By IRNA,
Islamabad : The World Bank has promised to provide $1.4 billion aid to Pakistan in the current year to overcome its ongoing economic crises.
The amount includes $600 million for investment and $800 million for budget support as macroeconomic stabilization programme moves forward.
The amount would be used for fast track investment projects and budgetary lending.
The economy of Pakistan has been facing many serious challenges such as trade deficits, galloping inflation, increase in the level of poverty, power outages, water shortages, closure of industries and food insecurity.
Pakistan receives economic aid from several sources as loans and grants. The International Monetary Fund (IMF), World Bank (WB), Asian Development Bank (ADB), etc provides long term loans to Pakistan.
Pakistan also receives bilateral aid from developed and oil-rich countries.
The recent offer was first made by World Bank President Robert Zoellick at a meeting with President Asif Ali Zardari last month in New York. The offer was reiterated as Pakistan ‘s Adviser on Finance Shaukat Tareen met with the Bank’s Managing Director Ms. Ngozi Okonjo-Iweala.
Shaukat Tareen briefed his interlocutors about the current economic challenges and blow impact of the war on terrorism that Pakistan being the Front Line State has to face on its economy.
He also highlighted the impact of global financial crisis on developing countries, particularly on those intending to access capital market but cannot do so because of liquidity crunch.
The World Bank, DFID, US and German officials appreciated the courageous measures taken by Pakistan to correct the macroeconomic imbalances and reaffirmed their commitment to support the country in meeting its economic challenges and establishing safety nets for the poor.
Friends of Pakistan group has already had pledged financial support to it at a time when the country is under the grip of bomb blasts and suicide attacks.
The group in its first meeting in New York assured Pakistan of its support in fight against terrorism and to help Pakistan in facing formidable challenges.
The Friends of Pakistan is a changed version of Aid Consortium of Pakistan as three new countries UAE, Saudi Arabia and Chin have been inducted in the Friends of Pakistan along with G-7 countries.
Pakistan economic indicators are worsening. It is estimated that alone remittances and loans would not support economic in the long term due to prolonged negative indicators of macro economy.
After the monetary crisis in the United States and Europe, central banks and financial institutions of Asian countries are also going through the same crisis.
It is likely that the economic crisis, which is destroying the US financial institutions, is now gradually taking into its grip the stock markets and financial institutions of other countries also.