WASHINGTON: The World Bank has approved a four-year over $6 bn lending program for Pakistan that seeks to boost tax revenues, make energy supplies more reliable and improve conditions in conflict-hit areas.

While the lending strategy from 2010 to 2013 is slightly less than the $6.5bn committed during the last four-year period, the program hones in on specific trouble spots in Pakistan.

The World Bank said it will intensify its efforts to help the government increase tax revenues, which has caused chronic underfunding of key services and made the country reliant on foreign aid.

Pakistan’s tax-to-GDP ratio is one of the world’s lowest.

“Raising the ratio of tax to GDP – currently only 10.2 per cent of GDP – is essential to mobilize resources to invest in human development and infrastructure, build resilience to future shocks, and guard against costly and disruptive growth reversals,” the Bank said in a statement.

In the energy sector, the Bank said it will help Pakistan tap its huge hydropower potential to make power supplies more reliable and improve the distribution of natural gas system, which through leakage or inefficiencies has higher than average losses.

The World Bank said it will also focus its lending on addressing problems in Pakistan’s conflict-hit areas. These include Federally Administered Tribal Areas near the Afghan border, and Khyber-Pakhtunkhwa province, which has been targeted by militants but is not an Islamist stronghold.

In particular, the World Bank said funding will be aimed at health and education, and improving the livelihoods of people, particularly for young men, living in these areas.

“This strategy recognizes that to steer Pakistan back on a path of broad-based growth, create jobs, and reduce poverty, a prolonged period of macroeconomic stability, financial discipline and sound policies is required,” said Rachid Benmessaoud, World Bank country director for Pakistan.