WORLD BANK APPROVES US$300 MILLION POVERTY REDUCTION SUPPORT CREDIT
WASHINGTON, September 2, 2004-The World Bank today approved a credit of US$300 million in support of the Government of Pakistan's Poverty Reduction Strategy. The Poverty Reduction Strategy Credit (PRSC) is the first phase of a three-year program to support the country's efforts at sustaining rapid growth and reducing poverty.
"Pakistan has come a long way in implementing a comprehensive and ambitious economic reform program," says John Wall, World Bank's Country Director for Pakistan. "These reforms have resulted in GDP growth accelerating to over 6 percent and the debt burden declining considerably, paving the way for greater expenditure targeted at poor people."
The World Bank has supported the Government of Pakistan's reform program since 1999 with two credits, a first Structural Adjustment Credit of US$350 million in May 2001 and a second credit of US$500 million in May 2002.
This ongoing reform program, supported by the PRSC, is aligned with the Government of Pakistan's medium-term program to accelerate growth and poverty reduction and to improve health and education. This program is articulated in the Government's Poverty Reduction Strategy Paper (PRSP) entitled "Accelerating
Economic Growth and Reducing Poverty: The Road Ahead."The Strategy is based on four pillars: (i) achieving sustained high and broad-based economic growth, while maintaining macroeconomic stability; (ii) improving governance and consolidating devolution, both as a means of delivering better development results and ensuring social and economic justice; (iii) investing in human capital, with renewed emphasis on effective delivery of basic social services; (iv) targeting the poor and vulnerable, to bring the marginalized sections of the population and backwards regions into the mainstream of development.
"The next few years pose the challenge of maintaining the reform momentum, attracting domestic and foreign investment to sustain a higher growth path, finding more ways of translating this higher growth into lower poverty, and mobilizing additional domestic and external resources to accelerate improvements in education, health, and infrastructure," says Manuela Ferro, the World Bank's Country Economist for Pakistan and co-task manager of the PRSC.
"Improving service delivery in social service outcomes is critically conditional upon improved utilization in expenditures which in turn are dependent on the governance reforms that are being supported through this credit," says Zahid Hasnain, a World Bank Economist that co-managed the PRSC from the Bank's Islamabad Office.
The US$300 million interest-free credit, from the International Development Association (IDA), the World Bank's concessionary lending arm, has a 35-year maturity, a 10-year grace period, and a 0.75 percent service charge.
For more information on the World Bank in Pakistan, visit: http://www.worldbank.org.pk