World Bank president hails Pakistan

Wolfensohn said he was impressed by open debate

By Susannah Price BBC correspondent in Islamabad

The president of the World Bank, James Wolfensohn, has praised Pakistan's government for recognising corruption as a problem and trying to tackle it.

Government critics say foreign investors are staying away

Mr Wolfensohn, who has been visiting Pakistan and Afghanistan, also highlighted the importance of reforms in education, health and other areas.

He said he had seen much progress in poverty reduction in Pakistan, and sounded pleased at future reform plans, particularly in education and women's empowerment.

Mr Wolfensohn said he was particularly impressed by the open debate within Pakistan's government institutions on the problem of corruption.

But he added it was important for Pakistani citizens to realise they would have to change their culture as well.

Economic hopes

Mr Wolfensohn would not be drawn into discussing the controversial referendum last month in which, according to official figures, 98 percent of voters said they wanted the military leader, president Musharraf, to stay in power.

He told journalists he had to deal with what he saw in front of him, and it was up to the people to decide who should run them.

Many of the government's critics point out unemployment and prices are continuing to rise, and foreign investors are still staying away.

Mr Wolfensohn said Pakistan had been affected by the 11 September attacks, drought, and many other factors, and he hoped economic growth would rise.

When asked about the build-up of troops and rising tension on the border between Pakistan and India, he said any form of military confrontation inhibited a country's ability to deal with poverty.

The World Bank president said he would be delighted to ask the two countries to withdraw their forces, but doubted anyone would listen to him.