Pakistan gets $1.5 billion from World Bank to assist economic policies
Vice-President of the World Bank, Philippe Le Houerou, has indicated that the bank is ready to deliver a $1.5 billion programme to assist the Pakistan government’s economic policies.
The full press release as published on the Government of Pakistan Press Information Department website is as follows. There is as yet no press release on the World Bank site:
“WB PLEDGES 1.5 BILLION DOLLARS PROGRAMME FOR PAKISTAN
Islamabad: August 21 2013
Mr. Philippe Le Houerou, Vice President of the World Bank said that the World Bank appreciates and shares the diagnosis of Pakistan’s economy as well as the direction set by the present Government of Pakistan and would like to continue to be partners and take the relationship to the next level, after a successful conclusion of a program with IMF
The World Bank delegation met the Finance Minister at his Office this afternoon.
Mr. Philippe said that he choose to visit Pakistan as his first trip because he wanted to have a personal feel and discussion with the new government.
The Vice President of World Bank said that in view of the economic policies and stabilization measures taken by the present government the World Bank is now ready to work out a 1.5 billion dollars program for the present fiscal year to support the government’s economic policies.
On Basha Dam, the World Bank Vice President said that Asian Development Bank is carrying out due diligence of the project and once that is completed we will start working on it.
The World Bank President informed the Finance Minister that there is a great interest of foreign investors in Pakistan, especially in the energy sector.
The Finance Minister, Senator Mohammad Ishaq Dar said that the present PML-N government has increased the Public Sector Development Programme, enhanced the social safety net budget and aims to bring macroeconomic stability.. This government, he said is committed to transparency, financial discipline and good governance. The Finance Minister terming the visit of the World Bank delegation as timely said that the country was going through a very delicate economic phase un-precedented in its history. We were confronted with the twin menace of budget and current account deficit, he added
Giving an overview of the economic situation inherited by the government, the Finance Minister said that the public debt which was 3 trillion rupees in 1999 increased to over 14 trillion rupees June,2103.
The Finance Minister said that we have prepared an economic road map keeping in view the ground realities and set targets that were doable.
Senator Ishaq Dar said that we had to clean up past acts which were long overdue. In this connection, the circular debt was cleared and power tariffs were rationalized to check its re-emergence. The government also announce along with the budget a three year macroeconomic stability framework which aims at increasing the tax to GDP ratio to 13%, bring down fiscal deficit to 4% and public debt from 63.5 percent to 57.5 percent, and increase investment to GDP ratio from 14 to 20 percent by the end of third fiscal year.
The Finance Minister said that the initial vibes of the measures taken by the government are positive, foreign remittances from overseas Pakistanis have improved to a record amount of 1.4 billion US dollars in July 2013, and the stock exchange is booming. There is a great potential of increase in our foreign remittances and we are presently working on how to enhance them. The Overseas Investors’ Chamber of Commerce which conducted a survey of business confidence has shown that the investors’ confidence has moved to plus 2 whereas it was -34 a few months back.
Referring to his recent visit to Karachi Stock Exchange, the Finance Minister told the World Bank delegation that the approval in principle has been given for the trading of T-bills and Pakistan’s Investor Bonds in Stock Exchanges. Besides, the KSE has been asked to protect the interest of small investors whenever a major correction takes place.
The Finance Minister said that the Income Support Programme was important to provide social safety to the poorest segments of the society and so were the schemes for the youth because of rising unemployment. The government therefore, has allocated Rs.75 billion for current fiscal year as opposed Rs40 billon last year for Income Support Programme and has announced six new schemes for the youth.
The Finance Minister said that the PML-N government believes in encouraging regional trade and good relations with its neighbours and believes that regional cooperation has a great potential for accelerating growth in their economies for the betterment of people of this region.
The meeting was attended by the senior officials of Ministry of Finance, Ministry of Planning and Development, Ministry of Water and Power and Federal Board of Revenue.”