Islamabad:
The Minister of Finance, Muhammad Aurengzeb, said on Wednesday that Pakistan failed to develop invertible projects related to floods to benefit from the $ 11 billion committed to the Geneva conference almost three years ago, a period that highlights the gap between the government’s desire to ensure help and its ability to use it effectively.
The Minister spoke at a conference on “Building an Ecosystem of Public Management Resistant” organized by the Pakistan Public Accountants Institute (ICAP), on a day when heavy rains flooded parts of Punjab.
The province faces an unprecedented flood emergency triggered by torrential rains and the release of water from India.
“Let’s accept that we could not find invertible projects” to make use of the miles promised in Geneva, said Aurengzeb. He questioned whether the national institutions had learned some lesson from the devastation of the floods of 2022, once again emphasizing that Pakistan faces two existential threats, climate change and the explosive population bomb.
2022 floods caused estimated damage to $ 30 billion, including reconstruction costs. Aurengzeb said that current floods are expected to cause billions of dollars in damages.
His comments occurred one day after the Ministry of Economic Affairs presented a report to the Public Accounts Committee on the use of flood promises, which shows that against $ 6.4 billion promised for project financing, the real disbursements were only $ 2.8 billion.
Foreign lenders had committed a total of $ 11 billion, of which $ 4.6 billion were for oil financing and the remaining $ 6.4 billion had occurred to spend on rehabilitation and reconstruction.
The details showed that the World Bank promised $ 2.2 billion and has so far disbursed $ 1.6 billion. The Asian Development Bank committed $ 1.6 billion, but so far it has launched $ 513 million. Similarly, China and the Asian Infrastructure Investment Bank (AIIB) promised $ 1.1 billion, but until now they only gave $ 250 million in the absence of any credible financing project.
The Islamic Development Bank promised to give $ 600 million, but launched $ 231 million. Paris Club countries promised almost $ 800 million, but released $ 139 million. The United States promised to give $ 100 million and gave $ 70 million.
Meanwhile, heavy rains in the upper collection of the Chenab River have increased downstream flows, putting thousands of citizens at risk. Based on the contributions of India, the Ministry of Water Resources issued flood alerts for the Sutlej, Ravi and Chenab rivers.
Aurengzeb warned that, unless Pakistan took seriously the challenges of population growth and climate change, he would not reach his vision of becoming an economy of $ 3 billion by 2047, the centenary of the independence of the nation.
ICAP recommendations
At the end of the conference, ICAP presented recommendations to strengthen Pakistan’s public management.
He has recommended to restructure the Prize of the National Finance Commission, saying that the current award has given birth to unsustainable tax imbalances.
The biggest problem is spending, and the federal government continues to spend RS1.2 annual billion in the subjects that fall in the provincial domain, said Shahid Kardar, former state bank of the governor of Pakistan, while speaking during the conference.
Kardar also added that the International Monetary Fund had an out -of -place approach in the relationship imposed on GDP and the main balance, which ignores the issue of expenses in areas that are not the responsibility of the federal government.
The pension liabilities of federal and provincial governments have increased to a record of 33 billion rupees, excluding liabilities from companies such as energy distribution companies, railroads and Pia, said Kardar.
Muhammad Aurengzeb said that in the first phase, the government has stopped bleeding, as of July of last year, the new recruitments in the public sector are based on a contributory pension system.
The conference also recommended strengthening the FBR freeing it from external influences. There have been many entities that advise the FBR without real results, such as the IMF, the World Bank, the ADB, Mackenzie and the United Kingdom under its Remit project.
The president of ICAP, Saifullah, said that only the annual cost of fiscal exemptions was RS5.8 billion, while the accumulated losses of state companies have increased to RS6 billion.
He said that the economy has stabilized, but real problems such as soe reforms, circular debt resolution and privatization are still not addressing. Fiscal shock absorbers are weak, privatization has stagnated and the relationship imposed on GDP is bonus at 10%.
“Our headline may sound positive, but the base is still unstable,” said the president of ICAP.
He reaffirmed ICAP’s commitment to promote transparency and strengthening institutional capacity throughout the public sector of Pakistan.
Khalid Rahman, president of the ICAP Public Sector Committee and member of the Council, described the ICAP conference as a milestone in the advancement of fiscal governance and institutional resistance of Pakistan.
