Adviser links donors’ stewardship to reforms agenda success

ISLAMABAD: Pakistan was locked onto a growth-oriented programme for institutional reforms and economic revival that required strong stewardship and support from multilateral development institutions, country’s top finance official said on Thursday.

“For achieving various development goals in different sectors of the economy, technical as well financial assistance from the World Bank is vital,” said Dr Abdul Hafeez Shaikh, the finance adviser to Prime Minister, while talking to Patchamuthu Illangovan, country director for World Bank in Pakistan.

Illangovan, who called on the adviser along with his team, said the World Bank management strongly desired to work with Pakistan to drive its institutional reforms and support the government’s growth agenda through any technical or financial assistance required from the Bank.

He said the World Bank could work on any financial arrangement looking at the objective need and assessment of the policy matrix as the Bank was very supportive of the institutional reforms being undertaken by the government of Pakistan in different sectors of the economy.

The World Bank official also filled the adviser in on the ongoing discussions with the Ministry of Finance on two policy-based lending operations to provide budgetary support to Pakistan which would be finalised by December, 2019.

Besides, issues related to World Bank’s ongoing portfolio of $9 billion as well as firming up of Pakistan’s delegation to attend the annual meetings of IMF/WBG during October, 2019, also came under discussion.

The country head for the international financial institution also briefed the

adviser on the visit of World Bank President David Malpass to Pakistan scheduled for

the first week of November, the statement said.

Welcoming the news, Dr Shaikh hoped the World Bank president’s visit would lead to opening of greater avenues for more productive engagement between the World Bank and Pakistan.

Last month David Malpass met with Prime Minister Imran Khan at Pakistan’s embassy in Washington and assured him of World Bank’s steady and prompt support in implementing his (Prime Minister’s) vision of economic development.

Commending Prime Minister’s development agenda, Malpass said Pakistan was a key country in the region with a large portfolio of World Bank projects.

The World Bank head also hoped Pakistan’s entering a new International Monetary Fund program should go a long way in ensuring macroeconomic stability and rejuvenating confidence of foreign investors in the country.

Malpass especially hailed the social protection programs of the government including skill development of the youth – preparing them for the job market. Pakistan Tehreek-e-Insaf-led government is struggling to stabilise a wobbly economy to curb ballooning current and fiscal account deficits.

Dominated by agriculture and textiles and with a large informal sector that pays no tax, the economy has struggled to develop export industries and successive governments have spent heavily to defend an overvalued exchange rate.

The $60 billion China Pakistan Economic Corridor, launched in 2015, had promised a new beginning. Its infrastructure projects were intended to become a new foundation for growth, but they also required heavy imports of capital equipment, widening the trade deficit.

According to IMF forecasts, real GDP growth is expected to slow to 2.4 percent in the current fiscal year to June 2020, down from 3.3 percent in the year just ended. Pakistan faces tough economic medicine to tackle problems that have been years in the making.