ISLAMABAD
Amid political uncertainty caused by sit-ins in the federal capital, the pace of foreign inflows including loans and economic assistance slowed down during first quarter of the current fiscal year.
Not only Pakistan failed to complete disinvestments of OGDCL shares, auction of Sukuk bonds and getting IMF tranche but it also received the foreign assistance at a much slower pace during the first quarter (July-September) of the ongoing financial year 2014-2015. Pakistan received $764 million as foreign assistance during July-September of the FY2015, which is only 9.7 per cent of the budgeted annual estimate of $7.4 billion.
The country’s foreign exchange reserves did not soar to $15 billion level by the end of September, as planned by the incumbent government due to the sit-ins of Pakistan Tehreek-I-Insaf (PTI) and Pakistan Awami Tehreek (PAT), as the reserves currently stood at $13.44 billion. The government had estimated to generate $2.4 billion from three sources including one billion dollars from Sukuk bonds, $850 million from disinvesting 10 percent shares of OGDCL and IMF tranche worth of $550 million. However, government failed to materialize these three transactions. The government is now hoping to receive two tranches from IMF worth $1.1 billion in December this year.
According to the provisional figures of the Economic Affairs Division (EAD), the country received $764 million from different sources during July-September of FY2015. Disbursements from other donors, particularly the United Kingdom and the United States, were lesser. The UK provided $78 million against the annual estimate of $245 million. According to the documents, the US gave only $8 million against the annual estimate of $358 million.
Meanwhile, the Islamic friendly country Saudi Arabia did not provide a single penny during first three months of FY2014. The Islamic friendly country had to provide $171 during current year. The documents showed that China disbursed the maximum amount of $295 million in the first three months. Pakistan is expected to receive $1.5 billion in fresh loans from China this fiscal year 2014-2015. The Islamic Development Bank was the other main lender that gave $147 million, as the Bank would provide $580 million in current year. The Asian Development Bank (ADB) disbursed $80.8 million out of the total $1.1 billion to be disbursed during ongoing financial year. Against the annual estimate of $1.9 billion, the disbursement from the World Bank (WB) was $52 million during first quarter of the current fiscal year, according to the EAD documents.
According to the documents, the consortium of commercial banks did not provide any assistance while it has to provide $100 million this year. The government has planned to issue $1 billion worth of sukuk (Islamic bonds) and expects to complete the transaction by the next month.
The amount $764 million from different sources during July-September does not include the fourth tranche of $556 million from International Monetary Fund (IMF), under the September 4, 2013 approved $6.64 billion Extended Fund Facility (EFF) and $371.4 million under the Coalition Support Fund (CSF).