By Muskan Naveed
ISLAMABAD, Jan. 24 (INP-WealthPK): The total external inflows estimated by the Economic Affairs Division (EAD), Government of Pakistan, for the fiscal year 2021-22 are valuated at $17,189 billion, WealthPK reported.
Commercial banks account for $4,870 million, Sukuk bonds for $3,500 million and International Monetary Fund (IMF) share stands at $3,100 million, while the remaining $5,719 million is from multilateral and bilateral donors.
According to officials at the EAD, currently 225 active foreign-funded projects are going on in the country – ranging across various development sectors. The combined portfolio of the development projects is valuated at $30 billion with an average period of five years.
The officials told WealthPK that the total budget estimate for 2021-22 for the foreign-funded projects stands at $2,968 million. The major bilateral development partners of Pakistan are China, US, and Japan, while Asian Development Bank (ADB) and the World Bank constitute a major stake in the multilateral donors’ portfolio. Among the bilateral donors, Japan leads the list with an estimated economic assistance of $79 million to be extended, while the World Bank has been the most generous in multilateral donors with a portfolio of $1.21 billion.
External economic assistance lagging
Following the average duration of a project with the current total valuation of $30 billion, the EAD officials stated that the economic assistance should be disbursed at a rate of approximately $6 billion a year ($30 billion/5 years). However, the budget estimate for 2021-22 falls short of the ideal target by nearly $3 billion. This can be attributed to various problems that different agencies have been facing while implementing foreign-funded projects.
While speaking to WealthPK, an official of the EAD said foreign-funded projects encounter many bottlenecks, which results in delays in meeting objectives and subsequently, delays in disbursements, which is why Pakistan is lagging on this front. More specifically, the energy sector emerged as one of the most problematic sectors when it comes to foreign-funded projects because of structural inefficiencies that exist in the industry as a whole. Most of the issues faced by foreign-funded projects can be attributed to a lack of good governance.
However, it is also important to note that the government has been actively trying to smoothen out these bottlenecks to ensure effortless operation of the projects.
A National Coordination Committee of foreign-funded projects was founded under the domain of the EAD towards the end of 2020 with its first meeting on November 5, 2020. Since then, the committee has been working to fast-track the disbursement and implementation of economic assistance from foreign donors.