The World Bank has urged Pakistan to accelerate reforms in key sectors like energy, water, and taxation to enhance economic development and prosperity. Martin Raiser, the Vice President for South Asia at the World Bank, emphasized the need for long-term reforms to address deep-rooted issues and improve governance. He pointed out that delays in implementing necessary reforms, especially in the energy sector, have led to inefficiencies and higher costs, impacting the country’s economy.
Raiser also highlighted the importance of honoring agreements with independent power producers (IPPs), as maintaining trust with investors is crucial for future growth. Regarding climate change, he advocated for global mechanisms like carbon pricing to fund adaptation efforts for countries vulnerable to climate impacts, despite the complexity of international negotiations.
On the topic of revenue generation, Raiser noted that while Pakistan had made progress in tax administration, its system still needed improvement to incentivize wealthier individuals to pay taxes. He also recommended reducing subsidies and tax exemptions to redirect resources into human development.
Additionally, Raiser stressed the need for water sector reforms, citing the outdated infrastructure that requires maintenance and improvements. The World Bank is working with Pakistan to digitize its tax and social protection systems to increase efficiency and ensure that resources are used effectively for the country’s growth.
In terms of energy, Raiser mentioned the importance of investing in renewable energy sources and improving grid stability to reduce long-term costs. He acknowledged that Pakistan’s economy had suffered from multiple external shocks, but emphasized that addressing underlying structural issues would help the country recover and grow.
