The objectives of the proposed Program are to (i) enhance the policy and institutional framework to improve fiscal management; and (ii) improve the regulatory framework to foster growth and competitiveness. These objectives will promote social protection and economic resilience to prevent long-term damage to the productive capacity, including human capital, of Pakistan’s economy.
The RISE Program is proposed to be supported under the COVID-19 Crisis Recovery Facility (the Facility) of the Bank and co-financed with the World Bank (WB) as a Development Policy Financing (DPF) under the WB’s Policy on Development Policy Financing (DPF Policy).
The Program constitutes one element of Pakistan’s response to and recovery from the impact of COVID 19 pandemic, focusing on economic revitalization and crucial health and social sector spending. While covering the Government’s public health and emergency expenditures, the Program also comprises policy and institutional actions to mitigate the adverse health and economic shocks. These policy actions will promote medium term reforms in macroeconomic management, institutional strengthening and foster growth and competitiveness for economic resilience.
The fiscal space provided under the Program will deliver (i) social protection for the poor and vulnerable, (ii) an expanded health sector response to the pandemic, and (iii) a pro-poor fiscal stimulus package to ensure recovery in growth and employment. The Program is, therefore, part of an integrated package of immediate efforts by the Government of Pakistan (GoP) to mitigate the significant negative health, social, and economic impacts of the COVID-19 pandemic.
This Loan will be co-financed with the WB as lead co-financier, and the Program’s Environmental and Social (ES) risks and impacts have been assessed in accordance with the WB’s DPF Policy. AIIB’s Environmental and Social Policy (ESP) was designed to apply to investment projects and has no provisions for its application to DPF operations. Therefore, as permitted by a decision of the AIIB’s Board of Directors, the WB’s DPF Policy will apply to this operation in lieu of AIIB’s ESP. This will ensure a harmonized approach to addressing the ES risks and impacts of the program.
The WB has conducted several assessments under the WB’s DPF Policy to determine whether the proposed operation is likely to have significant social and poverty consequences (especially on the poor and vulnerable groups) and or to cause significant effects on the country’s environment, forests and other natural resources. The WB has determined that the policies supported by the proposed DPF are likely to have positive overall environmental and social effects. Pakistan has adequate legislative coverage, policy guidelines, and institutional mechanisms in place for managing the environment. This Program is not likely to cause any significant effects on Pakistan’s environment, forests and other natural resources, and there are systems in place for reducing any eventual adverse effects. WB carried out a Poverty and Social Impact Analysis and concluded that there are no potential negative impacts of the policy measures under the Program. Actions supported by the Program encourage economic growth and will positively impact the poor. Some of the policy actions, such as increasing the use of digital payments, are expected to have a positive impact on the underprivileged as well as women by increasing access to finance to individual and small businesses.
Asian Infrastructure Investment Bank
Senior Investment Operations Specialist,
Investment Operations Department, Region 2
Shabih Ali Mohib
Program Leader and Lead Economist
M. Aslam Chaudhary
Economic Affairs Division
Ministry of Finance, Revenue & Economic Affairs
The Islamic Republic of Pakistan
Aamir Nazir Gondal
External Finance Policy, Ministry of Finance, Finance Division