ISLAMABAD: The World Bank (WB) will extend $500 million under a programme called Poverty Reduction and Economic Stabilisation Operation (PRESO) before June 30 and resume programme loans, which were stalled last financial year. After attending a meeting with the visiting World Bank Managing Director Ngozi Okonjo-Iweala here on Friday, a senior official of the Economic Affairs Division (EAD) told The News that Pakistan and WB have agreed to convert Poverty Reduction Strategy Credit (PRSC) into PRESO for extending $500 million through one installment in the current fiscal year. Some official sources say that WB has linked its programme loan with successful implementation of the IMF's programme under the second review which is due for discussion in Dubai from Feb 14 to 24.
According to an official, the PRSC was devised in shape of releasing three installments, but Islamabad was pressing upon the WB for extending programme loans on speedy basis. "Currently, there is no Country Assistance Programme (CAS) of the WB so it has been decided that PRESO would be pursued for the time being and then it would be changed into PRSC after its successful completion," added the official. After meeting with the WB MD, Minister of State for Economic Affairs Hina Rabbani Khar in a brief chat with The News said that the WB would definitely resume programme loans during the current fiscal year ending on June 30. "I cannot assume at this moment how much the WB will lend in the ongoing fiscal year, but there will be a portfolio of the Bank within the current fiscal," she maintained.To another question regarding WB's linkage with envisaged targets of the International Monetary Fund (IMF) programme for resuming programme loans, Hina said that Pakistan has already successfully met all envisaged targets till December 2008 and there would be no problem in getting the second tranche of $750 million from the Fund after its review by the third week of February.
She said that the government has successfully met two deficit targets (fiscal deficit and current account deficit) in the ongoing fiscal year. "We have performed better in the case of fiscal deficit in the first half (July-Dec) of fiscal 2008-09 as our deficit stood at 1.9 per cent of the GDP against the target of 2.1pc," she added. The current account deficit, she said, is also on the decline, adding that exports are going well while imports are reducing, resulting in narrowing of the trade gap.
According to an official statement issued by the finance ministry, World Bank Managing Director Ngozi Okonjo-Iweala, currently on a visit to Pakistan, lauded Pakistan's efforts aimed at economic stabilisation and pledged that the Bank will vigorously support Government of Pakistan's agenda for economic growth and social development. The Bank's managing director after calling on the minister of state, held a detailed meeting with the government's economic team led by Hina Rabbani Khar. The meeting took stock of the economic situation of the country and reviewed joint initiatives for fostering a development partnership. The World Bank MD while appreciating the government's nine point agenda indicated that the Bank will like to see it working beyond the achievement of economic stabilisation, as this is only a means to an end.
She informed that the Bank will like to help Pakistan in its agenda for social development especially the government's programmes like Benazir Income Support Programme. Gozi appreciated Government of Pakistan's efforts for revenue collection and meeting revenue targets. She added that Pakistan needs to capitalise on new initiatives from institutions like IFC and other multilateral and bilateral donors. She under-pinned Pakistan's geo-strategic position which can be leveraged as a regional logistic giant by positioning itself through trade and infrastructure corridors, for South and Central Asia. Ngozi informed the government's team about the Bank's support for organising a donors' conference in order to mobilise multilateral and bilateral donors in a structured process to meet the country's financing gaps. The Minister of State informed about the steps taken by the government to tackle the challenges on the economic front and appreciated the support of the World Bank in the socio-economic development of Pakistan. She reiterated the continued commitment of the present government to the economic agenda and explained that the government has made tough decisions to implement the economic reform programme.   mawaiz.khan@businessmonitorpk.com