ISLAMABAD, Aug 28: The World Bank and Asian Development Bank have asked Pakistan to take stringent macroeconomic stabilisation measures to qualify for quick loan disbursements needed for augmenting its foreign exchange reserves.

The reserves fell to about $9 billion from over $16 billion in October last year, making it difficult for the government to adequately finance current account and trade deficits.

The government is seeking about $1 billion in quick disbursements to overcome the severe problems it is facing. Prime Minister Syed Yousuf Raza Gilani and Finance Minister Syed Naveed Qamar held separate meetings with delegations of the two lenders on Thursday and asked them to understand the difficulties being faced by the government and ensure quick disbursement of loans.

Members of the World Bank team, led by its vice-president for South Asia Region Ms Isabel M. Guerrero, held meetings with the prime minister and the finance minister in which they were briefed on the political and economic developments of the past few months.

Ms Guerrero assured of World Bank’s strong support for the democratic government and said the bank’s programme was substantive and diverse and it would help Pakistan in both economic and social uplift.

Pakistan informed the delegation of its commitment to macroeconomic stabilisation and explained the policy measures including improving the cost recovery for utilities, achieving demand containment through appropriate monetary policy measures, and helping the poor through an effective social safety net. The prime minister “underscored for the multilaterals and bilaterals to understand that the government would like to have strong ownership of the macroeconomic stabilisation package and structural reforms”.

Mr Gilani agreed to involve development partners, both separately and collectively, for their feedback and the monitoring of the overall economic reform agenda, but said it was equally critical for the development partners to recognise the need for timely inflows of financial help for building up the reserve and meeting development requirements.

“The World Bank delegation assured the prime minister of their full support in this transition and consider possible augmentation of the financing,” an official statement said.

The prime minister also assured an ADB delegation led by its Director General Juan Miranda that the government was implementing a comprehensive macroeconomic stabilisation programme and difficult but most warranted measures were being taken. The government, he said, was reducing subsidies by allowing pass-through in utility prices, expenditure controls and other rationalisation measures. The ADB team assured the prime minister of their support.