khalid assignment

8/8/2019 Khalid Assignment

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Economic Indicators of

BusinessInternational Monetary Fund

Submitted to Sir Arslan Wasti By

Khalid Rehman (BM25379)



Economic Indicators of Business

International Monetary Fund


1

Table of Contents

Economy of Pakistan................................................................................................................................ 3

Economic History ..................................................................................................................................... 3

The Economy Today................................................................................................................................. 5

Factors Affecting Economy ...................................................................................................................... 6

Manufacturing ..................................................................................................................................... 7

Finance ................................................................................................................................................ 7

Stock market........................................................................................................................................ 8

Tourism ............................................................................................................................................... 8

Revenue .............................................................................................................................................. 8

Sectors of Pakistan Economy ................................................................................................................... 8

Agriculture ........................................................................................................................................... 8

Industry ............................................................................................................................................... 8

Automobile industry .................................................................................. .......................................... 8

CNG industry ....................................................................................................................................... 9

Cement industry .................................................................................................................................. 9

IT industry............................................................................................................................................ 9

Textiles ................................................................................................................................................ 9

Services ............................................................................................................................................. 10

Communication ................................................................................................................................. 10

Electricity ........................................................................................................................................... 10

Installed capacity ........................................................................................................................... 10

Exports .............................................................................................................................................. 11

Imports .............................................................................................................................................. 11

International Monetary Fund ................................................................................................................. 11

What Does International Monetary Fund - IMF Mean? ...................................................................... 11

History of IMF ........................................................................................................................................ 12

IMF Assistance to Pakistan ........................................................................................ ............................. 12

1. The Agreement Of 1980 ................................................................................................................. 13






2

2. The Agreement Of 1988 ................................................................................................................. 13

3. The Agreement Of 1994 ................................................................................................................. 14

4. The Agreement Of 1997 ................................................................................................................. 15

The Year 2003-04 ..................................................................................... .......................................... 15

The Year 2008 .................................................................................................................................... 15

The Year 2009 .................................................................................................................................... 16

Effects of IMF Programs ................................ ......................................................................................... 16

World Bank Assistance to Pakistan......................................................................................................... 17

Suggestion ............................................................................................................................................. 19






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First of all we should understand Pakistan¶s economy and on what factors it depends. Inthat we can easily understand the role of IMF and World Bank on our economy.

Economy of Pakistan

The economy of Pakistan is the 27th largest economy in the world in terms

of purchasing power, and the 48th largest in absolute dollar terms.Pakistan is the

second largest economy in South Asia. Pakistan's economy mainly encompasses,

y Textiles

y Chemicals

y Food processing

y Agriculture

and other industries.

Economic History

At the time of independence in 1947, Pakistan was a very poor country and its

economy majorly depends on agriculture. Since independence,Pakistan's average

economic growth rate has been higher than the average growth rate of the world

economy during the period. Average annual was 6.8% in the 1960s, 4.8% in the 1970s,

and 6.5% in the 1980s. Average annual growth fell to 4.6% in the 1990s with

significantly lower growth in the second half of that decade.Industrial-sector growth,

including manufacturing, was also above average. During the 1960s, Pakistan was seen

as a model of economic development around the world, and there was much praise for

its economic progression. The table which gives every five years progress of GDP, US Dollar Exchange Rate,

Inflation Index, and Per Capita Income is given on the next page.






4

Year Gross Domestic Product US Dollar ExchangeInflation Index

(2000=100)

Per Capita Income

(as % of USA)

1960 20,058 4.76 Pakistani Rupees 3.37




1978 283,460 9.97 Pakistani Rupees 21 2.83

1985 569,114 16.28 Pakistani Rupees 30 2.07

1990 1,029,093 21.41 Pakistani Rupees 41 1.92









5

The Economy Today

Pakistan raised back its Foreign Reserves to a handsome $16.4 billion by October 2007.

Exceptional policies kept Pakistan's trade deficit controlled at $13 billion. Pakistans exports

increased to $18 billion. The revenue generation increased to become $13 billion and attracted

foreign investment of $8.4 billion.Since the beginning of 2008, Pakistan's economy has a downfall

due to war on terror.The War on Terror has created great instability and led to a decline in FDI from a

height of approximately $8bn to $3.5bn for the current fiscal year.Combined with high global

commodity prices, the dual impact has shocked Pakistan's economy, with gaping trade deficits, high

inflation and a crash in the value of the Rupee, which has fallen from 60-1 USD to over 80-1 USD in a few

months.For the first time in years, it may have to seek external funding as Balance of Payments support.

Economic Comparison of Pakistan 1999-2009

Indicator 1999 2007 2008 2009

GDP $ 75 billion $ 160 billion $ 170 billion$ 185

billion

GDP Purchasing Power

Parity (PPP)$ 270 billion $ 475.5 billion $ 504.3 billion

$ 580.6

billion

GDP per Capita Income $ 450 $ 925 $1085 $1250

Revenue collection Rs. 305 billion Rs. 708 billion Rs. 990 billionRs. 1.05

trillion

Foreign reserves $ 700 million $ 16.4 billion $ 10 billion $ 14 billion

Exports $ 7.5 billion $ 18.5 billion $ 19.22 billion$ 18.45

billion






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Indicator 1999 2007 2008 2009

Textile Exports $ 5.5 billion $ 11.2 billion - -

KHI stock exchange (100-

Index)

$ 5 billion at 700

points

$ 75 billion at

14,000 points

$ 56 billion at

9,000 points

Foreign Direct Investment $ 1 billion $ 8.4 billion $ 5.19 billion $ 4.6 billion

Debt servicing 65% of GDP 26% of GDP - -

Poverty level 34% 24% - -

Literacy rate 45% 53% - -

Development programs Rs. 80 billion Rs. 520 billion Rs. 549.7 billionRs. 880

billion

Factors Affecting Economy

Growth And Investment

Agriculture

Manufacturing

Fiscal Development






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Money and Credit

Inflation

Capital Market

Trade and Payments

External and Domestic Debt

Education

Health And Nutrition

Population, Labor Force and Employment

Poverty

Transport and Communication

Energy

Manufacturing

Pakistans manufacturing sector is growing from 2000. In 1999, large scale manufacturing is 1.5%

and it is 19.9% in 2004-05. So it makes an average 8.8% by the end of 2007. Below is growth of largescale manufacturing,

y 1999-00 ± 1.5%

y 2000-01 ± 11%

y 2001-02 ± 3.5%

y 2002-03 ± 7.2%

y 2003-04 ± 18.1%

y 2004-05 ± 19.9%

y 2005-06 ± 8.7%

y 2006-07 ± 8.6%

y 2007-08 ± 5%

Finance

Pakistans finance and insurance sector department also showed a great development from

2000. In 2005, it is at Rs.311, 741 million. It shows a growth of 166% since 2000.






8

Stock market

Business Week the international magazine declared Pakistans stock market, the best

performing stock market index in the world, in the first four years of 21st century. But in 2008, there is a

great decline in Pakistans economy due to uncertain political environment and many other reasons.

Tourism

Pakistan has diverse cultures, people and landscapes.Tourism in Pakistan is a growing

industry.To promoting Pakistans unique and various cultural heritages, PM launch "Visit Pakistan"

marketing campaign in 2007.In 2009, The World Economic Forums Travel & Tourism Competitiveness

Report ranks Pakistan as one of the top 25% tourist destinations for its World Heritage sites. Some

famous tourist spots are shown below,

RevenueThe income of a government from taxation, excise duties, customs, or other sources,

appropriated to the payment of the public expenses.The Board of Revenue has collected nearly one

trillion Rupees ($14.1 billion) in taxes in the 2007-2008.

Sectors ofPakistan Economy

Agriculture

Pakistan ranks fifth in the Muslim world and twentieth worldwide in farm output. About 25% of

Pakistan's total land area is under cultivation and is watered by one of the largest irrigation systems inthe world. Agriculture accounts for about 23% of GDP and employs about 44% of the labor force.

ZaraiTaraqiati Bank Limited is contributing a lot in our agriculture sector.

Industry

Pakistan ranks forty-first in the world and fifty-fifth worldwide in factory output. Pakistan's

industrial sector accounts for about 24% of GDP. Cotton textile production and apparel manufacturing

are Pakistan's largest industries, accounting for about 66% of the merchandise exports and almost 40%

of the employed labor force. Merchandise exports mean export of goods not services. Other major

industries include cement, fertilizer, edible oil, sugar, steel, tobacco, chemicals, machinery, and food

processing.

Automobile industry

Pakistan is an emerging market for automobiles and automotive parts. The total contribution of

Auto industry to GDP in 2007 is 2.8%. Auto sector presently, contributes 16% to the manufacturing

sector which also is expected to increase 25% in the next 7 years. But in my opinion this prediction cant

be correct due to high inflation and shortage of CNG.






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CNG industry

Compressed Natural Gas (CNG) is a substitute for gasoline (petrol) or diesel fuel. It is considered

to be an environmentally clean alternative to those fuels. In 2009, Pakistan is one of the largest users

of CNG (compressed natural gas) in the world.Presently, more than 2,900 CNG stations are

operating in the country in 85 cities and towns. It has provided employment to many people. But now

this industry has a decline and shortage of CNG is creating a big problem for CNG station owners and the

employs working at these stations. Many CNG stations closed and many are going to close if we dont

fight with the shortage problem of CNG.

Cement industry

Growth of cement industry is rightly considered a barometer for economic activity. In 1947, Pakistan

had inherited 4 cement plants with a total capacity of 0.5 million tons.The industry comprises of 29

firms, with the installed production capacity of 44.09 million tons. There are four foreign companies,

three armed forces companies and 16 private companies listed in the stock exchanges. The cement

sector is contributing above Rs 30 billion to the national exchequer in the form of taxes. Exchequer was

a part of the governments hat was responsible for the management and collection of revenues.Cement

industry is also serving the nation by providing job opportunities and presently more than 150,000

persons are employed directly or indirectly by the industry.

IT industry

Pakistans IT industry has been rising steadily. The Government of Pakistan has been proactively

developing the IT sector in Pakistan.A few of the incentives offered include tax exemption till 2016,

establishment of IT Parks with low rent, foreign ownership of equity invested in IT and 100% repatriation

of profit allowed to IT companies.Profit repatriation is an important factor that determines whether

'foreign direct investment' in another country is actually profitable for the parent firm.

Textiles

Pakistans textile industry and clothing sector has always been a major contributor to the foreign

exchange earning and still contributes about 55% to the total exports.

Textile exports in 1999 were $5.2 billion and rose to become $10.5 billion by 2007. Textile

exports managed to increase at a very decent growth of 16% in 2006. There is development in other

sectors and exports of other sectors increases therefore textile exports share in total export of Pakistanhas declined from 67% in 1997 to 55% in 2008.The top buyers of Pakistani textile goods are:

y USA

y UK

y Japan

y Korea






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y Saudi Arabia

y Italy

y Turkey

y Germany

Services

In GDP the share of service sector is 53.3%. Transport, storage, communications, finance, and

insurance shares 24% of this sector, and wholesale and retail trade shares about 30%.

Communication

Pakistan won the prestigious Government Leadership award of GSM Association in 2006. In

2008, the mobile telephone market reached a subscriber base of 91 million users. In addition, there are

over 6 million landlines in the country with 100% fiber-optic network. The contribution of telecomsector to the national exchequer increased to Rs 110 billion in the year 2007-08 on account of general

sales tax, activation charges and other steps as compared to Rs 100 billion in the year 2006-07. The top

mobile phone operators in Pakistan are:

y Mobilink (Parent: Orascom Telecom Holding, Egypt)

y Ufone (Parent: PTCL (Etisalat), Pakistan/UAE)

y Telenor (Parent: Telenor, Norway)

y Warid (Parent: Abu Dhabi Group / SingTel, UAE/Singapore

y Zong (Parent: China Mobile, China)

Electricity

Installed capacity Electricity - total installed capacity: 19,505 MW (2007)

Electricity - Sources (2007)

y Fossil fuel - 12,580 MW - 65% of total

y Hydro - 6,463 MW - 33% of total

y Nuclear - 462 MW - 2% of total

Pakistan is facing a serious shortage of electricity. We should make more dams, nuclear plants,

and we have large coal reserves so we should depend on coal and finally we can make solar plants for

producing electricity.






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Exports

Pakistan's exports increased more than 100% from $7.5 billion in 1999 to stand at $18 billion in

the financial year 2007-2008. Pakistan

exports rice, furniture, cotton fiber, cement, tiles, marble, textiles, clothing, leather goods, sports goods,

surgical instruments, electrical appliances, software, carpets, rugs, ice cream, livestock

meat, chicken, powdered milk, wheat, seafood, vegetables, processed food items, Pakistani

assembled Suzukis (to Afghanistan and other countries), defense equipment, salt, marble,

onyx, engineering goods, and many other items. Pakistan now is being very well recognized for

producing and exporting cements in Asia and Mid-East.

Imports

Pakistan's imports stood at $30.54 billion in the financial year 2006-2007. Pakistan's single

largest import category is petroleum and petroleum products. Other imports include: industrial

machinery, construction machinery, trucks, automobiles, computers, computer parts, medicines,

pharmaceutical products, food items, civilian aircraft, defense equipment, iron, steel, toys, electronics,

and other consumer items.


The International Monetary Fund (IMF) is an organization of 186 countries, working to help the

development of global monetary cooperation, secure financial stability, facilitate international trade,

promote high employment and sustainable economic growth, and reduce poverty around the world.

The IMF works to help development of global growth and economic stability. It provides policy advice

and financing to members, in economic difficulties and also works with developing nations to help them

achieve macroeconomic stability and reduce poverty.

The IMF's fundamental mission is to help ensure stability in the international system. It does so

in three ways: keeping track of the global economy and the economies of member countries; lending to

countries with balance of payments difficulties; and giving practical help to members.

What Does International Monetary Fund - IMF Mean?

An international organization created for the purpose of:

1. Promoting global monetary and exchange stability.

2. Facilitating the expansion and balanced growth of international trade.

3. Assisting in the establishment of a multilateral system of payments for current

transactions.

The IMF plays three major roles in the global monetary system. The Fund surveys and

monitors economic and financial developments, lends funds to countries with balance-of-






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payment difficulties, and provides technical assistance and training for countries requesting it.

The IMF works to foster global growth and economic stability. It provides policy advice and

financing to members in economic difficulties and also works with developing nations to help

them achieve macroeconomic stability and reduce poverty. The IMF has a management team

and 17 departments that carry out its country, policy, analytical, and technical work. One

department is charged with managing the IMF's resources. The IMF is led by a Managing

Director, who is head of the staff and Chairman of the Executive Board. He is assisted by a First

Deputy Managing Director and two other Deputy Managing Directors. The Management team

oversees the work of the staff, and maintains high-level contacts with member governments,

the media, non-governmental organizations, think tanks, and other institutions. The IMF

currently employs about 2,400 staff, half of whom are economists. Most of them work at the

IMF's Washington, D.C., headquarters but a few serve in member countries around the world in

small IMF overseas offices or as resident representatives.

History of IMF

The International Monetary Fund was created in July 1945, originally with 45 members, with a

goal to stabilize exchange rates and assist the reconstruction of the world's international

payment system. Countries contributed to a pool which could be borrowed from, on a

temporary basis, by countries with payment imbalances (Condon, 2007). The IMF was

important when it was first created because it helped the world stabilize the economic system.The IMF works to improve the economies of its member countries. The IMF describes itself as

"an organization of 187 countries (as of July 2010), working to foster global monetary

cooperation, secure financial stability, facilitate international trade, promote high employment

and sustainable economic growth, and reduce poverty".

IMF Assistance to Pakistan

When IMF is advancing loans to their members, they not only analyze the economic

conditions of their members but the borrower will also have to frame its policies in the light of

directions given by IMF authorities.

The question in my mind is that when and how much was lent to Pakistan by IMF. And

what were the conditions imposed by IMF and what were the consequences of these loans.






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Pakistan joined IMF on 11th July, 1950. IMF is providing financial assistance to Pakistan

since 1952. According to 1977 statistics, Pakistan borrowed 1193 million dollars from IMF. Since

1980, the fund has made four main agreements with Pakistan as,

1. In November,1980

2. In December, 1988

3. In February, 1994

4. In July, 1997

1. The Agreement Of 1980

Under this agreement, IMF provided $1.7 billion for the period of 1980-83. The biggest

condition against this loan was to reduce the fiscal deficit. For this purpose they asked the

Government to increase the prices of public enterprises like fertilizers, cement, electricity, clean

water, educational and health services. The indirect taxes should increase and subsidies should

be withdrawn. But the budget deficit in 1980-81 was 5.8% of GDP went to 9.1% in 1985-86.

When Government of Pakistan again asked IMF for assistance, they showed dissatisfaction over

our efforts to reduce fiscal deficit. Accordingly, IMF prepared a package of policies for Pakistan

and chalked-out a time-table for the required changes. IMF set the following conditions for

Pakistan:

1. Rupee be devalued by 20% in terms of dollar

2. The imports be liberalized

3. Prices should increase and subsides be withdrawn

4. The custom duty on imports be decreased and sales and exercise duty be imposed

in the country

5. The industrial sector is liberalized from govt. controls through de-regulations and

privatization.


During the period of 1988-91, IMF gave the assistance of $900 million to Pakistan in order

to remove the deficit in BOP by redressing structural problems. According to this agreement:

1. The current account deficit of BOP which was 4% of GNP in 1987 was to be reduced to

3.3% of GNP in 1988-89, 2.7% in 1989-90, and 2.5% of GNP in 1990-91.






14

2. The foreign debt burden which was 31% of GNP in 1987 would be decreased to 25% in

19990-91.

3. The overall fiscal deficit of federal and provincial govt. which was 8.5% of GDP in 1986-

87 would be reduced to 4.8% of GDP in 1990-91.

4. The bank borrowings be reduced to 1% of GDP, while non-bank borrowings to 3.6% of

GDP.

5. The tax structure will be changed. The tax-base will be expanded and tax collection

system will be improved.

6. The system of general sales tax will be introduced.

7. The federal and provincial govt. will control their expenditures, while the price of social

services will be increased.

The main objective of this agreement was to reduce fiscal deficit. But the govt. failed to

meet these conditions. The budget deficit which was 8.7% of GDP in 1990-91 decreased to 8%

GDP in 1992-93. This means that the budget deficit could not be decrease appreciably.


The aim of this agreement was to reduce the financial deficit to 4% of GDP in 1994-95

and to 3% of GDP in 1995-96. But this agreement was renegotiated in December, 1995. As a

result, this target was set at 5% of GDP for 1994-95 and 4% for 1995-95. In this agreement IMF

stressed upon early conditions. As the price of gas, electricity, water, education and health

services should be increased.

The govt. of Pakistan made some efforts but little success was attained. The budget

deficit was 5.8% of GDP in 1994-95 and the target for 1995-96 was set at 5% of GDP. This led to

create a suspension in the attainment of loan of $1.4 billion could be raised. Then the govt. of

Pakistan failed to complete the conditions of IMF. Then the finance minister re-negotiated with

IMF. As a result, a new agreement took place between Pakistan and IMF where the fiscal deficit

was stipulated at 4% of GDP for 1996-97. Against it, the agreement was extended to

September, 1997, instead of February, 1997, while the amount of loan was raised from $250

million to $850 million.

Government of Pakistan neither reduces its expenditure nor raised tax revenues. The

IMF failed to learn any lesson from Pakistans experience. Government of Pakistans

dependence remains the same and efforts for new agreement started.






15


In 1997, IMF prepared a Medium Term Policy Framework Paper for the growth and the

stabilization of the economy of Pakistan. This period is of three years from 1st July, 1997 to 30

June, 2000. Pakistan demanded a lot of amount as financial aid but IMF sanctioned $500 million

on January 14, 1999. IMF suggested conditionality in order to bring structural changes in the

economy. The IMF issued a long structure. Government of Pakistan applied many suggestions

but still they failed to impose sales tax at retail level. The rupee was devalued in 1998. The

trade was liberalized. IMF has associated its tranche ($280 million) with the issue of IPPs. It

means that unless govt. of Pakistan settles the issue with IPPs, they will not get any loan from

IMF.

The Year 2003-04 Most projects with IMF were suspended because Pakistan could not complete their

conditions. But first time in 2004, Pakistan got the entire amount which was sanctioned by IMF

on PRGF which is $1.47 billion dollars.

Pakistan exports grew during this period. Although IMF and other financial institutions

of the world have shown satisfaction over macroeconomic stability of the country, yet WB is of

the view that Pakistan has to face the problem of internal and external loans, and it will have to

reduce them.

The Year 2008

As a result of elections of 18th February 2008, General Musharaf had to surrender and

Asif Ali Zardari became the president of Pakistan. At that time, the country was entrapped into

economic difficulties. Not only trade deficit had gone to $20 billion, but the fiscal deficit also

reached 4.7% of GDP. Foreign reserves had touched at lowest level.

The IMF's Executive Board has approved a $7.6 billion loan for Pakistan to support its

program to stabilize and rebuild the economy while expanding its social safety net to protect

the poor.

"The Government's program has two objectives: first, to restore overall economic

stability and confidence through a tightening of macroeconomic policies, and second, to do so

in a manner that ensures social stability and adequate support for the poor during the

adjustment process," said Juan Carlos Di Tata, the IMF mission chief to Pakistan.

Of the $7.6 billion loan, $3.1 billion will be made available by the IMF immediately to

strengthen the reserve position. And the regular monitoring of the economy by the IMF will






16

show how the macroeconomic objectives set by the Government are being met and whether

they need to be adjusted in the light of changing circumstances.

The Pakistan authorities have already taken some difficult steps to achieve these objectives:

energy subsidies have been cut and the interest rate has been increased to tighten monetary

policy. The authorities' program for the coming 24 months envisages a number of additional

steps:

y The fiscal deficit, excluding grants, will be brought to down from 7.4 percent of GDP in

2007/08 (starting July 1) to a more manageable 4.2 percent in 2008/09and 3.3 percent

in 2009/10in line with what it was three years ago. This fiscal adjustment will be

primarily achieved by phasing out energy subsidies and strengthening revenue

mobilization through tax policy and administration measures.

y The State Bank of Pakistan (SBP) will act on monetary policyto build its international

reserves, bring down inflation to 6 percent in 2010, and eliminate central bank financing

of the government. The program includes measures to improve monetary management

and enhance the SBP's bank resolution capacity, and avoid the use of public resources to

support the stock market.

y Expenditure on the social safety net will be increased to protect the poor through both

cash transfers and targeted electricity subsidies. The fiscal program for 2008/09

envisages an increase in spending on the social safety net of 0.6 percentage points of

GDP to 0.9 percent of GDP.

The Year 2009

The IMFs Executive Board agreed to increase lending to Pakistan by an extra $3.2 billion

to fund priority spending and help the government provide assistance to nearly three million

people displaced by military operations and a difficult security situation.

The Board reviewed progress under a $7.6 billion Stand-By Arrangement for Pakistan

that was agreed in November last year. During the August 7 discussion, Directors agreed to

increase lending by $3.2 billion, after a request from the Pakistan government to meet thecountrys increased balance of payments needs resulting from higher oil prices.

Effects of IMF Programs

IMF authorities think that the problem of Pakistan increased because of non-compliance

with the IMF programs. But it is not true. The IMF program has led to increase the charges of






17

gas, electricity, petrol and telephone. The imposition of sales tax and cut in tariff rates on the

advice of IMF has greatly affected the incomes of the poor and middle class earners. They have

widened the gaps between the incomes. The absolute poverty has increased which has

promoted unsocial activities. But this is not all because of IMF, we are responsible for it. If our

fiscal deficit and trade deficit decreases then we should not go to IMF for financing. But we

should be prepared to pay more in the form of taxes and reduces imports; particularly oil etc,

the dependence on IMF may go down.

World Bank Assistance to Pakistan

y They are supporting reforms at both the federal and provincial level.

For encouraging growth, investment, and employment generation,the Federal and

Provincial Governments have been implementing various reform programs. In June 2007, the

World Bank approved a US$350 million to support ongoing implementation of the

Government's Poverty Reduction Strategy. At the provincial level, the Bank approved

operations worth US$430 million for Punjab, Sindh and the North West Frontier Province to

help improve irrigation, education and human development indicators.

y They are working with Pakistan Poverty Alleviation Fund to bring differencein the lives of poor.

The World Bank funded Pakistan Poverty Alleviation Fund Project (PPAF) is designed toreduce poverty and empower the rural and urban poor in Pakistan through the provision of

resources and services to the poor, especially women. This is being achieved through an

integrated approach that includes building institutions of the poor and then providing them

with micro-credit loans; grants for small scale infrastructure projects; training and skill

development and social sector interventions. The program is impacting over 10 million people.

PPAF has issued 1.5 million micro-credit loans, (average loan-size US$ 150), benefiting nearly 9

million people.

y They are helping the victims of the Earthquake. The October 2005 earthquake in Pakistan destroyed or damaged around 575,000 rural

houses,and rendering over 3 million people without shelter in North West Frontier Province

(NWFP) and Azad Jammu and Kashmir (AJ&K). In response, the government created the

Earthquake Relief and Reconstruction Authority (ERRA) and launched an ambitious US$1.5

billion owner-driven rebuilding program - largely suited to the mainly rural affected population.

It is partially funded by World Bank.

y They are working with the government to improve education outcomes.






18

The World Bank is providing assistance to the Government of Pakistan in education reforms,

at both the national and the provincial level. This support is provided through development

policy operations with a strong focus on primary and secondary education. These programs

target increasing participation of girls and children from poorer houses. The World Bank is also

assisting the government in improving the quality and relevance of its higher education and

technical and vocational training system.They have a strong focus on improving the quality of

education.

y They are joining with international partners to help Pakistan fight polio.

They approved two projects US$42.71 million in 2003 and US $ 74.27 million in 2006 for

Pakistan to purchase the oral polio vaccine.The loan to Pakistan will help the countrys Polio

Eradication Initiative which aims to make Pakistan a Polio free country. Since 1997 the number

of polio cases has decreased from 1147 to 31 in 2007. The first project has been successfully

completed.

y They are focusing on un-served and underserved low-income communities.

In NWFP and AJK, Bank projects are supporting delivery of cost effective and sustainable

community development schemes, and basic infrastructure and services.To achieve this, the

role and capabilities of local governments at the district and lower levels have been

strengthened. In AJ

K, the projec

t has already reac

hed a population of 893,000 against theoriginal target of 830,000, through 320 CBOs. Out of the 54 Tehsil Municipal Authorities (TMA)

in NWFP, 50 are now participating in the Project.

y They are helping Pakistan prevent the spread of HIV/AIDS.

The key challenge facing the country is to expand and improve quality of HIV preventive

services to vulnerable groups that are most at risk of contracting and transmitting the disease.

These include sex workers and injecting drug users. The Bank is supporting the Government

efforts to control AIDS through the HIV/AIDS Prevention Project designed to prevent the

disease from becoming established in these populations, while at the same time working toprotect these groups from stigmatization. A key focus of the project is delivery of HIV

preventive services to high risk populations through public-private partnerships. A total of 17

service delivery packages for injecting drug users (IDUs), sex workers, truckers and jail inmates

have been contracted out to NGOs by the National and Provincial AIDS Control Programs

covering most major cities across the country.






y They are helping to µimprove trade flows¶ and µlower transit costs andtimes¶.

In 2005, the Government of Pakistan (GOP) launched major initiatives around the National

Trade Corridor Improvement Program (NTCIP) to reduce the cost of trade and transport

logistics and bring services' quality to international standards in order to reduce the cost of

doing business in Pakistan and ultimately enhance competitiveness and industrialization.

y They rely on local expertise.

They rely mostly on local expertise. As 90% of their staff is local who are working for

Pakistan. While a large part of World Banks value is its global experience and expertise, local

knowledge is indispensable to effective development.

y Assistance:

During the past four years from FY 2006 - 2009, the Bank has approved 30 projects of total

US$3.7 billion for Pakistan.

The World Bank is currently working with the Government of Pakistan to prepare a new

Country Assistance Strategy (CAS) for the period FY2010-2013.

Suggestion

Pakistan is a country having many natural resources in it. We should be self-sufficient,

we should rely on ourselves. Sincerity is the key to success so we should be sincere with our

country and work hard for its development. If we have financial crisis, we should not beg for aid

from IMF and World Bank or any other organization, but we can handle the problem by relying

on ourselves. We should pay more taxes and we should try to remove corruption from every

department of our beloved homeland. The government should make such opportunities that

foreign investment is attracted towards us. By applying these things we dont need to dependon IMF and World Bank.

khalid assignment

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