What did the World Bank visit mean?

A person enters the building of the World Bank Group, in Washington, United States. — AFP/File

A nine-member delegation of World Bank Executive Directors visited Pakistan in February 2025 to engage in discussions on economic development plans and the implementation of the Country Partnership Framework (CPF).

The delegation, comprising senior officials from the World Bank, engaged in extensive discussions with Pakistan’s leadership, including the prime minister, finance minister and key economic stakeholders. The primary agenda of the visit revolved around economic reforms, fiscal policies and progress under the Country Partnership Framework (CPF).

The CPF articulates the primary objectives and developmental outcomes established by the World Bank Group (WBG) to assist member countries in their endeavors to eradicate extreme poverty and promote shared prosperity on a sustainable planet. The CPF organises WBG engagement into specific objectives that are categorised within priority focus areas, thereby facilitating countries in achieving their developmental goals.

Each objective is accompanied by a comprehensive description detailing the anticipated impact of progress within that domain on poverty reduction and the enhancement of shared prosperity. The identified focus areas are: Reduction of Child Stunting, Reduction of Learning Poverty, Enhancement of Climate Resilience, Advancement of DE Carbonisation, and Promotion of More Inclusive Economic Opportunities.

The foundational framework for the CPF is collaboratively developed by the WBG, which includes the World Bank, encompassing both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). This collective approach provides a cohesive perspective on the optimal allocation of development resources to bolster governmental efforts in achieving national objectives.

Pakistan has been struggling with economic instability in recent years, with rising inflation, fiscal deficits and declining foreign exchange reserves. The World Bank delegation sought to evaluate the effectiveness of current policies and explore avenues for future collaboration. The World Bank has served as a crucial development partner for Pakistan, financing a multitude of programmes across various sectors, including infrastructure, education, health and economic reforms.

Over the past several decades, the Bank has executed various initiatives aimed at poverty alleviation, financial stability, and sustainable economic growth. Among the most significant initiatives was the Pakistan Poverty Alleviation Fund (PPAF), which concentrated on the provision of microfinance, social mobilization, and rural development. While this programme contributed positively to the enhancement of livelihoods in numerous rural areas, challenges such as mismanagement and limited outreach impeded its potential for broader impact.

In the energy sector, the Tarbela and Dasu Hydropower Projects, financed by the World Bank, were designed to augment Pakistan’s electricity generation capacity. These projects have made notable contributions towards alleviating power shortages; however, the overarching energy crisis persists due to issues related to governance inefficiencies and transmission losses.

The Education Reform Program, particularly within the provinces of Punjab and Sindh, has successfully increased school enrollment and improved literacy rates. Nonetheless, challenges such as insufficient teacher training and elevated dropout rates have constrained its long-term effectiveness. The Benazir Income Support Program (BISP), recognised as one of the most successful initiatives supported by the World Bank, has extended financial assistance to millions of low-income households, thereby significantly reducing extreme poverty levels. Nevertheless, concerns regarding corruption and the accurate targeting of beneficiaries have occasionally arisen.

Concurrently, structural reform programmes aimed at enhancing Pakistan’s tax system and fostering a more favourable business environment have yielded mixed outcomes, as political instability has frequently obstructed effective policy implementation.

The recent visit from the World Bank delegation to Pakistan, the first in two decades, has yielded significant discussions regarding new financial support initiatives. Pakistan is actively seeking additional funding from international financial institutions to stabilise its economy. The engagement with the World Bank indicates the possibility of forthcoming loans or grants, which could provide crucial assistance.

Under the CPF, Pakistan is prioritising the enhancement of infrastructure and energy efficiency. The delegation conducted a review of ongoing projects and assessed potential funding for new initiatives, particularly in the realms of renewable energy and transportation networks. Such efforts could substantially contribute to long-term economic stability and job creation. This high-profile visit is anticipated to bolster investor confidence in Pakistan’s economy.

Positive interactions with the World Bank frequently signal economic stability, which may incentivise foreign investors to pursue opportunities in essential sectors including technology, agriculture, and manufacturing. The Bank has played a pivotal role in assisting Pakistan in its poverty reduction efforts. Discussions during this visit centered on the expansion of social safety nets, enhancement of access to education and healthcare, and support for marginalised communities. These initiatives are intended to elevate living standards and promote economic inclusivity.

In light of the increasing threats posed by climate change, Pakistan’s susceptibility to natural disasters and the imperative for sustainable development, the delegation highlighted the importance of investments in climate resilience. This encompasses sustainable agricultural practices, flood mitigation projects, and initiatives aimed at addressing water scarcity.

While this visit has been largely perceived as a positive development, several challenges remain that may impede the anticipated benefits. Although financial assistance from the World Bank can provide immediate relief, it contributes to Pakistan’s escalating debt burden. Critics contend that dependence on international loans without initiating structural reforms may result in long-term economic vulnerabilities.

Pakistan has encountered obstacles in executing previous projects funded by the World Bank, attributed to bureaucratic inefficiencies and governance challenges. Ensuring transparency and accountability in project implementation will be essential to maximising the potential benefits of future collaborations. Frequent political fluctuations and changes in policy may lead foreign investors and financial institutions to hesitate in committing to long-term support.

The delegation’s visit has brought to light concerns regarding policy continuity and the government’s capacity to maintain economic reforms across electoral cycles. Despite interventions from the World Bank, inflation persists as a significant challenge. Escalating fuel and food prices have diminished the purchasing power of the general populace, rendering economic recovery slower and more arduous.

Pakistan’s economic outlook is also influenced by regional tensions, particularly with neighbouring nations. Unstable geopolitical conditions can deter foreign investment and adversely affect trade relations.

The World Bank delegation’s visit represents a critical juncture in Pakistan’s economic trajectory, opening avenues for potential financial support, infrastructure development, and poverty alleviation initiatives. The delegation’s engagement was perceived as a significant advancement in the efforts to strengthen economic ties and evaluate Pakistan’s progress in critical development domains.

While this visit has generated optimism regarding economic revitalisation, it has also highlighted various challenges that could impede sustained growth in the long term. The success of this engagement will hinge on Pakistan’s ability to effectively implement the recommended reforms and navigate its economic hurdles. Achieving long-term economic stability will require ongoing commitment to governance, fiscal discipline, and investment in pivotal sectors.

It is essential that Pakistan’s leadership translates the benefits of this renewed engagement into meaningful improvements in the lives of its citizens. The forthcoming months will be instrumental in determining whether this landmark visit facilitates sustainable economic growth or serves merely as a temporary uplift amidst persistent challenges.

The writer is a trade facilitation expert, working with the federal government of Pakistan.

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