The World Bank has recommended that Pakistan establish a permanent Debt and Risk Management Committee (DRMC) to address growing fiscal risks and streamline debt management processes. The proposed committee would be accountable to Parliament, ensuring transparency in loan-related decisions, according to government sources.
The recommendation comes as part of efforts to mitigate Pakistan’s high debt burden. The Washington-based lender has urged the finance ministry to introduce secondary legislation to better manage the country’s mounting debt challenges. The World Bank has raised concerns in recent months about the lack of coordinated debt management across various government bodies.
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The need for the committee was acknowledged during the latest meeting of the steering committee for the Revenue Mobilisation, Investment, and Trade Programme (REMIT), a UK-funded initiative. The proposed DRMC would ensure that new loans align with macroeconomic policies and meet the government’s financing needs while considering both domestic and international market conditions.
Pakistan’s debt management has been marked by fragmentation, with debt recorded by both the Economic Affairs Ministry and the central bank. This lack of coordination often leads to poor decision-making, with critical debt obligations scattered across different institutions. A unified approach, as suggested by the World Bank, would streamline debt management, reducing associated risks.
The World Bank is also set to approve a 10-year Country Partnership Programme for Pakistan, with an estimated $20 billion funding package for 2025-2035. The DRMC would play a key role in overseeing debt management and ensuring fiscal responsibility.
