ISLAMABAD, Jan 12: The World Bank is likely to start extending $1 billion annually to Pakistan from the next fiscal year with a view to help tackling poverty in the country.

However, sources in the multilateral agencies expected that the government of Pakistan would also substantially increase its funding for social sectors to match the proposed enhanced World Bank assistance.

The enhancement of the assistance from about $800 million to $1 billion in 2004-05, along with other issues, is expected to be discussed between the senior government officials and World Bank's new chief economist for South Asia Mr Shanta Yanan Devaragan who is arriving here on Jan 19. This will be first visit to any South Asian country.

Sources said that since the Pakistan government had finalized the Poverty Reduction Strategy Paper (PRSP) and admitted that poverty was one of its biggest problems, the World Bank would like to help specially by enhancing its annul funding level.

The bank has recently approved a $238 million poverty alleviation programme and a $200 million highway rehabilitation programme. "For more assistance, the bank wants to ensure that the reform programme is on track and development projects are moving in the right direction," a source said, adding that the delay in the appointment of project directors and prevalent corrupt practices had been a matter of concern for the donor agencies.

The bank has agreed with the government that availability of adequate resources for poverty alleviation programmes was essential. But it advised the government to invest in human resources which had been grossly neglected in the past. The sources said Pakistan needed to achieve a sustainable growth rate to address the serious issue of poverty and creating jobs particularly for the educated youth.

When contacted, an official source said adequate implementation on the full Poverty Reduction Strategy Paper was a very important issue which required more foreign assistance including increased bilateral assistance from Japan, Germany, France, the United States, Britain and donor agencies like UNDP, UNFPA, ILO, UNICEF, JICA, CIDA and USDAID.

Key reasons for poverty identified were discriminatory education system, high incidence of health problems, widespread unemployment, inaccessibility to capital from traditional sources to start productive enterprise, few opportunities for women to earn a livelihood, lack of availability of vocational skills, inadequacy of agriculture and livestock extension services, environmental degradation, inconsistent water supply, lack of access to justice, and a rapid rise in population and, at times, variance between local priorities and needs and projects implemented through national and provincial planning agencies.

Major donor agencies, specially the World Bank and the Asian Development Bank (ADB), have also reportedly asked the government to increase annual funding for health and education sectors.

The government accepts that the education service delivery in Pakistan is faced with a multitude of challenges, from lack of infrastructure and facilities to severe shortage of qualified and trained teachers. Similarly, current health status of the nation is characterized by a high population growth rate and maternal mortality.