ISLAMABAD: Mahir Binici, the IMF Resident Representative for Pakistan, has said that Pakistan needs to increase its tax-to-GDP ratio to 15 percent to overcome its economic and climate change challenges.
He stated this in a panel discussion titled ‘Financing Sustainable Development in the Emerging World Dis/Order’ organized on the occasion of the 28th Sustainable Development Conference and hosted by Sustainable Development Policy Institute (SDPI) on Friday.
The IMF representative said the narrow tax and export base, inefficient energy sector, and the loss-making state-owned enterprises (SoEs) are the biggest hurdles holding back Pakistan’s growth.
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However, he said Pakistan’s newly approved USD 1.4 billion arrangement under the Resilience and Sustainability Facility (RSF) will play a vital role in strengthening the country’s economic resilience and capacity to withstand environmental shocks.
“The initiative is aimed at integrating climate considerations into Pakistan’s public financial management and fostering long-term sustainable growth,” he said adding the RSF is operating in parallel with Pakistan’s ongoing Extended Fund Facility (EFF), a three-year structural reform program running until 2027. “Both programs are Pakistan’s own reform efforts, supported by the Fund,” Binici said.
Samuel Rizk, UNDP Resident Representative, said the world is witnessing a transformative phase where financing has become more appropriate and critical for ensuring sustainable development.
He noted that to achieve Sustainable Development Goals (SDG) by 2030, Pakistan needs financing of around USD 50 billion, annually, whereas the multilateral agencies like the World Bank, the IMF, the Asian Development Bank e.t.c. could provide maximum financing of USD 8-10 billion annually. He said the government is the biggest source of financing for sustainable development, but, unfortunately, no one from the present government is participating in this discussion.
Dr Bolormaa Amgabazar, the World Bank Country Director, said Pakistan’s climate and disaster vulnerability is flagrantly high, along with rising air and water pollution. She said that in 2022 World Bank released the Country Climate Development Report, according to which if Pakistan doesn’t prepare itself to overcome challenges of climate change, it could lose 18 to 20 percent of its GDP by 2025 as a result of natural calamities. She said Pakistan incurred losses of USD 30 billion in the 2022 floods, whereas this year, the losses due to the flood are estimated at USD 2.9 billion.
She said for Pakistan, the WB committed financing of USD 20 billion for the next 10 years, which is not merely meant for the economic development but also for addressing the aftershocks of climate change.
She said that for the development role of provinces, academia, and civil society are also very critical to overcome the economic and environmental challenges Pakistan is facing right now. She pointed out that Pakistan’s population growth is the highest among many nations of the world, which can incur severe repercussions for the country in the future amid rising population and thinning natural resources.
Jason Avanceña, the Chief Executive Officer & Managing Director, Nestlé Pakistan, said that the country needs to invest in technologies ensuring clean energy access, efficiency, and resource management in production lines. Pakistan, he said, needs enhanced collaboration between the private sector for shared learning and growth with a core emphasis on reforms in the existing systems and frameworks.
Earlier, the moderator of the panel discussion, Dr Abid Qaiyum Suleri, SDPI Executive Director, said the conference has blended multiple themes from regional connectivity to global tariffs, living wage to climate resilience, disaster risk reduction to sub-regional cooperation that convened regional and international experts from around 23 countries, including South Asian countries and beyond.
Copyright Business Recorder, 2025