New Delhi, Nov 10 Representatives of the UNDP, IMF and World Bank have painted a grim picture of Pakistan's economy as the human development indicators continue to worsen amid weak governance in a country that is surviving on bailouts from multilateral agencies such as the latter two.
The United Nations Development Programme’s Resident Representative, Dr Samuel Rizk, said last week that "there are two tales of Pakistan’s story, as on one side there is macroeconomic stability, but on the other hand, the social and human development indicators are worsening and posing serious challenges", according to an Islamabad-datelined report in The News International.
He said that Pakistan was receiving $14 billion from all multilateral agencies, including the IMF, World Bank, ADB, and others, including the IFC, on a per annum basis, but its requirement stood at 15 to 17 per cent of GDP, having an annual estimated requirement of $50 billion for achieving sustainable development goals. This cannot materialise without the co-blending of financing needs, he added.
He also highlighted that the EU delegation would soon be visiting Pakistan to review the GSP+, whereby Pakistan would have to show compliance with 27 conventions, the report said.
GSP+ is a special incentive arrangement under the EU's Generalised Scheme of Preferences (GSP) that grants developing countries zero customs duties on over two-thirds of their exports to the EU. To qualify, a country must be vulnerable, have limited export diversification, and demonstrate a commitment to sustainable development and good governance by ratifying and implementing 27 international conventions on human rights, labour rights, environment, and good governance.
India has been highlighting that Pakistan has been flouting these conditions but yet the EU is continuing with the GSP+ status for the country.
The IMF’s Resident Representative in Pakistan, Chief Mahir Binc, highlighted Pakistan’s weak energy sector, poor institutional reforms, weak governance, low exports, an unfriendly business climate, and a narrow tax base as serious challenges holding back economic stability and growth, according to The News International Report.
He stated that Pakistan was facing challenges of revenue mobilisation and energy sector losses, which are hampering growth in exports. He said that the IMF wanted to have fiscal and export buffers by the end of the ongoing Extended Fund Facility (EFF) and Resilience Sustainability Fund (RSF) programmes by 2027. The tax-to-GDP ratio, he said, should have gone up to 15 per cent in accordance with the IMF assessment, but it might go up to 13 per cent by 2027.
The World Bank’s Country Director for Pakistan, Bolormaa Amgabazar, stated that Pakistan was losing 20 per cent of its GDP by 2030, mainly because of climate change and natural disasters. She said that if Bangladesh could curb population growth, why was Pakistan lagging? She also highlighted stunting, standing at 40 per cent among children in Pakistan, causing an increased number of learning poverty.
According to the World Bank, climate shocks will continue to hit Pakistan if action is delayed, as the country is already facing aftershocks of environmental disasters. She cited the example of Lahore, where air pollution has become hazardous for human life.
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