World Bank calls on govt to implement policy actions under $20bn reform partnership

The World Bank has urged the Pakistani government to speedily put into action the policy measures outlined in its $20 billion economic reform partnership. This partnership, launched in January last year, seeks to harmonize sales tax, provincial agriculture and property taxes and remove regulatory hurdles to spur growth, increase revenue collection and facilitate trade and investment.

The World Bank's 10-year framework, involving both concessionary and commercial lending, is now transitioning into the implementation phase, with a delegation led by its country director Bolormaa Amgaabazar meeting with Finance Minister Muhammad Aurangzeb to discuss progress. The focus of the meeting was on moving from reform design to effective implementation, tackling practical measures that can boost economic activity, investment, jobs and the overall business environment.

The discussions covered a wide range of reforms, including the investment framework, reducing regulatory and business constraints, facilitating access to finance for SMEs, developing export finance products, and reforms to the Prime Minister’s Access to Finance initiative. They also looked into sector-specific reforms in pharmaceuticals, medical products, and agriculture, aiming to improve seed registration, deregulate certain commodities, and enhance international accreditations.

Discussions on fiscal and revenue reforms included the World Bank's support for tax-policy capacity strengthening, general sales tax harmonization, and better coordination between federal and provincial governments. The meeting also addressed reforms to agriculture income tax, provincial property-tax reforms, and improving domestic capital market efficiency.

The finance minister emphasized the importance of enhancing debt-management capacity and developing domestic bond markets, with discussions focusing on financial instruments for managing market risks, bond-market development, and improving investor relations. The World Bank also offered analytical support on Pakistan's sovereign credit profile and the route to better sovereign ratings.