ISLAMABAD: Pakistan on Wednesday requested the World Bank’s technical help in reforming the country’s costly public sector pension system.
Abdul Hafeez Shaikh, advisor to the Prime Minister on finance and revenue “requested technical inputs from the World Bank on the pension reforms currently being prepared by the Ministry of Finance”, said a statement issued after advisor’s meeting with Najy Benhassine, newly appointed Country Director of the World Bank in Pakistan.
Prime Minister Imran Khan recently described the government’s rapidly increasing pension bill as a far more serious problem than the huge power-sector debt.
The country’s consolidated public sector pension obligations are around one trillion rupees for the current financial year.
Last month, the government has approved Concept Clearance Paper for Pension Reform Project. The reforms are to be executed with a $75 million loan from the World Bank.
Shaikh highlighted the reforms initiated by the government to tackle the balance of payment crisis in the fiscal year 2018/19 and bring stability to the economy and shared details of how the COVID pandemic has adversely impacted the economy and slowed down the reforms program.
Shaikh outlined the steps taken by the government to tackle the COVID 19 pandemic and stimulate the economy.
“In particular, he highlighted the Prime Minister’s Ehsas program where over 16 million of the most vulnerable households have benefitted from cash transfers,” the statement said.” Similarly, support provided to SMEs and business in the form of subsidized payroll loans, deferred loan repayments and subsidy on power bills have supported economic activities during the pandemic induced downturn.”
Shaikh stressed on the need to strengthen public finances with a focus towards enhancing the tax base and improved expenditure management. “Looking ahead both sides reaffirmed to strengthen the relationship and remove bottlenecks in executing the development projects funded by the World Bank,” the statement added.
Benhassine appreciated the strong response by the government during the COVID 19 pandemic and highlighted the World Banks support to the emergency response with projects totaling almost half a billion dollars to help the country prevent, detect and respond to the pandemic and strengthen public health preparedness.
The World Bank portfolio in Pakistan includes 56 active projects amounting to approximately $11 billion. The portfolio supports reforms and investments to strengthen institutions, particularly in fiscal management and human development.