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REFOCUSING PRIORITIES: THE WORLD

BANK'S COMMITMENT TO HUMAN
DEVELOPMENT AND CLIMATE
RESILIENCE IN PAKISTAN
By
Mir Sher Baz Khetran
Research Fellow
Centre for Strategic Perspectives (CSP), ISSI

Edited by
Dr Neelum Nigar

December 12, 2024

(Views expressed in the brief are those of the author, and do

not represent those of ISSI)

Introduction

In the wake of multiple challenges in the country, the World Bank has declared a
change in its development strategy. Conventionally focused on infrastructure and
budget support, the World Bank now addresses two of Pakistan's most pressing
challenges: low human development and worsening climate conditions. This
transition was officially announced by the World Bank’s Country Director for
Pakistan, Najy Benhassine, marking a key moment in the Bank’s relations with
Pakistan, where social and environmental issues have become increasingly urgent. 1
The World Bank's financing in Pakistan has traditionally been dominated by large
infrastructure projects and budgetary support. These projects have helped improve
physical infrastructure and been critical in stabilizing Pakistan’s macroeconomic
framework.2 However, social indicators remain lagging, particularly in education
and health. Pakistan faces a serious human development deficit, with over 26
million children out of school and alarmingly high rates of child stunting.
Meanwhile, the country is highly exposed to climate change, experiencing

1 Shahbaz Rana, “Human, climate crises to get funds”, The Express Tribune, October 9, 2024
https://tribune.com.pk/story/2501568/human-climate-crises-to-get-funds
2 “The World Bank of Pakistan”, Report
https://www.worldbank.org/en/country/pakistan/overview

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Development and Climate Resilience in Pakistan

increasingly frequent and severe floods, such as those in 2022, which caused
estimated $30 billion in damages.3

In the wake of these developments, the World Bank evidently feels the need to shift toward a more
holistic development strategy. The new Country Partnership Strategy will focus on six key areas:
child stunting, education, climate resilience, clean energy transition, air pollution, and improving the
business climate. This represents a significant move away from an infrastructure-centric approach
toward a more balanced strategy prioritizing human development and environmental sustainability.

Addressing the Human Development Crisis

The education sector in Pakistan faces significant challenges, including low enrolment rates, high
dropout rates, gender inequality, and regional disparities. With over 26 million children out of
school, the country is facing an educational crisis of unprecedented scale.4 The national literacy rate
stands at around 62.8%, with large gaps between urban and rural areas and genders. Male literacy
rates increased in all provinces: Punjab from 66.1 percent to 66.3 percent, Sindh from 61.6 percent
to 61.8 percent, Khyber Pakhtunkhwa from 52.4 percent to 55.1 percent, and Balochistan from 53.9
percent to 54.5 percent.5 Nearly one-third of girls are out of school at the primary level, a figure that
worsens in secondary education due to cultural, economic, and security issues. Access to quality
education also varies across provinces, with Punjab generally performing better than Balochistan
and Sindh, where educational resources are particularly lacking. The government of Balochistan has
announced the establishment of a public-private school system. Recently, it dismissed over sixty
government teachers for absenteeism, while those remaining received warnings.6

Infrastructure deficits further impact enrolment and retention, as around 22% of public schools lack
essentials like clean drinking water, toilets, and electricity. Teacher shortages, absenteeism, and
outdated curricula hinder education quality nationwide. Additionally, education funding is critically
low; at only 2.5% of GDP, it falls short of UNESCO’s recommended 4-6%, limiting advancements in
educational infrastructure and teacher training. Pakistan’s dropout rate from primary to secondary
school is about 33%, driven by poverty, early marriage, and child labour. These challenges contribute
to the high rate of out-of-school children, estimated at 22.8 million—one of the highest in the world.

3 Ibid
4 “Pakistan faces severe education crisis with over 26 million children out of school”, ANI, September 10,
2024, https://www.aninews.in/news/world/asia/pakistan-faces-severe-education-crisis-with-over-26-
million-children-out-of-school20240910150943/
5 “Pakistan Economic Survey 2023-24”, Education, June 16, 2024
https://www.finance.gov.pk/survey/chapters_23/10_Education.pdf
6 “65 ‘absentee schoolteachers’ sacked in Balochistan”, Dawn News, October 29, 2024
https://www.dawn.com/news/1868334

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Development and Climate Resilience in Pakistan

Statistics on human development in Pakistan paint a grim picture. Besides challenges in the
education sector, child stunting remains a critical issue, reflecting deep-rooted malnutrition and
poor access to healthcare. The World Bank’s new strategy addresses these challenges by allocating
significant resources to education and health, with a particular focus on reducing child stunting and
increasing school enrolment.7

Flood reconstruction projects in Sindh, a province severely affected by floods, have shown
noticeable progress in improving social indicators. The $1.3 billion in projects, primarily focused on
housing and infrastructure reconstruction, have had a tangible impact on the ground. Social
indicators in the region have improved, with millions of people benefiting from rehabilitated
infrastructure and housing projects. These initiatives have provided not only immediate relief to
flood-affected communities but also laid the foundation for long-term human development by
improving access to essential services like healthcare, education, and clean water.

The World Bank’s emphasis on human development is part of a broader strategy to build the
resilience of Pakistan’s population to future crises. By improving education and healthcare, it aims to
support efforts to empower Pakistan’s youth and create a healthier, more skilled workforce capable
of driving the country’s economic growth.

Climate Resilience: An Ever-Growing Need

In addition, Pakistan faces a serious environmental crisis due to climate change. The country is highly
vulnerable to extreme weather events, particularly floods, which have caused billions of dollars in
damages and displaced millions of people in recent years. The 2022 floods serve as a stark reminder
of Pakistan’s susceptibility to climate-related disasters, with widespread destruction of
infrastructure and livelihoods across many provinces.8

The new strategy emphasizes climate resilience, reflecting the growing urgency of addressing
Pakistan’s environmental vulnerabilities. According to the World Bank, around $2 billion was
reprioritized from its existing financing envelope to support flood recovery efforts in Pakistan. In
Sindh alone, five major projects worth $1.3 billion have been funded, focusing on the reconstruction

7 “Addressing Pakistan’s high level of stunting, now!” World Bank Blogs, June 13, 2023
https://blogs.worldbank.org/en/endpovertyinsouthasia/addressing-pakistans-high-level-stunting-now
8 “Pakistan: Flood Damages and Economic Losses”, World Bank Group” , October 28, 2022
https://www.worldbank.org/en/news/press-release/2022/10/28/pakistan-flood-damages-and-economic-
losses-over-usd-30-billion-and-reconstruction-needs-over-usd-16-billion-new-assessme

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of roads, housing, and flood protection infrastructure.9 These projects are crucial for mitigating the
impact of future floods and ensuring that vulnerable communities are better protected.

A key project under this initiative is the reconstruction of 2.1 million housing units in Sindh, with
direct transfers to beneficiaries' bank accounts helping to expand financial inclusion. According to
the International Labour Organization, the housing reconstruction project has created around one
million job opportunities, providing much-needed employment in flood-affected areas. In addition to
housing reconstruction, the World Bank has focused on rehabilitating critical infrastructure such as
roads and water supply systems, essential for rebuilding local economies and supporting long-term
development. The focus on climate resilience extends beyond immediate reconstruction efforts. The
World Bank contends it is also investing in long-term solutions to enhance Pakistan’s ability to
withstand future environmental shocks.

Clean Energy and Air Pollution: Keys to Sustainability

A key focus of the World Bank’s new strategy is the transition to clean energy and the reduction of
air pollution. Pakistan’s energy sector is heavily reliant on fossil fuels, contributing to both air
pollution and greenhouse gas emissions. The World Bank recognizes that transitioning to clean
energy is not only crucial for reducing Pakistan’s carbon footprint but also for improving public
health, as air pollution is a major cause of respiratory diseases in the country.10

The clean energy initiatives include investments in renewable energy sources like solar and wind
power, as well as efforts to improve energy efficiency. These projects aim to reduce Pakistan’s
dependence on fossil fuels and promote the use of sustainable energy sources that are both
environmentally friendly and cost-effective.11 By supporting the transition to clean energy, the
World Bank is helping Pakistan address its energy needs in a sustainable and resilient way amid the
impacts of climate change.

Air pollution is another major issue in Pakistan, particularly in urban areas where industrial
emissions and vehicular pollution contribute to hazardous air quality levels.12 The World Bank’s

9 “Pakistan: World Bank Approves $1.692 Billion for 5 Projects to Support the People of Sindh in the Flood-
Affected Areas”, World Bank Group, December 19, 2022
https://www.worldbank.org/en/news/press-release/2022/12/19/pakistan-world-bank-approves-1-692-
billion-for-5-projects-to-support-the-people-of-sindh-in-the-flood-affected-areas
10 “ACHIEVING SUSTAINABLE ENERGY,” WB, December 2023,
https://thedocs.worldbank.org/en/doc/79f2e3cafba128c39b2057d06ef3bd3e-
0310062023/original/Pakistan-Reforms-For-A-Brighter-Future-Policy-Note-5-Achieving-Sustainable-
Energy.pdf
11 Ibid
12 Sher Baz Khetran, ““Health hazards caused by increasing air Pollution in Pakistan”, ISSI, October 11, 2023

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focus on reducing air pollution includes investments in cleaner technologies and policies that
encourage the adoption of low-emission practices in industries and transportation. By addressing air
pollution, the World Bank aims to improve public health and reduce the economic costs associated
with pollution-related diseases.

Challenges and Way Forward

While the World Bank’s new strategy marks a significant shift in its approach to development in
Pakistan, challenges remain. One key issue is the allocation of resources, particularly with limited
concessional financing. Developing countries like Pakistan need more concessional financing to
effectively combat climate change and improve human development outcomes. However, the
availability of such funding remains uncertain, with the next round of pledges not expected until
December 2024.

Additionally, the repurposing of existing funds for flood recovery has impacted other important
development projects. Planning Minister Ahsan Iqbal noted that while flood-related projects have
been prioritized, other schemes have suffered as a result.

In provinces like Balochistan, progress has been slower. Despite the approval of $213 million for
flood rehabilitation, the implementation of projects has been delayed by issues such as validating
damaged homes and opening beneficiary bank accounts. This underscores the importance of
effective governance and coordination between federal and provincial authorities in ensuring the
timely execution of development projects.

Conclusion

The World Bank’s new country partnership strategy for Pakistan departs from its traditional focus on
infrastructure and budget support. Prioritizing human development, climate resilience, and clean
energy seeks to address the root causes of Pakistan’s socio-economic challenges. While progress has
been made, particularly in flood-affected areas like Sindh, much work remains to be done, especially
in provinces like Balochistan. The success of these initiatives will depend on sustained financial
support, effective governance, and continued collaboration between the World Bank, the Pakistani
government, and provincial authorities. If implemented effectively, this strategy has the potential to
positively impact Pakistan’s development trajectory, creating a more resilient and prosperous future
for its people.

https://issi.org.pk/issue-brief-on-health-hazards-caused-by-increasing-air-pollution-in-pakistan/

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