WB asks Pakistan to speed up power sector reforms

ISLAMABAD: The World Bank (WB) has asked Pakistan to accelerate the pace of power sector reforms in order to achieve a higher economic growth and resilient recovery from the COVID-19 pandemic.

The World Bank Vice President for South Asia, Hartwig Schafer, concluded on Sunday a week-long visit to Pakistan to discuss the country’s development priorities and how the bank could continue to support the government’s reform agenda. Schafer was joined in his meetings by the Country Director for Pakistan, Najy Benhassine, and the Pakistan Alternate Executive Director for the World Bank, Naveed Baloch.

In meetings with Shaukat Tarin, Minister for Finance and Revenue, Omar Ayub Khan, Minister of Economic Affairs, and Hammad Azhar, Minister of Energy, Schafer emphasised on the importance of staying the course on structural reform program launched by the government, particularly in the power sector and with respect to fiscal sustainability.

“We urge the government to accelerate the pace of power sector reforms as these are critical for Pakistan to achieve higher economic growth and resilient recovery from the COVID-19 pandemic,” said Hartwig Schafer, adding “The key issue for the power sector is to be on a financially viable footing to support the country’s green, resilient, and more inclusive development.”

The meetings also focused on the importance of building fiscal resilience through harmonising the General Sales Tax nationwide, establishing an integrated debt management office and ensuring a sustainable macroeconomic framework that encourages private investment and growth.

Schafer met Prime Minister Imran Khan to discuss these key reforms. The government’s ambitious plans for investing in human capital, social protection and job creation were also discussed. The bank offered its support to ensure that new initiatives like ‘Kamyab Pakistan’ benefits from international experience, global knowledge and is implemented in a targeted, impactful and fiscally sustainable way.

The World Bank Group is preparing its new five-year program of support for Pakistan, the Country Partnership Framework (CPF) for 2022-2026. The government’s development priorities for the next few years were discussed in that context. The CPF framework has been informed by broad-based stakeholder consultations to help ensure alignment with the country’s priorities. Consultations have been held with federal and provincial governments, parliamentarians, private sector, civil society organizations, including women and youth groups, media and academia, as well as development partners.

“I am pleased to see broad support for the direction of the new Country Partnership Framework, which is structured around human capital development – particularly ensuring health and education for girls and boys to give them the best possible start; promoting a cleaner and more climate-resilient future; fostering more equitable and inclusive growth; and strengthening governance,” Schafer added.

Schafer also met Asad Umar, Minister for Planning, Development, Reforms and Special Initiatives, and Faisal Sultan, Special Assistant to the Prime Minister on National Health Services. He reassured them of the bank’s continued support to finance the procurement of WHO-approved vaccines for Pakistan. The bank had earlier restructured the Pandemic Response Effectiveness Project (PREP) to provide $153 million for vaccine financing. He also assured the planning minister of the bank’s support to strengthen the planning function and statistical apparatus of Pakistan.

During his visit, Schafer also met Malik Amin, Special Assistant to the Prime Minister on Climate Change, Abdul Razak Dawood, Adviser to the Prime Minister on Commerce and Investment, and Dr Reza Baqir, Governor of the State Bank of Pakistan. He acknowledged the government’s commitment to green, sustainable growth, decarbonisation and clean energy, nature-based solutions, and climate-friendly development. Recent macroeconomic, industrial and trade developments were also discussed.

During his meeting with Dr Sania Nishtar, Special Assistant to the Prime Minister of Pakistan on Poverty Alleviation and Social Protection, Schafer was updated on the foundational progress made in developing the social protection system of Pakistan and reiterated the bank’s continued support to the Ehsaas program, which is crucial to help the citizens in need to cope with impact of the COVID-19 pandemic and other socioeconomic shocks.

Schafer also held virtual meetings with Chief Minister Sindh Murad Ali Shah, and Chief Minister Khyber Pakhtunkhwa Mahmood Khan. He reassured them of the bank’s commitment to support their respective sustainable development agendas at the provincial level under the new CPF. He also met with a diverse group of parliamentarians and representatives from the civil society and academia.