World Bank unhappy over diversion of funds from Balochistan flood housing programme

The World Bank has expressed serious concern over the diversion of funds from a multi-million-rupee flood housing programme in Balochistan to infrastructure projects. The organization warned that this could deepen poverty in the region, as 84% of eligible beneficiaries are ultra-poor and vulnerable, with limited savings and access to formal credit.

The bank noted that these groups typically have few productive assets and low capacity to absorb shocks, making them more susceptible to recurring disasters. After meetings with government officials, the World Bank's country director raised concerns over the decision and the handling of fraud and corruption issues. She highlighted that capping and redirecting housing support has left 119,049 eligible households without identified financing support, and wrote to government officials urging them to contact excluded households individually and formally notify them of the decision.

The bank emphasized that each complainant should receive written acknowledgment or verifiable evidence confirming the communication, and that a credible grievance resolution process is crucial to mitigating legal, operational, and reputational risks. The bank warned that excluded households may face a compounding cycle of vulnerability, exacerbating poverty, raising disaster risks, and undermining long-term recovery and resilience.