BERLIN, June 23: The World Bank has approved $90 million structural adjustment credit (SAC) in continuation of its financial support to implement economic and structural reforms in the NWFP.
The credit, approved by the bank's board of directors in its meeting held in Washington on Tuesday, would help the Muttahida Majlis-i-Amal government implement the second phase of multi-sectoral reforms.
The release of the second loan instalment would enable the provincial government to implement in the 2004-05 financial year the strategies and plans it could not execute because of its inability to qualify for the same at an early stage of the outgoing financial year.
The province had received first tranche of $90 million during the days of the last military-backed civil government on the basis of the three-year rollover provincial reforms programme (PRP).
Though the first tranche was released to the province in the first month of the 2002-03 financial year enabling the then government to utilize the money the way it wanted to, the province could not manage to get the second instalment well in time in the 2003-04 financial year, leaving under stress the reform process.
The delay also negatively affected the annual development programme for the outgoing financial year. Besides, the provincial government's capital receipts and capital expenditure plan also experienced distortions.
The provincial government was anticipating receiving the second instalment during the first half of the 2003-04 financial year. The provincial finance minister, Mr Siraj-ul-Haq, had also made an announcement to this effect in his speech on June 16, 2003, during which he had presented the provincial government's budget for the 2003-04 financial year.
However, the provincial government's inability to meet some of the conditions of the donor agency in the early stage of the 2003-04 financial year did not let the provincial finance minister's announcement to see the light of the day.
The World Bank's credit involves zero per cent interest rate and 0.75 per cent service charges and it would be matured in 35 years with 10-year grace period while the foreign exchange risk would be borne by the federal government.
Earlier, in May last, the bank approved an amount of $37.1 million to fund the second NWFP community infrastructure project entailing provision of increased access to basic infrastructure and services to low income rural and urban communities.
The second instalment for SAC-II, according to the World Bank, will support reforms in four major sectors - fiscal and financial management reforms, service delivery improvement reforms, governance and civil service reforms and private sector development and growth-oriented reforms.
"Improvement in the delivery of basic services like education and health will surely help reduce poverty in this province, which has so much potential to improve its human and social indicators," said John Wall, bank's country director for Pakistan.
Under SAC-II the province, through the reforms process, would be required to improve its revenue, prioritize its expenditures, improve expenditure management, improve budget preparation and strengthen fiscal devolution.
In terms of improving service delivery system, the province would be required to improve primary education in both enrolment and quality of instruction, reduce gender and rural-urban disparities and expand capacity at the secondary school level.
In the health sector, the government would be required to 'significantly' improve health indicators over the medium-term. The governance and civil service reforms to be implemented under SAC-II are meant to increase efficiency and effectiveness of the government operations, including the delivery of public services, raise the level of competence and integrity of government officials and making them more accountable.
