- Finance Minister Dar says 90% pledges are project loans
Prime Minister Shehbaz Sharif said on Wednesday that “the ball is in Pakistan’s court” after the country managed to secure pledges of nearly $10 billion at the ‘International Conference on Climate Resilient Pakistan’ in Geneva.
In a press conference, he termed the event a resounding success and stated that $4.2 billion commitment received from Islamic Development Bank “is a huge amount for Pakistan.” According to him, the commitments totaled $9.7 billion.
“This is the result of the hard work of the coalition government and I congratulate the public of Pakistan for the success of the Geneva event,” he said. “Now it is our turn to show the results”
He stated that the government began working since the day floods gripped Pakistan and it will continue its efforts until the affected Pakistanis returned to their homes.
“If the international community had known about the negative propaganda against the present government that is taking place in Pakistan, we would not have been able to accumulate pledges of nearly $10 billion.”
He also regretted the “man-made political polarisation” in Pakistan and stated that representatives from all provinces were present in Geneva.
“The ball is in our court now and we have to decide how to utilise the funds in efficient and transparent manner,” the PM said. “We will revamp infrastructure and rebuild Pakistan.”
He cited that the Pakistan’s Resilient Recovery, Rehabilitation and Reconstruction Framework was made by experts from diverse fields.
PM Shehbaz appreciated Saudi Arabia for “being the largest donor in the conference on a country-wise basis.”
No threat to banks’ reserves
Speaking on the occasion, Finance Minister Ishaq Dar stated that his remarks regarding banks’ reserves, that he made prior to leaving for Geneva, were “misinterpreted”.
“Before leaving, I stated that Pakistan’s reserves are $10 billion. This is because till 1999, the reserves were classified cumulatively and this is done by every country in the world.”
“Some people misquoted me and spread misinformation. I want to clarify that we are not taking over commercial banks.”
He also said that the status of $1 billion announced by Saudi Arabia was unclear.
“We are unclear whether it is a loan or grant so for now, we have not counted this in the commitments,” he said. However, he said that nearly 90% of the pledges were project loans.
According to him, commitments from the Islamic Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank and the World Bank were project loans.
Talking about the International Monetary Fund (IMF), he said that although the government would achieve fiscal budget target, it would still “enhance fiscal measures but we will not burden the common man.”
“Circular debt will be reduced by giving dividends”
In response to a question, Dar added that the government of Pakistan will “reduce circular debt through dividends of companies”.
He said that the circular debt in gas sector had risen to Rs1.6 trillion and added that a comprehensive exercise to deal with in had been completed.
“We want to reduce the stock first and this would be done by paying companies’ dividends,” he said.
At the ‘International Conference on Climate Resilient Pakistan’ in Geneva on Monday, Pakistan secured pledges of nearly $10 billion for flood rehabilitation and reconstruction.
EU pledged $93 million, Germany $88 million, China $100 million, IDB $4.2 billion, World Bank $2 billion, Japan $77 million, ADB $1.5 billion, USAID $100 million, France $345 million.
Meanwhile, Saudi Arabia committed $1 billion and Asian Infrastructure Investment Bank pledged $1 billion.
According to Pakistan’s Resilient Recovery, Rehabilitation and Reconstruction Framework, which it officially presented during the conference, $16.3 billion will be needed in all. Pakistan’s government aims to cover half that amount with “domestic resources”, including its development budget and through public-private partnerships.
Meanwhile, Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister of Saudi Arabia, has directed to study augmenting KSA’s investments in Pakistan which have previously been announced on August 25, 2022 to reach $10 billion, Saudi Press Agency reported on Tuesday.
“The Saudi crown prince has also directed the Saudi Development Fund (SDF) to study increasing the amount of the deposit provided by the Kingdom of Saudi Arabia in favor of the State Bank of Pakistan (SBP) which have previously been extended on December 2, 2022 to hit a $5 billion ceiling, confirming the Kingdom’s position supportive to the economy of the Islamic Republic of Pakistan and its sisterly people,” read the report.