The World Bank has expressed serious displeasure over reputational challenges, warning that redirecting funds from a multi-billion-rupee resilient housing programme for the flood-affected population toward infrastructure projects would further deepen poverty in Balochistan.
“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 said in detailed communication to the federal and Balochistan governments.
Among the eligible beneficiaries, 84% are ultra-poor and vulnerable, with 28% earning less than $30 a month and another 26% earning between $31 and $70. Of these, 39% are tenants, 37% are daily-wage labourers, and 8% are small farmers, groups the bank said typically have limited savings, weak access to formal credit, few productive assets, and low capacity to absorb shocks.
The concerns followed meetings between the federal minister for planning, the Balochistan chief minister, and others after housing support was capped at 62,966 first-tranche beneficiaries as of June 22, 2026, with subsidy support limited to 97,000. World Bank Country Director Boloromaa Amgaabazar raised objections to the decision itself, as well as the handling of associated fraud and corruption issues.
Cautions Exclusion Could Deepen Poverty, Disaster Risks, Social Tensions
In written correspondence to the federal secretaries for economic affairs and planning, as well as the Balochistan secretary, Amgaabazar noted that the capping and redirection of housing support has left 119,049 verified and eligible households without identified financing support. She said the decision’s public disclosure, made before a jointly agreed communication strategy with the bank had been finalised, has created additional risks, since households that had already completed verification and signed project undertakings may continue expecting housing assistance.
She 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, and said each complainant should be contacted individually and formally notified of the decision. “Written acknowledgment, or other verifiable evidence confirming delivery and receipt of the communication, should be obtained and 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,” she wrote.
With housing support now capped, eligible but excluded households risk falling into a compounding cycle of vulnerability, one that not only reinforces poverty but actively increases it, raises disaster risk, and undermines the long-term recovery and resilience the project was originally designed to build. With limited resources, families may be forced to divert income away from essentials like food, healthcare, and education toward temporary shelter repairs, while resorting to debt or selling productive assets to cope. Meanwhile, families unable to rebuild resilient homes may remain in damaged or unsafe structures, leaving them more exposed to recurring floods, storms, earthquakes, and heatwaves.
The exclusion of verified, eligible beneficiaries also risks generating fresh grievances, perceptions of inequity, and continued erosion of trust in government institutions and development programmes, risks the World Bank noted have been observed in other housing reconstruction operations elsewhere.
