KARACHI – Pakistan has lost hope in garnering further financial assistance under the $5.3 billion pledges made in Tokyo on the part of the Friends of Democratic Pakistan (FoDP), owing to an alteration in the donors’ criteria for providing aid. During the Tokyo conference in April 2009, the supporters of democracy in Pakistan representing 26 countries and multinational organisations pledged the provision of at least $5.3 billion over three years to the struggling South Asian country.
But, from the very outset the flow of financial aid and assistance, generally known as Tokyo pledges, progressed at a snail’s pace and till date, Pakistan has only received a meager 25 percent of the pledged money amounting to a little over a billion dollars. According to ministry of finance officials, the majority of the multilateral and bilateral FoDP donors had pulled back from the pledges they had made in the Japanese capital two years ago.
“Most of the FoDP donors have pulled back… we are trying our best but they are not coming forward,” Shamim Wazir, Deputy Chief Economic Affairs Division (EAD), told those present at a seminar organised by the State Bank of Pakistan on “Contributions and Achievements of Official Statistics” at the SBP Learning Resource Centre.
The official stated that Pakistan will find it increasingly difficult to receive more funds through the Tokyo pledges. Elaborating on reasons for the development, the deputy chief said the multilateral and bilateral donors had changed the ‘basis’ for their financial assistance regime. “Pakistan’s PRSP (Poverty Reduction Strategy Papers) and MTFD (Medium Term Development Framework) are now the basis for donors’ contribution in the country,” Wazir informed participants of the seminar.
In addition, the deputy EAD chief noted that each multilateral donor agency had changed its country assistance strategy. “This strategy is based on macroeconomic stability that in Pakistan’s case means that on the federal level it is imperative to devise a development-friendly policy,” the official stated.
It was also pointed out that the new standards were aimed at fostering greater employment opportunities in a recipient country such as Pakistan through the creation of a more conducive business environment.
“This is part of an effort to support in Pakistan in the case of second generation reforms, different pillars of economic strategy, PRSP and the country’s debt reduction strategy,” Wazir said. Illustrating his point, he noted that the Asian Development Bank had made the “vision to achieve eight percent (economic) growth”, part of its Country Strategy Program for providing aid and assistance to the needy states. “Which (8 percent growth) is impossible in Pakistan’s case,” the deputy chief lamented. He also underlined the need for deputing ‘knowledgeable’ and ‘qualified’ officials who could convince multilateral and bilateral donor agencies to provide the heavily-indebted government with grants and not loans. He acknowledged that while Pakistan was opting for more and more backbreaking foreign loans, its regional competitors from India, Sri Lanka and Bangladesh were receiving a greater number of grants from international agencies. The slow pace of transfer of the pledged funds has further pushed Pakistan towards multimillion-dollar loans of the International Monetary Fund. Official sources said Islamabad had asked the IMF for using a part, at least $ 1.5 billion, of the Standby Arrangement (SBA) loan to meet its pressing budgetary needs. According to sources, Pakistan is yet to repay the $ 1.5 billion IMF money, the deadline for which had passed in the fourth quarter of 2009-10.
