Catastrophe bond for Pakistan

The Express Tribune published an opinion piece by an independent economic analyst proposing a World Bank-supported catastrophe bond for Pakistan. The writer suggests starting with $500 million, with the size possibly rising towards $1 billion, to transfer rare but severe disaster risks to international investors. The argument follows Nepal's floods, which had caused more than 500 deaths and left nearly 1,000 people missing at the time of writing.

Under the proposal, Pakistan would instead make yearly premium payments, avoiding emergency debt taken on once a disaster hits, with payouts depending on measured rainfall, river levels or earthquake intensity. The piece cites the 2022 floods, which affected 33 million people, and notes that Jamaica's $150 million bond paid out in full when Hurricane Melissa struck in 2025. To fund the premium, the writer argues that setting aside the Rs50 billion climate levy and shifting 1% of the petroleum levy could yield about Rs66.8 billion a year.

The article also proposes a catastrophe insurance pool overseen by the SECP, with provincial contributions built into the next NFC Award and automatic payouts through BISP channels. It argues that insurance cannot replace prevention, citing dam, motorway and CPEC route protection. The writer frames natural disasters as sovereign fiscal shocks, not only humanitarian events, which bears on the country's fiscal outlook.