He made this observation when a journalist asked at a press conference here if India's "comparative stability" in the face of the Asian economic crisis due to its conservative approach could be an argument against liberalisation.

Wolfensohn remarked: "Well, it could be, but then it could not be. I think India has done a pretty good job in terms of running the country."

He, however, said there were a lot of factors that made this performance possible. These included a fairly strong education campaign, a shift to high-tech exports, development of new industries and delegation of powers to the states, which he felt had gone very well overall.

Another factor he listed for India's good performance was the fact that it had not been overly exposed in terms of global financialflows. "It has not been a place for quick money in terms of trading. So I think you have been protected from some of the worst impacts of global flows," he remarked.

At the same time, he pointed out India had been able to attract "pretty good investments. So, I think, India has done a pretty good job, but I wouldn't want to give you a blanket headline on whether that is a reason for one course or another. I think India has chosen a very good course and so far has done very well."

About the situation in Pakistan, where several billion dollars worth of some World Bank-supported infrastructure projects were in "deep" trouble, Wolfensohn said, "I understand the Bank is helping out particularly in relation to the Hub River project, trying to reconcile the differences between the government and the project operators."

The Bank chief recalled a meeting he had last week with Pakistani prime minister Nawaz Sharif in New York when the latter came to address the UN general assembly.

Wolfensohn said theydiscussed two issues: The economic constraints which the US had placed on India and Pakistan after their May nuclear tests and their impact on Bank lending to the countries. The issue, pertaining to lending in general, was now being considered in the US Congress, he added.

He said the World Bank had been approving loans for development projects dealing with humanitarian, cultural, social and environmental problems. But, in terms of brand new projects, there would be some limitation on funding by the Bank until Congress relaxed the sanctions.

Wolfensohn said his lending agency was continuing to work with both Pakistan and India and "the principal reason is that these are the two of the largest sources of poverty in the world." The population living below the poverty line in India, he said, was 36 per cent and in Pakistan it was at least 16 per cent, though he suspected it was much higher.

"But given our focus on environment and poverty, we have to try and find ways of working with them (India andPakistan)," he said.

Wolfensohn also referred to problems in Pakistan's power structure, including high tariff and high incidence of line losses and difficulties faced by independent power producers. There were more than 40 per cent line losses in Pakistan, basically due to power theft. "It is a good way to get electricity. You throw a line up and you get it down to you and you don't pay for it, or some people don't pay," he added.

Wolfensohn also spoke of the problem of corruption in Pakistan -- either at the time when the contracts were entered into or continuing corruption.

"We have told the Pakistan government that we are very happy to cooperate with them. We are quite happy to separate the corruption issue. We are proceeding on it vigorously in trying to support the Pakistan government, but we are really pretty much dependent on them because they are running the show," he added.

Discussing the performance of the Bank and its affiliates in fiscal 1998, which ended on June 30, he said the Bank andits concessionary lending agency, the International Development Association (IDA), had extended loans totalling $28.6 billion in commitments. The International Finance Corporation (IFC), which helps the private sector, had a big year, doing about $2.5 billion for its own act and roughly an equivalent amount for others, totalling $5 billion.

Wolfensohn held the press conference in connection with the annual meetings of the World Bank and International Monetary Fund (IMF) beginning here next week.

Earlier, IMF managing director Michel Camdessus gave the agenda of the interim committee, the policy-making body of the Fund, meeting here next Sunday.