The World Bank has issued a stark warning to Pakistan’s federal and Balochistan governments, cautioning that redirecting funds from a multibillion-rupee flood housing programme toward infrastructure projects risks deepening poverty, increasing disaster vulnerability, and undermining the province’s long-term recovery.
In a detailed communication, the bank said the decision to cap housing assistance had left 119,049 verified and eligible households without identified financing support, after the government limited first-tranche beneficiaries to 62,966 as of June 22, 2026. Subsidy support was similarly capped at 97,000 beneficiaries.
“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 bank stated.
The affected families are among Balochistan’s most destitute. According to the World Bank, 84 percent of eligible beneficiaries are classified as ultra-poor, with 28 percent earning less than $30 a month and another 26 percent earning between $31 and $70. Nearly 39 percent are tenants, 37 percent are daily-wage labourers, and 8 percent are small farmers — groups the bank described as having limited savings, weak access to formal credit, few productive assets, and low capacity to absorb economic shocks.
World Bank Country Director Boloromaa Amgaabazar, who raised the concerns after meetings with Planning Minister Ahsan Iqbal, Balochistan Chief Minister Sarfraz Bugti, and other officials, also flagged the handling of fraud and corruption issues tied to the project. She noted that the government’s public disclosure of the funding changes — before a jointly agreed communication strategy had been finalised — had created additional risks, as many verified households had already completed the required documentation and signed project undertakings, leaving them expecting assistance that may never arrive.
The bank further revealed that 66,120 exclusion-related grievances had been registered in the project’s grievance management system by the agreed cut-off date. It urged that every complainant be contacted individually and formally notified of the decision, with written acknowledgment or verifiable proof of delivery shared with the bank for review.
“A credible and transparent grievance resolution process is essential to mitigating legal, operational, and reputational risks associated with eventual closure of the component,” Amgaabazar wrote.
The bank painted a grim picture of the cascading consequences for excluded families. With limited resources, households may be forced to divert income from food, healthcare, and education toward temporary shelter repairs, while also resorting to debt or the sale of productive assets to cope. Families unable to rebuild resilient homes could remain in damaged or unsafe structures, leaving them exposed to recurring floods, storms, earthquakes, and heatwaves.
Beyond the immediate humanitarian toll, the World Bank warned of broader social and institutional fallout. The exclusion of verified eligible beneficiaries, it said, could generate grievances, perceptions of inequity and unfairness, and a continued erosion of trust in government institutions and development programmes — risks the bank said had been observed in other housing reconstruction operations and could ultimately undermine the very objectives the project was designed to achieve.
