The Independent Evaluation Group of the World Bank has delivered a mixed verdict on Pakistan’s 856.1 million dollar Resilient Institutions for Sustainable Economy reform programme, rating its overall outcomes as moderately satisfactory. While the evaluation group highlighted strong advancements in national fiscal coordination and digital transaction infrastructures, it noted that key structural reforms either lost momentum or fell short of their targets during the implementation window. The ambitious program, which was funded through a combination of World Bank loans and credits, was originally envisioned as a continuous three-operation policy series. However, the international lender ultimately chose to terminate the program after the second phase. This early closure followed a twenty-four month administrative delay caused by a cooling of reform commitment, escalating political uncertainty leading up to the 2024 general elections, and a strategic decision to transition to a new Country Partnership Framework.
In terms of positive outcomes, the assessment credited Pakistan with establishing stronger institutional frameworks to enhance macroeconomic stability and fiscal management. A key achievement was the successful strengthening of the federal Macro-Fiscal Policy Unit, alongside the introduction and systematic publishing of an Annual Borrowing Plan. Furthermore, the program exceeded its targets for the deployment of digital payment mechanisms. A significant portion of federal government payments successfully shifted to digital platforms, backed by a wider rollout of biometric verification systems for personal bank accounts. The period also witnessed a rapid expansion of branchless banking services, particularly among women, representing a major milestone for financial inclusion across previously underserved demographic segments.
Despite these digital and administrative successes, the evaluation group reported that several core structural reforms did not meet their intended objectives. Legislative and administrative efforts to broaden the domestic tax base by upgrading property valuation systems produced disappointing results. Instead of generating the targeted revenue increases, property transfer tax collections actually declined over the program’s active lifespan before showing a delayed recovery after the formal closure of the initiative. Similarly, the government’s efforts to curb the annual flow of circular debt in the power sector fell well short of the targets established under the program.
The evaluation group also observed that progress remained highly restricted on two of Pakistan’s most critical structural reform objectives, namely the nationwide harmonisation of the General Sales Tax and the rationalisation of import tariffs. Although the state successfully launched a centralized online portal for GST filing across selected sectors, a comprehensive, unified sales tax framework harmonized between the federal and provincial governments remained incomplete. On the trade front, import tariff reforms yielded only modest, short-term benefits before those policy gains partially reversed, reflecting the ongoing struggle to protect domestic industries while managing severe fiscal pressures.
The evaluation report criticized the design phase of the project, stating that the World Bank significantly underestimated the political complexities involved in coordinating reforms that require active buy-in from both the federation and individual provinces. The document also pointed out that several monitoring indicators used to evaluate the program’s success were too narrow to properly assess whether genuine, sustainable reform had taken place on the ground. Nevertheless, the evaluation group commended the World Bank for its commitment to maintaining active policy engagement during an exceptionally challenging period for Pakistan, which was defined by the global pandemic, the catastrophic 2022 monsoon floods, domestic political turbulence, and ongoing macroeconomic crises.
Looking ahead, the Independent Evaluation Group warned that Pakistan continues to face a very high risk of policy reversals. This vulnerability is driven by persistent fiscal deficits, unresolved structural inefficiencies in the national energy sector, and the ongoing difficulty of securing cooperative fiscal policies between the federal government and the provinces. To ensure that gains in public debt management, subsidy targeting, tax harmonization, and tariff reforms are not permanently lost, the country will need to demonstrate deep political commitment, coupled with coordinated support from active World Bank initiatives and the structural reform guidelines outlined under the current International Monetary Fund program.
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