March 23, 2003	Sunday	Muharram 19, 1424

ISLAMABAD, March 22: World Bank Vice President Ms. Mieko Nishimizu said on Saturday Pakistan’s economy was “still fragile” which could be further hit by the war in Iraq.

“There is no doubt that Pakistani economy is still fragile to absorb serious shocks like attack on Iraq but had the previous government not implemented macro and structural level reforms three years ago, Pakistan today would have been declared financially bankrupt”, she said.

Talking to a group of reporters she said that the situation was uncertain and if the Iraq war continued any length of time, “we should all be concerned about its negative impact”.

She said Pakistani economy was still not out of woods, although there existed higher level of $10 billion foreign exchange reserves. “But that does not mean that people should go home and sleep”, she said adding that reform process must go on uninterrupted to have better life for a common man.

Responding to a question she said that in case of more shocks coming in the backdrop of war in the region, the Pakistani government will have to further accelerate the reform process.

Referring to the area of disappointments, she said that Pakistan still has a very expensive public health system which did not look after the poor people. “Social injustice is a national security issue in Pakistan”, she asserted. She said that health system should be for poor people and not for corrupt people.

Ms. Mieko said that education and health sectors needed more attention of the government. She also urged the government to complete the process of institutional reforms in the Central Board of Revenue (CBR) in order to create modern and honest tax collection system.

She believed that people within the CBR and elsewhere did not want restructuring of government departments because of their own vested interests.

The continuity in the intended reform process, she said, was essential to have better change in the government departments.

Ms. Mieko said that she was glad to meet Prime Minister Mir Zafarullah Khan Jamali and learnt from him that the political government will continue to implement the reform agenda.

“It is a very uplifting experience for me that political government is ensuring continuity and consistency of reforms”, he said adding that progress in health programme was also encouraging.

In reply to a question, she expressed her satisfaction over the functioning of devolution programme in the provinces. Talking about the power sector reforms, she said that financial health of Water and Power Development Authority (Wpada) still threatened fiscal balance of Pakistan. “We need to have more efficient Wapda so that the end game should be to have its early commercialization, corporatization and privatization”, she said.

She said that chairman Wapda was facing management challenges from within the organization to remove its losses and improve its financial health. Nevertheless, she said that she was happy to know that line losses of Wapda have gone down considerably. “But there is a need to make more efforts on this account”.

The World Bank vice-president did not have objections over the recruitment of people in grade 11 to 16 by the government. But she said that merit must be upheld in recruiting new people and that nobody should be offered jobs on political considerations.

Reply another question, Ms. Mieko said that there was a need to accelerate the process of privatization by ensuring good governance and transparency. She said that there were many privatization cases to be completed in the banking sector.

Asked about the civil service reforms, she said she was happy to note that these reforms were totally home grown and were being implemented in letter and spirit. Ms. Mieko also said she was not against meaningful downsizing in the government organizations.