December 13, 2001	Thursday	Ramazan 27, 1422

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ISLAMABAD, Dec 12: The Paris Club creditors, now meeting in Paris, are considering sympathetically Pakistan’s request for rescheduling $4 billion debt, part of which also includes debt re-profiling.

“The Paris Club is in session since Tuesday and we are getting very encouraging reports about Pakistan’s request for debt rescheduling,” said Dr Waqar Masood Khan, Additional Secretary, Ministry of Finance.

Dr Khan, who is also the ministry’s spokesman, told Dawn here on Wednesday that Finance Minister Shaukat Aziz was already in Paris to attend the meeting as well as to hold bilateral talks with the members of the club.

“The representatives of the World Bank and the IMF have issued positive statements in favour of Pakistan during the meeting and we are very hopeful about the outcome of the Paris Club session,” the additional secretary of the finance ministry said.

He also clarified DAWN’s story, which appeared in Wednesday’s issue, in which it was said that Pakistan’s total external debt amounted to 43 billion dollar. He said 43 billion dollar also included over 11 billion dollar private foreign currency deposits in 1998.

He also clarified DAWN’s story, appearing in Wednesday’s issue, in which it was stated that Pakistan’s total external debt amounted to $43 billion. He said this amount also included over $11 billion private foreign currency deposits in 1988.

Therefore, the actual foreign debt stands at $38 billion and not $43 billion, he added.

WB ADVICE: The World Bank has called upon the Paris Club to adequately restructure Pakistan’s debt to not only help address its immediate cash flow needs but also bring its debt to sustainable level.

The World Bank representative, in his address to the Paris Club meeting on Tuesday, said that Pakistan’s challenge of growth and poverty reduction was of a global significance. “To this end we believe the support of all Pakistan’s creditors is critical to strengthen the hands of reformers and to address the severe balance of payments needs,” he added.

According to a text of the speech, released here on Wednesday by the ministry of finance, although Pakistan remains a blend of IBRD/IDA country, the World Bank expects to provide only highly concessional IDA credits over the next three years.

However, Pakistan’s growth and poverty reduction prospects are severely constrained by the high level of indebtedness and the very poor social indicators, he said. “A key issue over the medium term is how to bring Pakistan to a sustainable position.”

Pakistan’s human development indicators are abysmal and lag behind those countries with similar income level. Only 43 per cent Pakistanis are literate and the gap between male and female is wide. Only 27 per cent of all Pakistani women over the age of 15 are literate, the World Bank representative noted.

The full impact of the Sept 11 events on Pakistan is still to be measured. Governance is a key component of the overall reform programme. Emphasis has been on improving tax policy, including widening of the tax net and eliminating exemptions.

Public financial management has been strengthened through the appointment of Public Account Committees and enhanced fiscal transparency, he said.

The President of Pakistan has approved a medium term programme that aims at effective tax administration that will facilitate and improve governance with tax laws, the World Bank representative said.

The support from the World Bank is designed to complement the reform programme through a series of structural adjustments and investment credits. These include the Structural Adjustment Credit that is already in place, a Banking Restructuring and Privatisation Project and investment projects focussed on improving basic service delivery, he said.

Talking about the private sector, he said that tariffs had been lowered significantly to a maximum of 30 per cent and the tariff bands reduced from five to four. Three nationalised banks had been restructured, ineffective branches closed and prudential regulations strengthened.