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World Bank funds

March 13, 2019

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IN this era of skyrocketing foreign borrowing and slashed development expenditures, it is almost a travesty that the disbursement of up to $2.3bn of World Bank funds should be held up due to bureaucratic red tape. The issues behind this delay are petty — such as the failure to open the bank accounts where the funds are supposed to be deposited. Other than this, there are conflicting procurement guidelines and staffing issues, because officers with a key role to play in the development projects for which the funds are intended have not yet been appointed. Up to 27 development projects of the federal and provincial governments are impacted because their funds have not been released. In the same period, the government has borrowed up to $6bn from foreign sources, and is continuing to slash development projects in order to contain the fiscal deficit.

The irony of the situation is difficult to miss. Pakistan has borrowed extensively from the World Bank in the past, and though a great deal of bureaucracy is involved in dealing with this multilateral lender, it is not exactly an impossible task to do so. If the government is genuinely short of resources and opposed to slashing the development budget unless absolutely necessary, it is reasonable to expect that it would have focused on this issue and made an early, genuine attempt to unlock the funds and keep the development work going. The fact that it has dropped off the government’s radar shows that the senior leadership of the economic team has been distracted from its core task. It has been unable to get a grasp on its own division and its associated departments, and navigate important issues through the bureaucracy even though it holds the key ministerial positions required for the job. Instead, the economic managers have touted borrowing from friendly countries as their signature achievement. This has to change. The economic team, led by the finance minister, must get a handle on the current state of affairs. To do this, the finance leadership has to extricate itself from the clutches of powerful vested interests that permeate the ministry, whether they pertain to the bureaucracy or private-sector lobbies or any other, and assert its own authority independently over the finance division. Such elementary failures of leadership happen when those at the top have gone into reactive mode, and are thereby failing to see reality with their own eyes.

Published in Dawn, March 13th, 2019