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Another World Bank loan

Another World Bank loan

Pakistan is ready to receive another loan of $1.02 billion from the World Bank to carryout economic reforms in the country and deal with natural disasters in Sindh. According to the latest reports, at least 40 percent or 60 million population of the country lives below the poverty line and most of which is concentrated in the tribal areas and Balochistan. In line with Competitiveness and Growth Development Policy Financing, the bank will support the government efforts to raise economic growth and encourage investment to ensure reduction in poverty and build shared prosperity among less privileged classes of society. At least $920 million, which included a credit of $500 million and a guarantee of $420 million, will be utilized to improve business climate and strengthen fiscal discipline in the country. The people of the tribal areas still live in a set up devised by the British Raj to create a buffer with Afghanistan.

According to Illango Patchamuthu, the World Bank Country Director for Pakistan, Islamabad emerges successful in stabilising the economy, initiating reforms for mobilisation of revenues and persuading the private sector to take part in the economic activities. After achieving the financial stability, there is a need to ensure speedy implementation of the economic reforms, create jobs and alleviate poverty. The investment climate in the country is very poor as compared to other countries in the region and it needs to be improved. According to experts, the bank guarantee of $420 million will help the country get access to the international market for budgetary supports and create conditions for investment in the private sector. The loan will help implement reforms and accelerate growth in the country which is facing multifarious problems. The problem is how the government will be able to ensure transparency in the use of loan amount. The past experiencess how that part of the loan amounts is syphoned off one way or the other and no one cares in this country. If economy is rising, the rate of poverty is also rising and the government must use the latest loan amount to improve the living conditions of the people.

According to experts, the country is likely to receive more rains this year. At least $100 million from the World Bank loan will be used to fight risks of floods and droughts in Sindh. The parts of Punjab and Sindh are facing acute water shortage, but risks of flood are also high during monsoon. The uneven water management also resulted in slow economic activities in the affected areas and loan amount should be prudently utilized to save five million people from disaster.