ISLAMABAD: Improving the business climate, simplifying regulations and increasing the tax collection efficacy to increase tax revenue potential are part of the next Country Partnership Framework (CPF), said Najy Benhassine, the World Bank Country Director for Pakistan.
This he stated while talking to media as part of a series of consultative discussions on upcoming CPF, which the World Bank Group (WBG) is in the process that will outline its strategic support in the country for the period 2022-26.
The World Bank official said that in terms of how much resources allocation and where they are planning for the next five years is very tricky.
“We have the allocation for the current IDA cycle that ends at the end of 2023 is $4.2 billion but we cannot speculate on what will be IDA 20 allocation for Pakistan. On top of that Pakistan given its level of income is also eligible to borrow from IBRD that is about a billion dollar a year so we have about $7 billion at the end of IDA 19 cycle,” he added. The next IDA allocation will be in the line of current one, he added.
Benhassine said that the next CPF would broadly focus on five strategic areas i.e. education, health, environment and growth and improved governance as an enabler. Focus on social security and poverty is the heart of the exiting as well as coming CPF because the Covid crises has hit the poor proportionality more, he added.
There is no long-term growth without building and strengthening the human capital and providing for the poorest of the society.
We will indeed increase our support and focus on social sector this is why 5Gs is the name of the upcoming strategy.
There will be higher support for the poorest and social protection aligned with the government policy, he added.
The World Bank official said that the fourth G is not only about growth but inclusive growth, so they would continue to focus on financial inclusion, agriculture productivity because that increases the income for farmers and thinking about growth.
He further said that it is to make sure that the operation to focus on government programmes to improve policies.
It is not just about financing but whether the financing is going in the right direction for the overall government policies for the implementation of these projects, he added.
“Given the Covid crisis level we have are trying to frontload and a lot of support come in early in that cycle because that is the moment where the government needed more to meet the crisis is implementations,” the World Bank official added.
The number one priority which is the priority of the government as well is implementing the current portfolio and delivery and disbursing before talking to the topics on the new operation.
We have diversified portfolio of around 12 billion dollars that would itself focus on delivery, results and disbursement, he added.
He further said that the new strategy will have a small set of indicators as they want to be held accountable in achieving these objectives. We do not put conditionality on releasing funds but these are government’s decisions to ensure transparency,” he added.
The World Bank supports the government in a set of reforms to ensure sustained macroeconomic stability.
We are supporting fiscal reforms and will continue to do so and are pleased to see the government in these difficult situations is sticking to reforms agenda.
“We want to go with budgetary support operations in condition with macroeconomic framework is sustainable that is the basic to ensure sustainability of the macro framework,” he added.
The government is actively involved in numbers of reforms in power sector but this is a complex sector and not has short-term solutions.
It needs to improve the efficacy of distribution and there is lot to be done in terms of diversifying the energy mix to contribute to reduce the cost of power generation as well as financial reforms to address the current stock of circular debt, the World Bank official added.
“We are encouraged to see the government is committee to whole package of reforms and there is progress. It is a journey needs to be sustained this is not a six month package it takes time to reduce the cost of generation and that is critical to attract investment in the sector”, he added.
Replying to a question, the World Bank official said that they still believe in quality of measures in ease of doing business report and the new report will be launched on March 11.
The Pakistan team is engaging with key stakeholders on the next CPF, 2022-26 planned for board approval by the end of this fiscal year (FY21).
The CPF will draw from the Systematic Country Diagnostic (SCD), Country Private Sector Diagnostic (CPSD) and the flagship Pakistan@100: Shaping the Future initiative which seeks to identify the main changes necessary for Pakistan to become an upper middle-income country by the time it turns 100 years old in 2047.
Prepared jointly by the International Development Association (IDA), International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), this CPF represents a shared view of how resources across the entire Bank Group can best support the Government of Pakistan’s effort to achieve its national goals.
The next CPF, 2022-26 will be submitted to the executive directors of the WBG Board by the end of fiscal year 2021.
Copyright Business Recorder, 2021