World Bank approves $223m package to modernize Karachi, help Pakistanis access finance

Irshad Salim — The World Bank approved a package of $223 million on Thursday to help millions of Pakistanis, especially women and the poor get access to financial services and to improve living conditions in Karachi, Pakistan’s financial capital — its biggest city where more than 20 million people live and is growing with changing demographics and socio-economic dynamics. (Read World Bank Report’s overview on Karachi problems below)

“The two new projects have a strong element of inclusion that is at the heart of the World Bank’s partnership with Pakistan, especially where women, youth and the poor are concerned,’’ said Illango Patchamuthu, World Bank Country Director for Pakistan.

“Five per cent of the world’s unbanked population live in Pakistan. We need to change this to empower people financially, especially women. (And) Karachi contributes about 15 per cent of the country’s economy — the World Bank’s support will improve public spaces, mobility, and safety for its citizens,” Patchamuthu added.

Patchamuthu said out of the $223 million package, $86 million Karachi neighbohood improvement project will benefit almost one million residents, business owners and commuters by improving living conditions in the Saddar, Korangi and Malir areas of Karachi.

He said it will help improve the safety, accessibility, and attractiveness of public spaces in Karachi, such as streets, parks, city squares and pedestrian areas. “It will ensure equal access to all including women, youth and the poor. The project will also make it easier for the public and investors to access services such as construction permits and business registrations.”

“This project represents the start of a long-term partnership between the city of Karachi and the World Bank Group and will help strengthen confidence in the city’s administration among residents,” said Jaafar Friaa, the project’s task team leader.

“A systematic engagement with citizens will ensure that investments in public spaces are responsive to the local context, and build community ownership of the project,” Friaa said.

The financial inclusion and infrastructure project will provide $137 million to help millions of Pakistanis, especially women and the poor who do not have bank accounts and cannot get loans, to have access to these and other financial services. It will upgrade Pakistan’s payment systems to ensure affordable and faster payment services. The project is designed to implement selected actions of the national financial inclusion strategy.

“Our goal is to provide transparent and accessible financial services including micro and small loans to individuals and firms, particularly women and women-owned businesses in Pakistan,” said Gabi George Afram, the project’s task team leader.

“We will be working closely with the Central Directorate of National Savings to provide more efficient and convenient access to financial services to seven million clients through computerization of their financial systems.”

The project aims to improve access to financial and banking services for 50 per cent of all adults, half of them women, throughout Pakistan by 2020. It will also boost private sector credits to small and medium businesses to 15 per cent from seven per cent in 2015, the WB statement said.

This project will support the setting up of a multi-member steering committee that includes the local government, civil society and private sector. It will guide the development of the city by laying out a vision.

Both credits are financed by the International Development Association, the World Bank’s fund for the poor, with a maturity of 25 years, including a grace period of five years, the statement added.

World Bank report includes Karachi among 10 worst live-able cities

A World Bank report released in November 2016, highlighted the deplorable condition of Pakistan’s biggest city by including it in the list of 10 worst livable cities.

The report titled ‘Pakistan Development Update – Making growth matter’ launched in collaboration with the Sindh government, stated the varied reasons for the worst standard of livability and also put forth solutions to diminish the issues marring the metropolis.

It stated that Karachi continued to rank among the bottom 10 cities in Global Livability Index 2015.

Regional conflicts, organized crime, and social and ethnic tensions arising from an incoming tide of immigrants holds the city’s security hostage, the report stated.

Despite being Pakistan’s economic and industrial hub, the city’s infrastructure and institutions were in a pathetic condition. It had become prone to natural disasters such as floods, earthquakes, tsunamis, water scarcity and heat waves.

“Karachi faces a complex political environment, adhoc planning, poor governance, and weak financial and institutional capacities,” the report further maintained.

The most serious and imminent problem was stated as water scarcity since the water supply available only met 55 percent of the city’s needs.

The city lacked infrastructure to treat and dispose of sewerage water. Every year 475 million gallons of sewerage water was released directly into the open sea without any treatment, posing a direct threat to residents’ health and wellbeing.

Holding bad governance responsible for water scarcity, the report stated that the city had no formal policy for water supply and sanitation. It further noted that only 50 percent of the garbage that the city produces was sent to landfill sites.

There was no central public transport network in the city and no transport policy, it further maintained, whereas approximately 42 percent of its residents relied on public transport, yet the city had only vehicles which could facilitate only 5 percent of the population.

The city’s nutrition shortage was also brought into light and attention was also drawn on chronic malnutrition in Pakistan. It noted that the country had the third-highest stunting (low height according to age) rate in the world.

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