World Bank offers Pakistan $500-million

The World Bank said on Thursday it had approved $500-million, interest-free credit to support Pakistan’s programme on economic stability.

“Pakistan has experienced severe external and internal shocks in the past year and is confronting a very difficult macroeconomic situation,” the Washington-based World Bank said in a statement.

“The rise in international oil and food prices sharply inflated the country’s import bill and the subsequent slowdown in the global economy dampened external demand for Pakistan’s exports.”

It noted that “political turmoil and uncertainties affected investor confidence”, leading to capital outflows.

The Poverty Reduction and Economic Support credit is designed to support measures that promote macroeconomic stability, the Bank said.

It also seeks to improve Pakistan’s competitiveness by bolstering the financial sector and cutting barriers to business.

“The government of Pakistan has taken important policy steps to stabilise the economy,” said Yusupha Crookes, World Bank director for Pakistan.

“These polices have succeeded in reducing external imbalances, rebuilding foreign exchange reserves, narrowing fiscal overruns and lowering inflation.

“However, the sharp deterioration of the global economy poses significant risks to exports, remittances, and external financing. This underlines the importance of Pakistan regaining economic stability and protecting its poorest citizens during the process.”

Japan will host a donors meeting for Pakistan on April 17 that is set to be attended by the country’s President Asif Ali Zardali and United States envoy Richard Holbrooke.

The World Bank will co-chair the meeting.

Japan has sought to contribute to US-led efforts in Pakistan and Afghanistan, as US President Barack Obama’s administration has reviewed its policies and appointed Holbrooke as regional envoy.—Sapa-AFP

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