The World Bank’s Independent Evaluation Group (IEG) has rated Pakistan’s $856.1 million Resilient Institutions for Sustainable Economy (RISE) programme as “Moderately Satisfactory,” acknowledging progress in fiscal management and digital financial services while highlighting shortcomings in key tax, power sector and structural reforms.
The RISE programme, financed through World Bank loans and credits, was initially designed as a three-operation policy financing series. However, the programme concluded after its second operation following a 24-month delay, as reform momentum slowed amid political uncertainty ahead of the 2024 general elections and the adoption of a new Country Partnership Framework.
According to the evaluation, Pakistan achieved notable improvements in fiscal governance by strengthening the Macro-Fiscal Policy Unit and introducing an Annual Borrowing Plan to improve public debt management. The programme also surpassed its digital payments targets, with most federal government payments shifting to digital platforms, expanded biometric verification of bank accounts and significant growth in branchless banking services, including greater financial inclusion for women.
Despite these achievements, the evaluation found that several critical reforms failed to meet their intended objectives.
Efforts to broaden the tax base through improved property valuation fell short of expectations, with property transfer tax revenues declining during the programme period before recovering after its completion. Similarly, the initiative did not achieve its target of reducing the annual accumulation of circular debt in Pakistan’s power sector.
The report also noted limited progress on two major structural reforms nationwide General Sales Tax (GST) harmonisation and import tariff rationalisation. While an online GST filing system was introduced for selected sectors, harmonisation between the federal and provincial governments remained incomplete. Import tariff reforms also recorded only modest progress before partially reversing.
The IEG observed that the World Bank underestimated the political and institutional challenges associated with implementing reforms requiring coordination between the federal and provincial governments. It also noted that some of the programme’s performance indicators were too narrow to accurately measure broader reform outcomes.
Despite these challenges, the evaluation credited the World Bank for maintaining policy engagement with Pakistan during multiple crises, including the COVID-19 pandemic, the devastating 2022 floods, prolonged political uncertainty and broader macroeconomic pressures.
Looking ahead, the IEG warned that Pakistan remains vulnerable to reform reversals due to persistent fiscal pressures, political instability, inefficiencies in the power sector and continued challenges in securing provincial cooperation. The report stressed that sustaining progress in debt management, subsidy reforms, GST harmonisation and tariff rationalisation will require strong political commitment, supported by ongoing World Bank initiatives and Pakistan’s IMF-backed economic reform programme.
