The World Bank has sanctioned $535 million in loans for Pakistan, encompassing $400 million to enhance the Benazir Income Support Program (BISP). These funds are part of the Crisis Resilient Social Protection (CRISP) Program and the Sindh Livestock and Aquaculture Sectors Transformation Project, according to a press statement from the Washington-based lender’s local office.
The $400 million social protection loan aims to bolster Pakistan’s social protection framework and fortify resilience among impoverished and vulnerable households. Concurrently, the Sindh Livestock project is set to advance climate-smart and competitive small and medium enterprises in Sindh’s livestock and aquaculture sectors.
“The catastrophic floods that hit Pakistan in 2022 underscored the critical need for resilience against such disasters, including strengthening social protection and economic growth-supporting sectors,” stated Najy Benhassine, World Bank Country Director for Pakistan. He emphasized the importance of helping vulnerable populations withstand climate shocks through innovative technologies and strategic planning.
The additional $400 million financing for CRISP will build upon ongoing efforts to equip Pakistan’s social protection system for more effective crisis responses. This program will focus on long-term policy measures to enhance the national cash transfer program’s efficiency, coverage, and coordination between federal and provincial levels.
However, there has been criticism within Pakistan regarding the acceptance of foreign loans for BISP disbursements. Critics argue that these needs should be funded through the national budget rather than foreign borrowing. Of the $400 million, $130 million is provided under the World Bank’s short-term maturity loan facility.
In response, the government has allocated a record Rs593 billion in the budget for BISP, a 26% increase from the current fiscal year. The World Bank indicated that the $400 million loan would assist families in building resilience to climate and economic shocks while promoting provincial capacities to play a larger role in social assistance.
According to World Bank documents, the lower-middle-income poverty rate in Pakistan has risen to 40.1% for 2023-24, similar to 2018 levels, but with seven million more Pakistanis now below the poverty line. The World Bank has stressed the need for provincial governments to assume their constitutional responsibilities for social protection as per the 18th Amendment, which delegated this authority to the provinces. Federal programs like Nashonuma and the previous Ehsaas initiative, introduced post-amendment, have added fiscal strain to the federal budget despite being provincial responsibilities.
As part of the loan conditions, Pakistan must expand BISP coverage to approximately 9.8 million people, up from the current 9.3 million families. The World Bank noted that around 500,000 eligible families, registered in the national social registry, have not been enrolled in the program and are likely more vulnerable than current beneficiaries. Standard recertification procedures must be applied to include these “left out” families.
Sindh Livestock Project
The World Bank also approved $135 million for a project targeting all districts in Sindh to protect livestock, benefiting over 940,000 farm families, including 930,000 livestock households and 10,000 aquaculture producers. The project aims to ensure female farmers’ participation and reduce gender gaps in the sector.
This substantial loan package underscores the World Bank’s commitment to supporting Pakistan’s efforts in social protection and climate-smart agricultural practices, aiming to foster resilience and sustainable development amid ongoing economic and environmental challenges.
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