Press Release No. <a name="P16_75"></a>04/46

The Executive Board of the International Monetary Fund (IMF) reviewed today the Joint Staff Assessment of Pakistan's Poverty Reduction Strategy Paper (PRSP) that was conducted by the staffs of the IMF and World Bank.

Pakistan's PRSP was published on February 9, 2004.

After the Executive Board's discussion of the Joint Assessment of Pakistan's PRSP, Agustín Carstens, Deputy Managing Director and Acting Chairman, issued the following statement:

"Pakistan's Poverty Reduction Strategy Paper provides a comprehensive and coherent framework for poverty reduction in Pakistan. The PRSP appropriately puts poverty reduction at the top of the policy agenda. A broad participatory approach, which was already initiated during the preparation of the Interim-PRSP, has underpinned the development of the full PRSP.

"The PRSP builds on the strategy articulated in the Interim-PRSP and on the progress that has been made in implementing that strategy. The PRSP recognizes that economic growth is a necessary but not a sufficient condition to reduce poverty. It therefore makes a special effort to ensure that the benefits of economic growth are shared by all, by emphasizing greater social inclusion—including through human development and devolution—increasing access to physical and financial resources by the poor, and targeting the poor and vulnerable through safety net programs. The medium-term expenditure framework and the structural reform agenda reflect the priorities and needs of the country as it strives to reach the Millennium Development Goals.

"In moving forward, several challenges will need to be addressed. The cross-cutting challenge will be to prepare an explicit and prioritized roadmap of reforms and policy actions envisaged over the medium-term, with a clear time-line. Specific policy challenges include strengthening the public finances and the financial performance of the power sector specifically to increase resources for social expenditures, and successfully implementing administrative and fiscal devolution, including capacity-building at lower tiers of government to enhance the effectiveness of public service delivery. It would also be important to introduce a broader rural strategy for improving agricultural productivity, expanding non-farm rural employment and reducing rural poverty, and to finalize institutional arrangements for monitoring social indicators and providing timely feedback into the policy process," Mr. Carstens said.