Although the World Bank President is not expected to be very forthright in publicly discussing sensitive issues in the relations with a member country on its own soil for obvious reasons, he, nonetheless, seems to have been able to convey a meaningful message during his recent sojourn in Pakistan.
While discussing a wide range of issues with Pakistani editors on 17th August, he made it clear that the argument in the US that Pakistan needs resources because it is an important ally on terror may not continue. The relations between the two countries in future though, may not be as poor as in the 1990s when Pakistan was isolated, he said, yet "Pakistan will increasingly have to raise resources internally".
About his own list of priorities, he indicated that the focus would be on poverty reduction, sustaining and strengthening the role of the international financial institutions and maintaining proper relationship with rapidly developing countries like China and India. On the question about the general perception that the World Bank sets the agenda rather than seek the recipient country's input, Wolfowitz clarified that policy and development agenda had to be a two-way street between the Bank and the borrowers.
Further, he explained, "We cannot dictate the political future of a country. We have the responsibility that Bank money is used efficaciously and not wasted in corruption". Discussing Pakistan, he said that development was very much a story about glass half full or half empty and the glass, in his view, was "filling up here".
At a joint press conference with the Advisor to the Prime Minister, Salman Shah, Paul Wolfowitz revealed that the World Bank had scaled up funding for Pakistan to $1.5 billion from $950 million per annum, and it can be utilised for key sectors like health, education and other society-based development projects. The country faced a number of challenges, including improvement in governance and tackling the menace of corruption, but he was impressed with the confidence of the government to meet these challenges.
The government also needs to create a balance between social and defence spending and continue reforms with special focus on equitable development of the poor. Lower defence spending would obviously provide additional space to spend more on basic human needs. Improved relations between India and Pakistan could cut down defence expenditures and also boost regional trade that would help sustain the growth rate.
Pakistan was an important country of the region and leader of over 1.2 billion Muslims of the world. In order to enable it to play a significant role, the Bank would extend all possible assistance for exploiting its enormous potential for sustainable growth.
About Kalabagh dam, the World Bank President made it clear that the Bank would assist Pakistan for the overall development of water sector and it was the prerogative of the government to execute any project on its own.
We feel that the recent visit of the new World Bank President has been useful in a number of ways. After his appointment, there were apprehensions that he may not be as generous and committed to poverty reduction in the developing countries as his predecessors. It seems that he has adapted himself to his new role more quickly than expected.
Enhancement of Bank's annual assistance to Pakistan from $950 million to $1.5 billion is really welcome news. If properly utilised, it could help the country achieve sustainable growth and create an environment that is conducive to the improvement of socio-economic conditions in the country. While some people may not like it, his straightforward mannerism could actually turn out to be a boon for the country.
For instance, economic managers of the country have been relying too heavily on the continued inflow of assistance and resources from abroad for their plans which could almost be equated to "dependency syndrome". The World Bank President has indirectly told them that such an assumption is not the right way to proceed with policies and plans.
Once the threat of terrorism abates, the international community, particularly the US, as well as the multilateral institutions, may revise their liberal assistance strategies. Therefore, Pakistan needs to raise higher level of resources domestically.
Unfortunately, the domestic resource mobilisation continues to be poor and neither are there plans in the offing to raise domestic resources to the desired level in future.
Wolfowitz's observations on relations with India, good governance, elimination of corruption etc, are also equally relevant. The top functionaries of the government talk endlessly about these areas and the advantages to be had from treading on the right path, but some of the measures announced by the President after assuming power are not being implemented in the right spirit.
For example, Pakistan Procurement Regulatory Authority was set up as part of the National Anti-corruption Strategy to streamline the awarding of public sector contracts and to root out corruption from the system. Rules were framed in a way that every government department and public sector enterprise was supposed to follow certain procedures to ensure transparency and avoid arbitrariness. Sadly, however, the number of exemptions requested by the relevant departments and granted by the Ministry of Finance from this requirement, has been so large that the utility and effectiveness of this measure has been whittled down to a great extent.
The perception about NAB is also not flattering, to say the least. To promote self-respect, the authorities of the country need to set their house in order rather than be told by outsiders to proceed in the desired direction.