ISLAMABAD, May 30: World Bank Vice President Praful Patel said on Friday that “tough, yet essential, reforms can ensure that high international food and oil prices do not derail Pakistan’s poverty reduction and economic development.”
“During my last trip to Pakistan two months ago, I noted that the economic challenges did not constitute a crisis, but the economic picture for Pakistan was very serious,” said the World Bank vice president after interactions with various stakeholders at the conclusion of five-day visit.
Senior officials of the bank visited Islamabad to review the economic situation inherited by the PPP-led coalition government and suggest measures to steer the country out of economic crisis.
Mr Patel’s visit is the latest in a series by world leaders, particularly US senators, who have been here to pursue their agendas. The senior officials of the donor agencies also seem to be keen to ensure their say in the new economic policies of the government.
According to an announcement of the Islamabad-based office of the World Bank, international oil and food prices have continued to rise since then, and we are working closely on their programme to address the cost to Pakistan of the high prices, and to ensure the poorest are protected.
A source in the finance ministry told Dawn that due to the cash flow problems to finance the soaring balance of payments, Pakistan would need assistance from the international financial institutions (IFIs). He said the World Bank is attaching its loans with a string of conditionalities, including removal of all subsidies, including oil by making it very difficult for new government to go for it.
The source said as Pakistan has no formal arrangement with the IMF, so the World Bank is also monitoring the fiscal and monetary policy of Pakistan as well.
During his stay in Pakistan, Patel met Prime Minister Yousuf Raza Gilani and the government’s economic team led by Federal Minister for Finance Syed Naveed Qamar to discuss the economy and safety nets to protect the poor as domestic prices are adjusted.
In this regard Mr. Patel offered World Bank support to build upon international best practice in responding to the current situation.
In meetings with President Parvez Musharraf, Pakistan People’s Party Co-chairman Asif Zardari and PML-N Shahbaz Sharif, Mr Patel thanked them for the warm reception and hospitality shown to him throughout his tenure as the regional vice-president of the World Bank.
During his visit, Mr Patel once again reconfirmed the World Bank’s ongoing commitment to Pakistan. He noted that despite uncertainty in the recent months, the bank’s programmes in Pakistan remain on track.
He said that bank’s technical assistance with targeting exercises on the social safety nets, capacity and institution building for water management, and electricity generation and distribution efforts would help Pakistan in meeting its development priorities.
“Over the last five years, I have visited Pakistan very often and have always gone back impressed with the resilience of its people,” Mr Patel said and added: “Persisting and new challenges notwithstanding, I am sure that with the right policies and strong support from its development partners, Pakistan can maintain its poverty reduction path. I take very fond memories with me and wish Pakistan well.”