Pakistan Country Overview 2010

Bank’s assistance to Pakistan

During the past five years from Fiscal Year (FY) 2006 to March 2010, the Bank has approved 31 operations of total US$3.9 billion for Pakistan.

The World Bank is working with the Government of Pakistan to prepare the new Country Partnership Strategy (CPS) for the period FY2010-2013. The CPS is scheduled to be presented to the World Bank’s board of Executive Directors in May, 2010. It is built on the knowledge, diagnostics and analytical work undertaken over the years by the Bank and other development partners in Pakistan. It has taken into account the results and lessons learnt from the Bank’s past programs in the country and will also reflect the Government of Pakistan’s development priorities, articulated in its Poverty Reduction Strategy Paper (PRSP) and provincial development plans. The proposed activities of the CPS are clustered around three pillars: (i) sustained macroeconomic stability and reduced macroeconomic vulnerability; (ii) improved human development and social protection; and (iii) improved environment for private sector investment and growth. Governance is a cross cutting theme across all of the pillars.

	Information at-a-glance Lending FY09: US$1.6 billion Lending FY08: US$ 544.9 million GDP (2007): US$143.6 billion Population (2007): 162.4 million GNI per capita (2007): US$870 Population below $1 Dollar a day (2002): 17% Population below $2 Dollar a day (2002): 74% Source: World Development Indicators 2006, Business Warehouse, Annual Report 2006

In 2007/08, the sharp rise in international oil and food (specifically wheat) prices, combined with internal political turmoil, led to rapidly expanding macroeconomic imbalances in Pakistan. To avoid a balance of payments crisis and default on foreign debt payments, the Government developed a home-grown stabilization program, which was supported by the IMF through a 23-month Stand-By Arrangement (SBA) in November 2008. IMF has released four tranches amounting to $ 6.54 billion with the fifth tranche due in April. The program includes a medium-term macroeconomic framework, which envisages fiscal and monetary tightening to bring down inflation and reduce the external current account deficit to sustainable levels. The development emphasis remains on poverty reduction and social protection, particularly on enhancing social safety nets for the most vulnerable sections of society. , Infrastructure is also vital, particularly in water management, transport, education and energy.

Continuing challenges facing Pakistan include the combined effects of food and fuel crisis, the global financial crisis and continuing volatile security situation, insufficiently targeted social safety net, an infrastructure deficit – particularly in energy, transport, and irrigation, and poor delivery of social services. While Pakistan’s human development indicators have generally improved over the past few years, it lags behind most other countries in the region.

Stringent implementation of the economic program will be critical to success, and timely responses of fiscal and monetary authorities to emerging risks will be essential to ensure it remains on track.

The Bank is deepening its engagement on social protection, community-led development, water management, energy, and infrastructure, while maintaining strong programs in education, and irrigation.