World Bank for balance in spending: Defence, social sectors
By Khaleeq Kiani
ISLAMABAD, Aug 17: Pakistan presents a mix picture of bad and good governance and needs to create a balance between social and defence spending and continue reforms with special focus on equitable development of the poor.
This was the crux of a news conference by visiting President of the World Bank Paul D. Wolfowitz on conclusion of his three-day first ever trip to Islamabad here on Wednesday.
On the occasion, advisor to the prime minister on finance and revenue Dr Salman Shah announced that the World Bank would soon launch a trust fund with the help of international community for the development of areas bordering Afghanistan.
Secretary Economic Affairs Division said the Bank would provide a $3.5 billion assistance to Pakistan over the next three years, of which, about $2.5 billion would be under the concessionary international development assistance (IDA) and about $1 billion for solid infrastructure projects.
Mr Wolfowitz said the World Bank had enhanced its annual assistance for Pakistan by about 50 per cent to $1.5 billion from $950 million to help the country achieve sustainable economic growth and create conducive environment for the improvement of socio-economic lot of its people.
Responding to a question whether high defence spending with reference to recent cruise missile tests by Islamabad would not affect poverty reduction efforts, the World Bank chief said this should be seen in the context of regional security situation but added the government should decide as to how to create a balance between defence and social sector spending as lower defence expenditure would provide space to spend more on basic human needs.
He said Pakistan faced a number of challenges, including improvement in governance and tackling the menace of corruption but he was impressed with the confidence of the government to meet these challenges. He said corruption was a world wide challenge and it was a collective responsibility of the international community to take on the challenge.
Responding to a question, he said Pakistan did not make any specific request to bring back illegal money stashed away by some Pakistanis but the bank generally committed to improving legal requirements to speed up recovery of such money deposited in certain countries.
Responding to a question on Baglihar dam and whether he would take up the matter with the Indian government during his second leg of visit to South Asia, he said the bank has appointed a neutral expert in this regard and would wait for the report and then think what to do next.
He said Pakistan’s economy was moving forward on the right path and this trend must continue with a special focus on the development of the poor.
Pakistan, he said, was the most important country of the region and leader of over 1.2 billion Muslims of the world, and had to play a significant role, and the Bank would extend all possible assistance for exploiting its enormous potential for sustainable growth.
He said the World Bank was appreciative of Pakistan’s economic gains and it was very much interested to sustain this growth, which was very important for the poor people of the country.
Responding to a question, Mr Wolfowitz said the Bank has expertise in water sector and would extend all possible assistance to the Pakistan government in developing water and hydel power projects.
Responding to a question on Kalabagh dam, he made it clear that the Bank would provide assistance to Pakistan for the overall development of water sector and it is prerogative of the Pakistan government to execute any project on its own.
However, he said, the World Bank had adopted a policy of staying away from large projects in the 1990s owing to some bad experiences but with the passage of time it had been realised that large projects should be funded because these could be implemented in a responsible way and in an efficient manner by tackling environment and population issues.
The World Bank president emphasised the need for improving Pakistan-India ties and resolution of all issues between the two countries for sustainable peace in the region and economic development and prosperity of huge population of South Asia where majority of the poor lived.
To another question, the Bank president said corruption was the major challenge with the whole world including developed countries and collective measures needed to root out this menace. He said the Bank could facilitate NAB in speeding up the process for combating corruption.
He said the education was the major area in which the Bank was assisting Pakistan and added that it would be ready for more funding for the human resource development under its medium term country assistance strategy.
