World Bank Gives Pakistan Ultimatum to Repay Pending Loans by May 30

Pakistan, already facing a deep financial crisis, has received a major setback from the World Bank. A confidential letter, dated May 17, was sent by the World Bank to Pakistan’s Ministry of Economic Affairs. In this letter, the World Bank has asked Pakistan to immediately clear its pending loan accounts and has set a strict deadline of May 30 to repay the outstanding amounts.

Pakistan Under Pressure to Repay Old Loans

According to the letter addressed to Dr. Kazim Niaz, Secretary of the Ministry of Economic Affairs, the World Bank highlighted that loans were taken for development projects in four different regions of Pakistan, including Sindh, Khyber Pakhtunkhwa, Punjab, and Balochistan. However, Pakistan has not returned the remaining funds even after the completion or closure of these projects.

The World Bank has clarified that the unused or leftover loan amounts, which were supposed to be returned as per the terms of the agreement, have not been paid back. Now, the World Bank is putting strong pressure on Pakistan to return these funds without any further delay.

Pending Loan Amounts

• 1. Sindh Water and Agriculture Project: Pakistan has yet to return approximately $700,000 to the World Bank. A notice was earlier sent on May 31, 2024, but no action was taken.
• 2. South Area Development Project – Khyber Pakhtunkhwa: Pakistan also borrowed funds for development in Khyber Pakhtunkhwa. A reminder was issued back in December 2019, but the pending amount remains unpaid.
• 3. Punjab Improvement Project: Pakistan owes around $3 million from this project, which has also been closed.
• 4. Balochistan Governance and Policy Project: The loan for this project is also unsettled, with no repayment made so far.

World Bank Gets Strict on Pakistan

The World Bank’s letter points out that many senior officials in the Pakistani government are aware of these issues. It also states that not only the leftover loan money but also the unused funds from these closed accounts must be returned immediately.

This situation has further worsened Pakistan’s image globally. According to Dr. Abhishek Singh, an expert on foreign affairs and Assistant Professor at Delhi University, recovering these funds will be difficult for the World Bank because Pakistan’s economy is in a severe crisis. The recent war-like situation with India has made things worse by damaging key infrastructure and exhausting economic resources.

With this new ultimatum from the World Bank, Pakistan is under immense pressure. Experts believe that unless urgent steps are taken to stabilize the economy and clear international dues, Pakistan may face even more isolation and embarrassment on the world stage.