April 2020 | Roots for Equity

NEWS COVERAGE PERIOD FROM MARCH 30^TH TO APRIL 5^TH

IMF RESCUE PACKAGE

Editorial March 30, 2020

IT is heartening to hear that the government is in fast-track talks with the International Monetary Fund to accelerate balance-of-payments support for Pakistan as the country gears up for its fight with the coronavirus. The lockdowns that are necessary will exact a terrible toll from industry, and more importantly, from the workforce and the poor, who must be protected, even if extraordinary measures are required. This effort will not only cost money, primarily for ramped-up social protections schemes and investments in healthcare provision, but many of the targets set in the IMF programme are now going to have to be set aside almost entirely. Some examples might be revenues and spending, as well as ceilings on government borrowing. These are extraordinary times and all tools available to the state must be mobilised to build the capacity necessary for success in this fight. There is no alternative to lockdowns to arrest the spread of the virus, and there is little option but to rapidly boost social protection programmes to enable the vulnerable to weather the resultant freeze in their incomes. The only question right now is how to get all this done.

The IMF has hinted in its statement that its support will be focused on health and social protection, which is the right place for the emphasis to be. But money is fungible, as the Fund is no doubt aware, and external assistance should not mean that the government diverts its own resources, meagre as they may be, towards priorities other than securing access to essential items for the poor and vulnerable and ramping up healthcare. There is a large pull on the state’s resources from owners of capital who are speaking about protecting their workers, but in reality are out to protect their own profits. IMF assistance should not provide a cover for resources to be diverted towards this.

For its part, the Fund will need to think about inverting many of the ways in which it has seen the policy framework in Pakistan. Suddenly, it is a good thing that power has been devolved to the provinces since they are today providing the most robust response to the threat. This is a good time to put more resources in the hands of the provinces, perhaps by lowering the provincial surplus targets, to enable them to ramp up their response. And suddenly growth, revenues and debt sustainability are no longer the top priorities for the economic managers. In fact, the Fund now finds itself in the awkward — but essential — position of calling for debt relief for heavily indebted countries like Pakistan so resources can be diverted to the fight against the virus. The quicker the economic managers and their counterparts in the multilateral agencies learn and internalise the new thinking that they now have to demonstrate, the better prepared we will be to wage the fight that has only just begun.

Published in Dawn, March 30th, 2020

https://www.dawn.com/news/1544911

WORLD BANK/IMF SHOW THE WAY

By RECORDER REPORT on March 30, 2020

The World Bank and IMF have come together at just the right time and urged governments as well as official bilateral creditors to provide immediate debt relief to the world’s poorest countries as they battle the coronavirus threat. The move comes in the backdrop of a fast expanding global lockdown, which is putting weak economies with small reserves at high risk of collapse. The immediate reaction, pretty much across the world, has been provision of immediate liquidity to capital markets as well as relief and stimulus packages for the more vulnerable segments of the real economy. But the governments can only keep throwing money at markets to keep them afloat, especially those with already limited capacity, for a short time. And since there’s still no way of knowing just how long these emergency measures of propping up economies to ensure business and production shutdowns will have to continue, the World Bank/IMF initiative, if approved, will provide the world’s poorest nations some welcome relief. Just as importantly, it will send a very important signal to international financial markets, which are under severe trauma primarily because of the threat of a number of not-so-resilient economies defaulting on their debt payments.

Few countries understand this particular predicament better than Pakistan, of course. Even before the coronavirus stood the world on its head our best case scenario was ending the current fiscal with double-digit inflation, high unemployment and a growth rate somewhere under three percent. Now, with the interest rate reduction likely to put upward pressure on prices, however limited, and the prime minister’s Rs1.25 trillion relief package sure to blow yet another hole in reserves, we will not be able to afford the lockdown beyond a very small window. That is why Pakistan was perhaps the first country to ask international financial institutions (IFIs) and rich nations to write off Third World debt in light of the new reality; or at least defer payments till everybody is able to get a handle on the virus. In fact, even prior to the World Bank/IMF suggestion, Pakistan’s prime minister Imran Khan had announced approaching multilateral creditors including the Fund, World Bank and Asian Development Bank (ADB) for loans worth $3.65 billion just so the economy has something in the tank in case of a prolonged shutdown. It is also a very safe bet that the finance ministry will talk to the IMF for some sort of leniency in the ongoing $6 billion Extended Fund Facility (EFF).

Till there’s a breakthrough in developing a cure or much of the world’s population develops herd immunity to the virus, most countries will stay locked down. That, of course, means that the global economic paralysis will continue. The US Food and Drug Administration (FDA), the global gold standard for the drug approval process, reckons it will be somewhere between 12 and 18 months – for development, lab testing, trial etc. – before any vaccine can come to the market. Till then, considering that around three billion people are confined to their homes at the moment, surviving this emergency basically boils down to the kind of financial reserves countries have access to.

Rich countries as well as IFIs must step forward and help with poor country debt as much as possible. It is reassuring that the world’s leading institutions have realised that the coronavirus pandemic has now become a serious threat for the entire human race. And unless everybody comes together, many if not most of us will not be around by the time this storm blows over.

https://www.brecorder.com/2020/03/30/584739/world-bankimf-show-the-way/

RFI FROM IMF

By RECORDER REPORT on March 31, 2020

Managing Director International Monetary Fund (IMF) Kristalina Georgieva in a statement on Pakistan pledged disbursement of its Rapid Financing Instrument (RFI) that would allow the government to meet “additional and urgent balance of payments needs and support social protection, daily wage earners and the healthcare system.” Given the staff-level agreement on the second mandatory review dated 27 February 2020 which is indicative of the Fund’s satisfaction with Pakistan’s reform efforts, with mutually agreed adjustments in the quantitative time bound targets as well as structural benchmarks, Georgieva stated that “the authorities have continued their reform efforts to address Pakistan’s economic challenges, but progress is being threatened by the devastating effects of the COVID-19 outbreak and the deterioration in the global economic financial conditions.”

The 50 billion dollar RFI fund is an emergency financing facility for low income and emerging markets with 10 billion dollars available at zero interest for the poorest countries through the Rapid Credit Facility; for all other countries it would be available at the same rate as the Stand-By Arrangement (SBA) notably to be repaid within three and a quarter years to five years at the rate of 1.5 percent. Pakistan is not classified as one of the 37 Highly Indebted Poor Countries (HIPC) that are likely to be eligible for zero interest rate, however, at a time when the global economy is in a state of recession due to the COVID-19 any assistance at subsidised rates is greatly appreciated.

Georgieva did not mention the actual amount that Pakistan has requested or may receive under the RFI though the Advisor to the Prime Minister on Finance Dr Hafeez Sheikh, during a recent press conference, mentioned that the government is seeking an additional 1.4 billion dollars from the Fund; however, he added that it would be clubbed with the ongoing 6 billion dollar 39-month Extended Fund Facility (EFF) programme. The EFF is a longer term arrangement (loans to be repaid over 4.6 to 10 years in 12 instalments) relative to SBA.

While clarity will certainly emerge in the coming days as to whether the government requests and receives additional funding under RFI, additional to the 1.4 billion dollars mentioned by Sheikh, or whether it would seek to access the RFI as much as is possible within the 1.4 billion dollars already under negotiations; however, it is relevant to note that Georgieva’s statement not only endorses the government’s 1.2 trillion rupee COVID-19 package, out of which over 850 billion rupees are targeted to provide relief to the general public, but has appropriately acknowledged that meeting the EFF’s time-line conditions would have to be deferred for rather obvious reasons: (i) a global recession that is severely impacting on trade with Pakistan’s major consumer exports taking a massive hit (Razzak Dawood acknowledged during his recent press conference that only a quarter of the export orders remain valid while the rest have been delayed); (ii) a decline in remittances as the world buckles down on productive activities due to lockdowns expected to severely impact on these inflows; (iii) a decline in oil prices may provide some reprieve to the balance of payment due to loss of export orders and remittances; however, with the economy at a virtual standstill as a consequence of the IMF EFF conditions agreed in May 2019 (with a projected growth rate of 2.4 percent). COVID-19 may well push the economy into the realm of negative growth and hence the need to renegotiate the EFF programme design to ensure that a positive growth rate, however small, maybe maintained; and (iv) clamping down of all investment-related activities (portfolio and direct) and hot money outflows leading to a collapse of the stock markets around the world (which raises questions about the possibility of success of the Prime Minister’s proposal to overseas Pakistanis to park their money in the SBP).

Multilaterals including the IMF have acknowledged that the COVID-19 impact on the global economy far transcends the impact of the 2009 crisis, and requires urgent fast releasing assistance. For Pakistan, already on a Fund programme, the acknowledgement that achieving the ongoing programme objectives will be delayed due to the pandemic must be seen by the country’s economic team leaders as a God-sent opportunity to negotiate a package that is realistic in terms of revenue generation, envisages a massive reduction in all expenditure excepting that targeted towards providing relief to the general public struggling under the COVID-19 restrictions, and proactively seeking to divert productivity from existing output to products required as the pandemic rages in the country through a well thought-out incentive package.

https://www.brecorder.com/2020/03/31/585148/rfi-from-imf/

PAKISTAN TRYING TO GET IMF LOAN RESCHEDULED, SAYS FM QURESHI

By APP Published: April 1, 2020

MULTAN: Foreign Minister Shah Mehmood Qureshi has said the federal government is trying to get loans – taken from the International Monetary Fund (IMF), the World Bank (WB) and the Asian Development Bank (ADB) – rescheduled in order to better deal with the coronavirus pandemic.

“The rescheduled amounts will be spent on issues that have emerged after the coronavirus outbreak,” he said on Tuesday while addressing a meeting at the Circuit House in his hometown.

He said the government is carefully monitoring coronavirus trends at the international level and has constituted two subcommittees to deal with the crisis.

“I am leading one sub-committee which is working on maintaining and promoting contacts at the international level to deal with coronavirus related issues. The other committee, headed by Planning Minister Asad Umar, is focusing on lockdown situation and supply of food in the country,” he said.

UN warns Pakistan could be hardest-hit by economic fallout of pandemic

Qureshi said the government is in contact with the European Union, G-77 and G-20 countries and is also contacting Pakistanis living abroad.

To a question, the foreign minister observed that Pakistan is playing its role for the lifting of international restrictions on Iran which is a regional epicenter of the viral disease. “Iran could not purchase even ventilators despite having money to buy them,” he added.

Qureshi said immense preparation is required to enforce a complete lockdown in the country. In China, about 60 million people underwent a complete lockdown. During this period, the Chinese mobilized over 45,000 workers for online supply of food items at people’s houses, he added.

He said the government will have to distribute meal at every doorstep in case of a complete lockdown.

Qureshi said the first meeting for the Corona Relief Tiger Force – a team of volunteers – would be held in Multan. Proper coordination could guarantee success of the force, he added.

PM establishes virus relief fund

The minister said every union council is comprised of six wards and the Tiger Force would be made in every ward. The volunteers of the Tiger Force would register names, ID card numbers, phone numbers and addresses of the laborers.

He urged the local parliamentarians and district administration to extend maximum cooperation for the success of the revolutionary programme of Prime Minister Imran Khan.

Qureshi said the incumbent government has given a relief package of Rs1,200 billion, which is historic and the best in recent critical scenario.

“The government is well aware that it is wheat season and would surely facilitate wheat reaping and other operations including wheat procurement. The pandemic could be dealt effectively by forging unity. However, unfortunately, the opposition is busy in political point scoring,” he said.

https://tribune.com.pk/story/2188283/1-pakistan-trying-get-imf-loan-rescheduled-says-fm-qureshi/

GOVT SEEKS FOREIGN LOANS TO FIGHT COVID-19

By Shahbaz Rana Published: April 1, 2020

ISLAMABAD: The Pakistan Tehreek-e-Insaf (PTI) government is chasing $1 billion foreign loans to fight with coronavirus contagion that is already in its pockets but requires timely execution of the projects as it also pursues a policy of seeking foreign loans to fight an emergency.

Pakistan’s two largest creditors-the World Bank and the Asian Development Bank (ADB), have so far committed $2.4 billion. The Manila-based ADB has promised to give $1.2 billion and its net fresh emergency related loan is expected to be around $700 million. But it may be approved either in June or July.

The World Bank has also committed to give $1.2 billion but its net fresh lending is only $200 million that it could approve on Thursday mainly for health and food supplies and also to partially finance cash support under the Benazir Income Support Programme (BISP).

The diversion of $1 billion idle approved money by the World Bank also highlights the chronic problem of signing billions of dollars of foreign loans without having either the capacity to spend or due to ill execution of the projects. All the successive governments have failed to mobilise these funds and the cost is paid by the taxpayers as “commitment charges”.

Instead of releasing all the needed funds from the budget to fast track health emergency related procurements, the economic ministries have been pursuing to get money that is either already approved and can be accessed by fulfilling remaining requirements or need fresh policy matrices.

The PTI’s predecessors, the Pakistan Peoples Party (PPP) and the Pakistan Muslim League-Nawaz (PML-N) had also sought foreign loans to cope with natural calamities. But Prime Minister Imran Khan has in past opposed the policy of seeking foreign loans.

Last week, Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh announced seeking more loans; $1 billion from World Bank, $1.2 billion from ADB and $1.4 billion from the International Monetary Fund (IMF) to offset impact of the global pandemic on Pakistan’s economy and to upgrade health facilities.

The date for approval of additional financing has not been announced yet and estimation is that it could take place in a matter of weeks, IMF Resident Representative Teresa Dabán Sanchez told The Express Tribune. She said that everybody was working very hard to get it done as soon as possible

World Bank loans

The sources said that the World Bank has so far committed $1.2 billion but $1 billion will be channelled from the existing projects and programmes.

The World Bank is meeting the government’s emergency needs by providing fresh loans as well as from the ongoing projects, said Mariam Altaf, spokesperson of the World Bank, when she was asked to comment on the reasons of including already approved loans in the package.

The World Bank plans to augment its support once Pakistani authorities make an assessment of socio-economic losses from the deadly pandemic. The World Bank is set to approve $200 million on this Thursday and loan agreement is expected to be signed on Friday. Out of $200 million, half of the amount is from the World Bank’s emergency COVID-19 fund and remaining is being approved from Pakistan’s concessional loan quota.

The World Bank would provide $500 million by taking the money out of various federal and provincial government projects that are under execution.

Interestingly, the World Bank has shown $395 million stalled loans as part of COVID-19 assistance that can be availed only if the disbursement linked indicators are achieved. About $50 million of it is already overdue and the remaining can be accessed if the federal and provincial governments can make progress on conditions in next three months.

The Washington-based lender also proposed to divert $60 million from an already approved climate change project subject to waiver of relending policy by the Economic Coordination Committee of the cabinet.

The $38 million have already been made available by deducting money from 10 existing slow moving projects.

ADB loans

The ADB has also indicated to provide $1.2 billion in three to four months. It has already agreed to divert $50 million from the National Disaster Risk Management Fund and rest has to be approved.

It has shown $300 million as new emergency assistance lending. But $100 million has been cancelled from the existing projects and will be made part of the new package. The loan is tentatively scheduled to be approved in June or July.

Pakistan has requested the ADB to provide $500 million in counter cyclical support facility to deal with exogenous shocks. It is a commercial rate facility that will attract London Interbank Offered Rate and loan will have to be returned in 10 years. But the facility will be available only in June or July.

Similarly, another loan of $300 million for financial sector reforms was already in the pipeline and its approval in June or July will depend upon Pakistan’s ability to fulfil prior actions. This loan is not related with coronavirus contagion financial assistance package.

Published in The Express Tribune, April 1st, 2020.

https://tribune.com.pk/story/2188274/2-govt-seeks-foreign-loans-fight-covid-19/

JAPAN TO PROVIDE $2.16M GRANT FOR COVID-19

Amin Ahmed Updated April 02, 2020

ISLAMABAD: The Japanese government will provide a grant assistance of $2.16 million to Pakistan to deal with the escalating number of coronavirus infections in the country.

Of the $2.16m grant, $1.62m will come through Unicef and $540,000 through the International Organisation for Migration, according to statement issued recently.

Japanese Ambassador Matsuda Kuninori commended the efforts by the government and the people of Pakistan against Covid-19, the disease caused by the new coronavirus, as the pandemic was becoming even more serious worldwide, he added.

“The Japanese government always stands by Pakistan,” the envoy added and also referred to Japan’s aid amounting to $229 million provided to Pakistan over the years for its polio eradication programme since 1996.

“Thus, the Japanese government would like to cooperate again with the Pakistani government in its fight against the novel coronavirus infections,” he said.

Federal Minister for Economic Affairs Hammad Azhar thanked the Japanese government for the grant assistance to deal with the virus. “We have also allocated Rs2.5 billion from our existing unspent grant funds in Pakistan towards health projects,” he said

This assistance, according to the statement, is intended to reduce and delay the transmission of Covid-19, decrease associated deaths, ensure ongoing health services during epidemic peak periods and minimise the socio-economic impact.

Published in Dawn, April 2nd, 2020

https://www.dawn.com/news/1545771/japan-to-provide-216m-grant-for-covid-19

WORLD BANK TO ROLL OUT $160BN EMERGENCY AID OVER 15 MONTHS

By Agence France-Press on April 3, 2020

The board of the Washington-based development lender announced the first set of fast-track crisis funding, with an initial $1.9 billion going to projects in 25 countries, and operations moving forward in another 40 nations, the bank said.

WASHINGTON: The World Bank on Thursday approved a plan to roll out $160 billion in emergency aid over 15 months to help countries deal with the impact of the global coronavirus pandemic.

“We are working to strengthen developing nations’ ability to respond to the COVID-19 pandemic and shorten the time to economic and social recovery,” said World Bank President David Malpass.

“The poorest and most vulnerable countries will likely be hit the hardest, and our teams around the world remain focused on country-level and regional solutions to address the ongoing crisis.”

The bank also is working to redeploy $1.7 billion of existing funding, including the use of “catastrophic drawdowns,” a type of emergency credit line.

India will be the largest beneficiary of the first wave of programs with a facility for $1 billion, followed by Pakistan with $200 million and Afghanistan with a little over $100 million, but funding is going to countries on nearly every continent, the bank said.

In addition, the World Bank’s private sector arm, the International Finance Corporation, is providing $8 billion in financing “to help private companies affected by the pandemic and preserve jobs.”

https://www.brecorder.com/2020/04/03/586022/world-bank-to-roll-out-160bn-emergency-aid-over-15-months/

$200M PANDEMIC RESPONSE PACT SIGNED WITH WB

Amin Ahmed Updated April 04, 2020

ISLAMABAD: Pakistan and the World Bank on Friday signed a $200 million ‘Pandemic Response Effective Project’ (PREP) that will help the poor and vulnerable cope with the immediate impact of the Covid-19 pandemic through social protection measures, food rations and remote learning education.

The board of executive directors of World Bank earlier approved the $200 million package to help Pakistan take effective and timely action to respond to the coronavirus pandemic by strengthening the country’s national healthcare systems and mitigating socio-economic disruptions.

The bank’s support will also draw on extra $38 million from eight existing projects for urgently needed medical equipment and supplies. Procurement of equipment and supplies by federal and provincial governments is under way and some equipment and supplies have arrived and being pressed into service, a World Bank press release says.

Minister for Economic Affairs Hammad Azhar witnessed the signing ceremony through a video link in Islamabad. Secretary, Economic Affairs Division, Dr Syed Pervaiz Abbas signed the financing agreement on behalf of the government, while provincial project agreements were signed by the designated officials of provincial governments. World Bank Country Director Patchamuthu Illangovan signed the agreement for the bank.

‘Pandemic Response Effective Project’ will be for social protection measures, food rations and remote learning education

The project is financed from the International Development Association (IDA), the World Bank’s concessional credit window for developing countries, in the amount of $200 million, of which $100 million is provided through the World Bank Group’s Covid-19 Fast-Track Facility. The World Bank Group is rolling out a $14 billion fast-track package to strengthen the Covid-19 response in developing countries and shorten the time to recovery.

PREP will help establish quarantine facilities in collaboration with public and private hospitals and also supply equipment to hospitals, including ventilators and Personal Protection Equipment for doctors and paramedics. The project will benefit infected people, at-risk populations, medical and emergency personnel, service providers in medical and testing facilities (both public and private), and national and provincial departments of health.

The scope of the project will be nationwide, covering all provinces and territories of the country. The primary project beneficiaries will be infected people, at-risk populations, medical and emergency personnel as well as service providers at medical and testing facilities, both public and private, and national and provincial departments of health. Staff of key technical departments and provincial health departments will also benefit from the project as their capabilities increase through the strengthened institutional capacity.

The primary target groups for the support to mitigate socioeconomic impacts are expected to be: affected households with high vulnerability to shocks, particularly the poorest and most vulnerable who tend to have limited assets and other mechanisms to protect themselves from shocks (bottom 20 of the distribution); and households who are affected due to mobility restrictions such as quarantine centres that disrupt their ability to meet basic needs.

Households may benefit from multiple interventions under the project which include emergency cash transfers to up to four million families enrolled in the safety programme across the country; emergency food supply for quarantined populations; and children’s learning activities by ensuring remote learning sessions through broadcast — to minimise the Covid-19 emergency effects on children’s and youth learning.

Published in Dawn, April 4th, 2020

https://www.dawn.com/news/1546304

AFTERMATH OF COVID-19 OUTBREAK: IMF LIKELY TO DELAY RELEASING OF $450M THIRD TRANCHE TO PAKISTAN

Mehtab Haider

April 5, 2020

ISLAMABAD: The International Monetary Fund (IMF) might delay completion of second review and release of third tranche worth $450 million for Pakistan in the aftermath of outbreak of coronavirus and surfacing of new realities on macroeconomic front, The News has learnt.

Under the existing arrangement of $6 billion Extended Fund Facility (EFF), the approval of third tranche might be delayed for some time because all macroeconomic targets have shaken, arising out requirement to re-adjust macroeconomic targets.

However, the IMF’s management has agreed to consider Pakistan’s separate request of providing $1.4 billion under Rapid Finance Instrument (RFI) for combating against COVID-19 pandemic.

Both Pakistan and the IMF officials are tight lipped as no one was ready to talk on this subject publicly. It indicates that different proposal were under consideration but nothing is yet finalised for moving ahead.

Top sources having knowledge about working of Breton Wood Institutions (WBIs) such as the IMF and World Bank, told this scribe that there were two possibilities under consideration; one was to complete the second review after the next budget for 2020-21 and second was to club second and third reviews of Extended Fund Facility (EFF) for providing third and fourth tranches together probably in July 2020.

It is not yet known what will be the final decision of the IMF’s top management but they will be taken ultimate decision after holding consultation with Pakistani side, said the official sources. Anyway, the next IMF review mission was expected to undertake round of talks for third review by late April or early May 2020 for revising all major targets in line with new emerging realities on the economic front.

When the IMF’s Resident Chief in Pakistan Teresa Daban Sanchez was contacted for inquiring about approval of $1.4 billion under RFI, she replied “it is not yet announced by the IMF’s Board of Directors.

The IMF team is working hard for prompt approval and disbursement of RFI. Hopefully, it will be done by mid April” she added.

However, the sources said that Pakistan would be provided substantial amount from the IMF so it would not matter if the completion of second review got delayed.

It is relevant to mention here that the IMF had announced on February 27, 2020 that both the Fund staff and Pakistani side had struck staff level agreement for second review of the EFF.

Ernesto Ramirez Rigo, Mission Chief for Pakistan, had stated on the occasion that “Following discussions between IMF staff and the Pakistani authorities in Islamabad from February 3-13, which continued from the IMF headquarters in recent days, IMF staff and the Pakistani authorities reached a staff-level agreement on policies and reforms needed to complete the second review of the authorities reform programme supported under the EFF.

The agreement is subject to approval by the IMF management and consideration by the Executive Board, which is expected in early April. Completion of the review will enable disbursement of SDR 328 million (around $450 million)”.

So far IMF’s Executive Board had not yet announced any date for consideration of second review and releasing of third tranche under $6 billion EFF for Pakistan, indicating clearly that things got delayed on this front.

However, on the request for $1.4 billion assistance made by Advisor to PM on Finance Dr Abdul Hafeez Shaikh, the IMF’s MD Kristalina Georgieva stated on March 26 that “The authorities have continued their reform efforts to address Pakistan’s economic challenges, but progress is being threatened by the devastating effects of the COVID-19 outbreak and the deterioration in global economic and financial conditions.

Prime Minister Khan and his government have swiftly approved an economic stimulus package aimed at containing the spread of the virus and providing support to affected families and businesses.

Similarly, the State Bank of Pakistan (SBP) has adopted a timely set of measures, including a lowering of the policy rate, new refinancing facilities to support the flow of credit, and temporary regulatory relief measures.

“To support these efforts and ensure prompt and adequate relief to the people and the economy, the government of Pakistan has requested financial assistance under the Fund’s Rapid Financing Instrument (RFI).

This emergency financing will allow the government to address additional and urgent balance of payments needs and support policies that would make it possible to direct funds swiftly to Pakistan’s most affected sectors, including social protection, daily wage earners, and the healthcare system. Our team is working expeditiously to respond to this request so that a proposal can be considered by the IMF’s Executive Board as soon as possible.

The Fund stands ready to continue to support the authorities’ efforts to implement much-needed economic and structural reforms aimed at fostering strong and sustainable growth”, it concluded.

https://www.thenews.com.pk/print/639767-aftermath-of-covid-19-outbreak-imf-likely-to-delay-releasing-of-450m-third-tranche-to-pakistan

NEWS COVERAGE PERIOD FROM APRIL 6^TH TO APRIL 12^TH

JAPAN TO PROVIDE $250,000

A Reporter Updated April 08, 2020

ISLAMABAD: The Japanese government plans to provide a grant of $250,000 through the International Federation of Red Cross and Red Crescent Societies (IFRC) to Pakistan to curb the spread of coronavirus infections in the country.

Japan’s assistance would be $2.45 million in total including the amount of $0.25 million through the IFRC, according to a press release issued by the Japanese embassy on Tuesday.

With IFRC’s support, the Pakistani government would be strengthened in surveillance, contact tracing and screening, said the statement. It will also be equipped with Personal Protective Equipment (PPE), medical consumables and medical equipment to prevent the spread of Covid-19, the disease caused by the new coronavirus.

Published in Dawn, April 8th, 2020

https://www.dawn.com/news/1547327/japan-to-provide-250000

ANOTHER $50M TO COME FROM ADB TO FIGHT PANDEMIC

The Newspaper’s Reporter Updated April 10, 2020

ISLAMABAD: The Asian Development Bank (ADB) is making available another $50 million to Pakistan to support the government’s efforts to fight the outbreak of novel coronavirus in the country.

This amount has been repurposed from the National Disaster Risk Management Fund (NDRMF) project. Following a request from the government for an emergency support, the ADB swiftly processed a change in the scope of its NDRMF project, enabling the repurposing and immediate use of these resources in the fight against Covid-19. The funds, which form part of ADB’s series of support for Pakistan’s fight against Covid-19, will help to procure medical equipment and supplies to strengthen hospitals, diagnostic laboratories, isolation units, and other medical facilities in the country, says a press release issued by the ADB on Thursday.

The funds include the reallocation of $30m of previously approved but unutilised resources from the Asian Bank to the disaster risk management fund.

“The outbreak of Covid-19 is a profound challenge for Pakistan and we are committed to providing flexible and timely support to help manage this crisis,” said Xiaohong Yang, the ADB Country Director for Pakistan. “This funding will immediately support Pakistan’s efforts to fight the pandemic and strengthen health care services for the poorest and most vulnerable groups, including the elderly, women, and children,” she said.

In addition, the NDRMF has provided $20m using capital gains from its endowment fund financed by the ADB to support the government’s Covid-19 response. These funds complement the financing approved on April 2 by the World Bank under its Pandemic Response Effectiveness Project.

Last month, the ADB approved $2.5m in immediate response grant funding to help Pakistan purchase emergency medical supplies, personal protective equipment, diagnostic and laboratory supplies, and other equipment. This consisted of $2m from ADB’s Asia Pacific Disaster Response Fund, and $500,000 for procurement of supplies through Unicef.

Aside from the $50m, the ADB is mobilising existing technical assistance — Capacity Building of Disaster Risk Management Institutions — to provide training for at least 5,000 doctors, nurses, and technical staff working on the frontlines in intensive care facilities. The grant will also provide additional technical capacity to the government for planning and coordinating its Covid-19 response.

The NDRMF was established in 2016 in partnership with the ADB to provide support for disaster risk reduction and to invest in early warning systems and disaster preparedness projects in Pakistan. The ADB provided the initial financing through a $200m loan, while the government of Australia contributed a $3.4m grant.

In 2018, the Swiss Agency for Development provided a $1.5m grant and technical assistance to support the NDRMF. In January 2020, an additional $5m was committed to the fund by the government of Norway.

Published in Dawn, April 10th, 2020

https://www.dawn.com/news/1548002

WORLD FACES WORST TIME SINCE GREAT DEPRESSION, SAYS IMF’S GEORGIEVA

AFP Updated April 10, 2020

WASHINGTON: The global coronavirus pandemic is causing an economic crisis unlike any in the past century and will require a massive response to ensure recovery, IMF chief Kristalina Georgieva said on Thursday.

The warnings about the damage inflicted by the virus already were stark, but Georgieva warned that the world should brace for “the worst economic fallout since the Great Depression.” With the number of cases now surpassing 1.5 million worldwide with nearly 89,000 deaths in 192 countries and territories, much of the global economy has been shut down to contain the spread of the virus.

The International Monetary Fund expects “global growth will turn sharply negative in 2020,” with 170 of the fund’s 180 members experiencing a decline in per capita income, Georgieva said.

Just a few months ago, the fund was expecting 160 countries to see rising per capita income, she said in a speech previewing next week’s spring meetings of the IMF and World Bank, which will be held virtually due to the restrictions imposed due to the Covid-19.

‘It could get worse’

Even in the best-case scenario, the IMF expects only a “partial recovery” next year, assuming the virus fades later this year, allowing normal business to resume as the lockdowns imposed to contain its spread are lifted.

But she added this ominous caution: “It could get worse.” There is “tremendous uncertainty around the outlook” and the duration of the pandemic, Georgieva said.

The IMF will release its latest World Economic Outlook on Tuesday, with grim forecasts for its members this year and next. In January, the IMF projected global growth of 3.3 per cent this year and 3.4pc in 2021. But that was a different world.

The US economy has purged 17 million jobs since mid-March, with the latest weekly data issued Thursday showing 6.6 million workers filed for unemployment benefits, and economists projecting a double-digit jobless rate this month.

The World Bank said on Thursday the pandemic might cause the first recession in Africa in 25 years.

Recovery depends on decisive actions now, Georgieva said. The IMF has $1 trillion in lending capacity and is responding to unprecedented calls from 90 countries for emergency financing.

Send more lifelines

Countries already have taken steps worth a combined $8 trillion, but Georgieva urged governments to do more.

“Lifelines for households and businesses are imperative” to “avoid a scarring of the economy that would make the recovery so much more difficult.”

The IMF board approved a doubling of emergency lending facilities which will provide about $100 billion, and is moving ahead with debt relief for the poorest countries, and also help for countries with unsustainable debt levels.

“The bleak outlook applies to advanced and developing economies alike. This crisis knows no boundaries. Everybody hurts,” Georgieva said.

She noted that about $100 billion in investments already had fled emerging markets — more than three times the capital exodus seen in the 2008 global financial crisis.

US officials have scrambled to apply a tourniquet to stem the bleeding of jobs in the world’s largest economy and keep the financial system from freezing up.

Published in Dawn, April 10th, 2020

https://www.dawn.com/news/1547974

$1.4 BILLION LOAN UNDER RFI: IMF TO CONSIDER REQUEST ON APRIL 16

BR Web Desk April 10, 2020

The International Monetary Fund (IMF) Executive Board is scheduled to meet on April 16, to consider Pakistan’s request for $1.4 billion loan under the Rapid Financing Instrument (RFI).

The IMF Executive Board calendar updated on its website shows that its meeting has been scheduled for April 16, and the agenda includes “Request for Purchase under the Rapid Financing Instrument”.

As already revealed by the IMF Resident Representative to Pakistan Teresa Daban Sanchez the second review report under the Extended Fund Facility (EFF) with a request for the release of the third tranche under the $6 billion Extended Fund Facility is not on the Board agenda.

The government has requested the Fund for additional $1.4 billion through RFI -which provides rapid and low-access financial assistance to member countries facing an urgent balance of payments need, without the need to have a full-fledged program in place. The RFI of $1.4 billion, if approved, would not carry any conditionality and would be disbursed in one go.

Financial assistance provided under the RFI is subject to the same financing terms as the Stand-By Arrangement (interest rates are currently about 11/2 percent), and should be repaid within 31/4 to 5 years, as per documents uploaded on the Fund website.

https://www.brecorder.com/news/1000639/may-inflation-roundup

EU TO HELP WELFARE BODIES MITIGATE COVID-19 IMPACT

Amin Ahmed Updated April 11, 2020

ISLAMABAD: The European Union has decided to support and strengthen the capacities and engagement of civil society organisations in Pakistan with the purpose of mobilising communities towards mitigating social and economic effects of the Covid-19 outbreak.

An EU delegation in Pakistan is seeking proposals for projects amounting to 6,650,000 euros by civil society organisations for alleviating the socio-economic impact of Covid-19 on communities.

The EU believes that the coronavirus outbreak will have socio-economic impact in Pakistan, including economic damage caused by the crisis, weakening the coherence of communities and challenges and tensions in the fabric of society as a whole, as well as the stability of governance structures being put to the test as a consequence of the outbreak.

European Union seeks proposals for projects

EU projects will involve young people, including through mobilisation and creating small-scale income opportunities through sub-grant projects.

Young people represent the majority of the population.

European Union Ambassador Androulla Kaminara said that the coronavirus pandemic was requiring “us all to work together to slow down the spread of the disease and to address the disastrous consequences that it will have on the economy, our societies and especially the most vulnerable people”.

Published in Dawn, April 11th, 2020

https://www.dawn.com/news/1548210/eu-to-help-welfare-bodies-mitigate-covid-19-impact

WORLD BANK WORKING ON REPURPOSING $2BN TO HELP COMBAT COVID-19

BR Web Desk April 11, 2020

The World Bank is working on repurpose of up to $2 billion, to make available to support Pakistan’s recovery initiatives of the pandemic through building on safety net programme, supporting employment through public works programme and micro-enterprises, and addressing the looming food security issue.

This was stated by the WB Country Director in Pakistan, Illango Patchamuthu, during an online COVID-19 Policy Response Dialogue “World Bank’s support to Pakistan in Responding to COVID-19”, organised by the Sustainable Development Policy Institute (SDPI).

Every crisis presents an opportunity, whereas the COVID-19 provided the world and Pakistan an opportunity to reform the social sector policies and to initiate the structural reforms in institutions that need to concurrently happen, which were delayed for years now, the WB official added.

“We are working on how we can repurpose a good part of our pipeline, around $600 million to $2 billion, to make available to support recovery initiatives through building on safety net programme, supporting employment through public works programme and micro-enterprises and addressing the looming food security issue,” he said.

While commenting on the WB support initiatives for Pakistan amid COVID-19 crisis, Illango said that initially the bank was able to repurpose the $40 million aid programme to help the government in immediately purchasing the medical equipment and supplies that already had started to arrive at district and local levels.

The bank board recently approved $200 million pandemic responsive fund facility for Pakistan, which was part of the $14 billion global fund facility for coping with the pandemic.

He said that out of $200 million fund, $150 million covered immediate response of purchasing the medical equipment, and $50 million covered the relief through Ehsaas cash transfer to help poor families.

He further said that they were working with the Ministry of Finance, Commerce, Energy and Planning and Development departments both at federal and provincial levels to look at structural reforms that needed to concurrently happen, which were delayed for years now.

Structural reforms need to go hand in hand, because fiscal challenge continues to remain there and will be further constrained due to the COVID 19 related response.

Stressing the need for investing in human capital, he said that Pakistan was spending around three percent of the GDP on health sector and that needed to be enhanced.

Executive Director SDPI Abid Qaiyum Suleri said that the world had learnt after COVID19 outbreak that social services such as health, education, water, and sanitation etc, could not be reduced to be private commodity that only rich might afford to buy.

He said it was about time that multilateral development partners such as the WB should play their due role by investing in social sector rather than mega development projects only.

This would help in bringing the focus of member governments back to social sector development, he maintained.

Aliya Kashif, senior health professional at the WB said Pakistan’s health care system was not equipped to handle such emergencies, whereas WB was working with the government to help enhance health capacity to respond to the challenge effectively.

Gonzalo Varela, trade economist at World Bank Group (WBG) said that they had seen substantial impact on exporters, where 2/3rd exporters had experienced 10-50 percent reduction in orders, and global trade was going to drop to unprecedented levels.

It is believed that Pakistan’s exports will be substantially impacted. He suggested the need for protecting the exporters through relief measures, whereas structured reforms were going to be crucial for recovery.

https://www.brecorder.com/news/1000687/bangladesh-pharma-sends-covid-19-drug-to-pakistan-to-treat-patients

WORLD BANK WORKING ON REPURPOSING $2BN TO HELP COMBAT COVID-19

BR Web Desk April 11, 2020

he World Bank is working on repurpose of up to $2 billion, to make available to support Pakistan’s recovery initiatives of the pandemic through building on safety net programme, supporting employment through public works programme and micro-enterprises, and addressing the looming food security issue.

The bank board recently approved $200 million pandemic responsive fund facility for Pakistan, which was part of the $14 billion global fund facility for coping with the pandemic.

Structural reforms need to go hand in hand, because fiscal challenge continues to remain there and will be further constrained due to the COVID 19 related response.

Stressing the need for investing in human capital, he said that Pakistan was spending around three percent of the GDP on health sector and that needed to be enhanced.

He said it was about time that multilateral development partners such as the WB should play their due role by investing in social sector rather than mega development projects only.

This would help in bringing the focus of member governments back to social sector development, he maintained.

https://www.brecorder.com/news/1000687/bangladesh-pharma-sends-covid-19-drug-to-pakistan-to-treat-patients

WORLD BANK STRESSES STRUCTURAL REFORMS FOR SOCIAL SECTOR

By Our Correspondent Published: April 11, 2020

ISLAMABAD: Every crisis presents an opportunity, whereas COVID-19 provided the world and Pakistan an opportunity to reform the social sector policies and to initiate structural reforms in institutions that need to be concurrently happen which were delayed for years now, said World Bank Country Director of Pakistan Illango Patchamuthu.

Speaking during an online COVID-19 Policy Response Dialogue titled ‘World Bank’s support to Pakistan in Responding to COVID-19’, he said that they are working on how they can repurpose a good part of their pipeline, around $600 million to $2 billion, to make available to support recovery initiatives through building on safety net program, supporting employment through public works program and microenterprises and addressing the looming food security issue.

While commenting on World Bank support initiatives for Pakistan amid COVID-19 crisis, Illango said that initially the bank was able to repurpose the $40 million aid programme to help the government in immediately purchasing the medical equipment and supplies that already have started to arrive at district and local levels.

Whereas, recently, the bank board approved $200 million pandemic responsive fund facility for Pakistan which was part of the $14 billion global fund facility for coping the pandemic. He said that out of $200 million fund, $150 million covers immediate response of purchasing the medical equipment and $50 million covers the relief through Ehsaas cash transfer to help poor families.

Illango said that we are working with the Ministry of Finance, Commerce, Energy and Planning and Development departments both at federal and provincial levels to look at structural reforms that need to concurrently happen which were delayed for years now.

“Structural reforms need to go hand in hand, because fiscal challenge continue to remain there and will be further constrained due to COVID-19 related response.” Stressing the need of investing in human capital, he said that Pakistan is spending around 3% of GDP on health sector, which is $242 per capita health spending and that needs to be enhanced.

Also speaking on the occasion, Sustainable Development Policy Institute (SDPI) Executive Director Abid Qaiyum Suleri said that the world has learnt after COVID-19 outbreak that social services like health, education, water, and sanitation etc, cannot be reduced to be private commodity that only rich may afford to buy.

He said that it is about time that multilateral development partners such as the World Bank play their due role by investing in social sector rather than mega development projects only. “This would help in bringing the focus of member governments back to social sector development,” he maintained.

Suleri also suggested that incorporating the challenges posed by COVID-19, the world bank should update its recently published “Pakistan@100” report suggesting the way forward post-pandemic.

Published in The Express Tribune, April 11th, 2020.

https://tribune.com.pk/story/2195349/2-world-bank-stresses-structural-reforms-social-sector/

IMF DELAYS APPROVAL OF REVIEW FOR $450M TRANCHE

By Shahbaz Rana Published: April 7, 2020

ISLAMABAD: The International Monetary Fund (IMF) has postponed approval of second review of the $6-billion bailout programme that was scheduled for coming Friday due to delay in implementing agreed actions by Pakistan.

The IMF has confirmed the development but says its priority has now shifted to the approval of a rapid financing facility of $1.4 billion.

The Ministry of Finance told The Express Tribune that the IMF did not inform it about any delay in approval of the second review of the 10-month-old loan programme.

In February, Pakistan and the IMF agreed that the fund’s executive board would approve the second review for release of a third loan tranche of $450 million on April 10, subject to fulfilling of all the conditions by the Pakistan government.

According to the IMF’s February 27 statement issued to announce a staff-level agreement, “The (staff-level) agreement is subject to approval by the IMF management and consideration by the executive board, which is expected in early April.”

Sources said the IMF board would not take up Pakistan’s request for approval of the second review for the October-December 2019 period under the Extended Fund Facility (EFF) on April 10. “The priority now is to move ahead with the Rapid Financing Instrument (RFI). The IMF team and Pakistani authorities are working hard for prompt approval and disbursement,” stated IMF Resident Representative Teresa Dabán Sanchez. She had been requested to comment whether the IMF was still taking up Pakistan’s case on April 10.

The initial tentative agreed date, as given in IMF documents, for approval of the second review was March 6, which the IMF extended to April 10. The IMF has not given fresh date for approval of the second review. But $1.4 billion in additional facilities for Covid-19 related relief may be approved this month.

Pakistan had sought $1.4 billion worth of emergency facility from the IMF to offset the impact of Covid-19 on its external sector.

Sanchez said regarding the EFF, as IMF Managing Director Kristalina Georgieva stated in her announcement of Pakistan’s RFI request, the Pakistani authorities remained committed to the policies and reforms outlined under the EFF-supported programme.

“The priority now is to get the RFI in motion and there will be a board meeting soon that will discuss, assess and provide guidance on next steps,” said Sanchez.

But a delay in approving the second review may create more problems for the government due to its implications for markets and Pakistan’s financial relations with other multilateral lenders.

The given reason that the IMF delayed approval of the review because it was only taking up Covid-19 related work is factually incorrect. In the previous week (March 30 to April 3), the IMF board approved eight regular reviews of various countries and Article-IV cases, according to the IMF’s website. On Friday, April 3, the IMF executive board completed the second review of Sierra Leone’s performance under the Extended Credit Facility (ECF) and sanctioned release of $21.3 million.

Moreover, on the same day, the board completed the sixth and final review of Togo’s economic performance under the Extended Credit Facility and released $131.3 million.

Both these economies are too small and not in distress situation as compared to Pakistan.

On March 31, the IMF executive board concluded Article-IV consultations with Belgium, which too does not fall within the definition of Covid-19 cases.

“We have not been informed of any delay” by the IMF, said Omar Hamid Khan, spokesman for the Ministry of Finance. He did not address the question of whether the date of April 10 remains intact. Talks for Pakistan’s second review remained tough since February 3 when the dialogue began.

The IMF staff returned to Washington on February 14 without reaching a staff-level deal due to disagreement over a mini-budget and increase in electricity tariffs.

Two weeks later, the IMF staff and the Pakistani authorities reached the staff-level agreement on policies and reforms needed to complete second review of the programme.

Last month, FBR’s acting chairperson Nausheen Javaid claimed before the Public Accounts Committee that the IMF had agreed to further reduce Pakistan’s tax collection target from Rs5.2 trillion. But the Ministry of Finance said no such agreement had been reached with the IMF.

The IMF had given a Rs5.503-trillion tax collection target to the FBR for the current fiscal year. Tax authorities collected Rs3.06 trillion in first nine months of the current fiscal year – a shortfall of Rs693 billion.

Published in The Express Tribune, April 7th, 2020.

https://tribune.com.pk/story/2192321/2-imf-delays-approval-review-450m-tranche/#:~:text=In%20February%2C%20Pakistan%20and%20the,conditions%20by%20the%20Pakistan%20government.

ANOTHER $50M TO COME FROM ADB TO FIGHT PANDEMIC

The Newspaper’s Reporter Updated April 10, 2020

ISLAMABAD: The Asian Development Bank (ADB) is making available another $50 million to Pakistan to support the government’s efforts to fight the outbreak of novel coronavirus in the country.

The funds include the reallocation of $30m of previously approved but unutilised resources from the Asian Bank to the disaster risk management fund.

Published in Dawn, April 10th, 2020

https://www.dawn.com/news/1548002

WORLD FACES WORST TIME SINCE GREAT DEPRESSION, SAYS IMF’s GEORGIEVA

AFP Updated April 10, 2020

The International Monetary Fund expects “global growth will turn sharply negative in 2020,” with 170 of the fund’s 180 members experiencing a decline in per capita income, Georgieva said.

‘It could get worse’

But she added this ominous caution: “It could get worse.” There is “tremendous uncertainty around the outlook” and the duration of the pandemic, Georgieva said.

The World Bank said on Thursday the pandemic might cause the first recession in Africa in 25 years.

Recovery depends on decisive actions now, Georgieva said. The IMF has $1 trillion in lending capacity and is responding to unprecedented calls from 90 countries for emergency financing.

Send more lifelines

Countries already have taken steps worth a combined $8 trillion, but Georgieva urged governments to do more.

“Lifelines for households and businesses are imperative” to “avoid a scarring of the economy that would make the recovery so much more difficult.”

“The bleak outlook applies to advanced and developing economies alike. This crisis knows no boundaries. Everybody hurts,” Georgieva said.

She noted that about $100 billion in investments already had fled emerging markets — more than three times the capital exodus seen in the 2008 global financial crisis.

US officials have scrambled to apply a tourniquet to stem the bleeding of jobs in the world’s largest economy and keep the financial system from freezing up.

Published in Dawn, April 10th, 2020

https://www.dawn.com/news/1547974

EU TO HELP WELFARE BODIES MITIGATE COVID-19 IMPACT

Amin Ahmed Updated April 11, 2020

An EU delegation in Pakistan is seeking proposals for projects amounting to 6,650,000 euros by civil society organisations for alleviating the socio-economic impact of Covid-19 on communities.

European Union seeks proposals for projects

EU projects will involve young people, including through mobilisation and creating small-scale income opportunities through sub-grant projects.

Young people represent the majority of the population.

Published in Dawn, April 11th, 2020

https://www.dawn.com/news/1548210/eu-to-help-welfare-bodies-mitigate-covid-19-impact

WORLD BANK STRESSES STRUCTURAL REFORMS FOR SOCIAL SECTOR

By Our Correspondent Published: April 11, 2020

Suleri also suggested that incorporating the challenges posed by COVID-19, the world bank should update its recently published “Pakistan@100” report suggesting the way forward post-pandemic.

Published in The Express Tribune, April 11th, 2020.

https://tribune.com.pk/story/2195349/2-world-bank-stresses-structural-reforms-social-sector/

NEWS COVERAGE PERIOD FROM APRIL 13^TH TO APRIL 19^TH

ADB TRIPLES COVID-19 PACKAGE TO $20BN

APP April 14, 2020

BEIJING: The Asian Development Bank (ADB) on Monday tripled the size of its response to the novel coronavirus disease (Covid-19) pandemic to $20 billion and approved measures to streamline its operations for quicker and more flexible delivery of assistance.

The package expands ADB’s $6.5 billion initial response announced on March 18, adding $13.5bn in resources to help ADB’s developing member countries counter the severe macroeconomic and health impacts caused by Covid-19.

The $20bn package includes about $2.5bn in concessional and grant resources, according to a news release issued here.

Up to $13bn will be provided through this new option to help governments implement effective countercyclical expenditure programmes.

Published in Dawn, April 14th, 2020

https://www.dawn.com/news/1549012/adb-triples-covid-19-package-to-20bn

ADB ANNOUNCES $20BN COVID-19 RESPONSE PACKAGE FOR DEVELOPING ASIAN COUNTRIES

By Ali Ahmed on April 13, 2020

The package expands ADB’s $6.5 billion initial response announced on 18 March, adding $13.5 billion in resources to help ADB’s developing member countries.

The Asian Development Bank (ADB) on Monday announced to triple the size of its response to the novel coronavirus pandemic to $20 billion to help developing Asian countries in combating this virus.

The package expands ADB’s $6.5 billion initial response announced on 18 March, adding $13.5 billion in resources to help ADB’s developing member countries counter the severe macroeconomic and health impacts caused by COVID-19. The $20 billion package includes about $2.5 billion in concessional and grant resources.

“This pandemic threatens to severely set back economic, social, and development gains in Asia and the Pacific, reverse progress on poverty reduction, and throw economies into recession,” said ADB President Masatsugu Asakawa, in a statement.

“Our expanded and comprehensive package of assistance, made possible with the strong support of our Board, will be delivered more quickly, flexibly, and forcefully to the governments and the private sector in our developing member countries to help them address the urgent challenges in tackling the pandemic and economic downturn.”

ADB’s most recent assessment estimates the global impact of the pandemic at between 2.3 percent and 4.8pc of gross domestic product. Regional growth is forecast to decline from 5.2pc last year to 2.2pc in 2020.

The new package includes the establishment of a COVID-19 Pandemic Response Option under ADB’s Countercyclical Support Facility. Up to $13 billion will be provided through this new option to help governments of developing member countries implement effective countercyclical expenditure programs to mitigate impacts of the COVID-19 pandemic, with a particular focus on the poor and the vulnerable.

Grant resources will continue to be deployed quickly for providing medical and personal protective equipment and supplies from expanded procurement sources.

Some $2 billion from the $20 billion package will be made available for the private sector.

https://www.brecorder.com/2020/04/13/588930/adb-announces-20bn-covid-19-response-package-for-developing-asian-countries/

JAPAN OFFERS $1M TO HELP FIGHT COVID-19

| 4/16/2020 12:00:00 AM

ISLAMABAD: The Japanese government has decided to provide another $1million to Pakistan through theUnitedNations High Commissioner for Refugees (UNHCR) to equip people and Afghan refugees to fight Covid-19.

Prior to this, the Japanese government had provided $2.41m to Pakistan to support its efforts to combat the infection, including $1.62m through the United Nations Children`s Fund (Unicef), $540,000 through theInternational Organisation for Migration (IOM) and $250,000 through the International Federation of Red Cross and Red Crescent Societies (IFRC), a press release of Japanese assistance said on Wednesday.

Throughthefreshgrant assistance, the UNHCR will provide necessary technical assistance and equipment and material to prevent the spread of Covid-19 by considering the situation on the ground at the request of the gov-ernment. The support will boost Pakistan`s capacity to quickly track the coronavirus-affected persons and treat them accordingly.

Japanese Ambassador Matsuda Kuninori, while appreciating the tremendous efforts of the Pakistan government, said that the spread of Covid19 had become a serious issue worldwide and it was now crucial for the international community to take necessary measures to address this disease.-Our Reporter

https://epaper.dawn.com/DetailImage.php?StoryImage=16_04_2020_003_005

IMF OKAYS OVER $1.3BN AID TO HELP PAKISTAN

Khaleeq Kiani Updated April 17, 2020

ISLAMABAD: In a major support to shore up the declining reserves following the outflow of hot money, the International Monetary Fund (IMF) on Thursday night approved the disbursement of $1.386 billion to Pakistan under the Rapid Financing Instrument (RFI) to address the economic impact of the Covid-19 shock.

“The Executive Board of the IMF approved a purchase of Pakistan under the RFI equivalent to SDR 1,015.5 million ($1.386 billion, 50 per cent of quota) to meet the urgent balance of payments needs stemming from the outbreak of the Covid-19 pandemic,” the IMF said in a statement.

With the near-term outlook deteriorating sharply, the authorities have swiftly put in place measures to contain the impact of the shock and support economic activity. Crucially, health spending has been increased and social support strengthened.

As the impact of the Covid-19 shock subsides, the authorities’ renewed commitment to implementing the policies in the existing Extended Fund Facility (EFF) will help support the recovery and strengthen resilience, the Fund said.

The disbursement will enable country to meet urgent balance of payments needs stemming from outbreak of Covid-19

While uncertainty remains high, the near-term economic impact of Covid-19 is expected to be significant, giving rise to large fiscal and external financing needs. The IMF support will help provide a backstop against the decline in international reserves and provide financing to the budget for targeted and temporary spending increases aimed at containing the pandemic and mitigating its economic impact.

“The IMF remains closely engaged with the Pakistani authorities and as the impact of the Covid-19 shock subsides will resume discussions as part of the current EFF,” said the IMF.

Following the Executive Board discussion, Geoffrey Okamoto, the First Deputy Managing Director and Acting Chair, said that “the outbreak of Covid-19 is having a significant impact on the Pakistani economy”. The domestic containment measures, coupled with the global downturn, are severely affecting growth and straining external financing. This has created an urgent balance of payments need, the Fund noted.

In this context of heightened uncertainty, The IMF emergency financing under the Rapid Financing Instrument provides strong support to the authorities’ emergency policy response, preserving fiscal space for essential health spending, shoring up confidence, and catalysing additional donor support.

In response to the crisis, the government of Pakistan has taken swift action to halt the community spread of the virus and introduced an economic stimulus package aimed at accommodating the spending needed to tackle the health emergency and supporting economic activity.

Crucially, the authorities are increasing public health spending and strengthening social safety net programmes to provide immediate relief to the most vulnerable. Similarly, the State Bank of Pakistan has adopted a timely set of measures, including lowering of the policy rate and new refinancing facilities, to support liquidity and credit conditions and safeguard financial stability. “In this context, the authorities’ policies should be targeted and temporary,” the IMF emphasised.

Published in Dawn, April 17th, 2020

https://www.dawn.com/news/1549897/imf-okays-over-13bn-aid-to-help-pakistan

GOVT, IMF AGREE TO PUT ON HOLD $6BN PROGRAMME

Khaleeq Kiani Updated April 18, 2020

ISLAMABAD: With $1.4 billion upfront breathing space, Pakistan and the International Monetary Fund (IMF) have agreed to put on hold the existing $6bn Extended Fund Facility (EFF) and revise it after the Covid-19 pandemic is over as the macroeconomic indicators deteriorate.

“The Rapid Financing Instrument (RFI) is the appropriate instrument to support Pakistan at this juncture as the severity of the shock and the uncertainty about the outlook make it difficult to recalibrate the existing EFF to ensure that it remains on track to meet its objectives,” said a staff report released by the IMF on Friday after its executive board approved $1.4bn fresh support to Islamabad.

“The Rapid Financing Instrument is disbursed in one tranche, at once, upon approval,” said Teresa Dabán Sanchez, the IMF’s resident representative in Islamabad.

The IMF staff believed the RFI would catalyse additional donor financing as it estimated $2bn gap this year and $1.6bn next fiscal year, including the RFI.

The Fund anticipated ‘significant’ near term impact of Covid-19 and said the forecasts were subject to higher than usual uncertainty, but economic activity could contract for the first time since the 1950s.

Real GDP is projected to decline by -1.5pc in FY2020 as a result of severe contraction in output during the last quarter of the current fiscal year. The growth is to remain tepid in the first half of FY2021, depending on the success of efforts to contain the spread of the pandemic in Pakistan and worldwide, and to return gradually to faster growth in the second half of the next fiscal year in line with the expected global recovery.

Extended Fund Facility will be revised after Covid-19 is over as macroeconomic indicators deteriorate

“Cumulatively, real GDP growth has been revised down by 5 percentage points over FY2020-21. Manufacturing, especially textiles, transportation and services are expected to be the sectors more severely impacted. Private sector credit is likely to weaken further due to the heightened uncertainty,” the IMF staff said.

The IMF baseline estimates assume a gradual lifting of containment measures and normalisation of economic activity both domestically and internationally in FY2021, but a deeper slowdown cannot be ruled out if these assumptions do not materialise.

The Fund said public finances were expected to come under a significant pressure and primary deficit was now expected to deteriorate to 2.9pc of GDP in FY2020 (from 0.8pc expected earlier) due to a 1.8 percentage point decline in tax revenue relative to the pre-virus baseline, and the needed higher spending to support the health response, social safety nets for the very poor, and employment.

The IMF also anticipated the debt-to-GDP ratio deteriorating to 90pc this year against 85pc prior to the Covid-19 shock. But this showed even the pre-virus debt situation was also worse than debt-to-GDP ratio that stood at 75.3pc and the Fund estimated it reaching 80.5pc in FY2020. The IMF staff concedes this, saying the “public debt is higher than projected at the time of programme approval and the first review but continues to be on a clear downward path”.

The Fund said the Covid-19 shock had given rise to an urgent balance of payments needs even though oil prices and weaker import demand provided some support to the current account. This will be because of a likely halt to export growth due to fall in external demand, $5bn drop in remittances in FY2020 and FY2021 owing to setbacks in the Gulf and outflow of portfolio funds.

This scenario will result in new external financing needs of about $2bn — 0.8pc of GDP — in the last quarter of FY2020. These urgent financing needs will be met through $1.4bn RFI and fresh resources of around $250 million committed by multilateral partners and maintaining SBP reserves at $12bn (2.7 months of imports) by the end of FY2020, a level similar to the one prior to the Covid-19 shock.

Moreover, a potential financing gap of around $1.6bn could emerge in FY2021, which would be filled through the use of reserve assets, additional support from multilateral partners, and, if needed, additional policy adjustments.

The IMF that noted the package for the construction sector would address acute employment needs generated by the lockdown, which included a special tax regime and no wealth declaration for projects launched during a short window until the end of 2020.

To ensure the quality of emergency spending in the health sector, the Fund said, the authorities had committed to subject the procurement of urgently needed medical supplies to an ex-post audit by the Auditor General of Pakistan, the results of which would be published on the website of the Ministry of Finance. “This measure will help limit vulnerabilities to corruption,” it added.

The IMF warned that with growth remaining below potential, risks associated with policy slippages and resistance to reforms, including from vested interest groups, loomed large. This, together with weak implementation capacity, may jeopardise the programme objectives and availability of external financing.

The Fund said it was encouraged by the authorities’ commitment to resuming the EFF, as soon as possible, to implement the agreed reform agenda to support growth and strengthen resilience. “In this regard, the Ministry of Finance and the SBP have committed to update the existing memorandum of understanding that clarifies the responsibilities for timely servicing of the obligations to the Fund,” it added.

Published in Dawn, April 18th, 2020

https://www.dawn.com/news/1550121

$500M WB AID LIKELY TO BOOST SOCIAL SECTOR

Amin Ahmed Updated April 19, 2020

ISLAMABAD: The World Bank plans to approve a credit of $500 million for Pakistan next month to strengthen civil registration and vital statistics, health and education systems essential for human capital accumulation, and improve national safety nets to respond to shocks effectively.

The Securing Human Investments to Foster Transformation (SHIFT) project will contribute to improvements in the quality of civil registration and vital statistics, birth and death certification rates and the ability of the country to better plan for human capital accumulation.

The project seeks to implement in the country universal health coverage policy to improve health outcomes, increased sustainability of immunisation, better quality of education, boost engagement and recognition of women’s participation in economic activities, develop safety net programmes, expand education and nutrition initiatives, cash transfers to the poor and vulnerable to cope with the potential negative impact of the fiscal adjustment and of the Covid-19 pandemic.

The document prepared for the project says macroeconomic risk in Pakistan is high, as the impact of Covid-19 will weaken ongoing stabilisation efforts and medium-term structural reforms and add additional pandemic-related shocks.

Published in Dawn, April 19th, 2020

https://www.dawn.com/news/1550411

IMF’S EFF PUT ON HOLD CHINA TO CONTRIBUTE $6.3BN IN FINANCING OVER NEXT 12 MONTHS

TAHIR AMIN April 19, 2020

ISLAMABAD: China will contribute $6.3 billion in financing to Pakistan over the next 12 months with all key bilateral partners committing to maintaining their exposure throughout the Extended Fund Facility (EFF) programme which would remain in effect, says the International Monetary Fund (IMF).

The IMF has updated its website on “IMF Extended Fund Facility arrangement for Pakistan – Frequently Asked Questions”, stating that discussions on the EFF were paused in late-March 2020 to focus on a purchase under the Rapid Financing Instrument (RFI).

With the Covid-19 shock in Pakistan still unfolding and the full magnitude of its impact both in Pakistan and globally still unknown, it is premature at this time to set out a concrete timeline for the resumption of the EFF, although IMF staff remains engaged with the authorities. Strong policies and reforms remain critical to increase resilience and boost Pakistan’s growth potential in order to deliver benefits for all Pakistanis, especially the most vulnerable.

In response to a question, the IMF stated that debt transparency is essential to conduct a proper analysis of the sustainability of a country’s debt, in Pakistan as in all IMF member countries. In this context, the authorities have provided information on public debt and loans from other countries, including China, in support of a comprehensive debt sustainability analysis, which is a key component of an IMF-supported programme.

The IMF financing is aimed to support the implementation of policies to reduce vulnerabilities, and bring about sustainable growth. Financial support from Pakistan’s international partners will be critical, including additional financing from other international financial institutions and bilateral creditors.

The authorities have received commitments from key bilateral partners, including China, to maintain their exposure throughout the programme period and to ensure that the new financing will be consistent with debt sustainability objectives. China will contribute $6.3 billion in financing in the next 12 months.

It further stated the RFI provides emergency one-off financing to a country experiencing a large shock, like that from Covid-19. Pakistan requested a purchase equivalent to 50 percent of its quota (about US$1.4 billion), which was approved by the IMF Executive Board on April 16, 2020. The resources will provide critical support for medical supplies, the vulnerable population, and food security.

The RFI is not a replacement for the EFF. Strong policies and reforms remain critical to increase resilience and boost Pakistan’s growth potential in order to deliver benefits for all Pakistanis, especially the most vulnerable.

The Fund further stated that Pakistan has been facing long-standing economic challenges, including low revenue mobilization, high fiscal deficit and indebtedness, low spending on education, health, and social programs, and a weak external position. This reflects the legacy of uneven and procyclical economic policies in recent years aiming to boost growth, but at the expense of rising vulnerabilities and lingering structural and institutional weaknesses.

The Pakistani authorities have already started implementing difficult but necessary measures aimed at helping Pakistan revive its economy and create the foundation for lasting change and inclusive growth. The policy reforms and measures mark a positive and significant turning point in Pakistan’s economic prospects for the population at large. These efforts need to be strengthened.

Decisive policies and reforms, together with significant external financing are necessary to reduce vulnerabilities faster, increase confidence, and put the economy back on a sustainable growth path, with stronger private sector activity and job creation.

The adoption of a market determined exchange rate will help the functioning of the financial sector and contribute to a better resource allocation in the economy.

A comprehensive plan for cost-recovery in the energy sectors and state-owned enterprises will help eliminate or reduce the quasi-fiscal deficit that drains scarce government resources. This will free up resources for spending in priority areas such as health, education, human capital development and reducing poverty.

Improving public finances and reducing public debt through tax reforms would strengthen revenue mobilization and ensure a more equal and transparent distribution of the tax burden. Provinces are committed to contributing to these efforts by better aligning their fiscal objectives with those of the federal government.

The programme envisages budget increase on social spending in a significant way. Social protection is a key element of the programme to help alleviate effects on the vulnerable groups, particularly the poorest.

The programme includes improved plans for social protection measures. Over the medium term—the next three to five years— there will be more jobs, better healthcare and improvements in education.

https://epaper.brecorder.com/2020/04/19/6-page/834112-news.html

UK ANNOUNCES £2.67M AID FOR PAKISTAN

By Khalid Mehmood Published: April 19, 2020

ISLAMABAD: Britain has announced an aid of £2.67 million for Pakistan to combat the novel coronavirus pandemic.

British High Commissioner Christian Turner said, “Friends support in difficult times. The aid will help Pakistan cope with the virus and save people’s lives.”

Apart from the £2.67 million aid for Pakistan to combat the virus, Britain also announced £1 million to prevent destruction of crops caused by the locusts in Pakistan.

According to the British High Commission statement, in the coming weeks, the most vulnerable people in the wake of the coronavirus would be assisted under a broader British cooperation plan, and the DFID support programme would be revised.

In a video message, the high commissioner said, “There has been an unusual situation. Millions of people all over the world have been affected by corona and this extraordinary situation demands a new and efficient strategy.

Turner believes Pakistan has the potential to get out of the problem. “Friends cooperate in difficult times. Despite ‘social distancing’ we are together.”

https://tribune.com.pk/story/2201707/1-uk-announces-2-67m-aid-pakistan/

NEWS COVERAGE PERIOD FROM APRIL 20^TH TO 26^TH

FY21 BUDGET: IMF WORKING CLOSELY WITH AUTHORITIES: SANCHEZ

By TAHIR AMIN on April 21, 2020

While emphasising the need for adopting good taxation principles with sometime increase in the tax-base and sometime increase in rates, the International Monetary Fund (IMF) Monday, stated that it was working closely with the Pakistani authorities on preparing budget for the next fiscal year.

This was stated by Teresa Daban Sanchez, resident representative of the IMF in Pakistan, while speaking at an online policy dialogue, “IMF support to Pakistan under RFI, Existing Extended Fund Facility (EFF) programme and Debt Rescheduling” organized by the Sustainable Development Policy Institute (SDPI), here on Monday.

She said that the Covic-19 had changed the near-term outlook for Pakistan dramatically and new targets, projections and scenario would be evaluated under the EFF, which was intact, once the uncertainty was over.

“Pakistan needs to move the way with taxation, in line with good taxation principles and some times it requires increasing the base, and some time increasing the rates,” Teresa said.

“As for I understand that prices in certain areas vehicles, beverages and petroleum products are not in line with other countries in the region, so in this context, we advised Pakistan to move by adopting good taxation principles, which is better not only for collecting more but also providing right signal about the cost of the products,” added the IMF official.

She stated that taxation on tobacco in Pakistan was very low and it needed to be more taxed, not only for more collection but also for health reasons.

The IMF has no involvement over the decision on petroleum prices in Pakistan. If the government does not reduce the petroleum levy then it is its prerogative, she added.

Teresa said that budget was very important piece of legislation they needed to put together, in this new environment.

“We will work very closely with the authorities, advising on how to put a good budget,” she added.

Replying to a question, Teresa said that everything had changed globally and in Pakistan as well.

“We have to calibrate everything but how it would be calibrated, I can’t answer this question, as we have to sit down together to make new targets, projections and scenario evaluated,” she added.

“The IMF is working closely with the authorities in Pakistan, and the next review mission may take place virtually. As the medium-term economic outlook is changing, we have to recalibrate everything from targets to trajectories. However, we need to continue working on the EFF as a framework as the programme provides continuity along with a healthy and sustainable trajectory from an economic point of view. It is encouraging that the GoP is committed to fiscal consolidation and reforms once the things get normal,” she added.

Replying to a question, Teresa said that hot money was not part of the programme, but Pakistan succeeded in attracting, and now like other emerging markets, people were more risk averse.

She said that Pakistan could repay its loans from China, while remaining in the programme, as there was no bar in the programme.

Pakistan has not requested the IMF to defer its loan payments as no formal request has been received in this regard, she added.

Teresa said that the State Bank of Pakistan (SBP) act needed some changes to make it in line with the best international practices including for modern monetary policy and there were various ways in complying with best international practices.

The IMF experts are providing technical assistance to Pakistan in this regard, she added.

While commenting on the overall impact of Covid-19 on Pakistan’s economy, Teresa said that there would be a significant cut in imports from Pakistan from various countries, the remittances would get reduced, tax collection would reduce considerably and the growth rate might get reduced to -1.5 percent.

“It is in this context, funds under the RFI arrangement would help Pakistan to bridge the gap in immediate financing needs. [Going forward, in post COVID-19 times], the IMF is working to make Pakistan as competitive and open as possible by making it more export oriented and an attractive destination for investment,” she added.

The inflation rate is expected to remain at 11.3 percent this fiscal year. Pakistan’s expenditure may increase by up to 1.2 percent, whereas, the country’s tax receipts are projected to decline massively.

Everything is changing including prices, the oil prices are going down. It is credit for countries importing for energy, she said, adding that the demand supply also affects prices. Inflation is not only some numeric but also depends on expectations.

Commenting on opening up of the construction sector, she said that the IMF supports opening of labour-intensive sector where daily wagers may be absorbed.

However, Teresa expressed her hope that amnesty announced for investment in construction sector was temporary in nature, and would be withdrawn once situation became normal. “The IMF recommends that Pakistan as well as other countries recalibrate their policy actions as we move on. Therefore, the regulatory measures taken are temporary and regulatory relaxation might not be necessary in the future as it can create problems,” she added.

Teresa said that the IMF was quite happy the way Pakistan was implementing various policies to achieve fiscal consolidation and macroeconomic stability and would continue to provide its support to the country to face the socio-economic challenges posed by the Covid-19.

She shed light on the IMF toolkit to fight the Covid-19 shock that included the RFI, which Pakistan would be utilising.

DrAbidQaiyumSuleri, executive director, SDPI, while highlighting Pakistan’s recent engagements with the IMF, said that the Covid-19 had brought socio-economic uncertainties with a lengthy period of emergency response that would result in global recession.

This “new normal”, according to the UN would be accompanied or followed by a severe food crisis.

In these circumstances, multilateral lenders such as the IMF would have to redefine their role as a socio-economic saviour to ensure “stability” of the “stability” that the IMF talks about.

“Among all deficits that Pakistan is facing today, trust deficit between people and the IMF, may also lead to trust deficit between people and the government, which Pakistan cannot afford during these testing times. The SDPI is continuously playing a positive role to bridge this deficit by bringing all stakeholders together for a candid discussion leading to greater transparency,” added DrSuleri.

https://www.brecorder.com/2020/04/21/591061/fy21-budget-imf-working-closely-with-authorities-sanchez/

THE IMF AND PAKISTAN

By RECORDER REPORT on April 22, 2020

The Resident Representative of the International Monetary Fund (IMF) in Pakistan Teresa Daban Sanchez stated during an online policy dialogue organised by the SDPI that the Fund will remain engaged with the Pakistani authorities ‘advising on a good budget’. The budget expected to be announced after Ramazan, in the last week of May or early June, is in all probability already under preparation in the Ministry of Finance though the suggestions/recommendations of stakeholders in the private sector have so far not been sought. There is ample evidence that as government expenditure has risen due to coronavirus relief measures (of around 1.2 trillion rupees) yet its revenue base due to the lockdown has shriveled to about 3.9 trillion rupees or in other words, the budget deficit would rise to a more unsustainable than last year’s 8.9 percent. The government has succeeded in getting around 2 billion dollar Covid-19 relief assistance from multilaterals at low rate of interest (1.4 billion dollars from the IMF and the rest from World Bank and Asian Development Bank); however, this amount would add to the total loans of the country. In this context, the government must seek a loan deferment from not only the IMF but also the G20 countries – a deferment that requires a request which, Sanchez stated, has not yet been made by the authorities. One would hope that DrHafeez Sheikh, Advisor to the Prime Minister on Finance, would be just as quick in seeking a deferment as he was in seeking the 1.4 billion dollar assistance under the Fund’s Rapid Financing Instrument because without that all the claims by PTI leaders, particularly foreign minister Shah Mehmud Qureshi, of a 12 billion dollar deferment would remain spurious.

The budget exercise in Pakistan, as in other democratic countries, requires a majority vote in parliament and while parliaments in other countries are engaged on critical matters through a virtual linkup, the ruling PTI has so far refused to similarly engage with parliamentarians. An option may well be to pass the budget through an ordinance, an exercise that took place during military dictatorships, however the shelf-life of an ordinance is 90 days that can be extended by another 90 days. Thus it would be more appropriate for the government to consider setting up a virtual parliamentary meeting and begin to seek and discuss the options available. In any case, if the virtual proceedings are to be conducted then it would require framing of new rules on which the opposition would have to be taken onboard.

The range of commitments made by the Pakistani authorities to the IMF was ambitious and consisted of unrealistic measures, a 5.5 trillion rupee revenue for the year, which as per Sanchez, must include widening the tax base and raising taxes (unfortunately in the current year raising existing taxes was the major source of raised revenue) while expenditure (current and development) was allowed to rise by more than 30 percent each. Suggestions on how to raise revenue through widening the tax net have been forthcoming as in the past with a suggestion being to reduce the income tax ceiling to 10 percent for individuals and 20 percent for companies while at the same time replacing the existing sales tax regimen (including the income tax withholding in the sales tax mode on goods which is becoming a major source of government revenue) by announcing a single stage single digit sales tax. It is unlikely that the government would be able to enforce this and still raise revenue generation as, no doubt, required under the IMF’s Extended Fund Facility that remains in abeyance. Sanchez suggested bringing taxes in line with other regional countries to equalize the input costs and subsequent sales price. This is indeed good advice as the inability of the private sector to compete internationally is sourced to the higher input costs in this country (including the levy of high taxes on petroleum and products) and a high discount rate designed to attract hot money which Sanchez was quick to say was not a part of the Fund’s policy. This has to be the way forward as it has the potential of ensuring that our products not only are competitive within the country but also within the region.

And finally, Sanchez stated that inflation is likely to remain in double digits during the current year, adding that while IMF supports opening labour-intensive sectors yet hoped that the no source of money asked incentive given to the construction sector (which she added may create problems in future) is a short temporary measure – no doubt a reference to Pakistan’s commitments to the Financial Action Task Force. The projected inflationary pressure of course includes the recent monetary measures taken by the State Bank (reducing the discount rate to 9 percent) and releasing the 144 billion rupees to the poor and vulnerable as part of the relief measures.

Undoubtedly, these are extremely trying times for governments in general, and the PTI government is no exception; however, Pakistan already on strict IMF conditions under the EFF before the coronavirus rampage, will no doubt be steered back to implementing the challenging structural reforms and time-bound action plans, albeit recalibrated, and one can only hope that this time around Pakistan’s economic team leaders are more aware of what is doable or realistic before agreeing to the proposed conditions.

https://www.brecorder.com/2020/04/22/591365/the-imf-and-pakistan/

IDB PLEDGES $650M SUPPORT TO PAKISTAN

The Newspaper’s Staff Reporter April 23, 2020

ISLAMABAD: The Islamic Development Bank (IDB) has agreed to provide $650 million financial support to Pakistan to help absorb the impact of Covid-19 outbreak.

Federal Minister for Economic Affairs MakhdoomKhusroBakhtiar had a video call with Islamic Development Bank President Dr. Bandar M.H. Hajjar and discussed latest situation arising out of the Covid-19.

MrHajjar assured “bank’s support to Pakistan in the testing times under the pandemic,” the statement said adding the president said International Islamic Trade Finance Corporation (ITDC) has been directed to immediately finalise $500 million for import of oil and liquefied natural gas and an amount of $150 million is being allocated to mitigate the pandemic impact.

The IDB president also assured the minister of bank’s full support for the people and the government of Pakistan to mitigate the negative impacts of Covid-19.

He told the minister that board of IDB Group had approved the $2.3 billion ‘Strategic Preparedness and Response Package’ for the IDB member countries to mitigate and recover from the impact of the Covid-19 pandemic in the short, medium, and long-term.

The economic affairs minister appreciated IDB Group President for his special priority for Pakistan.

The technical teams from both sides have already outlined the initial assessment for Covid-19 related financing.

Ministry of economic affairs will evaluate and prioritise the proposals received.

The final requirement of the country will be shared with IDB to materialise financing by the IDB.

The minister and the IDB president expressed their strong commitment to further strengthen the relations as well as IDB portfolio in Pakistan especially for the Covid-19 related emergency activities.

Published in Dawn, April 23rd, 2020

https://www.dawn.com/news/1551419

WORLD BANK TO DOUBLE PAKISTAN’S LOAN SIZE

By Shahbaz Rana Published: April 23, 2020

ISLAMABAD: The World Bank has agreed to double the size of its loan for strengthening social indicators in Pakistan to $500 million to overcome emerging health and economic shocks but another loan of a similar amount may be delayed again due to unfulfilled prior conditions.

The World Bank has decided to increase the size of $250-million Securing Human Investments to Foster Transformation (SHIFT) programme to $500 million, a spokesperson for the World Bank confirmed to The Express Tribune on Wednesday.

World Bank spokesperson Mariam Altaf said the loan programme was tentatively scheduled for World Bank board consideration on May 21. The social-sector loan of $500 million is being obtained for bringing improvement in the quality of civil registration and vital statistics of birth and death certifications, and the ability of the country to better plan for human capital accumulation.

Improved targeting of safety net programmes and expansion of education and nutrition-related cash transfers to help the poor and vulnerable cope with the potential negative impact of the fiscal adjustment and of the Covid-19 pandemic is another key goal of the upcoming loan.

Its other stated goals are implementation of Pakistan’s universal health coverage policy and to improve health outcomes in the medium term, along with increase in sustainability of core sub-systems such as immunisation and improved quality of education. The loan size has been increased to meet Pakistan’s additional financing requirement in the wake of Covid-19 crisis that has created a $2-billion financing gap in the fourth quarter of current fiscal year.

However, the IMF has already approved $1.4 billion in emergency loan, which the central bank received on Wednesday.

In a briefing to analysts, the central bank said on Wednesday that Pakistan’s external financing requirements were fully covered for the current fiscal year, although net reserve buffers again slipped below $7 billion due to withdrawal of $2.7 billion worth of hot foreign money.

Before withdrawal of the hot foreign money, the reserve buffers had jumped over $10 billion – a level that the country last time saw about three years ago. But relying on hot foreign money inflows was a risky strategy that eventually backfired.

IMF Resident Representative Teresa Daban Sanchez said this week that hot foreign money inflows were not part of the IMF package deal.

Owing to the overall crisis-like situation, Pakistan’s sovereign bonds credit default swap ratio increased by 4% between January 20 and April 14 and was trading around 11%, according to the central bank briefing.

However, this was in line with trends in other emerging markets. Sri Lanka’s credit default swap ratio increased by 6% whereas India’s ratio increased by only 2%.

Pakistan is currently trying to keep its international financing lines open but authorities are falling short of taking required measures to secure all the loans that are in the pipeline.

Another policy credit of the World Bank worth $500 million, called the Resilient Institutions for Sustainable Economy (RISE) which was tentatively scheduled for World Bank approval on May 14, has again been delayed, according to sources.

The federal government has not yet fully implemented the conditions that may pave the way for approval of the loan by mid-May. Responding to a question, whether the RISE programme loan could be approved on May 21, Mariam Altaf said, “We continue to make good progress on RISE and it will be considered for approval when the remaining prior actions are completed.”

As part of the conditions, the World Bank has asked Pakistan to restructure the existing Debt Policy Coordination Office into a single Debt Management Office. The proposed structure will not just be a coordinating entity like the Debt Policy Coordination Office that only advises the finance minister.

Pakistan’s public debt-to-GDP ratio, which stood at 85% at the end of last fiscal year, is now projected to deteriorate further to 90% of gross domestic product (GDP) due to poor performance of the Federal Board of Revenue (FBR) and adverse implications of the Covid-19.

The existing Debt Office had been set up under the Fiscal Responsibility and Debt Limitation (FRDL) Act 2005, but its role was largely restricted to coordination and advising the government.

Now, it will be the first drastic change since 2005 in the government’s debt management structure, which is pegged with the World Bank loan of $500 million.

Published in The Express Tribune, April 23rd, 2020.

https://tribune.com.pk/story/2204597/2-world-bank-double-pakistans-loan-size/

NEWS COVERAGE PERIOD FROM MARCH 30TH TO APRIL 5TH

IMF RESCUE PACKAGE

WORLD BANK/IMF SHOW THE WAY

RFI FROM IMF

PAKISTAN TRYING TO GET IMF LOAN RESCHEDULED, SAYS FM QURESHI

GOVT SEEKS FOREIGN LOANS TO FIGHT COVID-19

JAPAN TO PROVIDE $2.16M GRANT FOR COVID-19

WORLD BANK TO ROLL OUT $160BN EMERGENCY AID OVER 15 MONTHS

$200M PANDEMIC RESPONSE PACT SIGNED WITH WB

AFTERMATH OF COVID-19 OUTBREAK: IMF LIKELY TO DELAY RELEASING OF $450M THIRD TRANCHE TO PAKISTAN

ANOTHER $50M TO COME FROM ADB TO FIGHT PANDEMIC

WORLD FACES WORST TIME SINCE GREAT DEPRESSION, SAYS IMF’S GEORGIEVA

$1.4 BILLION LOAN UNDER RFI: IMF TO CONSIDER REQUEST ON APRIL 16

EU TO HELP WELFARE BODIES MITIGATE COVID-19 IMPACT

WORLD BANK WORKING ON REPURPOSING $2BN TO HELP COMBAT COVID-19

WORLD BANK STRESSES STRUCTURAL REFORMS FOR SOCIAL SECTOR

IMF DELAYS APPROVAL OF REVIEW FOR $450M TRANCHE

ANOTHER $50M TO COME FROM ADB TO FIGHT PANDEMIC

WORLD FACES WORST TIME SINCE GREAT DEPRESSION, SAYS IMF’s GEORGIEVA

EU TO HELP WELFARE BODIES MITIGATE COVID-19 IMPACT

WORLD BANK STRESSES STRUCTURAL REFORMS FOR SOCIAL SECTOR

NEWS COVERAGE PERIOD FROM APRIL 13TH TO APRIL 19TH

ADB TRIPLES COVID-19 PACKAGE TO $20BN

ADB ANNOUNCES $20BN COVID-19 RESPONSE PACKAGE FOR DEVELOPING ASIAN COUNTRIES

JAPAN OFFERS $1M TO HELP FIGHT COVID-19

IMF OKAYS OVER $1.3BN AID TO HELP PAKISTAN

GOVT, IMF AGREE TO PUT ON HOLD $6BN PROGRAMME

$500M WB AID LIKELY TO BOOST SOCIAL SECTOR

IMF’S EFF PUT ON HOLD CHINA TO CONTRIBUTE $6.3BN IN FINANCING OVER NEXT 12 MONTHS

UK ANNOUNCES £2.67M AID FOR PAKISTAN

NEWS COVERAGE PERIOD FROM APRIL 20TH TO 26TH

FY21 BUDGET: IMF WORKING CLOSELY WITH AUTHORITIES: SANCHEZ

THE IMF AND PAKISTAN

IDB PLEDGES $650M SUPPORT TO PAKISTAN

WORLD BANK TO DOUBLE PAKISTAN’S LOAN SIZE

NEWS COVERAGE PERIOD FROM MARCH 30^TH TO APRIL 5^TH

NEWS COVERAGE PERIOD FROM APRIL 13^TH TO APRIL 19^TH

NEWS COVERAGE PERIOD FROM APRIL 20^TH TO 26^TH