World Bank's Pakistan Overview

PAKISTAN faces significant economic, governance and security challenges to achieve durable development outcomes. The persistence of conflict in the border areas and security challenges throughout the country is a reality that affects all aspects of life in Pakistan and impedes development. A range of governance and business environment indicators suggest that deep improvements in governance are needed to unleash Pakistan's growth potential.

Accelerating progress in human development remains the key underpinning for sustained economic gains. The Net Enrollment Rates in education have been increasing in Pakistan but still lag behind other South Asia countries. Infant and under five mortality rates represent a similar story. Gender disparities persist in education, health and all economic sectors. Pakistan has one of the lowest female labor force participation rates in the region. Nutrition also remains a significant crosscutting challenge, as 44% of children under five are stunted. Despite the worrying state of education and health, especially amongst the poor, the resource allocation as a percentage of the GDP remained low. Pakistan is ranked as one of the lowest spenders on education and health in the region (at about 2% of GDP.

The World Bank Group's Country Partnership Strategy (CPS) for Pakistan for FY2015-19 was formulated after an extensive, country-wide consultations process, with a diverse set of stakeholders. It is structured to help the country tackle the most difficult-but potentially transformationalareas to reach the twin goals of poverty reduction and shared prosperity. The four strategic pillars of the CPS are anchored in the Government's framework of 4Es: Energy, Economy, Extremism and Education; and the initial priorities of the upcoming Vision 2025.

The main points are:

Transforming the energy sector: The WBG is committed to support reforms and large investments in the power sector to reduce load shedding, expand low-cost generation supply, improve governance and cut losses.

Supporting private sector development: The WBG will aim to expand policy-based support for strengthening the business environment, including in the provinces, to improve competitiveness and expand investment, improve productivity of farms and businesses, and make cities more growth friendly to create productive and better jobs (especially for youth and women).

Reaching out to the underserved, neglected, and poor: This requires a stronger focus on micro, small and medium enterprises (MSMEs), women and youth, fragile provinces/regions and poorer districts, social protection, and resilience and adaptation to the impact of climate change.

Accelerating improvements in services: The pace of improvement is far too slow. At the federal and provincial levels this means increasing revenues to fund services and setting more ambitious stretch targets for areas that are not producing change fast enough (especially education and health).

Leveraging regional markets: Interwoven with the four results areas, this cross-cutting program focuses on energy and trade, including critical building blocks of an integrated regional electricity market in South Asia with power transmission links to Central Asia and India; sub-regional collaboration; and other opportunities to capture the potential of crossborder trade between Pakistan and its neighboring countries.

The CPS envisages an indicative financing envelope of about $11 billion over the CPS period. This includes an IDA lending of about $1.1 billion per year (subject to SDR/$ exchange rate). Pakistan could also benefit from additional regional IDA allocations, particularly in trade and energy.

The World Bank is helping the Federal and Provincial Governments in implementing various reform programs aimed at encouraging growth, investment, and employment generation. Reforms at the provincial level are specifically aimed at improving delivery of social services like education, health, clean drinking water, and sanitation. These efforts have yielded impressive results in many areas:

Investing in Education: The Bank supports government programs to improve access to education that focus explicitly on the achievement of results. Between 2004 and 2011, IDA extended over $1.1 billion to support increased investment and reform in the education sector in the two largest provinces in Pakistan: Punjab and Sindh. These efforts, including reforms in teacher recruitment and payment of stipends for girls' attendance, have started to translate into increased enrollment rates. For example, overall net primary school enrollment in Punjab increased from 45 percent in 2001 to 62 percent in 2008. Female primary enrollment went up from 43 percent to 60 percent.

Protecting the poorest: In social protection, the Bank has helped the government in establishing the social safety net systems. The Benazir Income Support Program (BISP) is the country's national safety net program and the Bank's support focuses on increasing its targeting efficiency and strengthening its operation.

Supporting rural livelihoods: The Bank has supported Pakistan Poverty Alleviation Fund (PPAF) since 2000 and during this time, the program has facilitated the formation of 80,000 community organizations and provided 1.9 million micro-credit loans, 16,000 community infrastructure schemes, and training support for 232,000 people in enterprise development skills.

Connecting the Poorest: The Bank is working to address Pakistan's vast urban and rural infrastructure deficits, often cited as the greatest constraint to sustained, rapid growth. Through its ongoing US$ 495.0 million Highways Rehabilitation Project, the Bank is helping Pakistan to improve its road network