World Bank advice
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.