Govt to seek $380 million loans from WB, ADB to fight locust

ISLAMABAD: Amid locust spreading in the Pakistan at alarming pace, the government has decided to seek $380 million loans from the World Bank (WB) and Asian Development Bank (ADB).

“Thus, international support amounting to $1.9 million (DFID $1.2 million, FAO $0.5 million and JICA $0.2 million) has been received while $200 million are committed by World Bank and another $180 million from Asian Development Bank is in process” the economic update shared by Finance Ministry stated on Saturday.

Since 2019, locust is spreading in Pakistan, at an alarming pace and it pushed the government to declare national emergency against desert locust on January 31, 2020. Although after 18th Amendment and devolution of agriculture, provinces have the mandate to maintain basic infrastructure for combating locust, ground operation for the control of locust and logistic support, the federal government at the same time has the mandate for crops protection from locust attack in its international aspect, and for aerial operation. Still, federal government is taking lead for implementation of National Action Plan.

Federal government has provided more than Rs1.0 billion as its share for stage-I under National Action Plan, from January to June, 2020. Provincial governments are also supporting in terms of funds and other resources in combating locust.

National Locust Control Centre (NLCC) was established with the approval of the prime minister with wide composition from federal and provincial government on 1st June, 2020. The NLCC will play a vital role for coordination, surveillance, control and monitoring of locust threat in the country. Revised National Action Plan worth of Rs25 billion is developed (Federal share Rs13.6 billion, provincial share will be Rs11.4 billion). F

urther, for providing support to the locust surveillance and control programme in Pakistan, FAO is taking lead in providing technical and operational support.

On effects of COVID-19 on Pakistan, Ministry of Finance stated that in the context of Pakistan, COVID-19 may have a double-edged impact; through the trade channel and through the remittances. Further, the performance in a number of key sectors (e.g., textiles, autos) has been hit hardly amid anaemic demand.

Business confidence has fallen in both manufacturing and services sectors. Closure of small and medium size enterprises induced significant loss in employment and private investment. Provisional estimates suggest that in FY 2020, Pakistan growth remained negative 0.4 percent, while for FY 2021, GDP growth is projected to be 2.1 percent but predominantly depends upon how the pandemic unfolds.

Policy priorities in most of economies are to lessen the on-going health and human costs and assuage the economic losses. Pakistan’s measures include additional spending on health care, cash transfers, and relief of utility payments. On the fiscal side, the government announced a fiscal stimulus package of Rs1.24 trillion while the State Bank of Pakistan (SBP) provided liquidity support to households and businesses to help them through the ensuing temporary phase of economic disruption.

The SBP has sanctioned Rs6.0 billion for hospitals and Rs8.8 billion for investment purposes. A total of 1,230 companies have availed SBP’s refinance scheme, and a sum of Rs113 billion has been disbursed for wages during three months till June 19, 2020.

It is mentionable that IMFs Rapid Financing Instrument (RFI) amounting to $1.386 billion to counter the economic impacts of this novel outbreak will also support government’s efforts to mitigate the economic shock, the facility will be used to address declining international reserves and increase social sector spending.

Additionally, concessionary lending by IFIs; the World Bank and Asian Development Bank will provide much needed support to the government during this crisis time and help government of Pakistan to tackle the COVID-19 challenge with minimum affects, it concluded.