ISLAMABAD, Feb 7: The World Bank President, James D. Wolfensohn, assured Islamabad on Monday that a neutral expert would be appointed soon to resolve Pakistan-India differences over the Baglihar dam following completion of necessary steps.

The assurance to this effect was made by the bank chief to President Gen Pervez Musharraf and Prime Minister Shaukat Aziz here at a meeting.

An official source said President Musharraf raised the Baglihar dam question with the visiting bank chief and told him that it was a crucial issue for Pakistan.

Mr Wolfensohn said the World Bank was required under the Indus Waters Treaty 1960 to complete certain steps before the appointment of a neutral expert and the bank would follow procedural requirements.

He also assured the president that there would be no delay in this respect, the source said.

President Musharraf conferred the award of Hilal-i-Pakistan on the Mr Wolfensohn in recognition of his all-round attainments, outstanding leadership and the bank's invaluable support to Pakistan's economic growth, poverty alleviation and good governance.

An official statement said the World Bank chief discussed the bank's continued cooperation and support for Pakistan's sustained economic growth.

Mr Wolfensohn appreciated the economic strides Pakistan had made in recent years in the wake of reforms and economic and fiscal stability, it said.

Meanwhile, Adviser to the Prime Minister on Finance Dr Salman Shah assured the bank chief that Pakistan still faced corruption-related problems at the middle level although higher level corruption had been eliminated.

The official statement said replying to a question about corruption in Pakistan, the adviser pointed out that corruption had been eliminated at the higher level but there were middle level problems, which the government was trying to overcome by way of institutional strengthening and curtailment of discretionary powers of police and tax officials.

The adviser apprised Mr Wolfensohn of the performance of the economy in the light of various reforms introduced by the government in fiscal, financial, administrative, institutional, agricultural, banking and governance areas.

The poverty reduction strategy of the government was also discussed. It was observed that the reforms had started delivering the desired dividends and the macro-economics indicators were gradually moving upwards.

The adviser asked the World Bank to support Pakistan in the development of infrastructure needs of the fast growing economy, including the energy sector.

He also asked the bank to help Pakistan in developing and implementing a private sector development strategy that would enable the private sector to efficiently compete in the world markets and ensure achievement of the goal of seven to eight per cent GDP growth targets set by the prime minister.

Briefing the delegation about the significant progress, Dr Salman Shah said Pakistan had overcome the macro-economic challenges and its policies of privatization, deregulation and liberalization had worked very well.

All the major banks had been privatized, 80 per cent of the banks were now with the private sector and the State Bank of Pakistan was now fully autonomous, he said.

Mr Shah said the GDP and flow of FDI in Pakistan were maintaining an upward trend, budgetary position and tax collection had improved and there was a visible decline in public debt.