Pakistan received $226.5 million in first quarter

October 12, 2012

ASMA RAZAQ

1 Comments

Pakistan has received foreign assistance of $226.5 million in the first quarter of the current fiscal year including $140.8 million from multilateral donors while $85.7 million has been received from bilaterals. Documents obtained by Business Recorder showed that from July 2012 till date, Asian Development Bank (ADB) remained the largest loan provider to Pakistan, disbursing $78.6 million.

The World Bank emerged as the second largest loan provider: it released 56.04 million dollars, while UK was third among donors. It disbursed $32.3 million. All foreign assistance received by the country is 'project aid' not program lending that has not been disbursed for the last two and a half years due to non-availability of the Letter of Comfort (LoC) from the International Monetary Fund (IMF). US, the largest grant provider to Pakistan in 2011-12, disbursed $13.6 million while Islamic Development Bank (IDB) provided $6.2 million in the first quarter of 2012-13.

Japan released $23.6 million, Germany 1.69 million dollars while Norway disbursed $2.36 million from July 2012 till date. Sources told Business Recorder that it had been almost two years since the formulation of Foreign Assistance Policy Framework and still the Economic Affairs Division (EAD) has not forwarded it to the Cabinet for approval.

The Framework was formulated in order to regulate foreign assistance in Pakistan and to cope with the issues like misalignment in Government of Pakistan and Donors priorities for aid utilisation, absence of any standard monitoring mechanism, and donors' direct interaction and aid disbursement to NGOs and INGO. Because of lack of political interest, the framework was still to be presented to the Cabinet for approval.

Sources said that according to the draft policy framework, the government would give preference to grants and soft-loans over other types of loans and these loans would only be used in those cases where it had been established that the proposed project would contribute to investment that would accelerate economic growth. The incumbent government has received $14 billion foreign assistance including $11.6 billion as loans and $2.3 billion as grants.