Senate Economic Affairs Committee resolves to ensure accountability of loans & timely completion of projects

ISLAMABAD, July 05 (SABAH): The maiden meeting of the Senate Standing Committee on Economic Affairs convened on Friday under the chairmanship of Senator Saifullah Abro at the Old PIPS Hall, Parliament Lodges, Islamabad.

The session aimed to comprehensively review the Ministry of Economic Affairs and its affiliated departments, with a detailed briefing provided by the Secretary, Economic Affairs Division.

Key agenda items included the ministry’s operational efficacy and its strategic alignment with national economic objectives.

In attendance were Senators including Taj Haier, Falak Naz, Kamran Murtaza, Rahat Jamali, and Senator Kamil Ali Agha, alongside senior officials from the Ministry of Economic Affairs.

Established initially as Development Board in 1948, the Ministry assumed independent ministerial status in 2019. Its primary responsibilities encompass federal government borrowing, program assessment & negotiation of foreign economic assistance, management of external debt, redistribution of foreign loans to provinces and autonomous bodies, economic collaboration, and credit facilitation to allied nations.

Additionally, it oversees the implementation of NGO policy, Foreign Training Courses for Civil Servants (FTC) under Technical Assistance (TA) arrangements with bilateral and multilateral partners, and the Pakistan Technical Assistance Program.

Regarding human resources, the ministry reported 54 vacant gazette positions out of 170 across BPS-16 to BPS-22.

The financial allocations were also discussed, with a total budgetary grant of Rs. 30,597.91 million earmarked for the ERE and operational expenditures for the fiscal year 2024-25. Furthermore, Rs. 6,058.065.10 million was allocated for external debt servicing during the same period.

The briefing emphasized the significance of foreign economic assistance (FEA), noting the utilization of highly concessional loans with fixed interest rates below 3.05% and tenure ranging from 20 to 40 years.

Additionally, concessional loans with fixed interest rates above 3.5% and variable rates (reference rate plus spread) were highlighted for their role in project financing and budgetary support. Senator Taj Haider underscored the importance of revenue-based budgetary support over reliance on external loans.

Senator Kamil Ali Agha asked about the total investment of CPEC projects in a country. To this, the Secretary, EAD informed the Committee that M/o Planning, Development and Special Initiatives deals with the project and requisite information will be provided before the next Committee meeting.

Discussion also centered on development partners, including multilateral institutions such as the World Bank, ADB, IsDB, AIIB and EU, as well as bilateral partners such as China, Japan, USA, UK, and UN agencies like UNDP, UNICEF, WFP and UNFPA.

The Committee was further briefed on the ministry’s project portfolio, comprising 298 ongoing projects, out of which 146 are multilateral and 152 bilateral. Disbursement figures were reviewed, highlighting US $ 6.683 million as the peak disbursement in FY 2022-23, with a projected US $ 5.325 million for FY 2023-24.

Debt management strategies were also outlined involving key government agencies including the Finance Division, Economic Affairs Division, and State Bank of Pakistan. The roles of these entities encompass negotiating and securing foreign economic assistance, managing external debt and liabilities, debt servicing, and data dissemination to stakeholders.

The additional functions of the ministry such as the NGO policy were detailed highlighting the signing of 975 MoUs from 2013 to 2022. The information on foreign training opportunities accessed by government officials, totaling 225 from countries like China, Japan, Korea, and Singapore, was also provided.

The Pakistan Technical Assistance Program was highlighted for its provision of long-term educational opportunities.

The session concluded with remarks from the Chairman of the Committee stating that if a loan is taken for the project or a proposal is finalized by EAD, it must be ensured that the amount is utilized properly by the department. He emphasized that projects must be completed on time.

The Committee also decided to hold upcoming meeting on 298 ongoing projects falling under multilateral and bilateral partners.