Pakistan has initiated fresh negotiations with the World Bank (WB) for a four-year Country Partnership Strategy (CPS) policy framework, with hopes of securing a commitment of $8 billion for key priority areas.
The CPS, anticipated to span from FY 2025 to FY 2029, is currently under discussion, with the exact policy framework and period yet to be finalized.
Delays in the CPS formulation from fiscal year 2022 to 2026 were attributed to extended election processes and government formation. Now, with a newly-elected government in place, negotiations for a new CPS covering a four to five-year period are underway and expected to conclude in the next couple of months.
“The CPS for the next four to five years will primarily concentrate on priority areas, with discussions ongoing to finalize the framework for major funding areas in the coming five years,” confirmed top official sources speaking to The News on Monday.
Pakistan aims to maximize disbursements over the next three to four years to align with its external financing requirements under the next IMF program. It is anticipated that, following an agreement with the IMF for an Extended Fund Facility (EFF) worth $6-8 billion, the WB’s CPS could provide additional financial support to the country over the next four years.
Pakistan is also seeking a $2 billion portfolio with visiting World Bank officials for the next budget of 2024-25, including approval for a $1 billion loan for the Dasu Hydropower Project. This visit by WB high-ups holds significant importance ahead of the upcoming IMF visit and the announcement of the next budget.
According to a statement from the Ministry of Finance, Martin Raiser, the South Asia Regional Vice President (SARVP) of the World Bank, met with Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb at the Finance Division on Monday. The meeting was attended by World Bank Country Director Najy Benhassine and senior officers from the Finance and Economic Affairs Divisions.
During the meeting, the finance minister briefed Mr. Raiser on the country’s macro-economic situation and the government’s efforts to stabilize the economy. He highlighted priority reform areas including increasing the tax-to-GDP ratio, reducing costs in the energy sector, SOE reforms, privatization, and human capital development.
Martin Raiser acknowledged Pakistan’s commitment to economic reforms and reaffirmed the World Bank’s readiness to provide technical assistance and financial support to facilitate the country in achieving its developmental objectives.
The finance minister requested alignment of the WB’s country partnership framework with Pakistan’s priority reform areas. Martin Raiser acknowledged the request, stating that the World Bank Group will support the government in implementing its reform agenda in the energy sector, boosting exports, microfinance, building climate resilience, and social protection. The meeting concluded with both sides reaffirming their commitment to strengthening the partnership for the betterment of Pakistan’s economy and its people.
