ON July 1 this year, during my usual doom-scrolling, I came across a tweet by Dr Martin Reiser, vice-president, South Asia, World Bank, announcing his retirement. At the same time came the news that the World Bank had split the South Asia region (SAR), with Pakistan and Afghanistan relocated to the Middle East-North Africa region, now called MENAAP. My initial response was a lament.

There was more to this announcement. The decision had been approved by the Bank’s Board of Executive Directors during the April 2025 annual meetings. Sources confirmed that an internal notification of the reorganisation was issued on May 5, 2025, with a public announcement made on July 1, 2025. The MENAAP vice-presidency was relocated to Riyadh on Sept 22, 2025. Pakistan is officially represented on this board by an Algerian national executive director. The new Alternate Executive Director Dr Kazim Niaz has only just arrived. Questions on the decision-making process sent earlier to the secretary of the Development Committee of the BoD were not answered. The only South Asian country on the Development Committee is India.

Perplexingly, key people in Pakistan had apparently not heard about this relocation. Syed Naveed Qamar, MNA and chair of the Finance Committee, was surprised when informed about it at the UN on July 9, 2025, saying it was the first time he had heard about this development. Later, he confirmed that the government of Pakistan had accepted the change through a press statement by Minister for Economic Affairs Ahad Cheema. Was Pakistan accepting this relocation (or was it, as the minister called it, a “transition”) as it was already a fait accompli? Or was it part of a broader strategy by the government on regional realignment? How would this impact Pakistan’s lending programme with the Bank, and what new opportunities could this repositioning present?

The vice-president of the MENAAP region, Dr Ousmane Dione, made his first visit to Islamabad on July 25, 2025, to reassure the government and reaffirm the Bank’s commitment to the $20 billion lending programme for Pakistan for the period 2026 to 2035. Responding to my questions, Dr Dione cited “macroeconomic stabilisation, tackl[ing] underlying constraints to productivity and competitiveness, and address[ing] human capital gaps” as the country’s key challenges. He said that the main priorities should include “reducing the presence of the state within the economy” and that “high costs of energy … can be addressed through expanding renewable energy-based generation … energy efficiency and decarbonisation”. These align with Pakistan’s own Uraan development plan.

The stakes in economic relocation from South Asia include looming environmental costs. The Hindukush and the Himalayas, together with the Indus Basin, are a mostly enclosed South Asian geological system. The rivers of South Asia flow across three countries north to south and southeast. The Indus Waters Treaty, 1960, between India and Pakistan, was brokered by the Bank. “Although the project funding of dividing the waters of these massive rivers is long over, the Bank still has the custodial role of appointing experts for regular reviews and judges for any disputes taken to international courts under the IWT,” according to Lahore-based environmental lawyer Rafay Alam.

In repositioning its Pakistan lending programme, the World Bank must ensure that projects aimed at mitigating the climate impact remain viable.

Why does this matter for Pakistan’s economy? Climate change impacts were already costing the country $3.8bn annually, according to a World Bank-Asian Development Bank 2021 report. This increased to $15.2bn in 2022’s floods of biblical proportions. It is predicted that by the middle of this century, the challenges of flood/ water management, caused by melting glaciers and rising river waters will lead to a shrinking GDP, with annual economic damages estimated at up to $38bn.

In repositioning its Pakistan lending programme to the MENAAP region, the Bank must ensure that projects aimed at mitigating the climate impact, particularly the SAR projects in the Indus Waters Basin, remain viable. For this, the government must undertake the following steps:

— Request that the World Bank’s SAR and MENAAP region undertake a joint assessment of the impact of economic, including environmental, costs of this repositioning on Pakistan’s economy and lending programme. The two regions should also set up a Standing Liaison Mechanism to deal with future projects/ issues in the Indus Basin, where Pakistan is a primary riparian — occupying parts of the upstream and the entirety of the downstream. The SLM sessions must be held in a regional flight hub that allows all stakeholders easy visa and travel access.

— Pakistan’s Ministry of Finance must do its own assessment of the same impacts along with a forward-looking review of new development funding opportunities including access to climate financing from private equity hubs.

MENAAP is a more diverse region — spanning both oil-rich donor countries and states in conflict or in the phase of post-war reconstruction. World Bank lending in 2024 to SAR was $15.9bn and to MENA $4.6bn (more country programmes and less overall lending). A country similar to Pakistan is Egypt — which, too, was home to an ancient civilisation — densely populated on the delta of a mighty river, the Nile. Egypt is the third largest African economy after Nigeria and South Africa. Both Pakistan and Egypt face similar socioeconomic and political security challenges. However, Egypt has a well-developed tourism economy supplemented by a large aid package from the US. Dr Saleem H. Ali, chair of the Department of Geography and Spatial Sciences, University of Delaware, is optimistic: “I see ecological and economic value in this new regional demarcation … [with] the maritime areas of connectivity … the Persian/ Arabian Gulf … [and] as a geographic bridge between South-West Asia and China.”

Lastly, Pakistan should seek to join the Development Committee of the Bank’s BoD. The World Bank’s policies are developed in this committee before being put to the board for decision. We must be present at this table to be counted.

The writer is president, AirQualityAsia, and an expert on parliamentary diplomacy related to the UN SDGs 2030.

X: @ShaziaZRafi

Published in Dawn, October 20th, 2025