ISLAMABAD: World Bank Managing Director Sri Mulyani Indrawati on Saturday advised the government to stay focused on its implementation of the reforms programme and create fiscal space to sustain social protection programmes which support the poorest and most vulnerable people.

Concluding one-day visit to Pakistan, Sri Indrawati, who is also the chief operating officer of the World Bank, said: “Pakistan is facing a set of very tough challenges, but we see good progress in the pace and quality of the government’s action.”

She said that successful reviews by IMF and the rapid implementation of initial reforms actions are positive signs. She also pledged that the World Bank group stands ready to help Pakistan through lending, private sector involvement and knowledge support.

Indrawati recognised that despite the difficult economic situation, the government’s reforms are going into the right direction and are necessary to lead the country on a stable path to recovery.

The use of $1.7 billion from IDA, the World Bank’s fund for the poorest, is part of the bank’s support to the country.

Target areas will be policy reforms in the energy sector, revenue mobilisation, governance, social sectors, and investment into hydropower.

The World Bank’s engagement in Pakistan will continue to be guided by its principle of selectivity, operational policy, and areas of comparative advantage, she said.

The development partnership between the World Bank and Pakistan has entered its seventh decade.

More recently, the World Bank’s engagement in Pakistan was focused on supporting education outcomes, development of hydropower and strengthening social safety net systems for the poorest and most vulnerable people, she said.

The World Bank managing director called on Prime Minister Nawaz Sharif on Saturday and discussed discuss Pakistan’s ongoing economic reform programme, including a stronger focus on private sector involvement and other poverty fighting measures. She also held talks with Finance Minister Ishaq Dar and ministers for water and power and petroleum and natural resources.

Mr Sharif informed the World Bank official that the government has identified priorities for next five years, including energy and infrastructure sectors.

Assistance of World Bank in the priority areas would support Pakistan in achieving its development targets, he said.

The premier said that due to the rational and pragmatic economic and monetary policy of the government, the economy of Pakistan has stabilised and is moving ahead in the right direction.

“We expect that the foreign exchange reserves of Pakistan will be around $16bn by end of this year,” he said.

Finance Minister Ishaq Dar briefed Sri Indrawati during a meeting about the steps taken by the government to put the economy back on track.

The new government is pursuing a three-point priority agenda, focused on addressing economy, energy and extremism, he said.

Senator Dar also spoke about landmark steps the Prime Minister recently announced with the objective to generate business opportunities for the youth and assist them in attaining educational excellence.

He said that our efforts have started yielding results in addressing long-delayed issues and pulling the country out of its economic woes.

He underlined that changes are being contemplated in relevant tax laws for permanently eliminating the discretion of Federal Board Revenue to issue special tax exemptions.

Sri Indrawati appreciated increased allocation for social safety network rogrammes and said Pakistan has strong support of the World Bank for its economic revival.

She said the World Bank would expect that the progress on energy projects would be made on fast track, adding that the focus of the World Bank will remain on tackling the energy crisis, increasing economic opportunity for women and youth and improving service delivery.

She disclosed that the World Bank will be considering Country Partnership Strategy (2014-19) for Pakistan on May 1, which reflects our commitment with the country.

She hoped success for Pakistan in launching of Eurobonds in the international market and auction of spectrum licences. She concluded that the credibility of reforms and private sector participation will make Pakistan an emerging market for FDI.