World Bank Emphasizes Structural Reforms for Social Sector

The World Bank (WB) is working on the repurposing of up to $2 billion to make available to support Pakistan’s recovery initiatives of the pandemic through building on safety net programm, supporting employment through public works programm and micro enterprises and addressing the looming food security issue.

This was stated by WB Country Director in Pakistan, Illango Patchamuthu during an online COVID-19 Policy Response Dialogue titled “World Bank’s support to Pakistan in Responding to Covid-19”, organized by the Sustainable Development Policy Institute (SDPI).

World Bank Emphasizes Structural Reforms for Social Sector

Every crisis presents an opportunity, whereas COVID-19 provided the world and Pakistan an opportunity to reform the social sector policies and to initiate the structural reforms in institutions that need to be concurrently happen which were delayed for years now, the WB official added. .

“We are working on how we can repurpose a good part of our pipeline, around $600 million to $2 billion, to make available to support recovery initiatives through building on safety net program, supporting employment through public works program and microenterprises and addressing the looming food security issue”, he added.

While commenting on WB support initiatives for Pakistan amid Covid-19 crisis, Illango said that initially the Bank was able to repurpose the $40 million aid program to help the government in immediately purchasing the medical equipment and supplies that already have started to arrive at district and local levels.

The Bank board recently approved $200 million pandemic responsive fund facility for Pakistan which was part of the $14 billion global fund facility for coping the pandemic. He said that out of $200 million fund, $150 million covers immediate response of purchasing the medical equipment and $50 million covers the relief through Ehsaas cash transfer to help poor families.

World Bank recently approved $200 million pandemic responsive fund facility for Pakistan

He further said that they are working with the Ministry of Finance, Commerce, Energy and Planning and Development departments both at federal and provincial levels to look at structural reforms that need to be concurrently happen which were delayed for years now.

Structural reforms need to go hand in hand, because fiscal challenge continue to remain there and will be further constrained due to COVID 19 related response. Stressing the need of investing in human capital, he said that Pakistan is spending around 3% of GDP on health sector and that need to be enhanced.

Executive Director, SDPI, Abid Qaiyum Suleri said that

the world has learnt after COVID19 outbreak that social services like health, education, water, and sanitation etc., cannot be reduced to be private commodity that only rich may afford to buy. He said it is about time that multilateral development partners such as World Bank should play their due role by investing in social sector rather than mega development projects only. This would help in bringing the focus of member governments back to social sector development, he maintained.

Aliya Kashif, Senior Health Professional at World Bank said Pakistan’s health care system is not equipped to handle such emergencies, whereas WB is working with the government to help enhance health capacity to respond to the challenge effectively.

Gonzalo Varela, Trade Economist at World Bank Group (WBG) said that they have seen substantial impact on exporters, where 2/3rd exporters have experienced 10-50% reduction in orders, and global trade is going to drop to unprecedented levels. It is believed that Pakistan’s exports will be substantially impacted. He suggested the need of protecting the exporters through relief measures, whereas structured reforms are going to be crucial for the recovery.