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World Bank approves $350M to Pakistan

Islamabad, 20 December, 2023 (GNP): The World Bank’s executive directors sanctioned $350 million in financing for Pakistan’s Second Resilient Institutions for Sustainable Economy (RISE-II) operation on Tuesday.

Najy Benhassine, the World Bank’s country director for Pakistan, highlighted the significance of this project in finalizing the initial phase of critical “tax, energy, and business climate reforms.” These reforms are aimed at enhancing fiscal revenues, fostering competition, and attracting investments.

RISE-II focuses on fortifying fiscal management and bolstering competitiveness to ensure sustained and inclusive economic growth in Pakistan.

The nation has been grappling with economic challenges, characterized by persistent high inflation and dwindling foreign reserves.

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Derek H. C. Chen, the task team leader of the operation, emphasized that RISE-II, complemented by concurrent support from other International Financial Institutions (IFIs), offers Pakistan an opportunity to address longstanding structural imbalances in its economy post the upcoming general elections.

Chen cautioned that failing to seize this opportunity could potentially subject the country to recurrent economic fluctuations.

The operation aims to stimulate growth and competitiveness by reducing tax compliance costs, enhancing financial sector transparency, advocating digital payments, and boosting exports through reduced import tariffs, as per the World Bank’s statement.

Martin Raiser, World Bank Regional Vice President for South Asia, cautioned against short-term measures and stressed the importance of comprehensive reforms in business climate, taxation, and human capital to address Pakistan’s broader economic challenges.

The World Bank’s previous report highlighted the necessity for fiscal reforms and sustainable growth, emphasizing the crucial role of meticulous economic management and profound structural changes in maintaining macroeconomic stability and fostering growth in Pakistan