AMN
The World Bank has warned that the Panama Papers issue has enhanced political risks in Pakistan and created some policy uncertainty. In its report titled ‘Pakistan Development Update’, launched yesterday, the bank cautioned that the country was exposed to political uncertainty, terrorism and natural disasters on the domestic front.
It said the upcoming national elections may affect reform momentum and macroeconomic policy orientation. According to a World Bank statement, the report, released twice a year, sets out recent developments across the economy and identifies risks and opportunities in the near-term future before focusing on a handful of key development challenges.
Released twice a year, according to a World Bank statement, the report sets out “recent developments across the economy and identifies risks and opportunities in the near-term future before focusing on a handful of key development challenges”.
The bank is not the first international financial institution to warn that Panama Papers issue may have consequences for Pakistan’s growth.
Last year, International Monetary Fund President Christine Lagarde had noted that the perception of corruption in Pakistan would hurt private investment and impede efforts to promote sustainable and inclusive growth.
Increasing transparency, making people accountable and removing red tape could help address the issue of perception of corruption, she had advised.
A former economic adviser to the Ministry of Finance explained that the Panama Papers issue had raised political risks, since investors had already gone into ‘wait-and-see’ mode. This, he said, was due to the uncertainty surrounding the issue.
“When political risks increase, economic growth falls,” Dr Ashfaque Hassan Khan said, adding that the bank’s projections for the country’s economic growth over the next two fiscal years were not consistent.
Since the Supreme Court’s decision to form a joint investigation team to probe the assets of Prime Minister Nawaz Sharif and his family, experts are divided over whether this would yield concrete results or whether it was a mere “eyewash”.
Earlier, many other international financial institutions had also warned that the Panama Papers issue may have consequences for Pakistan’s growth.
