World Bank will shortly approve around $1.9 billion for Pakistan: $300 million to be disbursed immediately

The World Bank Country Director Yusupha Crookes on Tuesday said that the bank would shortly approve around $1.9 billion for Pakistan of which $300 million will be disbursed immediately. He said that $200 million was earmarked for the safety net to protect poor while $100 million for Higher Education Commission (HEC). This amount will be disbursed before June 30, he added.
Talking to reporters after attending the ceremony to launch the WB report “Bringing Finance to Pakistan Poor: A study on access to finance for the undeserved and small enterprises,” Crookes said that around $650 million was ready for disbursement to Pakistan for the education programmes in Sindh and Punjab. “If Punjab and Sindh showed their performance in universalising education, the amount could be released immediately,” he said.
Primarily these programmes are aimed at increasing the students’ enrolment. For quite some time, the education departments are reluctant to show their performance due to which the disbursements were stopped.
The WB country said that $350 million could be released to Punjab and $300 million for Sindh. “These amounts could be released once we see the performance of the concerned authorities over the implementation of the projects,” he added. He praised the government decision of increasing the power tariff.
“This was one of the toughest decisions taken by the present political government,” he added. Crookes said that power sector reforms such as establishment of power distribution companies (Discos), etc, is having very limited impact on improving the power distribution system and reducing the sector’s losses.
“Despite having established Discos, Wapda is still all in all. Wapda’s role is still the same,” he added. There is need to give more powers and responsibility to Discos. They should have autonomy in their spheres. They should maintain their own balance sheets. This will have far reaching consequences to improve the power sector, he added.
The WB country director admitted that poverty had increased in Pakistan. However, there is safety net available to protect the poor electricity consumers. The international aid agencies, he said, are pleased after they learnt that subsidies are being withdrawn in power sector.
The WB report called for easier access to finance for Pakistan poor. The report said that average Pakistani household remains outside the formal financial system, saving at home and borrowing from family or friends in cases of dire need.
Only 14 percent of Pakistanis are using a financial product or service of banks and other financial institution compared to 32 percent of the population having access to formal financial system in Bangladesh. This figure amounts to 48 percent in India and 59 percent in Sri Lanka, the report said.
Over half of the population saves, but only 8 percent entrust their money to banks or any other financial institution. One-third of the population borrows, but only 3 percent use formal financial institutions. As a result of banking sector reforms, the private sector credit touched the figure of Rs 2,523 billion on May 2008, as compared with Rs 356.3 billion a year earlier. The SME credit increased from Rs 18 billion in fiscal year 2000 to Rs 403 billion till March, 2008.

Copyright Business Recorder, 2009