ISLAMABAD, Sept 23: The World Bank has asked Pakistan to improve its debt management by setting up an independent and separate debt office for timely risk assessment and risk management.

This was discussed on Thursday at a wrap up meeting of Ministry of Finance and World Bank Debt Management and Domestic Debt Markets Development-Identification/Preliminary Assessment Mission.

Adviser to Prime Minister on Finance Dr Salman Shah presided over the meeting. Pakistan is one of the twelve countries selected by the World Bank for a detailed evaluation of debt management practices and institutional arrangements at no cost to Pakistan government.

An official statement said Tomas I. Maprusan and Tadashi Endo of the World Bank made presentations about issues in sovereign debt management and government debt market development in Pakistan.

The mission would come to Pakistan again in November for further discussion and preparation of a comprehensive debt management policy.

Issues related to sovereign debt management like guidelines for Public Debt Management (2001), Development Government Bond Markets (2001, need for capacity building, need to set up debt office as a separate agency, and the role and functions of independent debt office, need for increased emphasis on risk assessment and risk management, need for a comprehensive strategy of debt management, mode of coordination between relevant agencies in debt management, the decision making process, role of parliament in debt management, check and balances, reporting and evaluation system came under discussion.

The World Bank team also presented few ideas about next steps required to be taken by Pakistan. Tadashi Endo in his presentation emphasized on tentative and possible market development issues.

This included promotion of non-bank intermediaries and their competition, SECP's leadership in capacity building of institutional investors, reinforcement of secondary market supervision by the State Bank or Securities and Exchange Commission of Pakistan.

The World Bank team also suggested areas of improvement including promotion of non-bank intermediaries and their competition, SECP's leadership in capacity building of institutional investors, reinforcement of secondary market supervision by the regulators, development of arbitrage facilities and improvement of issuance management.

The World Bank team appreciated the steps taken by the government to improve the economy particularly market-based pricing of government securities, increased transparency of government securities issuance and open market operations, market-friendly policies of Ministry of Finance, SBP & SECP, recognition of the importance of non-bank intermediaries and continued initiatives for market innovations by MOF, SBP, SECP and Private Sector.

Salman Shah assured the bank that finance ministry will provide feedback to the World Bank team after internal discussions and next round of talks will be held with a World Bank Team, which will shortly visit Pakistan.