Islamabad:Every crisis presents an opportunity, whereas COVID-19 provided the world and Pakistan an opportunity to reform the social sector policies and to initiate the structural reforms in institutions that need to be concurrently happen which were delayed for years now.
World Bank, Country Director of Pakistan, Illango Patchamuthu express these views during an online COVID-19 Policy Response Dialogue titled “World Bank’s support to Pakistan in Responding to Covid-19”, organized by the Sustainable Development Policy Institute (SDPI) Islamabad. He said that we are working on how we can repurpose a good part of our pipeline, around $600 million to $2 billion, to make available to support recovery initiatives through building on safety net program, supporting employment through public works program and microenterprises and addressing the looming food security issue.
While commenting on WB support initiatives for Pakistan amid Covid-19 crisis, Illango said that initially the Bank was able to repurpose the $40 million aid program to help the government in immediately purchasing the medical equipment and supplies that already have started to arrive at district and local levels. Whereas, recently, the Bank board approved $200 million pandemic responsive fund facility for Pakistan which was part of the $14 billion global fund facility for coping the pandemic. He said that out of $200 million fund, $150 million covers immediate response of purchasing the medical equipment and $50 million covers the relief through Ehsaas cash transfer to help poor families.
Illango said that we are working with the Ministry of Finance, Commerce, Energy and Planning and Development departments both at federal and provincial levels to look at structural reforms that need to be concurrently happen which were delayed for years now. Structural reforms need to go hand in hand, because fiscal challenge continue to remain there and will be further constrained due to COVID 19 related response. Stressing the need of investing in human capital, he said that Pakistan is spending around 3% of GDP on health sector, which $242 per capita health spending and that need to be enhanced.
While elaborating the WB’s global support during Covid-19 crisis, Illango said that the WB has now announced a $160 billion program to fast track investments and budget support, technical assistance and result base financing to enable all the WB’s client countries to access this program over next 15 months starting from April 1st this year to extended to June 30 next year. On the outset of the outbreak, WB announced a $14 billion global facility which is meant to provide emergency medical equipment and supplies like ventilators and PPEs. We have been working with many client countries such as Pakistan.
Executive Director, SDPI, Abid Qaiyum Suleri said that the world has learnt after COVID19 outbreak that social services like health, education, water, and sanitation etc., cannot be reduced to be private commodity that only rich may afford to buy. He said it is about time that multilateral development partners such as World Bank should play their due role by investing in social sector rather than mega development projects only. This would help in bringing the focus of member governments back to social sector development, he maintained.
Dr Suleri also suggested that incorporating the challenges posed by COVID19, the world bank should update its recently published “Pakistan@100” report suggesting the way forward post pandemic.
Aliya Kashif, Senior Health Professional at World Bank said Pakistan’s health care system is not equipped to handle such emergencies, whereas WB is working with the government to help enhance health capacity to respond to the challenge effectively. Gonzalo Varela, Trade Economist at World Bank Group (WBG) said that we have seen substantial impact on exporters, where 2/3rd exporters have experienced 10-50% reduction in orders, and global trade is going to drop to unprecedented levels. It is believed that Pakistan’s exports will be substantially impacted. He suggested the need of protecting the exporters through relief measures, whereas structured reforms are going to be crucial for the recovery.
Joint Executive Director SDPI, Dr. Vaqar Ahmed said that the government needs to take measures to improve donor coordination architecture. He said that the voices of smaller provinces in demanding the desired support from multilateral and bilateral donors is missing. On this subject it is important to invite a meeting of Council of Common Interests (CCI) followed by a more focused deliberation in National Economic Council. We hope that such measures will go a long way in strengthening cooperative federalism, he added. COVID19 also presents an opportunity to divert some of the untargeted, hidden, and cross subsidies which were provided to less efficient state-owned enterprises.
There is now an opportunity to divert some of these subsidies towards encouraging the work which social entrepreneurs are doing during this crisis phase, he suggested. Ms. Melinda, Uzma Qureshi and Shabih Mohib from World Bank Group also highlighted different issues of gender, quality of health expenditure and socio-economic disruption in the discussion.