements will be necessary. To this end, the technical assistance will specifically assess prospects and impediments for increased subregional trade and traffic, specifically cross-border arrangements and major physical bottlenecks, which will have to be addressed to strengthen subregional cooperation. Based on the findings of the technical assistance, the Project will be designed and considered by the ADB Board for approval in 2004.

E. Conclusion

Ladies and Gentlemen, I hope I have adequately apprised you of the ADB's role in assisting the development of Road Transport Infrastructure and Operations, and its importance in the development of regional linkages and regional cooperation.
I would also like to take this opportunity to thank and complement the International Transport Union for inviting me to share my thoughts and experiences with you all and for making such excellent arrangements.

Thank you.

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