87887
                                            Pakistan

                                Country Partnership Strategy

        First Fiscally Sustainable and Inclusive Growth Development Policy Credit

                   First Power Sector Reform Development Policy Credit

                                       Chair Summary

                                          May 1, 2014

        Executive Directors discussed the Joint IBRD/IDA/IFC/MIGA Country Partnership
Strategy FY2015-2019 (CPS) for the Islamic Republic of Pakistan. They also approved two IDA
credits for Pakistan -- (i) the First Fiscally Sustainable and Inclusive Growth Development
Policy Credit in the amount of SDR 258.5 million (US$400 million equivalent), and (ii) the First
Power Sector Reform Development Policy Credit in the amount of SDR 387.8 million (US$600
million equivalent).

        Directors welcomed the five year program laid out in the Bank Group’s Country
Partnership Strategy (CPS) for Pakistan. They supported the four pillars of the CPS and the fact
that they were firmly grounded in the Government’s own development strategy. Directors
appreciated the integrated view of the engagement of the World Bank Group, that it was based
on an extensive Government, donor and stakeholder consultation and that it was based on an
analytic framework that identified the key constraints for reducing poverty and building shared
prosperity. They also welcomed the critical role of the Bank in leveraging resources from other
development partners and private sector, particularly in energy; the need to break through the
barrier on services, and the inclusion pillar to bring greater focus on inequities faced by women
and the poorest. The importance of selectivity in the CPS was highlighted; while many Directors
appreciated the tighter results framework and in particular the focus on energy, others felt there
was room to increase selectivity further and disaggregate data on results.

        Directors thanked staff for their candid assessment of risks, and for building a program
that supported the Government’s reform efforts despite these risks. Nevertheless, they noted the
potential need for alternate plans in case a negative situation developed. Other areas Directors
highlighted include the need to further strengthen progress on governance, gender, youth
engagement, analytical data and climate change.          Directors welcomed the intensive IFC
engagement in the country through investments and advisory support, particularly in the
renewable energy sector, privatization support and in financial inclusion.

       Directors welcomed the First Power Sector Reform Development Policy Credit.
Directors appreciated the strong action taken by the Government to date, including the major
increase in tariffs and eliminating the $5 billion in outstanding circular debt. Directors also
praised the strong collaboration with the Asian Development Bank and Japan International
Cooperation Agency (JICA) who cofinanced the operation.
        Directors appreciated the actions taken to date under the First Fiscally Sustainable and
Inclusive Growth Development Policy Credit, including solid progress to reinvigorate the
privatization process and facilitate access to credit by small and medium enterprises, the effort to
expand the tax net and eliminate tax exemptions, and the increase in coverage of poor
beneficiaries under the BISP income support program.

         Executive Directors noted that the efforts under both DPCs were a start, and needed to be
followed up with additional actions that would be supported under a second round of DPCs. For
this, strong support in the way of technical assistance was needed.          Directors urged the
Government to remain on-track with the IMF program, and for the World Bank to continue its
good collaboration with the IMF going forward. Directors urged the Bank to help the
Government to build in systems to protect the poor from the impact of reforms, and to strengthen
its attention to outreach and communication to the people of Pakistan to ensure wider ownership
and generate greater confidence in reforms.




                                                            
*This summary is not an approved record.