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

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

ISLAMABAD: The World Bank on Friday called upon the government to expedite implementation of policy actions under its $20 billion economic reform partnership for harmonisation of sales tax, provincial agriculture and property taxes and removing regulatory constraints to achieve higher growth, revenue mobilisation and trade and investment facilitation. The World Bank group launched the 10-year country partnership framework 2025-35 in January last year, with a total blended financing of about $20bn, involving concessionary and commercial lending facilities. It is now pursuing the implementation phase of the agreed reform agenda. A bank delegation, led by its country director Bolormaa Amgaabazar, had a meeting with Finance Minister Muhammad Aurangzeb on Friday to review progress under the ongoing economic reform partnership, said a statement issued by the Ministry of Finance. The delegation discussed implementation priorities across growth, jobs, fiscal management, revenue mobilisation, capital-market development, trade and investment, and institutional reforms. According to the ministry, the meeting reviewed the World Bank’s support for Pakistan’s broader economic reform agenda, with particular emphasis on translating reform priorities into targeted, implementable actions and strengthening coordination among relevant ministries, provincial governments and implementing agencies. The two sides agreed on moving from reform design to effective implementation, with a focus on practical measures capable of delivering measurable improvements in economic activity, investment, jobs and the overall business environment, the statement said. The meeting discussed the proposed World Bank growth and jobs operation, including interventions aimed at improving the investment climate, access to finance, sectoral productivity and labour-market outcomes. During the meeting, the World Bank outlined proposed measures relating to the investment framework, reduction of regulatory and business constraints, access to finance for small and medium enterprises (SMEs), and development of export-finance products for the EXIM Bank of Pakistan to support incremental trade flows, the statement said. The ministry said that the discussion also covered reforms to strengthen the Prime Minister’s Access to Finance initiative, including a unified insolvency framework, factoring legislation and regulations to support SME financing, as well as measures to expand commercial financing and greater private-sector participation. On sectoral reforms, the World Bank highlighted proposed interventions in pharmaceuticals and medical products, and agriculture, including improvements in seed registration, deregulation of selected commodities and strengthening of international accreditations to facilitate participation in international procurement and markets. “The meeting also reviewed initiatives to strengthen skills development and labour-market alignment, including improvements in the national vocational qualifications framework, greater international recognition of skills and development of formal overseas migration pathways supported by digital platforms,” it said. According to the statement, the finance minister and the World Bank delegation reviewed implementation of the National Tariff Policy and ongoing analytical support for tariff reforms, including work relating to the automotive sector and future tariff reforms. “The discussion emphasised the importance of supporting competitiveness, productivity, investment, exports and Pakistan’s greater integration into global value chains.” On fiscal and revenue reforms, the meeting reviewed World Bank technical assistance to strengthen tax-policy capacity, including support for the medium-term revenue strategy and revenue-policy modelling, the statement said. It added that discussions also covered general sales tax harmonisation, including greater alignment of rules, definitions and classifications for services, improved federal-provincial coordination and stronger data-sharing arrangements. The ministry said that the meeting between two sides also reviewed progress on agricultural income tax reforms, including implementation of amended provincial laws and rules and digital systems for registration, filing and payment. “The importance of strengthening compliance and federal-provincial data sharing was also discussed.” It added that the discussion further covered provincial property-tax reforms, including efforts to improve and harmonise property-valuation approaches, strengthen digital systems and progressively move towards more market-based valuation frameworks. On domestic capital markets, the meeting discussed World Bank’s support for developing a roadmap for capital-market reforms through the Capital Markets Development Council, aimed at deepening domestic capital markets, broadening financing avenues and strengthening the ecosystem for investment and capital formation, the ministry said. “The meeting also reviewed World Bank support for public-sector efficiency and the government’s rightsizing agenda, including technical assistance to strengthen institutional effectiveness and improve the efficiency of public resources,” it stated. During the meeting, the finance minister highlighted the importance of strengthening debt-management capacity and domestic bond markets. “Discussions covered ongoing technical cooperation on financial instruments for managing market risks, domestic bond-market development and strengthening investor-relations capacity.” Meanwhile, the meeting also discussed the World Bank’s analytical support on Pakistan’s sovereign credit profile and the pathway towards further rating improvements. Per the statement, the finance minister said the government would work diligently to strengthen both the quantitative and qualitative drivers of sovereign ratings, including fiscal and debt sustainability, external buffers, sustainable growth, institutional effectiveness and continued structural reforms, while deepening engagement with relevant stakeholders to support further improvement in Pakistan’s sovereign credit standing. The World Bank delegation also briefed the finance minister on analytical work on governance and institutional effectiveness, with discussions focused on practical and measurable reforms to strengthen government effectiveness, regulatory quality, transparency, accountability and the overall business environment. “Both sides reaffirmed their commitment to continued cooperation under the economic reform partnership, with a shared focus on implementation, institutional strengthening, private-sector-led growth, improved public-resource management, stronger investment and enhanced economic opportunities,” the statement concluded.