Finance Ministry’s clarification

ISLAMABAD: A section of the media on Wednesday carried a news report: “Weakening External Sector: World Bank Cancels US $250.0 million Emergency Relief Loan”. The news report gives an impression that the World Bank has unilaterally cancelled a program loan of US $250.0 million owing to weak macroeconomic conditions of the country.

The Ministry of Finance (Economic Affairs) has clarified that the news report is factually incorrect. Question of cancellation of a loan only arises after a loan agreement has been negotiated and signed. In this case, the government of Pakistan has neither planned nor negotiated or signed any such loan agreement with the World Bank. Therefore the question of cancellation does not arise.

The proposed funding option of Catastrophe Deferred Drawdown Option (Cat-DDO) remains available to all member countries of the World Bank including Pakistan for utilisation upon need basis. Also, Cat-DDO is not linked with macroeconomic conditions of a country rather it’s a preemptive option to deal with the state of emergency where declaration to that effect becomes mandatory.