The World Bank has called on Pakistan to fast-track private investment, warning that current levels remain well below targets set under the Country Partnership Framework (CPF) 2026–35. The call was made during a meeting between Federal Minister for Finance and Revenue Muhammad Aurangzeb and the World Bank’s Pakistan Country Director Bolormaa Amgaabazar, where both sides reviewed ongoing collaboration and discussed priority reforms under the CPF.
According to the framework, raising productive private investment is central to lifting Pakistan’s investment-to-GDP ratio over the next decade. The Bank noted that policy and institutional constraints—including extensive controls, subsidies, taxes, trade protection, and a dominant state-owned enterprise footprint—have suppressed productivity, investment, and export competitiveness.
As a result, private investment remains around 10% of GDP, compared with 20–25% in India and Bangladesh, while exports have declined from about 16% of GDP in the 1990s to roughly 10% today.
The World Bank proposed a results-based approach anchored in clear policy milestones, measurable indicators, and targeted technical assistance to accelerate implementation and unlock investment. It said shifting toward a more open, export-led growth model could help capture an estimated $60 billion in additional annual export potential, provided the business environment improves decisively.
The Bank briefed the finance minister on progress under the CPF, including fiscal and revenue reforms, macroeconomic stabilisation, and policy-based engagements. Both sides acknowledged gains in macro stability through fiscal and monetary discipline, while stressing the need to translate stability into sustained growth, higher investment, and job creation.
Discussions focused on a programmatic investment framework aligned with CPF objectives, covering business environment reforms, SOE governance, trade facilitation, capital market development, and export competitiveness.
Aurangzeb reaffirmed the government’s commitment to structural reforms, citing tariff rationalisation, regulatory modernisation, improved SOE governance, and transparency measures. He also underscored the importance of deepening capital markets, expanding access to long-term finance, and strengthening institutional coordination to support private sector–led growth.
Employment and skills development were discussed as a key pillar of growth. The finance minister highlighted the need for market-driven vocational and technical training, stronger public-private collaboration, and alignment with domestic and overseas labour demand, particularly in IT, healthcare, nursing, hospitality, and construction.
The World Bank shared ongoing work on labour mobility, skills matching, and digital labour market platforms to boost productivity and overseas employment opportunities.
Sectoral priorities—including digital services exports, agriculture and agribusiness, minerals and mining, healthcare, and selected manufacturing—were identified as potential focus areas for future World Bank-supported operations. Both sides agreed that targeted sectoral interventions, backed by regulatory and institutional reforms, could deliver employment and export gains.
The Bank also discussed possible use of policy-based guarantees in future operations to support liability management, refinancing of high-cost debt, and innovative financing, subject to agreed policy milestones. Climate finance, regulatory streamlining, and coordination with provincial governments were also reviewed.
Both sides agreed to continue technical-level engagements to refine priorities and advance preparation of future World Bank-supported programs in line with Pakistan’s reform agenda and CPF objectives.
