Finance minister briefs IFIs on govt’s plans for economic reforms

ISLAMABAD: Federal Minister for Finance and Revenue, Muhammad Aurangzeb on Saturday briefed the chiefs of international financial institutions about the initiatives of the government of Pakistan for economic reforms and development.

During meeting of the finance minister with World Bank’s Regional Vice President for South Asia, Martin Raiser held in Washington DC, he expressed satisfaction that the new Country Partnership Framework (CPF) between Pakistan and the World Bank would be finalised soon.

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Muhammad Aurangzeb underlined the government’s reform thrust in the areas of energy, taxation and state-owned enterprises (SOEs), highlighting the pursuit of both short and long-term goals in these crucial sectors. Referring to his earlier meetings with the senior leadership of the World Bank, he stated that the Bank’s focus on climate change, digitalisation, and human capital development aligns well with the priorities of the government.

The finance minister highlighted the government’s vision to realise Pakistan’s true economic potential in terms of sustainable economic growth. He stressed the importance of timely completion of development projects and the realisation of intended impacts and outcomes, emphasising the need for effective implementation and monitoring.

He also briefed Martin Raiser on the role of the Special Investment Facilitation Council (SIFC) as a one-window facility for investment promotion and facilitation. Both sides agreed on the need for reforms in the agriculture sector, water management, and waste-water treatment.

The finance minister also met with Brent Neiman, Deputy Under Secretary for International Finance at the US Department of Treasury, on the sidelines of the IMF/World Bank Spring Meetings in Washington DC. Finance Minister briefed Neiman on Pakistan’s positive economic indicators in the wake of the Stand-By Arrangement (SBA) signed with the International Monetary Fund (IMF). He informed that the government has prioritised reforms in taxation, energy sector, and state-owned enterprises (SOEs).

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He underscored the United States’ significance as Pakistan’s largest trading partner and a key source of remittances and Foreign Direct Investment (FDI). He briefed Neiman on the role of the SIFC in facilitating foreign investment into the country. Finance Minister welcomed his visit to Pakistan after the presentation of the budget and assured full support in this regard.

Minister Aurangzeb also held a meeting with Jin Liqun, President of the Asia Infrastructure Investment Bank (AIIB) and discussed with him Pakistan’s economic trajectory and explore avenues for enhancing cooperation in infrastructure development. During the meeting, the finance minister briefed the AIIB President on Pakistan’s positive economic indicators, including improving foreign exchange reserves, a stable currency, declining inflation rates, and a surging stock market.

He highlighted the renewed institutional and foreign inflows into the market, on the back of the successful nine-month SBA with the IMF. The finance minister informed Jin Liqun that Pakistan was looking to enter into a larger and extended program with the IMF, building upon the progress achieved under the SBA. He identified broadening the tax base, fixing the energy sector, and undertaking SOE reforms as key priorities of the government.

The minister expressed gratitude for AIIB’s support in the aftermath of the devastating 2022 floods, particularly the co-financing of $250 million for the RISE-II program of the World Bank. He reaffirmed Pakistan’s commitment to continue working closely with AIIB on the infrastructure development of the country. The minister appreciated AIIB’s additional commitment of $500 million in project assistance and acknowledged the satisfactory progress on project implementation and disbursements.

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The finance minister also met with Makhtar Diop, Managing Director of the International Finance Corporation (IFC). In the meeting, Finance Minister briefed Diop on Pakistan’s positive economic indicators, including improving foreign exchange reserves, stable currency, declining inflation rates, and a surging stock market. He highlighted the renewed institutional and foreign inflows into the market, bolstered by the successful nine-month SBA with the IMF.

He informed the IFC Managing Director that Pakistan looked forward to entering into a larger and extended program with the IMF. He expressed gratitude to IFC for its support in the outsourcing of the Islamabad airport, which will be followed by similar initiatives in Lahore and Karachi.

He noted with satisfaction the uptick in IFC activities in the country and requested the corporation’s support in assisting the government in shifting its Public Sector Development Program (PSDP) to Public–Private Partnership (PPP) mode.

The finance minister is leading Pakistan’s delegation in the IMF/World Bank’s 2024 Spring Meetings being held in Washington DC. Other delegates include Finance Secretary Imdadullah Bosal, Secretary Economic Affairs Division Dr Kazim Niaz, State Bank of Pakistan (SBP) Governor Jameel Ahmed, and Economic Affairs Division (EAD) Senior Joint Secretary Adil Akbar Khan. – INP