ISLAMABAD: The Asian Development Bank (ADB) has linked Pakistan’s request for $500 million programme loan for Trade and Competitiveness Support with a No Objection Certificate (NOC) from the IMF about the country’s economic health.Donor funding for programme loans was suspended last financial year owing to deteriorated macroeconomic imbalances and dwindling foreign currency reserves and would continue unless the IMF bailout package finalises.Disbursement on account of project financing has also dried down owing to various reasons during the current fiscal year so far, as the political transition occurred on account of last general elections and bureaucratic hurdles as well as effective coordination among the center and provinces and subordinate departments were labeled as major stumbling blocks to the execution of donor-funded projects in a timely manner.“Without entering into an IMF arrangement, the ADB will not approve program loan of $500 million so the Pakistani authorities will have to finalise a deal with the Fund for moving ahead for resumption of programme loans from the multilateral creditors including the World Bank and Asian Development Bank,” official sources confirmed to The News, Friday.It is pertinent to mention that it was only the ADB among the multilateral institutions that helped Pakistan when it was in dire need of funding.In 2008, just ahead of the IMF programme the ADB had provided program loans on a special request of Pakistan.Now Pakistan and the ADB are busy doing preparatory work for undertaking Trade and Competitiveness Support Programme of $500 million. Once the IMF deal finalises, this program loan will be forwarded to the ADB’s Executive Board for approval before June 30, 2019. But if the deal is not finalised then there is no chance of getting this facility from the ADB, added the sources.This reporter contacted Secretary Economic Affairs Division (EAD) Noor Ahmed and inquired about Pakistan’s request for $500 million from the ADB on account of trade and competitiveness support and whether the bank could proceed without obtaining health certificate on Pak economy from the IMF, he replied, “The Government of Pakistan is working with the ADB on Trade and Competitiveness program to improve trade competitiveness of the country. This has two sub-programs spread over 2-3 years period. The idea is to undertake necessary sectoral reforms. As for your question on Fund endorsement, only ADB can clarify,” he added.Sources in multilateral donor agencies said the disbursement might go up if the country signed deal with the IMF before June 30, 2019 as the lump sum support could only be possible with resumption of budgetary support/program loans.On the other hand, the disbursement on account of project financing was literally very slow during the current fiscal year. The official data of EAD showed that disbursement from the World Bank (WB) was affected very negatively in the first seven months of the current fiscal year 2018-19 and it stood at $18.95 million in shape of IBRD funding and $128.13 million as IDA funding against $97 million and $192.8 million in same period of seven months during the last fiscal year 2017-18.The disbursement of project financing in shape of loans and grants from ADB stood at $356.8 million in first seven months of the current fiscal year against $498 million in the same period of the last financial year 2017-18 indicating that it decreased by $142 million.The EAD is making plans to gear up efforts to materialize disbursement from multilateral and bilateral creditors to $5.6 billion as so far it stood at $2.7 billion so far in the first seven months of the current fiscal year. But it requires full support of the Planning Commission, line ministries at federal level as well as the provincial governments to approve and execute projects in timely manner. The multilateral donors are also suggesting the government ways and means to accelerate slowed disbursements keeping in view the pressing dollar inflows requirement of the country but it can only be achieved through administrative improvements, selection of full-fledged project directors and simplifying procedures and requirements.
from The News International - National https://ift.tt/2FtdMG2
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