ISLAMABAD, Jan 26: Finance Minister Shaukat Aziz has said that the Bush administration has approved a $395 million economic assistance for Pakistan.

"I was told by US Under-secretary of State for Economic Affairs Alan Larson in Davos that the delayed $395 million assistance for 2003-04 has been signed by President Bush," he told Dawn on Monday.

The finance minister said the amount would be used to retire $200 million US debt. Last year, he said, Pakistan had retired one billion dollar of the US debt.

Shaukat Aziz said the remaining $195 million would be used for promoting growth, creating new investment opportunities, generating jobs and extending better health and education facilities to the people.

He said a part of the new assistance would be used for developing small and medium business enterprises (SMEs), agri business, information technology and housing. The finance minister said the US Congress was expected to approve the proposed $3 billion economic assistance in October this year.

He said more talks on the matter would be held in Islamabad with the representatives of the USAID and formal discussions would be concluded in April during the World Bank/IMF annual meeting at Washington.