The World Bank (WB), established in 1945 along with the International Monetary Fund (IMF) at the 1944 Bretton Woods Conference, in its 76 years of history, played a significant role, as no other institution or country did, in shaping the economic, political and social landscape of the world.
The initial target earmarked by the US for the two institutions was to win over and protect war ravaged European countries in the West and Japan in the Pacific region from the orbit of expanding communist Russia in these regions. The US salvaged Western Europe and Japan and secured them into its fold through their massive economic development - funded by the WB and the IMF.
US having achieved its political and economic objective of global alliances and supremacy, the WB in the 1970s focused more on loans to developing world countries to help reduce poverty. For the last 30 years, it has included NGOs and environmental groups in its loan portfolio. Its loan strategy is influenced by the Millennium Development Goals (MDGs) as well as environmental and social safeguards.
South Asia is the most venerable region exposed to massive poverty and environmental risks. It is one of the least integrated regions in the world in terms of trade and people-to-people contact.
South Asian countries such as Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka can help build back better with climate resilience and inclusive economic growth. The World Bank’s Regional Integration, Cooperation, and Engagement (RICE) is a framework to create a stronger, more resilient region that WB coin as ‘One SouthAsia’.
In this region, the WB focuses on three primary themes: enabling regional connectivity, increasing climate resilience, and investing in human and has a vision for South Asia. Putting aside traditional concerns and taking joint action can develop cross-border solutions to shared issues, strengthen regional institutions, improve infrastructure and connectivity, and advance trade policy.
Regional cooperation has the potential to produce significant gains across all countries of South Asia. Intraregional trade now stands at just one-fifth of its potential with an estimated gap of $44 billion annually. An electricity market of the BBIN countries - Bangladesh, Bhutan, India, and Nepal - would save an estimated $17 billion in capital costs. And improvements in transport and logistics can reduce the 50 percent higher cost for container shipments in South Asia compared to OECD nations.
The World Bank’s programme in Pakistan is currently governed by the Country Partnership Strategy for FY2015-2020 with four priority areas of engagement: energy, private sector development, inclusion, and service delivery. The current portfolio has 58 projects and a total commitment of $13.8 billion.
The World Bank Vice President for South Asia, Hartwig Schafer, concluded last year a week-long visit to Pakistan to discuss the country’s development priorities and how the Bank can continue to support the government’s reform agenda.
The writer is former President of the Overseas Investors Chambers of Commerce and Industry.
Two Scenarios
In its landmark report, Pakistan@100: Shaping the Future, the World Bank projects two scenarios. One would take Pakistan to a $2 trillion economy by the year 2047, placing the country in the middle-income Second World group. This is a highly optimistic scenario that requires the country to achieve sustainably high economic growth rates for approximately the next three decades.
The second scenario is extremely depressing. Failing to change the country will cause it to slide further into the abyss of poverty. Pakistan today is standing at a crossroads and, as the report warns, decisions over the next decade will decide Pakistan’s future.
Pakistan occupies a pivotal position in what is described by Peter Frankopan, an Oxford professor, as a ‘silk road’. According to the author of The New Silk Roads, “We are living in the Asian century already, a time when the movement of global GDP from developed economies of the West to those of the East is taking place at an astonishing scale and at an astonishing speed”. Its geographical position provides Pakistan a massive opportunity to transform the country into a trade and transit hub.
Given its geostrategic position, Pakistan has the potential to serve as a nexus for the two routes— the continental Eurasian ‘silk road economic belt’ and the Southeast Asian ‘maritime silk road’.
According to the report, increasing regional integration within South Asia could cause Pakistan’s economy to expand by 30pc by 2047. Stronger regional relations can support Pakistan’s economic transformation and security objectives, increasing its leverage to resolve disputes with its neighbours and freeing up resources for public investment in economic and human development.
But that requires a clear strategy for greater integration with other countries in the region. With clear policy direction and political will, Pakistan could join the other countries as a formidable economic power at the age of 100.