World Bank ad­vice

The Pak Banker - - 4EDITORIAL -

THE World Bank is an im­por­tant player in reg­u­lat­ing the world econ­omy and set­ting its di­rec­tion. As such, the words of its chief carry great sig­nif­i­cance in the con­text of per­for­mance by in­di­vid­ual coun­tries. Against this per­spec­tive the com­ments of World Bank Pres­i­dent Jim Yong Kim dur­ing his visit to Pak­istan should come as mu­sic to the man­agers of the na­tional econ­omy. Dur­ing his meet­ing with Prime Min­is­ter Nawaz Sharif the WB chief ap­plauded the pru­dent eco­nomic poli­cies of the govern­ment, say­ing that the coun­try's eco­nomic out­look had be­come sta­ble which was the re­sult of the ef­forts of its fi­nan­cial team. Ac­cord­ing to Dr Jim Yong Kim, avoid­ing the risk of bank­ruptcy was a big achieve­ment of the govern­ment. He ad­mired the var­i­ous projects aimed at achiev­ing bet­ter re­gional con­nec­tiv­ity and co­op­er­a­tion. He spe­cially men­tioned the fact that the govern­ment had suc­ceeded in sta­bi­liz­ing the econ­omy over the last three years and as­sured of the World Bank's con­tin­ued sup­port to Pak­istan.

The top­ics that came un­der dis­cus­sion in­cluded strength­en­ing the role of the pri­vate sec­tor for cre­ation of jobs, ac­cel­er­at­ing en­ergy re­forms, mak­ing im­prove­ments at the com­mu­nity level for bet­ter health and education fa­cil­i­ties and en­sur­ing anti-poverty mea­sures. The prime min­is­ter in his sub­mis­sion said that the govern­ment be­lieved in a lib­eral and pri­vate sec­tor-driven econ­omy. He ex­plained that the govern­ment's ef­forts are aimed at en­sur­ing ideal en­vi­ron­ment for the pri­vate busi­nesses. He also pointed out that all-out ef­forts are be­ing made to bring im­prove­ments in ev­ery sec­tor of the econ­omy, in­clud­ing de­vel­op­ment of mega-hy­dropower projects, rail and road in­fra­struc­ture, education and health.

The WB pres­i­dent said Pak­istan was pass­ing through a crit­i­cal phase of de­vel­op­ment and the govern­ment could play a his­toric role in the de­vel­op­ment of the econ­omy dur­ing the next two years.

He stressed the need for in­vest­ing in peo­ple, es­pe­cially in early child­hood education and pro­vi­sion of health fa­cil­i­ties to fur­ther boost eco­nomic growth in the coun­try. He said Pak­istan had an op­por­tu­nity to be­come more am­bi­tious in re­form­ing its econ­omy and re­duc­ing poverty in the coun­try. He em­pha­sized that pro­vid­ing the best education and health care fa­cil­i­ties to the peo­ple would help them in do­ing their best in ev­ery field of life for the eco­nomic growth of the coun­try. The World Bank Pres­i­dent also ad­vised the govern­ment to take tough de­ci­sions and go for struc­tural re­forms to con­sol­i­date its econ­omy and en­sure sus­tain­able growth. Th­ese in­clude over­due tax­a­tion re­forms to in­crease rev­enue needed for de­vel­op­ment projects. Sim­i­larly greater ef­forts are need to push up the GDP growth rate about which vary­ing fig­ures have been quoted by in­ter­na­tional agen­cies. Macroe­co­nomic in­di­ca­tors have inched up but vul­ner­a­bil­i­ties still re­main in crit­i­cal sec­tors of the econ­omy. A ma­jor chal­lenge is to over­come fis­cal deficit which con­tin­ues to weigh heav­ily on the econ­omy.

An­other se­ri­ous lack, as pointed out by the World Bank Pres­i­dent, is the low bud­get for the so­cial sec­tors, spe­cially health and education. Hu­man re­source de­vel­op­ment has been ne­glected and, in­stead, more al­lo­ca­tions have been made to in­fra­struc­ture projects like metro trains. The govern­ment also needs to give more at­ten­tion to en­ergy projects to meet the needs of the in­dus­trial sec­tor which has been lan­guish­ing. FDI in­flows have dried up while ex­ports are con­tin­u­ously de­clin­ing. Struc­tural re­forms can no longer been de­layed if we want to un­lock the econ­omy's true po­ten­tial. As the WB chief men­tioned, re­form­ing the econ­omy is the need of the hour so that more peo­ple are lifted out of poverty more quickly and pros­per­ity is widely shared among the masses.

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