ISLAMABAD: The World Bank’s Independent Evaluation Group (IEG) has delivered a mixed verdict on Pakistan’s USD 856 million Resilient Institutions for Sustainable Economy (RISE) reform programme, concluding that while the initiative strengthened fiscal coordination, digital payments and financial transparency, it failed to achieve several of its most critical objectives, including broadening the tax base, containing power sector circular debt and harmonising the country’s fragmented sales tax regime.
The IEG rated the overall outcome of the two-operation programme as “Moderately Satisfactory”, highlighting that some flagship reforms either lost momentum or were diluted before completion.
The RISE programme, financed through World Bank loans and credits worth about USD 856.1 million, was originally designed as a three-stage policy financing operation.
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However, the World Bank terminated the series after the second operation following a 24-month delay, citing slowing reform momentum, political uncertainty ahead of the 2024 elections and the need to realign future reforms under a new Country Partnership Framework.
According to the official document, Pakistan made notable progress in establishing institutions to improve fiscal management, including strengthening the Macro-Fiscal Policy Unit and publishing an Annual Borrowing Plan, while reforms promoting digital payments and biometric verification of bank accounts significantly exceeded expectations.
Digital transactions surged far beyond programme targets, federal government payments shifted almost entirely to digital platforms, and branchless banking expanded rapidly, including among women, reflecting one of the programme’s strongest achievements.
However, the document further noted that reforms aimed at increasing tax revenues through improved property valuation produced disappointing results. Instead of the targeted increase, property transfer tax revenues declined during the programme period before showing delayed improvement after programme closure, making attribution uncertain. Likewise, efforts to reduce the annual flow of power sector circular debt missed their targets during implementation despite subsequent improvements.
The evaluation also found that two of Pakistan’s most significant structural reforms — nationwide harmonisation of the General Sales Tax (GST) and rationalisation of import tariffs — achieved only partial progress.
While an online GST filing portal was introduced for selected sectors, comprehensive harmonisation across federal and provincial governments remained incomplete. Tariff reforms also delivered only modest gains before partially reversing, reflecting the fragility of policy implementation amid fiscal pressures.
The World Bank said the programme successfully supported institutional reforms in debt management, fiscal coordination and financial transparency but acknowledged that several prior actions were narrowed under the second phase as reform ambitions were scaled back.
The IEG also criticised aspects of the programme’s original design, stating that the Bank underestimated the political difficulty of sustaining complex reforms requiring cooperation between the federation and provinces. It further observed that several performance indicators were too narrow to fully capture whether intended reforms had actually been implemented.
Despite these shortcomings, the report credited the World Bank with maintaining policy dialogue during an exceptionally turbulent period marked by the Covid-19 pandemic, devastating floods, political instability and macroeconomic stress.
Looking ahead, the IEG warned that Pakistan faces high risks of reversing reforms because of persistent fiscal pressures, political uncertainty, unresolved power sector inefficiencies and the continued challenge of securing provincial cooperation on taxation and fiscal management.
It stressed that sustaining gains in debt management, subsidy targeting, GST harmonisation and tariff reforms would require continued political commitment alongside complementary support from ongoing World Bank projects and the IMF-backed reform programme.
Copyright Business Recorder, 2026