ISLAMABAD: The World Bank has endorsed a proposed lending programme of up to $6.2 billion for fiscal years 2010-2013 for Pakistan. The funds will primarily be used for poverty reduction.
On Friday, the World Bank’s Board of Executive Directors discussed a new Country Partnership Strategy (CPS) for Pakistan.
“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 issues to growth,” the bank said.
The programme will help address constraints like “weak revenue mobilisation, unreliable energy supply, and a fragile security situation”.
The bank also pledged to continue support for the education and health systems, reinforce safety net systems, and enhance the earning capacity of the poor and vulnerable.
Throughout its history, Pakistan has seen cycles of high growth interrupted by shocks and crises, said Rachid Benmessaoud, the World Bank country director for Pakistan.
A new series of Poverty Reduction Support Credits (PRSC) is proposed to be the bank’s primary lending instrument to support strengthening of macroeconomic management at the federal level.
Energy sector: The energy sector faces many challenges including significant supply shortages and financial uncertainty, the bank added. The bank will now concentrate its support on helping Pakistan exploit its considerable hydropower potential, improve the efficiency of utilisation of developed hydropower capacity and natural gas resources, and reduce energy losses.
The International Finance Corporation (IFC), the WB 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, the IFC regional director. “IFC will continue to increase investing in viable private sector projects in financial markets, infrastructure, health and education and agribusiness.”