Ishaq Dar, the finance minister of Pakistan, stated on Wednesday that project loans will make up about 90% of the donations pledged by the international community for the flood-affected nation.
His comments came two days after the international world offered more than USD 10 billion at a donors’ summit in Geneva to support the cash-strapped nation’s reconstruction in a climate-resilient manner following last year’s devastating floods.
The summit, which lasted all day and was co-hosted by Pakistan and the UN in Geneva on Monday, brought together representatives from almost 40 nations as well as private donors and international financial organisations.
Dar had to clarify that loans totaling USD 8.7 billion were included in the promises since there was confusion regarding the type of financial help. He withheld information on the conditions of these loans.
The cash-strapped nation, according to Prime Minister Shehbaz Sharif, “expects the terms to be forgiving,” adding that the promised sum will be distributed over the following three years.
According to the finance minister, project loan financing has already surpassed USD 8 billion thanks to promises from the World Bank, Asian Development Bank, and Asian Infrastructure Investment Bank.
Dar remarked, “I am purposefully not including the Saudi Development Bank’s pledge because it is unclear whether their statement of USD 1 billion applies to programmed lending or project financing.
The prime minister had earlier guaranteed that funds donated by the international community will be used for the welfare of the flood-affected people at the beginning of the briefing, when he hailed the Geneva conference as a success.
33 million people were affected by the disastrous floods in Pakistan last year, which claimed 1,739 lives.
Sharif claimed that of the total financial commitments, the Islamic Development Bank (ISDB) held the lion’s share, amounting to USD 4.2 billion. He also stated that Saudi Arabia had made a USD 1 billion commitment, followed by China with USD 100 million, Qatar with USD 25 million, Canada with USD 18.6 million, Denmark with USD 3.8 million, the European Union with 87 million euros, France with 380 million euros, Germany with 84 million euros, Italy with 23 million euros, and Azerbaijan with
He promised that “every penny will be spent in a very transparent manner and that transparency will be ensured by a third-party audit.”
He also thanked Bilawal Bhutto Zardari, Pakistan’s foreign minister, for his efforts to meet with dignitaries abroad and present “the case of Pakistan successfully.”
In his speech, Bilawal claimed that by securing aid for flood victims and refuting the misconception that Pakistan was isolated, the administration had hit “two targets with a single shot.”
The goal, he continued, was not complete because so many flood victims were living outdoors without even the most basic essentials.
We are working harder to get their lives back to how they were before the storm, he said.
The International Monetary Fund (IMF) team and Dar’s team met in-depth on the sidelines of the Geneva summit, according to Dar.
Although the finance minister withheld further information, he did promise that the government would not burden the populace.
The IMF has delayed the 9th review of the USD 6 billion loans agreed upon in 2019, despite Pakistan’s efforts to persuade the organisation to do so. The cash-strapped nation is unwilling to complete certain conditions that would result in higher taxes.
Although the Geneva meeting has improved trust in Pakistan’s economy, the country’s problems are still there as the central bank’s reserves have decreased to USD 4.5 billion, or less than four weeks’ worth of imports.
Similar to this, there is still no solution to the crucial problem of controlling commodity prices.
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