World Bank moves Pakistan out of South Asia list and into new MENAAP group

The World Bank has made a major change to its regional classification, removing Pakistan from the 'South Asia' list altogether. Pakistan, already struggling with a serious economic crisis, has now suffered another significant international setback from the World Bank.

Under the new arrangement, the South Asian countries are India, Bangladesh, Sri Lanka, Nepal, Bhutan and the Maldives. Pakistan, along with Afghanistan, has been placed in a new group called MENAAP (Middle East, North Africa and Pakistan). The decision has caused considerable stir in Pakistan's political and economic circles, and anger is being seen among people.

Well-known Pakistani journalist Shahbaz Rana explained the background to the move in a special analysis programme. According to him, World Bank president Ajay Banga is of Indian origin and had planned to have the World Bank's South Asia regional headquarters in New Delhi. Given the strained diplomatic relations and tension between India and Pakistan, Pakistani officials would have had to visit New Delhi repeatedly had the office been in India. That would have raised serious visa and security questions.

To avoid these likely difficulties and diplomatic complications, the Pakistan government had quietly agreed to the World Bank's restructuring. But the decision has now become a thorn in its side, and sharp criticism and protest have begun there. Pakistani experts say approving the decision was a grave strategic mistake. In trying to avoid being on the same regional platform as India because of India-Pakistan tension, Pakistan has lost its geographical and strategic place in South Asia, they say.

Analysts say regional classification is not merely a matter on paper. It directly affects global development funds, the distribution of funds and policy decisions. Until now, Pakistan was compared with developing economies such as India and Bangladesh, where issues of agriculture and social development were similar. After being placed in the MENAAP group, it will be compared directly with very wealthy oil-producing countries such as Saudi Arabia, the United Arab Emirates (UAE) and Qatar.

According to the World Bank's latest economic report, poverty in the MENAAP region has returned to its pre-Covid level and is continuing to rise. The most startling point is that nearly half of the entire region's extremely poor population lives in Pakistan alone. By being placed in a group with high-income countries such as Saudi Arabia and the UAE, Pakistan's poor economic condition has become more visible to the world.

Pakistani government officials have claimed that the change will not adversely affect the country's geographical identity or its direct income position. Even so, experts see it as a major diplomatic defeat for Pakistan. Given India's growing influence as the largest economy in South Asia and its standing in the World Bank, it is clear that Pakistan is being left behind in regional equations.