World Bank Expresses Strong Concern Over Diversion of Balochistan Flood Relief Funds

ISLAMABAD: The World Bank has expressed serious concern over the diversion of billions of rupees allocated for a housing programme for flood-affected families in Balochistan toward infrastructure projects, warning that the move could further increase poverty in the province.

According to media reports, the World Bank conveyed its concerns in a detailed letter to the federal and Balochistan governments, stating that the decision could leave thousands of vulnerable families without housing assistance and worsen their existing socioeconomic hardships.

The World Bank noted that 84 percent of the eligible beneficiaries belong to extremely poor and vulnerable groups. Around 28 percent have monthly incomes of less than $30, while another 26 percent earn between $31 and $70 per month.

Among the affected families, 39 percent are classified as vulnerable, 37 percent depend on daily wages and 8 percent are small farmers.

According to the World Bank, these households generally have limited financial resources, little access to formal credit, few productive assets and very limited capacity to withstand sudden economic or natural shocks.

Following a decision, as of June 22, 2026, to restrict housing assistance to 62,966 beneficiaries in the first phase and limit the subsidy period to 97,000 families, World Bank Country Director Bolormaa Agazzime held meetings with the federal minister for planning, the Balochistan chief minister and other officials.

She also expressed concerns about the mechanism for addressing allegations of fraud and corruption associated with the programme.

In a letter addressed to the secretaries of the federal ministries of Economic Affairs and Planning, as well as the Balochistan chief secretary, Agazzime said that limiting housing assistance and diverting the funds had left 119,049 verified and eligible families without any arrangement for financial support.

She warned that announcing the decision publicly before a joint consultation strategy with the World Bank had been agreed could create additional risks. Families whose eligibility had already been verified and who had signed the required project documents might still expect to receive housing assistance.

The World Bank said that 66,120 complaints had been registered in the project’s grievance management system by the specified deadline. It recommended that each complainant be contacted individually and formally informed of the decision.

Agazzime further called for written notification to every affected beneficiary and verification that the information had actually reached the concerned individual. Evidence of such notification should also be shared with the World Bank, she said.

The World Bank stressed that a reliable and transparent grievance redress mechanism was essential to minimise legal, administrative and social risks during the completion of the affected component of the programme.

It warned that excluding eligible families from a housing assistance programme could create a cycle that would not only perpetuate poverty but potentially deepen it, increase vulnerability to natural disasters and undermine long-term recovery and resilience.

The World Bank said low-income families could be forced to spend a greater share of their limited income on basic necessities such as food, healthcare and education. Some families could also be compelled to borrow money or sell productive property and assets to cope with financial pressures.

Similarly, families unable to construct stronger and disaster-resilient homes could remain in damaged or unsafe houses, leaving them more vulnerable to future floods, storms, earthquakes and extreme heatwaves.

The World Bank cautioned that excluding verified and eligible beneficiaries could increase grievances and perceptions of inequality and injustice, potentially undermining public trust in government institutions and development programmes.