KARACHI: The World Bank on Friday approved $100 million in loan to create jobopportunities, particularly for women, in Pakistanafter the country again became eligible to its IBRD lending facility.
The World Bank, in a statement, said on Friday the International Bank for Reconstruction and Development (IBRD) credit line is especially for the Punjab where one million newcomers enter the labour force every year.
“The Punjab government’s jobs and competitiveness program will undertake reforms to reduce the cost and risks of doing business and improve laws affecting labour, in particular to encourage women’s employment,” the bank said.
The loan will be the first after Pakistan became eligible again to the IBRD facility after jacking up its foreign exchange reserves to $15 billion at the fag-end of 2014.
Low-income countries don’t qualify for the IBRD credit line because of their weak creditworthiness. Pakistan was expelled from the list of qualifying economies when the central bank’s reserves hit the 12-year low of $3.5 billion three years ago.
The bank said the program will improve the investment climate in the Punjab and create more and better jobs, “thus contributing to reducing unemployment and poverty in Pakistan.”
The loan, sanctioned at market rates, has a variable spread with a maturity of 18.5 years, including a grace period of 4.5 years.
The World Bank suggested anomalies in the legal framework of the province. “Women’s labour force participation will be increased by reforming discriminatory policies, for example the Factory Act, which restricts women’s employment in manufacturing,” it said. “Additional support services in industrial estates, such as daycare and transport facilities for working women, are also planned.”
The IBRD loan will promote private sector-led development by making it easier to register a new business, getting construction permits, property registration and contract enforcement.
“It is extremely important to increase domestic and foreign investment to ensure there are more and better jobs especially for youth and women,” the statement quoted Illango Patchamuthu, World Bank Country Director for Pakistan, as saying.
The program aims to build the capacity and systems for supporting infrastructure such as industrial estates and central effluent treatment plants through public-private partnerships. It will also support industrial clusters with high growth potential.
“Entrepreneurs and workers will both benefit from increased social and environmental compliance as well as technological upgrading which will increase productivity as well as market access to global buyers,” Vincent Palmade, World Bank Co-Task Team Leader of the Program said.