World Bank Approves $6.2 Bn Pakistan Lending Plan

The World Bank approved a four-year $6.2 billion lending program for Pakistan that seeks to boost tax revenues, make energy supplies more reliable and improve conditions in conflict-hit areas.
While the lending strategy from 2010 to 2013 is slightly less than the $6.5 billion committed during the last four-year period, the program hones in on specific trouble spots in Pakistan. Pakistan is battling al Qaeda-linked militants, which has uprooted nearly three million people since 2009 and put an extra burden on the country’s struggling economy. The World Bank said it will intensify its efforts to help the government increase tax revenues, which has caused chronic underfunding of key services and made the country reliant on foreign aid. Pakistan’s tax-to-GDP ratio is one of the world’s lowest. Raising the ratio of tax to GDP – currently only 10.2 percent of GDP – is essential to mobilize resources to invest in human development and infrastructure, build resilience to future shocks, and guard against costly and disruptive growth reversals, the Bank said in a statement.

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