Search the Internet          Tips  Sites: Finance, Investment

US$350 million WB credit for Pakistan

Ela Dutt
India Abroad Correspondent in New York

The World Bank Board of Directors has approved a US$350 million structural adjustment credit for Pakistan aimed at supporting changes underway in Pakistan, focusing on governance, economic growth and social service delivery.

The World Bank has in the past praised the policy initiatives of General Pervez Musharraf's military government after its takeover of power in October 1999.

The bank emphasised that the latest loan would finance the transition costs of reforms already set in motion by the government.

The credit, which matures in 35 years and has a 10-year grace period, has been provided by the International Development Association, the World Bank's concessionary lending arm.

The credit, which is the second such large infusion of funds for structural adjustment in Pakistan in the last few years, will be channelled into implementing tax reforms, improving public financial management, introducing transparency into administration and providing public access to information.

The World Bank in its Country Brief 2000 on Pakistan had noted that the country continued to suffer from acute poverty and lack of social services.

Following the political developments in Islamabad over the last three years, particularly after the nuclear tests of May 1998, structural adjustment implementation had slowed down leading to a period of uncertainty and lack of support from the International Monetary Fund and other financial institutions.

On October 12, 1999, the Nawaz Sharif government was deposed in a bloodless military coup led by General Pervez Musharraf and the military government "set out an ambitious reform agenda to bring Pakistan onto a new path of improved governance, growth, and poverty reduction," the Bank noted.

This included fiscal reforms, enabling greater private sector activity, devolution of power to lower levels of government and bringing poverty to the forefront of the development agenda.

"The new regime has consequently maintained an active dialogue with the IMF, the World Bank and other bilateral donors to seek advice on how to implement this far-reaching reform program. It has set a new precedent for engaging civil society in reforms through a consultative process with the general public, professionals, NGOs, business leaders, academics and civil servants at the federal and provincial level," the report said.

The World Bank has also approved another credit of US$21.35 million for the North West Frontier Province on-farm water management project. This project plans to reduce the loss of water between the farm outlet and plant systems in the field.

Money

Business News

Tell us what you think of this report