PM hopes inflows will help Pakistan chart new course
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• Premier meets World Bank delegation, asserts institutional and economic reforms heading in right direction
• Says $20bn will be invested in private sector under IFC, equal amount to be spent on development
ISLAMABAD: Prime Minister Shehbaz Sharif on Monday welcomed a $40 billion “investment” by the World Bank and hoped that the inflow will open “a new chapter” in various sectors, including health, education, and youth development.
According to the statement from Prime Minister House, PM Shehbaz welcomed a delegation of nine World Bank executive directors in Islamabad. “Under the World Bank’s recent Country Partnership Framework, an investment of $40bn will be made in Pakistan, which is welcome,” the statement quoted the prime minister as saying.
“With the support of the World Bank, several major projects were built in Pakistan for national development and reconstruction, which played an important role in Pakistan’s development,” he added.
Last month, an official statement announced that the World Bank pledged to provide $20bn to Pakistan under a 10-year country partnership framework (CPF) to support inclusive and sustainable development within the country.
The PM further said that Pakistan benefited from its partnership with the World Bank, as it provided support to the country in the aftermath of the devastating floods of 2022 and supported multiple development projects.
PM Shehbaz said that $20bn will be invested into Pakistan’s private sector under the International Finance Corporation, while $20bn will be used to open “a new chapter of development …in various sectors, including health, education, youth development and others”.
“I am grateful for the World Bank’s confidence in our government’s policies,” the PM said, adding that “The country’s programme for institution and economic reform is progressing swiftly, while the economy is heading in the right direction.”
The delegation, as per the statement, appreciated Pakistan’s reform programme and noted that it was yielding positive results. “Pakistan’s journey towards economic reform is progressing swiftly under the leadership of the prime minister,” the World Bank delegation was quoted as saying. The statement added that the delegation will discuss investments and economic development projects during their visit.
In a recent interview, Najy Benhassine, World Bank country manager for Pakistan, had described the CPF as “not a loan program alone” but rather a “comprehensive engagement”.
The CPF is designed as a long-term approach with the flexibility to adjust to evolving circumstances and shocks.
Although the size and ambition of World Bank Group funding for the CPF is estimated at around $30-40bn over 10 years, project documents suggest that the actual lending envelope for FY26-35 will total around $20bn.
Of this, around $14bn will come from International Development Association (IDA) funding. The bank has recently achieved the replenishment target of $100bn under IDA21, and the $14bn figure is based on the assumption that the funding available in the coming cycles remains constant in real terms and about the average of IDA18, IDA19, and IDA20 amounts.
These are the funds available to the association, committed by donors who meet every three years to replenish IDA resources.
A second component derives from International Bank for Reconstruction and Development (IBRD) funds, which are estimated at around $6bn.
These depend on country demands, overall macroeconomic performance, global economic/financial developments that affect IBRD’s financial capacity, and demands by other borrowers.
The IBRD is the lending arm of the World Bank Group and is one of the two international financial institutions established by the Bretton Woods agreement after the Second World War.
According to the bank, IBRD has provided over $48.3bn in assistance since 1950, and the bank’s current portfolio includes 106 projects and a total commitment of $17bn in Pakistan.
According to the statement, the PM on Monday apprised the delegation about the progress of economic reforms, stating that there were positive developments.
“Our exports and remittances are increasing,” he said. “Investment in manufacturing has risen due to low interest rates and to control corruption, work on digitisation in the FBR (Federal Board of Revenue) is continuing on a priority basis.”
PM Shehbaz said in the power sector, the country has experienced an “uninterrupted power supply” alongside a deficit reduction.
“Through SIFC [Special Investment Facilitation Council], we have created an attractive environment for investors. This unique system involves all stakeholders,” he added.
Nadra DEEP initiatives
In a separate development, the delegation also expressed optimism on the progress of the Digital Economy Enhancement Project (DEEP) during their visit to the Nadra Headquarters.
Funded by the World Bank, the DEEP initiative aims to accelerate digitisation of Pakistan’s economy. It will also strengthen digital identity systems, promote financial inclusion and enhance citizens’ access to essential government services through National Data Exchange Layer portals.
Iftikhar A. Khan also contributed to this report
Published in Dawn, February 18th, 2025
