December 27, 2006	Wednesday	Zilhaj 05, 1427

ISLAMABAD, Dec 26: The World Bank has asked Pakistan to improve its legal (regulatory) and fiscal (taxation) regimes and to have in place an institutional framework in order to attract foreign investment in the mineral sector of the country.

Official sources told Dawn that the WB maintained that the lack of institutional arrangements was impeding progress to adequately develop the mineral sector and hence attracting foreign investment. It also wanted incorporation of social and environmental aspects.

In this behalf, the Bank has urged the government to urgently go for institutional strengthening and capacity building of the Mineral Wing of the ministry of petroleum and natural resources without which it would be difficult to attract considerable foreign investment in the country's neglected mineral sector.

For the development of the mineral sector, the World Bank said, international investment was required to be coordinated at the federal level. Since formulation of policies on mineral development is in the federal domain, considerable capacity improvements are needed to enable establishing mineral frameworks that are consistent at federal and provincial levels.

The Bank also called for facilitating the preparation of provincial Mineral Concession rules and regulations and coordinating development of the provincial mineral cadre systems.

The government, sources said, was asked to coordinate and promote mineral investments, develop and disseminate basic geological information and improve economic conditions of small scale minerals including coal, gemstone and dimension stones.

The Bank is also of the view that a database is pre-requisite to develop mineral sector through foreign investment and that constant monitoring is required to maintain the progress being made by multinational mining companies.

Sources said the international companies interested in making investment in the mineral sector have demanded of the government to have data in digital form. Currently, the mineral wing of the ministry has no facility of data bank and subsequent dissemination to the interested parties. "The establishment of Mineral Data Bank (MDB) is essential", a source said.

The Bank of the view that the mineral wing is under-staffed, which is why it cannot carry out all the required functions.The core function of the mineral wing, the WB believed, should be the correct registration of private companies, maintenance of export and import, data of minerals and dissemination data to different agencies as per their requirement.

The officials of the mineral wing were asked to make efforts for the development of mineral sector by coordinating efforts with the Balochistan Mineral Development Programme, which is likely to be sponsored by international donor agencies.

Initially, the World Bank, sources said, has promised considerable financial assistance to help implement mineral sector development programme.

The government was told that the mineral exploration is "high risk" capital investment. The risk in generation of basic geological data and identification of exploration targets are high, therefore, the private sector, even in developed countries, do not contribute in this phase of mineral exploration and the governments through geological surveys have to undertake these activities.