Good news for the nation. The World Bank has offered $500 million to the government to stimulate economic growth in the country and it is a bad news in the sense that loan will burden the nation with another half billion dollars without achieving any remarkable growth at the end.
Pakistan and the World Bank have signed the Second Fiscally Sustainable and Inclusive Growth — Development Policy Credit — of $500 million to support the government efforts to reinvigorate growth and stabilize the economy. According to newspaper reports, Pakistan’s ambassador to the United States Jalil Abbas Jilani and the World Bank Vice President for the South Asian region Annette Dixon, signed the agreement in Washington. Another $500 million loan is also expected in September this year to introduce reforms in the energy sector. Fortunately, the international lenders have never refused to extend loans to Pakistan, but the governments in the office always took the extension of loans as a pride. Unfortunately, the loan amount adds to the government liabilities and burden on the national economy. During the signing ceremony, the ambassador said that the offering of loan reflects the growing confidence of International donor agencies in Pakistan’s economy and they are satisfied with the transparent use of funds by the government to stabilize the economy. The main objective of the credit is to increase development in private and financial sector. However, the credit will also be used to create jobs and accelerate economic growth. The World Bank had provided $1.7 billion to Pakistan last year to fund 4,500 megawatt hydropower project in Dasu and an Irrigation projects in Sindh.
The government has launched a comprehensive programme to stabilize the economy and reduce energy shortages by focusing on various power projects. But there is also need to revitalize the economy apart from achieving a stability level. On the academic side, Pakistan has one of the lowest growth rates in the region and on the practical side; the country’s economy is on the right track after reforms in economic and social sectors. The stock exchange is heading toward becoming an emerging market from frontier market, foreign exchange reserves are at a stable point and rupee is struggling to intact its value against dollar. The rating agency Standard and Poor’s has recently revised Pakistan’s long-term B minus credit rating to positive from stable. The financial managers have to look inward rather than outward. There is lot of potential in the local industry and the government can earn precious foreign exchange by stimulating the growth and tax relief.
