ISLAMABAD, April 12: The Asian Development Bank (ADB) has said that Pakistan will have to take politically unpopular and difficult decisions, including increase in prices of various utilities, to improve the economy.

“The government’s commitment is there to increase the prices of various utilities including that of edible oil,” said Mr Marshuk Ali Shah, ADB Country Director of Pakistan.

Speaking at a news conference here on Friday, he said the implementation of reform process could not be ensured without taking politically unpopular and difficult decisions.

Mr Shah was critical of the performance of the Central Board or Revenue and said, “there is a resistance by the CBR itself to implement reform programme. The commitment has been made but not implemented,” Mr Shah regretted. He warned that Pakistan would remain caught between low growth and high poverty if it failed to implement the reforms.

He said the government would have to bring reforms in the CBR to increase revenues, otherwise the federal authorities would continue to face difficulties to have new resource mobilization.

The ADB Country Director regretted that poverty-related expenditure had reduced because of the change made in the devolution plan. “We are monitoring the situation and would make sure that the government increase poverty related spending,” he added.

He said the ADB would give $300 million for increasing capacity building under the ongoing devolution plan in all the four provinces of the country.

Mr Shah said that Pakistan’s economy was passing through a critical juncture although some success had been achieved to stabilise the economy.

He said there was a need to remove losses in the state-run organizations and in this behalf he particularly mentioned Water and Power Development Authority (Wapda) and the Karachi Electricity Supply Company (KESC). “The losses of Wapda need to be plugged,” he said, adding that advertisements campaign for the KESC’s privatization process would begin next month.

Responding to a question he said general election were more important than referendum to ensure continuity of political and economic reforms being undertaken by the present government.

“We believe the President’s referendum is not significant but the elections are significant because the continuity of reform hinges on the future government,” Mr Shah said.

He said the reforms had stabilised the country’s financial position during the last two-and-a-half years. He said the financial restructuring and debt restructuring by donors had also helped the government. “But you have to go a long way and take bold and unpopular decisions to achieve desired results.”

Talking about his concerns, he said he was really worried about the revenue collection. “It would be a big achievement if the CBR achieved downwardly revised Rs414 billion revenue target by June 30 this year.”