NEWS COVERAGE PERIOD FROM JAN 27 TO FEB 02, 2020
ADB TO LOAN $15M FOR DEVELOPMENT OF SEVEN PUNJAB CITIES
The Newspaper’s Staff Reporter January 31, 2020
ISLAMABAD: The Asian Development Bank (ADB) has approved a $15 million loan to help seven cities of Punjab to design comprehensive investment and public service delivery plans for urban development projects.
The loan will fund the preparation of master plans, detailed engineering designs, and operational business plans for proposed projects in Bahawalpur, Dera Ghazi Khan, Multan, Muzaffargarh, Rahim Yar Khan, Rawalpindi and Sargodha.
It will also help ensure a high level of readiness ahead of the ensuing Punjab urban development projects and complement the ADB’s existing technical assistance to Pakistan to conduct feasibility studies and explore innovations to improve the quality of urban services.
“The Government of Punjab has taken a proactive role in tackling urban development challenges in the province,” said ADB’s Senior Urban Development Specialist for Central and West Asia Jude Kohlhase.
“This loan will help local governments improve spatial and urban planning, prepare environmental assessments, put in place gender action plans with a special focus on gender equality, and incorporate climate resilient designs for priority investments.”
The country has experienced rapid urbanisation as people living in rural areas have had been migrating within the country to find jobs.
Urban development challenges are most pronounced in cities of Punjab, which account for 53 per cent of the country’s urban population and experience intermittent access to poor quality water, ineffective wastewater and solid waste management, and severe traffic issues because of lack of public transport and poor traffic management.
The ADB will also help identify integrated smart solutions to strengthen institutions’ urban and spatial planning systems.
It will also support the preparation of land acquisition and resettlement plans, feasibility studies, and procurement of documents. The upcoming projects are in line with the government’s development priorities, which emphasise providing access to safe water, sanitation, urban transport, and a healthy living environment.
Published in Dawn, January 31st, 2020
JORDAN AGREES $1.3 BILLION IMF PROGRAMME
By RECORDER REPORT on January 31, 2020
Jordan has agreed a new $1.3 billion programme with the International Monetary Fund (IMF) and will receive a first installment of $140 million by the end of March, the state news agency Petra said on Thursday.
Jordan will receive nine installments of $140 million to $150 million over the four-year programme, Petra said on its Twitter account. It cited Jordan’s finance minister, Mohammad Al Ississ, as saying the allocations carry a 3% interest rate.
In Washington, the IMF said it reached a staff-level agreement for the $1.3 billion programme that is subject to IMF management approval and consideration by the IMF Executive Board, which is expected in March. It said the programme was aimed at bolstering economic growth and stimulating job creation.
In December, Ississ said a new IMF deal to succeed a three-year extended fund facility that ends in March would secure lower servicing costs for the $42 billion in public debt that the country holds, which has spiraled in the last decade as a result of the spillover of regional conflicts on its economy.
The programme will focus on efforts to spur sluggish growth that has hovered at around 2% in the last decade. Petra on Thursday said the IMF forecast Jordanian economic growth of 2.1% in 2020.
The agency cited the IMF as saying there would be no tax hikes or increase in water prices under the new programme while electricity prices would be reduced for the business sector to increase competitiveness.
The IMF statement issued in Washington said Jordan’s structural reform agenda was “designed to improve the investment climate and reduce costs to businesses, which will make it easier to create jobs while also protecting Jordan’s poor and most vulnerable.”
IMF-backed austerity measures in 2018, including steep tax hikes, dampened domestic consumption, dealt a blow to investor sentiment and triggered some of the largest protests in years that brought down the previous government.
Jordan is now focusing on spurring growth by more public spending it hopes will revive consumer and business confidence. Economists warn that an expansive policy could derail fiscal stability and push higher debt which now stands at around 95%.
The country’s spiraling debt is at least in part due to successive governments adopting an expansionist fiscal policy characterized by job creation in the bloated public sector.
Past governments also hiked spending on welfare and public sector pay in a move to ensure stability in the aftermath of the “Arab Spring” protests in the region in 2011.
Copyright Reuters, 2020
NEWS COVERAGE PERIOD FROM DEC 20 TO 26, 2020
IN PAKISTAN, FOREIGN LOAN DISBURSEMENT JUMPS 156% TO $5.5 BILLION
By Shahbaz Rana Published: January 22, 2020
Out of $5.5 billion, Pakistan received $4.7 billion or 84.7% in non-project aid – the sum that has been used to either finance the budget, build foreign currency reserves and buy oil. PHOTO: FILE
Out of $5.5 billion, Pakistan received $4.7 billion or 84.7% in non-project aid – the sum that has been used to either finance the budget, build foreign currency reserves and buy oil. PHOTO: FILE
ISLAMABAD: Pakistan saw a 156% surge in disbursement of foreign loans that increased to $5.5 billion in first half of the current fiscal year but non-project loans rose to 84% of the total receipts, which could compound Islamabad’s debt sustainability issues.
Pakistan has taken another Chinese commercial loan of $700 million from China Development Bank as the government struggles to enhance its non-debt creating inflows.
Foreign loan disbursements have picked up significantly after signing of the International Monetary Fund (IMF) loan programme, which is providing a cushion to the government to meet its external financing needs.
But the disbursement by the World Bank and Saudi Arabia against its $3.2-billion annual oil credit facility remained low during the July-December period of the current fiscal year.
Bilateral and multilateral creditors and commercial banks disbursed $5.52 billion in loans in the July-December period of fiscal year 2019-20, according to figures released by the Ministry of Economic Affairs on Tuesday.
The State Bank of Pakistan has not released the external debt repayment data for the first half, therefore, it is not clear how much of the $5.5 billion has been utilised to repay the maturing debt.
The disbursement was higher by $3.4 billion or 156% compared with loans of $2.2 billion received in the same period of previous fiscal year.
The $5.5 billion in loans were equal to 43.7% of the projected $12.6-billion borrowing that the Pakistan Tehreek-e-Insaf (PTI) government has targeted to secure in the current fiscal year in a bid to bridge the current account deficit and meet the debt repayment requirement.
In its first year in power, the PTI government had acquired $16 billion worth of external loans.
The break-up of the $5.5 billion loans showed a trend that suggests that Pakistan’s external debt woes would not ease in the near future and it will keep taking new loans to repay the old loans.
Out of $5.5 billion, Pakistan received $4.7 billion or 84.7% in non-project aid – the sum that has been used to either finance the budget, build foreign currency reserves and buy oil. Out of this, the direct budget and balance of payments support stood at $3.8 billion or 70% of the total loans.
The project financing remained at only $865 million, which means these loans were used for some productive purposes. However, as compared to the previous fiscal year, there was 60% reduction in the project loans.
Foreign exchange-related risks elevated in fiscal year 2018-19 that ended in June last year, according to the new Public Debt Management Risk Report of the Ministry of Finance. The report showed that Pakistan’s short and long-term foreign debt maturing in fiscal year 2018-19 increased to 158.7% of the total liquid foreign currency reserves by June 2019.
The borrowing of $5.5 billion in July-December of this fiscal year included $1.8 billion in commercial loans, which was equal to 90% of the annual borrowing target of $2 billion. Pakistan secured $700 million in new loan from China Development Bank and $50 million from Dubai Bank in December alone.
The disbursements by bilateral lenders stood at $524 million, which was higher than the annual target of $480 million. China disbursed $392 million in project financing in the first six months of this fiscal year. Beijing disbursed $198 million for the Havelian-Thakot road project and $122 million for the Sukkur-Multan motorway that has been completed.
The Asian Development Bank has turned out to be a saviour for the government that has so far provided $2.1 billion, exceeding annual target of $1.7 billion. However, out of $2.1 billion, the ADB’s budgetary support loans amounted to $1.8 billion including a billion dollars crisis response facility.
The Islamic Development Bank disbursed $408 million under the oil credit facility out of the total of $1.1 billion. The World Bank has released just $233 million so far against the annual estimate of close to $1.2 billion. The World Bank’s disbursements were hardly 21% of the annual projections. Saudi Arabia has so far given $407 million worth of oil against the annual credit facility of $3.2 billion. The government has not yet floated the global bonds against the annual borrowing target of $3 billion.
In alternate financing, the government is relying on hot foreign money, which it so far has received to the tune of $2.4 billion. But the hot foreign money is coming at the expense of growth in local industries. In order to attract hot foreign money, the central bank has kept the interest rates at 13.25%.
Published in The Express Tribune, January 22nd, 2020.
UAE GAVE $68M GRANT TO PAKISTAN LAST YEAR
APP January 23, 2020
ISLAMABAD: Pakistan has been a major beneficiary of aid provided by the United Arab Emirates, with a grant of Dh251 million [$68m approximately] provided to the country last year, data from a UAE government report showed.
The UAE distributed more than Dh28 billion in international aid last year. Pakistan was the eighth most supported nation with a grant of Dh251.10m given to the country.
Special Assistant to Prime Minister on Health Dr Zafar Mirza said that the UAE was a time-tested friend of Pakistan and it was supporting the country in health and development sectors.
In an interview with the Arab News, Dr Mirza thanked the UAE government for their support in every field and said that increased aid reflected the UAE trust in Pakistan.
Under Prime Minister Imran Khan’s leadership, relations between Pakistan and the UAE had become stronger which was evident from frequent bilateral visits at the leadership level, he said.
He praised the UAE’s support in the health sector, especially in helping Pakistan eradicate polio from the country.
“They are our major partners in the polio eradication programme. I really appreciate the support provided by the UAE in our fight against polio as in our recent campaign they (UAE) have contributed a lot,” Dr Mirza said.
Published in Dawn, January 23rd, 2020
WB-FUNDED PLAN TO IMPROVE CITY’S MUNICIPAL INFRASTRUCTURE LAUNCHED
The Newspaper’s Staff Reporter Updated January 25, 2020
KARACHI: The Sindh government, with the help of the World Bank Group, on Friday launched a $240 million megaproject — the Competitive and Liveable City of Karachi (CLICK) — to bring in radical reforms in infrastructure with particular emphasis on increasing efficiency of the city’s local government delivery system.
The project is set to be completed in a period of six years.
Local Government Minister Nasir Shah, representatives of the World Bank and senior government officials attended the launching ceremony held at the Peoples Hall of the New Sindh Secretariat.
The Sindh government will share $10m through its annual development programme and the major portion of $230m would be financed by the WB (International Bank for Reconstruction and Development) under Investment Projecting Financing (IPF) as loan to the provincial government.
The Sindh government had sought the WB’s assistance to help improve the operational functionality of the Karachi Metropolitan Corporation, district municipal corporations and District Council Karachi.
A detailed property survey of the city is also to be carried out under the $240m CLICK project
“Once successful, this project will be spread to whole of the province,” said Minister Shah.
According to him, three key components of the project are: “improvement of capacity for infrastructure improvement of the local councils of Karachi under the local government department with project component amounting to $181.86m; improvement of urban property tax system through the excise and taxation department with project component amounting to $40.4m; and the Sindh Investment Portal through the investment department with project component amounting to $17.2m.
He said the project aimed to support the LG department for institutional development or governance in the KMC and six DMCs and one district council to strengthen their financial resources for infrastructure development capacity.
Besides, it would also help to establish a public-private-partnership mode in the LG department as well as provide technical assistance for the Sindh Solid Waste Management Board.
Minister Shah said the project would help the government plan in a scientific manner for improving the ever-increasing shanty settlements in the sprawling metropolis. Besides, the worn-out sewerage system could also be improved accordingly.
He said CLICK had been designed only to improve the provincial capital. He sought the WB’s assistance in starting similar projects for other cities of Sindh.
John Roome, a senior official of the World Bank, said Karachi was a huge urban place that demanded a vision for its betterment keeping in view its growing population.
He said as a key priority it was required to put a better system in place in the city to ensure better liveability, jobs and issues relating to migration.
He said it was necessary to improve infrastructure of one of the largest cities in the world and the same was an imposing challenge for governments.
LG Secretary Roshan Shaikh said the project would also help the related authorities to preserve Karachi’s rich history.
Project director Zubair Channa said the grand scheme also offered for conducting a property survey and capacity building of the excise and taxation department.
Besides, it would also provide for the better usage of solid waste including generation of power and improvement of its shifting to the designated garbage transit stations.
Sindh Chief Minister Syed Murad Ali Shah also met World Bank officials on Friday at CM House and discussed the provincial government’s development priorities and how the bank could support them.
Mr Shah spelled out his priorities, saying he had focused on the development of urban and rural areas equally. The urban areas needed drinking water and water for industrial requirements while the rural swathes were in need of efficient agricultural water system for growth of agro sector.
He said the other important project was urban transport schemes under which 21km Yellow Line Corridor should be developed with WB assistance under the Karachi Mobility Project (KMP).
The Yellow Line Corridor, starting from Dawood Chowrangi to Numaish, has three components.
The chief minister spoke about the WB-assisted Karachi Water and Sewerage Services Improvement Project, which is aimed at improving access to safe water services in the city and to increase Karachi Water and Sewerage Board’s financial and operational performance.
He said the loan was signed in December. It is a $100bn project in which $40m would be provided by IBRD, another $40m by Asian Infrastructure Investment Bank and $20m by the Sindh government.
Mr Shah said under the project there would be utility reforms and rehabilitation of water and sewerage network.
Published in Dawn, January 25th, 2020
MURAD DISCUSSES WATER PROJECTS OF OVER $1B WITH WORLD BANK
By Our Correspondent Published: January 25, 2020
KARACHI: Spelling out the priorities of the provincial government in a meeting with a World Bank (WB) delegation, Sindh Chief Minister Syed Murad Ali Shah claimed that he had given equal attention to the development of urban and rural areas.
The delegation, which included WB South Asia regional director Johan Roome, programme leader Lixin Gu and senior financial sector specialist Namoos Zaheer, met Shah at the CM House on Friday, discussing the provincial government’s development priorities as well as the WB’s ongoing and future projects.
“Urban areas need drinking water and water for industrial requirements, while the rural areas are in need of efficient agricultural water systems for the growth of the agro-sector,” explained the CM, bringing up
He told the delegation that the Karachi Water and Sewerage Services Improvement Project, assisted by the World Bank, was aimed at improving access to safe water in the city, as well as to boost the Karachi Water and Sewerage Board’s (KWSB) financial and operational performance.
The project will cost $100 million, of which $40 million are to be provided by the International Bank for Reconstruction and Development (IBRD), $40 million by the Asian Infrastructure Investment Bank (AIIB) and $20 million by the Sindh government. The loan agreement was signed in December 2019.
Shah informed the WB officials that the project would include utility reforms and rehabilitation of the provincial capital’s water and sewerage network. Briefing them about the progress to date, he said that the KWSB had been reconstituted, a steering committee had been formed, the project director appointed and a procurement document of $6 million approved by the bank.
They also discussed the second Karachi Water and Sewerage Services Improvement project of $6 million, of which $240 million would be given by the IBRD, $240 million by the AIIB and $120 million by the Sindh government. This project, according to the CM, includes the augmentation of the K-IV water project, bulk supply options and the installation of new filtration plants.
The planning and development chairperson, Muhammad Waseem, said that the CM had approved the investment plan but is yet to share it with the World Bank.
Meanwhile, Shah and the delegation also discussed the Sindh Water Sector Improvement Project (SWIP), which aims to improve the efficiency and effectiveness of irrigation in the Ghotki, Nara and Left Bank canals. The project, costing $257.6 million, also includes asset management and future planning components.
Shah further said that feasibility studies were being conducted for the rehabilitation and modernisation of the Guddu Barrage. “Institutional reforms will be made, focusing on the devolution of managerial responsibilities to farmers through the Sindh Irrigation and Drainage Authority, area water boards and farmers organisations,” he disclosed.
“The impact of the project will be improved water equity and reliability for 1.8 million hectares of agricultural land and over 100 towns and villages, benefiting more than five million people,” he claimed.
The project also aims to make water available up to the tail end of Ghotki, Tharparkar and Badin districts.
The World Bank representatives also discussed urban transport plans with the CM, with the 21-kilometre Yellow Line bus rapid transit (BRT) corridor to be developed with the bank’s assistance under the Karachi Mobility Project.
Shah said that the World Bank had approved a loan of $382 million for the BRT project, going from Dawood Chowrangi to Numaish, in June 2019, with the loan agreement being signed in November 2019.
Giving updates, Waseem said that the project director would soon be appointed, while the Sindh government was in the process of appointing six procurement specialists. Sindh finance secretary Hassan Naqvi pointed out that the provincial government had trained 550 Grade-17 procurement officers, of whom six would be appointed for this project.
NEWS COVERAGE PERIOD FROM DEC 30 TO 05, 2020
PAKISTAN TO UNDERTAKE 27 PROJECTS THROUGH $1BN GRANT FROM CHINA
December 31, 2019
ISLAMABAD: Pakistan will undertake 27 projects in diverse sectors including agriculture, health, education, drinking water and poverty alleviation with the grant of US$1 billion provided by China.
According to official sources, the Joint Working Group on socio-economic development of China Pakistan Economic Corridor (CPEC) had identified six sectors for the projects to be launched during the second phase of CPEC.
Projects would also be started for up-gradation and renovation of vocational and technical schools, solar power lighting project, smart classroom project, medical equipment for hospitals, provision of agricultural tools and equipment and setting up of Pakistan China joint agricultural laboratories.
Projects such as solar power lighting equipment for Balochistan, provision of solar water pumps in Khyber Pakhtunkhwa, water filtration plants in Azad Kashmir and smart classroom project for higher education were in the fast track category.
Pakistan was already benefiting from the energy and infrastructure projects completed under CPEC and these projects would provide a foundation for setting up nine special economic zones in the second phase of CPEC.—APP
UAE FUND ALLOCATES $200M TO SUPPORT PROJECTS
January 03, 2020
DUBAI: The de facto United Arab Emirates ruler, Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan, instructed the Khalifa Fund for Enterprise Development to allocate $200 million to support small and medium economic projects in Pakistan, state news agency reported on Thursday.
The Crown Prince is in Islamabad where he met Prime Minister Imran Khan, and the two discussed “regional and international issues of mutual interest as well as ways to enhance bilateral ties,” according to Sheikh Mohammed’s tweet earlier in the day.—Reuters