ISLAMABAD: China and Saudi Arabia are likely to roll over $9 billion in loans to Pakistan in the current fiscal year 2024-25, officials of the Economic Affairs Division (EAD) revealed before the National Assembly Standing Committee on Economic Affairs, here on Friday.
The meeting of the Standing Committee on Economic Affairs Division convened under the chairmanship of Muhammad Atif to receive a comprehensive briefing from the Ministry of Economic Affairs Division (EAD) regarding its evolution, mandate, organizational structure, management of foreign economic assistance, external debt, other key functions, challenges faced, and the strategic roadmap for the future.
The briefing, delivered by Dr Kazim Niaz secretary Ministry of Economic Affairs, and officials from the Ministry of Economic Affairs Division, provided deep insights into the historical evolution of EAD, highlighting its pivotal role in debt management, loans, external debt and liabilities, government borrowing, external public debt, policies for local NGOs, Joint Ministerial Commission, foreign trainings, Pakistan Technical Assistance Program and project financing.
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The ministry underscored its commitment to fostering economic growth, stability, and sustainable development through strategic planning and effective implementation of policies.
Emphasising Pakistan’s engagement with bilateral and multilateral partners, the ministry highlighted efforts in securing and effectively utilising foreign economic assistance to support national development priorities. Detailed insights were provided into the management of Pakistan’s external debt, including strategies for debt sustainability, risk management, and fiscal prudence.
Officials briefed the committee that EAD is in contact with the Arab Coordination Group and the Qatar Fund for Development to secure funding for the Diamer-Bhasha Dam within this financial year. Officials also confirmed plans to roll over $9 billion in loans from China and Saudi Arabia. Pakistan faces a total repayment of over $20.8 billion this fiscal year.
The EAD expects to receive $500 million from the Islamic Development Bank for oil and commodity loans. However, Saudi Arabia is currently not in favour of giving Pakistan another loan oil facility.
The committee was briefed that the Geneva Donor Conference, which was held in January 2023, pledged $10.7 billion in project financing, of which Pakistan has received just $3 billion, mostly in the form of debt instead of grants.
Officials added that this fiscal year, Pakistan will likely receive $1 billion from the World Bank for the Dasu Hydropower Project, with the first phase of the project expected to be completed by 2027. The Asian Infrastructure Investment Bank will be awarded the construction contract for the N5 project.
The EAD officials highlighted the lack of a monitoring mechanism for all NGO projects nationwide but assured that funding is monitored to prevent misuse for terror financing.
The committee requested more details of projects involving delayed external financing at the next meeting.
The briefing candidly addressed the challenges faced by EAD, including shrinking of concessional finance, global inflation, changing in global priorities, national economical outlook, oil and commodity financing issues, deferred oil facility, project portfolio issues, no framework for Pakistan Technical Assistance Program (PTAP) and legal challenges to NGOs policy.
Muhammad Atif, remarked, “The briefing provided by the Ministry of Economic Affairs Division has been enlightening. It underscores the critical role EAD plays in steering Pakistan’s economic agenda towards sustainable growth and development.” He further added that the committee will join hands and support initiatives that can lead towards economic growth and stability in the country.
Members of the committee stated that, “We remain committed to navigating the challenges ahead while capitalizing on opportunities for economic advancement. Our strategic priorities are aligned with national interests, aiming to achieve robust economic performance and improved living standards for our country.”
Members expressed their support for ongoing efforts to strengthen Pakistan’s economic resilience and promote an inclusive and sustainable development agenda.
Copyright Business Recorder, 2024
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