Govt committed to international fight against illicit financial flows

ISLAMABAD: Pakistan is committed to supporting all international initiatives to help stem the illicit financial flows and in the recovery of stolen assets, Planning Commission Deputy Chairman Jehanzeb Khan said on Wednesday.

“If the international efforts under SDG (sustainable development goal) target 16.4 do indeed yield results, then such recoveries can be used to address the funding gap in support of sustainable infrastructure investments in the developing countries” Khan said during a a virtual even organised by United Nations Economic and Social Council.

Khan said the debt service suspension initiative (DSSI) debt servicing relief provided much-needed fiscal space to developing countries, including Pakistan, to support their population cope with the deeply damaging health and livelihood consequences of the COVID-19 pandemic.

As a result, authorities in developing countries were able to expand and strengthen the public health system as well as assist their people by launching specific programs in support of protecting lives and livelihood. Despite repeated efforts and calls by the G20 leaders, the private sector creditors could not participate in the DSSI. The much-needed relief on comparable terms from them could therefore not be provided to the developing countries. The same was the case with the multilateral development banks, he added.

The forum discussed in detail the progress of promoting and sharing concrete national, regional, and global experiences and initiatives on financing the SDGs in a rapidly evolving context. The Forum will build on the work of various processes, including the high-level initiative on financing for development in the era of COVID-19 and beyond.

Planning Commission deputy chairman said the World Bank estimated that the financing requirement for developing countries to implement SDGs is at least $1 trillion annually and up to 2030 to implement the SDGs. Moreover, it is estimated that the building of sustainable infrastructure will require investments in the range of $100-120 trillion to ensure zero carbon emissions by 2050. He said that the shortfall in infrastructure investments is estimated at $22.6 trillion which rises to $26.2 trillion when the additional cost of implementing SDGs and the “greening” of infrastructure is taken into account. The total value of private transactions in Asian infrastructure declined by about 10 percent from $218 billion in 2018 to $196 billion in 2019.

While discussing on post-COVID-19 prospects for sustainable infrastructure investment, Khan said that the global economic environment, sustainable infrastructure investment in developing countries by the private sector already faced major challenges associated with the complexity of projects, the uncertainty of returns, risk-sharing arrangements, and a wide variety of macroeconomic uncertainties. He further said that the COVID-19 pandemic deeply affected the real economy; in particular, the consumer demand, financial sector activities, supply chain management, technology resilience, workforce employment, lives, and livelihood.

Khan said the projects struggle at the early stages due to upstream challenges, including inadequate preparation, governance issues, and access to finance Country risk and project development; therefore we urged this forum to look at the possibilities of devising new innovative instruments for financing Infrastructure needs by leveraging more private sector and Multilateral Development Banks in the form of blending financing in which private sector risk is mitigating and instruments should be designed as to help them invest in developing economies.

Khan said the UN-led efforts can coordinate the multitude of policies, facilities, and platforms to help developing countries access globe finance and investment for infrastructure projects. Particular attention required for quality project development, risk management, and support in execution and operations.