World Bank's positive Gesture

When faced with a crisis situation, even a small gesture of goodwill from a prospective source is welcome. This is true in the case of both individuals and nations. In a meeting with President Asif Ali Zardari in New York, World Bank President Robert Zoellick assured the Pakistani leader of his institution's continued support for the economy of the country.
A $1.377 billion package was being considered to help Pakistan overcome its economic problems, while a $1.337 billion World Bank funded programme was already in the pipeline. The funds will mostly be used for investment in energy and water sectors, besides developing infrastructure in other areas. Assistance will also be provided for development projects in FATA as well as poverty alleviation programmes.
President Zardari apprised the Bank's Chief of Pakistan's macroeconomic stabilisation programme and sought his help in mobilising resources for industrialisation and investment in the country. The political government had taken difficult and tough decisions to meet the current economic challenges and was doing its best to bring the country out of the economic crisis. The President of Pakistan also referred to the Friends of Pakistan group that was being mobilised to support the country's economic recovery.

We feel that the meeting between the President of Pakistan and World Bank's Chief was quite productive so far as spelling out the relative positions and the intentions of the two parties were concerned. While Zardari appeared to be quite convincing in impressing upon the World Bank President that Pakistan was very much prepared to take tough measures for a stabilisation programme envisaged by the government, Robert Zoellick's remarks were quite encouraging and explicitly meant to convey the commitment of continued financial support which by no means is small.
Understandably in a short meeting like this one, which was almost like a courtesy call, the nitty-gritty of the programme could not be finalised but the beginning appears to be good and we hope that the relevant authorities of the country would be able to make the most out of the goodwill generated in the meeting. Pakistan's foreign exchange reserves which had hit a record high of $16.5 billion in October last year dwindled to $8.82 billion on 20th September, out of which only $5.41 billion are held by the State Bank, due mainly to the soaring import bill and political uncertainty.
Some other inflows are expected but whether and when these would materialise or not, is not yet certain. In a situation like this, continued flow of resources on a substantial scale from the World Bank is of critical importance for the country. However, the authorities of the country would need to keep at last two things in mind in this connection.
Firstly, a proper framework for the macroeconomic stabilisation programme and justification for the proposed projects have to be provided for the satisfaction of the World Bank and agreed upon between the two parties. And secondly, we have to retain the sympathies of the western countries, particularly the Americans, to keep the World Bank in a helpful mood. Their quotas and consequently influence in the institution are too overwhelming to be ignored.