Islamabad:
The Minister of Finance, Muhammad Aurangzeb, said on Wednesday that Pakistan had not developed projects related to investable floods to benefit from the $ 11 billion promised to the Geneva Conference almost three years ago, a spear that highlights the gap between the government’s desire to guarantee aid and its ability to use it effectively.
The Minister spoke during a conference on the “construction of a resilient public financial management ecosystem” organized by the Institute of Authorized Accountants of Pakistan (ICAP), a day when heavy rain flooded regions of Punjab.
The province is faced with an unprecedented flooding emergency triggered by torrential rains and the release of water from India.
“Let us adopt that we could not find investable projects” to use the billions promised in Geneva, said Aurangzeb. He wondered if the national institutions had learned from the devastation of the 2022 floods, stressing once again that Pakistan faces two existential threats, climate change and the explosion of the population bomb.
The 2022 floods caused damage estimated at $ 30 billion, including reconstruction costs. Aurangzeb noted that current floods should again cause billions of dollars in damage.
His remarks intervened one day after the Ministry of Economic Affairs submitted a report to the Public Accounts Committee on the use of flood promises, showing that against $ 6.4 billion promised to finance the project, real disbursements were only $ 2.8 billion.
Foreign lenders had initiated a total of $ 11 billion, including $ 4.6 billion for oil financing and the remaining $ 6.4 billion had been given for rehabilitation and reconstruction expenses.
Details have shown that the World Bank has promised $ 2.2 billion and has so far paid $ 1.6 billion. The Asian Development Bank has hired $ 1.6 billion, but has so far published $ 513 million. Similarly, China and the Asian Investment in Infrastructure (AIIB) have promised $ 1.1 billion, but so far, but so far, has given only $ 250 million in the absence of credible financing projects.
The Islamic Development Bank has promised to give $ 600 million but has published $ 231 million. The countries of the Paris club have promised nearly $ 800 million but released $ 139 million. The United States has promised to give $ 100 million and have given $ 70 million.
Meanwhile, heavy rains in the upper watershed of the Chenab river have swollen downstream, putting thousands of citizens in danger. Based on the contributions of India, the Ministry of Water Resources has issued flood alerts for the Sutlej, Ravi and Chenab rivers.
Aurangzeb warned that Pakistan only seriously receives the challenges of population growth and climate change, it would not be able to achieve its vision of becoming an economy of 3 billions by 2047, the centenary of independence from the country.
ICAP recommendations
At the end of the conference, ICAP presented recommendations to strengthen Pakistan’s public financial management.
He recommended the restructuring of the National Finance Commission Award, saying that the current price has given birth to unsustainable budgetary imbalances.
The biggest problem is expenses, and the federal government always pays 1.2 billion of rupees per year on the subjects falling in the provincial field, said Shahid Kardar, former government bank of the State of Pakistan, while speaking during the conference.
Kardar has also added that the International Monetary Fund had a displaced emphasis on the tax ratio / GDP and the main balance, which ignores the issue of expenses in the fields which are not the responsibility of the federal government.
The liabilities of pension from federal and provincial governments have reached a record of 33 rummies of rupees, excluding business liabilities such as electricity distribution companies, railways and PIA, said Kardar.
Muhammad Aurangzeb said that in the first phase, the government has ceased to bleed, because from July from last year, new recruitments in the public sector are based on a contributory pension system.
The conference also recommended to strengthen the FBR by freeing it from external influences. There have been many entities that advise FBR without real results, such as the IMF, World Bank, Bad, Mackenzie and the United Kingdom as part of its delivery project.
ICAP president SAIFULLAH said only the annual cost of tax exemptions was 5.8 billions of rupees, while the losses accumulated by public enterprises went to Rs 6 Billions.
He said that the economy has stabilized, but real problems such as public enterprises reforms, resolution of circular debt and privatization remain unanswered. Budget tampons are low, privatization has been blocked and the tax ratio / GDP is blocked at 10%.
“Our title may seem positive, but the foundation remains fragile,” said the president of the ICAP.
He reaffirmed ICAP’s commitment to promote transparency and strengthening institutional capacities in the Pakistan public sector.
Khalid Rahman, Chairman of the ICAP Public Sector Committee and a member of the Council, qualified the ICAP conference a display in the advancement of budgetary governance and institutional resilience of Pakistan.
