The World Bank has issued a sharp warning to the Pakistan government against redirecting funds from a multi-billion-rupee resilient housing programme — designed for flood-affected communities in Balochistan — toward infrastructure projects, cautioning that such a move would deepen poverty among the state's most vulnerable residents. The warning, reported by Dawn newspaper, follows high-level meetings between the bank and Pakistani federal and provincial officials.

What Triggered the Warning

The World Bank's concern was prompted by the capping of housing support at 62,966 first-tranche beneficiaries as of 22 June 2026, along with subsidy support limited to 97,000 households. The bank's Country Director, Boloromaa Amgaabazar, met with the Federal Minister for Planning and the Chief Minister of Balochistan, among others, and subsequently expressed alarm over both the fund redirection and the handling of fraud and corruption concerns within the programme.

Scale of Vulnerability Among Beneficiaries

The World Bank's communication to the federal and Balochistan governments laid out a stark socio-economic portrait of those being left behind. According to the bank, 84 per cent of eligible beneficiaries are ultra-poor and vulnerable. Of these, 28 per cent earn less than $30 per month and another 26 per cent earn between $31 and $70 per month. Additionally, 39 per cent are tenants, 37 per cent are daily-wage labourers, and 8 per cent are small farmers.

'Based on the socio-economic profile of the eligible household, the risk is not simply that households remain without housing assistance; rather, it is that existing vulnerabilities become mutually reinforcing and deepen over time,' the World Bank stated in its detailed communication.

Households Left Without Financing

Amgaabazar wrote to the Federal Secretaries for Economic Affairs and Planning, as well as the Secretary of Balochistan, warning that the capping and redirection of housing support had left 119,049 verified and eligible households without any identified financing. She further flagged that premature public disclosure of the decision — before a jointly agreed communication strategy with the bank had been finalised — had created additional risks, as households that had completed verification and signed project undertakings might continue to expect assistance.

Grievance Process Under Scrutiny

The bank noted that 66,120 exclusion-related grievances had been registered in the project's grievance management system on or before the agreed cut-off date. Amgaabazar called for each complainant to be contacted individually and formally notified of the decision, with written acknowledgement or other verifiable evidence of delivery to be shared with the bank.

'A credible and transparent grievance resolution process is essential to mitigating legal, operational, and reputational risks associated with eventual closure of the component,' she wrote. The episode raises broader questions about Pakistan's ability to manage multilateral aid accountability, particularly as Balochistan continues to grapple with the aftermath of devastating floods.