World Bank approves $500mln loan for economic reforms

ISLAMABAD: The World Bank has approved $500 million loan for Pakistan to carry out economic structural reforms, a statement said on Wednesday.

“The World Bank Board of Executive Directors in its meeting held on June 20, 2016 at Washington DC has approved an amount of $500 million IDA Development Policy Credit (DPC),” it added. “Competitiveness and Growth Development Policy Financing and IBRD Policy based guarantee of $420 to support origination of commercial financing up to $1 billion.”

The International Development Association (IDA) is the part of the World Bank that helps the world’s poorest countries. Overseen by 173 shareholder nations, IDA aims to reduce poverty by providing loans or credits and grants for programs that boost economic growth, reduce inequalities and improve people’s living conditions.

IDA complements the World Bank’s original lending arm—the International Bank for Reconstruction and Development (IBRD). IBRD was established to function as a self-sustaining business and provides loans and advice to middle-income and credit-worthy poor countries. 

The statement said the bank support is to assist Pakistan in carrying out the critical economic structural reforms initiated by the present government to accelerate and reinvigorate inclusive growth in the country.’

“The Credit has two broad development objectives and pillars; improving the business environment and enhancing fiscal management through improving revenue management and making public spending more pro-poor,” the statement said. The government will formally sign the Financing Agreement with the World Bank at Islamabad on June 23, 2016, “thereafter the World Bank will disburse $500 million to Pakistan in a single tranche.”