World Bank warning to Pakistan ahead of general elections

Islamabad:

Before the general elections in Pakistan, the World Bank gave a candid warning to the next government to make decisions, making it clear that international lenders and development partners could only advise with successful international experiences and some financing, but with difficult choices and course-correcting decisions. It could only be taken within the country, Dawn News reported on Saturday.

World Bank Pakistan Director Najy Banhassine said in a summary of reforms for a better future: It’s time to decide: “Political decisions are heavily influenced by strong vested interests, including those of military, political and business leaders. “.

Pakistan is on the verge of a crisis in which it should decide to remain behind, with 40 percent of its population living below the poverty line, under the control of elites and political decisions driven by strong vested interests of military leaders, politicians and business, or change course to take off forward. a brighter future.

World Bank officials said Pakistan had been facing numerous economic difficulties, including inflation, rising electricity prices, severe climate shocks and insufficient public resources to finance development and climate adaptation, when the country was among the worst. vulnerable to the impacts of climate change.

“It also faces a ‘silent’ human capital crisis: abnormally high rates of child stunting, low learning outcomes and high child mortality,” Najy said, adding that Pakistan’s economic model no longer reduces poverty and It was very worrying that that reduction successes up to 2018 had since been reversed.

Furthermore, the World Bank also said that Pakistan’s average real per capita growth rate was only 1.7 percent between 2000 and 2020, less than half of the average per capita growth rate of South African countries during the period. and well below the average of comparison countries with similar economic structures.

Human development outcomes lag far behind those in the rest of South Asia and are roughly equivalent to those in many countries in sub-Saharan Africa, where costs are borne disproportionately by girls and women, while around 40 percent of children under five were stunted and had the largest number (20.3 million) of out-of-school children in the world.

The World Bank proposed shifting policies from fragmented, inefficient and underfunded social protection and service delivery systems towards coordinated, efficient and adequately funded service delivery, targeting the most vulnerable, in particular, to abnormally reduce rates of childhood stunting and increase learning outcomes. For all children, especially girls.

He also recommended moving from rigid and wasteful public spending that benefits a few to strictly prioritized spending on public services, infrastructure and investments in climate adaptation, which benefits the populations most in need.

The Pakistani rupee (PKR) touched a record low of Rs 299.64 against the dollar in the interbank market and fell further by 0.63 percent on Wednesday, ARY News reported.

According to the State Bank of Pakistan, the local unit fell by Rs 0.63 against the US dollar to close at Rs 299.64 on the interbank against Tuesday’s close of Rs 299.1, extending losses for the third season.

In the open market, the dollar was changing hands for PKR 314. Currency traders have attributed the rupee’s depreciation to an easing of import restrictions that has raised demand for the dollar, according to ARY News.

Notably, Pakistan imposed import restrictions in 2022 to stem outflows of its dwindling foreign exchange reserves. The removal of those restrictions starting in June was a condition of a $3 billion International Monetary Fund (IMF) lending program to help the crisis-ravaged economy.

Pakistan is currently governed by an interim government tasked with guiding the country toward a national election while dealing with scorching political tension, as well as historically high inflation and interest rates, ARY News reported.

In particular, Pakistan is battling a huge economic crisis, with staggering inflation and depleted foreign exchange reserves.

Earlier this month, Islamabad witnessed a slump in the manufacturing and service sectors as businesses struggled to cut expenses and weighed the option of job cuts, wage freezes or salary reductions, according to The News International.

Although Pakistan was able to get the agreement with the IMF just in time, the conditions imposed by the body are proving tedious to implement.

Under this, Pakistan imposed additional taxes of PKR 215 billion and cut expenditure by PKR 85 billion in its budget.

With sky-high inflation and foreign exchange reserves barely enough to cover a month of controlled imports, Pakistan has been facing its worst economic crisis in decades, which analysts say could have led to a default on debt payments in the absence of the agreement with the IMF. .

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated channel.)