$500m sought from World Bank for policy reforms

ISLAMABAD: The government is seeking a loan of $500 million from the World Bank to enhance the policy and institutional framework for improving fiscal management and regulatory framework.

It is learnt that the World Bank executive board will approve the government’s request with the start 2020-21 in July.

The proposed Resilient Institutions for Sustainable Economy (RISE) is the first in a programmatic series of three operations focused on addressing foundational reforms through enhancing the policy and institutional framework to improve fiscal management and regulatory framework to foster growth and competitiveness.

RISE is aligned with the government’s Covid-19 crisis response programme which aims at scaling up spending on health and social protection while maintaining macro-fiscal stability in the face of a severe economic contraction.

Similarly, ‘Programme for Affordable and Clean Energy’ (PACE) would tackle critical power sector reforms, by building on the foundations of RISE to ensure the sector becomes financially viable.

Pakistan has requested debt service suspension from all of its bilateral creditors under the Debt Service Suspension Initiative (DSSI). The country has committed to use the created fiscal space for social, health or economic spending, disclose all debt, and contract no new non-concessional debt during the suspension period, other than agreements under the DSSI or in compliance with limits agreed under the World Bank policy on non-concessional borrowing and the IMF Debt Limit Policy. RISE includes a set of actions that will enhance this transparency.