The overall vision of Poverty Reduction Strategy Paper (PRSP-II) is to steer Pakistan's economic growth back to the range of 5-7 percent per year by stimulating growth in the production sector; creating adequate employment opportunities, improving income distribution, and harnessing the country's economic competitiveness through economic liberalisation, deregulation and transparent privatisation.
"The strategy recognises that to steer Pakistan back on a path of broad-based growth, create jobs, and reduce poverty, a prolonged period of macroeconomic stability, financial discipline and sound policies is required," said World Banks's Country Partnership Strategy (CPS) 2010-2013 report, released here said.
According to the World Bank report on Pakistan, during the previous Country Assistance Strategy (CAS) period strong growth and rapid poverty reduction through 2007 stalled as the economy faced crisis in 2008.
The report said that an ambitious reform programme of the government elected in 2008 has reduced the fiscal and, in particular, the external current account deficit, increased GDP growth, restored foreign exchange reserves, and reduced inflation. The World Bank CPS report said that the reforms have also resulted in a significant increase in power tariffs along with an automatic pass through of international fuel prices.
"The government still has more work to do in a difficult security environment to further reduce inflation and the fiscal deficit, particularly to eliminate the large losses of public sector entities in the power, transport and manufacturing industries, and increase public revenues through the introduction of a value added tax and better tax administration," the report added. It said that the country's top leadership is cognisant of this and is committed to continue spearheading reforms in these areas.
The WB CPS said that Government's strategy focuses on regaining macroeconomic stability after the economic crisis and on structural reforms required to support the recovery of strong and sustainable growth. In addition, the proposed CPS will focus more on the longstanding structural problems (like tax revenue mobilisation and power) that contributed to the rapid erosion in growth and stability during 2007 and 2008.