Pakistan will get a whopping $6.2 billion aid from the World Bank in the next three years to come out of the current economic crisis, reduce poverty and improve the fragile security situation in the country.
"This strategy recognises that to steer Pakistan back on a path of broad-based growth, create jobs, and reduce poverty, a prolonged period of macroeconomic stability, financial discipline and sound policies is required," World Bank Country Director for Pakistan Rachid Benmessaoud said. Benmessaoud's remark came after a meeting of the World Bank Board of Directors to discuss a new Country Partnership Strategy (CPS) for Pakistan.
"The World Bank Group will therefore focus on the achievement of those outcomes that have the potential to be truly transformational. This means successfully addressing tax policy and administration and expanding power provisions," he said.
The goal of the CPS which is in direct support of Pakistan's own Poverty Reduction Strategy is to help steer its economy back onto a path of high growth by addressing the country's key long-term constraints to growth: weak revenue mobilization, unreliable energy supply, and a fragile security situation, the bank said.
Noting that the persistence of conflict in Khyber- Pakhtunkhwa (KP) and Federally Administered Tribal Areas poses a threat to some of the most vulnerable and marginalized populations in Pakistan, while also challenging economic stability across the country, the Bank said the CPS seeks to help Pakistan cope with the consequences of conflict while reducing the prospects of future conflicts.
Support under the Bank's strategy will likely include investment for agricultural/livestock-linked employment and livelihoods, expansion of general and technical/vocational education, investment in energy and transport, and social protection.
The Bank will also administer a Multi Donor Trust Fund (MDTF) that will support a comprehensive reconstruction and development strategy in conflict-affected areas of the country, it said.
"This strategy recognises the challenges and uncertainties facing Pakistan, and allows us to be flexible and quickly adapt to emerging challenges and opportunities," said Benmessaoud.
"In addition, the Bank will continue financing programs with proven track records, notably in education and safety nets, as well as priority areas in the health sector, particularly maternal and child nutrition," he said.
The International Finance Corporation, the Bank Group's private sector arm, intends to invest up to $1.5 billion during the same period. "Pakistan has a dynamic private sector, whose growth is still hampered by constraints in infrastructure support," said Dimitris Tsitsiragos, Regional Director for IFC.