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Pakistan (Poverty Reduction Strategy)

Volume 401: debated on Tuesday 18 March 2003

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:We are committed to supporting Pakistan's economic and social reforms. The ambition is to eliminate poverty in Pakistan that currently condemns over 40 million of its people to live on less than $1 per day.In October 2001, I pledged £105 million to Pakistan over three years (to December 2004) to support Pakistan's Poverty Reduction Strategy (PRS). Payments under this pledge are linked to the IMF reviews under the Poverty Reduction and Growth Facility (PRGF) and to the Government of Pakistan's commitment to poverty reduction.The first tranche of £20 million against this pledge was disbursed in March 2002, as notified to Parliament. Following Pakistan's elections, and in view of continued progress against the PRGF, we plan to disburse a further £85 million between now and March 2005, including a second tranche of £20 million to be disbursed this month. Up to £55 million will be provided as support to the PRGF, and £30 million will be for the National Health Facility (NHF). Disbursements will be conditional on continued and concerted progress with the PRS and with the implementation of the NHF.UK financial aid supports additional spending on poverty reduction in Pakistan, particularly in health and education. The Government of Pakistan, which is committed to sustained reforms in the health and education sectors, has agreed to increase public spending in those sectors by 20 per cent. in 2002–03 as against a general increase in public spending of 8 per cent. UK financial support underpins this trend.PRS support will be disbursed against Pakistan's debt payments to the IMF, World Bank and the ADB, as this is the most efficient method of disbursing our financial aid.