COVID-19 pandemic offers chance for social sector, structural reforms: World Bank

Islamabad : Every crisis offers an opportunity, so the novel coronavirus (COVID-19) pandemic has provided the world especially Pakistan with an opportunity for social sector and institutional reforms, which need to be happen concurrently, said World Bank country director Illango Patchamuthu.

“We are working with the finance, commerce, energy and planning and development ministries 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 coronavirus-related response,” he said during an online 'COVID-19 policy response dialogue' organised by the Sustainable Development Policy Institute here.

The World Bank country director said his organisation was working on how to re-purpose a good part of its $600 million-$2 billion funding pipeline to support recovery initiatives through building safety net programme, supporting employment through public works programme and micro-enterprises, and addressing the looming food security issue.

About the World Bank's support initiatives for Pakistan amid Covid-19 crisis, Illango said initially, the bank was able to re-purpose the $40 million aid programme to help the government immediately purchase medical equipment and supplies that had already begun to reach district and local levels.

He added that recently, the bank's board approved $200 million pandemic responsive fund facility for Pakistan that was part of the $14 billion global fund facility for coping with the pandemic.

"Of the $200 million fund, $150 million covers immediate response of purchasing the medical equipment and $50 million the relief through Ehsaas cash transfer initiative to help poor families," he said.

The World Bank country director stressed the need for investment in human capital and said Pakistan was spending around three per cent of GDP on healthcare i.e. $242 per capita health spending, which needed to be increased.

Elaborating on the World Bank's global support during COVID-19 crisis, Illango said a $160 billion programme had been announced to fast track investments and budget support, technical assistance and result-based financing to the benefit of all client countries in the next 15 months starting from April 1 this year.

He said at the outset of the coronavirus pandemic, the World Bank had announced a $14 billion global facility which was meant to provide emergency medical equipment and supplies like ventilators and personal protective equipment.

"We have been working with many client countries such as Pakistan [on medical equipment and supplies]," he said.

On the occasion, SDPI executive director Abid Qaiyum Suleri said the world had learnt after COVID-19 outbreak that social services like health, education, water, and sanitation etc. couldn't be reduced to be private commodity that only rich might afford to buy.

He said it was 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.

"All that will help bring the focus of member governments back to social sector development," he said.

Dr Suleri also suggested that incorporating the challenges posed by COVID-19, the World Bank update its recently published “Pakistan@100” report suggesting the way forward post pandemic," he said.

Senior health professional at World Bank Aliya Kashif said Pakistan’s health care system was not equipped to handle such emergencies, so the World Bank was working with the government to help enhance health capacity to respond to the challenge effectively.

Trade economist at World Bank Group Gonzalo Varela said a substantial impact of Covid-19 pandemic had been seen on export.

"Two-thirds of exporters have experienced 10-50% reduction in orders, while the global trade is going to drop to an unprecedented level. It is believed that Pakistan’s exports will be substantially impacted," he said.

He asked the government to protect exporters through relief measures and said structural reforms would be crucial for economic recovery.

SDPI joint executive director Dr Vaqar Ahmed said the government needed to take measures to improve donor coordination architecture.

"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 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 said.

Dr Vaqar said the COVID-19 crisis presented 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 said.

Melinda, Uzma Qureshi and Shabih Mohib from the World Bank Group highlighted different issues of gender, quality of health expenditure and socioeconomic disruption during the discussion.