July 11, 2006	Tuesday	Jumadi-ul-Sani 14, 1427

ISLAMABAD, July 10: Finance ministers from Saarc countries will formulate recommendations for the establishment of the Poverty Alleviation Fund (PAF), with an initial corpus of $300 million under the social window as an integral part of the Saarc Development Fund (SDF).

A finance ministry official said the finance ministers from Saarc countries who arrived here would start deliberation upon the modalities from Tuesday for fund raising for the PAF.

The fund will be managed and operated by the SDF governing board, with an initial corpus of $300 million to be raised from contributions of the member states. The focus of lending under the fund would be on poverty alleviating projects.

Prime Minister Shaukat Aziz is expected to inaugurate the meeting of finance ministers while adviser to the prime minister on finance and economic affairs will chair the working session of the meeting.

The fund, with its own permanent secretariat, would comprise three distinct windows -- social window, infrastructure window and economic window. These windows would offer concessional and non-concessional funds as well as grants to the Saarc countries.

The finance ministers’ meeting will review finance experts' recommendations discussed and refined during the preparatory meeting of finance experts and finance secretaries held on Monday.

Delegates from the Saarc Secretariat and Saarc member countries including, India, Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives and Pakistan, will participate in the conference. It is hoped that the conference will add another potential dimension to the rapidly progressing regional cooperation among the member states.

The meeting follows up from the deliberations and decisions of the 13th Saarc summit held in Dhaka in November 2005. Under the Dhaka declaration, the heads of state/government decided to establish a Saarc Poverty Alleviation Fund (SPAF) with voluntary and assessed contributions.

In this regard, they welcomed the offer of Pakistan to host the next meeting of the finance ministers. They agreed that the South Asia Poverty Fund would function within the South Asia Development Fund, which would be reconstituted as the SDF and would serve as an umbrella financial institution for all Saarc projects and programmes.

The first informal meeting of the Saarc finance ministers was held in Hyderabad, India, on May 3, 2006 on the sidelines of the 39th annual meeting of the Asian Development Bank in which all the member states participated. The meeting reiterated the need for seizing the opportunity for furthering the process of regional economic cooperation in a significant manner.

The first meeting of finance experts from the Saarc countries was held in September 2005, followed by the second meeting in Kathmandu in February 2006. These meetings came out with recommendations regarding the operations of the Saarc Poverty Alleviation Fund.