September 16, 2003	Tuesday	Rajab 18, 1424

ISLAMABAD, Sept 15: Pakistan on Monday asked the International Finance Corporation (IFC) to reduce interest rates for loans to the private sector, particularly for housing and infrastructure development.

The demand was made at a meeting between Finance Minister Shaukat Aziz and an IFC delegation led by its vice-president operations Assaad Jabre.

The IFC official said the corporation would assist Pakistan in accelerating its economic growth and promote private sector to enable Pakistan to achieve higher growth rate.

In this regard, the IFC would encourage asset management, housing finance, infrastructure development, including management and construction of ports and skill development. The IFC is also setting up an office at Karachi to enhance its funding to Pakistan from its existing level of $90 million per annum.

The two sides also discussed IFC’s role in building asset management, private pension management and developing capacity of Pakistani entrepreneurs to compete in the international market. The IFC also indicated its willingness to tap potential in Pakistan for increasing value-added services and capacity building.

Assaad Jabre said the IFC, which had a total global portfolio of over $14 billion, had so far invested $400 million in Pakistan making the country the eighth largest recipient of IFC assistance among 130 countries. He said that last year alone, the IFC invested $90 million and intended to increase its share.

He said that as a result of financial and structural reforms, Pakistan had achieved macro-economic stability. He said that continued adherence to the financial policies had improved its international image.

Now, the private sector would have to play its role in turning themselves into regional and global companies through improved skills to tap potentials and opportunities, he added.

Mr Shaukat sought the role of IFC in housing finance as it would be a main driver of growth in Pakistan. Other areas, he added, where the IFC could assist included pension fund management, infrastructure development, raising Pakistan’s international profile and attracting FDI through the IFC.

Mr Shaukat said that Pakistan had achieved macro-economic stability, its growth trajectory was healthy and its international credit rating had improved.

The IFC, he added, therefore should now reduce interest rates for loans to the private sector. He informed the visitors that after achieving macro-stability, the government was now focusing on second generation economic reforms.

Capital market reforms have created an enabling atmosphere for the private sector to play its role in economic development of the country. As a result, an investment of about $4 billion in the last three years has been made by the private sector to upgrade the textile sector of which about $1.5 billion was for new green field projects. Now, after China, Pakistan was the second largest buyer of state-of-the-art textile machinery.

Mr Shaukat said the forthcoming annual meeting of the IMF and the World Bank in Dubai would provide a platform to Pakistan to participate in the dialogue to work out strategy for economic growth and meet investors.