World Bank loan

Published
0

THAT the World Bank will give $20bn to Pakistan in the next 10 years to address some of the country’s most acute development challenges, including but not limited to stunting, learning poverty, climate change, and a collapsing energy sector, is a promising development for our struggling economy. The funding, says the bank, “aims to support inclusive and sustainable development through a strong focus on building human capital; fostering durable private sector growth; and building economic, social and environmental resilience in the country”. However, the lending, which includes $14bn in concessional debt, will start from next year and likely depend on the execution of the IMF-mandated reforms to correct structural imbalances in the economy.

The promised loan is part of the multilateral lender’s Country Partnership Framework, a document that sees the growing militant violence in Balochistan and KP as a major risk to investment under this package in the targeted areas of the economy in those provinces. The bank may not have directly mentioned unresolved political tensions as a risk to the execution and outcomes of its future interventions in the country in so many words, but does appear concerned about it. “The economy has been subject to successive boom-and-bust cycles driven by structural imbalances and unsustainable fiscal policies, which invariably resulted in ... short-lived reform episodes. The most recent [reform] cycle was exacerbated by political instability... .” the CPF document reads. The new funding package is a major opportunity for Pakistan to “durably take another course” and catch up with its peers in key development metrics by investing in health, education, water and sanitation, and other public services. Nevertheless, success in this endeavour will depend on removal of the causes of low investment and growth: shifting macroeconomic policies fuelled by a volatile polity, a complex and inconsistent business environment, and distortive trade and investment policies that benefit few and limit productivity and exports. The question is, do our politicians and policymakers have the will and patience to undertake the required reforms? Pakistanis have suffered a lot in the last few years and paid a huge price for the failures of our ruling elite. Failure to build on the hard-won, and still fragile economic stability will mean that despite going through long and harsh economic measures, the people would have suffered for nothing.

Published in Dawn, January 17th, 2025

Opinion

Editorial

Fixing bond markets
Updated 01 Oct, 2026

Fixing bond markets

Pension funds, insurance companies, mutual funds, retail investors, and eventually, foreign investors must become bigger participants in the market.
Call centre rackets
01 Oct, 2026

Call centre rackets

A NUMBER of recent raids conducted by the authorities in different cities point to the growing threat fraudulent ...
Homeward bound
01 Oct, 2026

Homeward bound

FIVE months after Somali pirates captured an oil tanker carrying a 19-member multinational crew, Somali maritime...
Kashmir unresolved
Updated 30 Sep, 2026

Kashmir unresolved

The just solution lies in India addressing the issue through a trilateral dialogue involving the legitimate representatives of the Kashmiri people and Pakistan.
Water shortage
30 Sep, 2026

Water shortage

THAT the country is entering the Rabi season with an anticipated water shortage of nearly 25pc, the lowest carryover...
Young hearts
30 Sep, 2026

Young hearts

THE observance may have passed, but the message of World Heart Day should not fade with it. The occasion is a useful...