World Bank shows tough love to Pakistan

The World Bank has said it will not release $350 million under the Poverty Reduction Strategy Pa p er (PRSC) programme until Pakistan meets its conditions by the end of June.

A senior finance ministry official told The Express Tribune that the World Bank has pressed Pakistan to increase electricity tariff by six per cent with retrospective effect from April 1 and transfer the circular debt of power distribution co

mpanies and oil marketing companies worth Rs250 billion to the Debt Company, formed under the tenure of former finance minister Shaukat Tarin. According to the official, Tarin had promised the World Bank that the government would transfer the circular debt to the Debt Company.

In the energy summit held in mid- April, the federal government in a bid to remove the circular debt on a permanent basis took the responsibility of settling Rs116 billion. In the third condition, the official said, the World Bank has asked Pakistan to replace General Sales Tax (GST) with Value Added Tax (VAT) from July 1 and for this to happen Pakistan’s parliament must pass the VAT Act before the end of June. In the fourth condition, the World Bank has called for power tariff adjustments on a quarterly basis.