The World Bank (WB) on Sunday publicly urged Pakistan to “stay the course on the structural reforms” after telling in private that any future budget support loans will be conditioned to revival of the International Monetary Fund (IMF) programme.
The WB local office released a detailed statement at the conclusion of the week-long visit of its vice president for South Asia, Hartwig Schafer. He was on a reconnaissance mission to gauge whether Pakistan is still committed to put the economy on a sustainable path.
“Mr Schafer emphasized the importance of staying the course on the structural reform programme launched by the government, particularly in the power sector and with respect to fiscal sustainability,” said the WB statement.
It said the vice president gave this message during his meetings with Minister for Finance Shaukat Tarin, Minister for Economic Affairs Omar Ayub Khan and Minister for Energy Hammad Azhar.
The WB’s words of caution came amid an ongoing dissension in the Ministry of Finance on the issue of whether to stay on the course of fiscal prudence or follow an irrational path in pursuit of the government’s bid to enter the next general elections on the back of a Rs1.6 trillion package.
“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.