The World Bank itself has been asking for more financial discipline and prudent management on the part of successive governments in Pakistan. The IFC offer has been welcomed by the Mohib Groups directors, who have been declared "persona non grata" by the domestic banking industry. The IFC, which extended $7.1 million in finance to a $9.2 million worth project of the group in 1994, has asked the directors to restart operations.

Asif Saigol, one of the directors, confirmed that the IFC had given the group the go-ahead and promised "more financing" if required. He said the machinery for the unit was lying at Karachi Port. It would be collected and the plant started as soon as possible, he said, adding that creditors should know the unit could not pay back its dues unless it bagan production.

The IFC, in its latest annual report, said, "In Pakistan, the IFC devoted attention to the existing clients who suffered the effects of the country's economic crisis, particularly the textile, power and cement industries which attempted to restructure their projects.

Still, not even IFC help could allay investor caution resulting from Pakistan's nuclear testing and slow economic growth," the report said. The IFC was optimistic about the future of the country, saying it expected to resume investment activities as the Pakistani economy improved. Pervez Hanif, the former president of the Lahore Chamber of Commerce and Industry (LCCI), felt the present situation was ironical.

When the World Bank itself felt that the return of extended amounts is unfeasible under the existing circumstances, how could it ask for the recovery of loans by domestic banks at any cost, he wondered. Hanif, however, said the economy can only improve if industry runs and contributes to the national exchequer in the form of taxes and other heads. Closure or winding up of industrial units was no way to revive the economy, he added.

(IANS)