US$ 500 million IDA Development Policy Credit (DPC) Financing Agreement signed

Government of Pakistan and World Bank signed Financing Agreement of US$ 500 million IDA Development Policy Credit for “Competitiveness and Growth” here on Thursday.

Mr. Tariq Bajwa, Secretary Economic Affairs Division signed the agreement on behalf of Government of Pakistan while Mr. Anthony Cholst, Acting Country Director, signed on behalf of the World Bank.

Finance Minister Senator Mohammad Ishaq Dar who witnessed the ceremony, welcomed signing of the agreement and said that the Government had embarked upon the much needed economic structural reforms three years ago and had made substantial progress in this regard.

Referring to the Competitiveness and Growth DPC, he said that the financial support provided by the World Bank, is meant to improve the business environment and enhance fiscal management; it focuses on simplification and streamlining of the payment of taxes; improvement in governance and transparency of policies to attract private sector investment; and remove entry barriers in the insurance sector. In terms of Enhancing Fiscal Management the focus is on withdrawal of discriminatory concessions granted through SROs in the past; improving debt management; and strengthening of social safety net programs, Finance Minister added.

He said that the Ministry of Finance and the World Bank team had been working together on the DPC for quite sometime and most of the agreed reform measures had already been completed. These reforms would enhance the competitiveness and promote ease of doing business in the country.

Mr. Anthony Cholst in his remarks on the occasion congratulated the Government of Pakistan for making significant progress in stabilizing the economy and initiating reforms for greater revenue mobilization and private sector growth.

“I would like to particularly acknowledge and appreciate the efforts of Minister Dar and the economic leadership team for their efforts in continuing reform momentum”, Cholst said. This operation recognizes Pakistan’s stepped up reform efforts in the business environment, revenue generation, State Owned Enterprises, debt management and making public spending more pro-poor, he added.

The World Bank Board which met on 20th June, lauded Pakistan for pursuing a reform agenda and supported continuation of support to the Government in its endeavours. Board members appreciated the progress made in the past three years by the Government and highlighted the financial innovation presented by this operation through combining IDA credit and IBRD Policy Based Guarantee.