The International Monetary Fund (IMF) has underlined the need for addressing certain challenges, including strengthening of public finances and financial performance of power sector for successful implementation of Poverty Reduction and Strategy Paper (PRSP).
"Poverty Reduction and Strategy Paper provides a comprehensive and coherent framework for poverty reduction in Pakistan but in moving forward, several challenges will need to be addressed," IMF Deputy Managing Director and Acting Chairman Agustin Carstens said.
The IMF executive board reviewed the joint staff assessment of Pakistan's PRSP that was conducted by the staff of the IMF and the World Bank.
In a statement issued here on Tuesday Carstens said the PRSP appropriately puts poverty reduction at the top of the policy agenda.
A broad participatory approach, which was already initiated during the preparation of the Interim-PRSP, has underpinned the development of the full PRSP.
"The PRSP builds on the strategy articulated in the Interim-PRSP and on the progress that has been made in implementing that strategy.
The PRSP recognises that economic growth is a necessary but not a sufficient condition to reduce poverty.
It, therefore, makes a special effort to ensure that the benefits of economic growth are shared by all, by emphasising greater social inclusion, including human development and devolution, increasing access to physical and financial resources by the poor, and targeting the poor and vulnerable through safety net programmes.
The medium-term expenditure framework and the structural reform agenda reflect the priorities and needs of the country as it strives to reach the Millennium Development Goals.
However, he said that cross cutting challenge would be to prepare an explicit and prioritised roadmap of reforms and policy actions envisaged over the medium-term, with a clear timeframe.
Specific policy challenges include strengthening the public finances and the financial performance of the power sector specifically to increase resources for social expenditures, and successfully implementing administrative and fiscal devolution, including capacity-building at lower tiers of government to enhance effectiveness of public service delivery.
It would also be important to introduce a broader rural strategy for improving agricultural productivity, expanding non-farm rural employment and reducing rural poverty, and to finalise institutional arrangements for monitoring social indicators and providing timely feedback into the policy process," Carstens said.