ADB loans sought to develop domestic revenue mobilisation

ISLAMABAD: With the approval of $300 million for Capital Market Development Programme likely within this month, Pakistan has formally requested Asian Development Bank (ADB) to extend programme loans for developing sectors like domestic revenue mobilisation, climate change, and public-private partnership, The News has learnt.

With an increased focus on domestic revenue mobilisation, the ADB’s Headquarters established Tax Hub initiatives, whereby the success models of China and Fiji might be replicated in other Asian economies. As Fiji’s tax to GDP ratio went up amazingly by employing the prescribed model, the Federal Board of Revenue (FBR) could take a leaf out of the island country’s book to improve Pakistan’s revenue collection.

The ADB’s programme loans for energy, market competitiveness, and capital market development are going to cease in the near future so the a high-powered team paid a visit to Pakistan to align their future programme with the ongoing IMF parleys.

According to the official announcement, Shixin Chen, Vice President (Operations) of ADB called on Omar Ayub Khan, Federal Minister for Economic Affairs in Islamabad, and discussed the ADB's technical and financial assistance for Pakistan.

At present, 37 ADB-funded development projects worth $7.9 billion are under implementation across the country in the energy, road & transport, agriculture, urban infrastructure, and social sectors. During the current fiscal year, ADB has disbursed $1.1 billion for various development projects and programmes.

The minister, while appreciating the ADB’s continued support to Pakistan, assured the Vice President, ADB that the Government is committed to completing structural reforms in multiple areas.

Both sides discussed new reform areas for ADB’s assistance including domestic resource mobilization, climate change, and public-private partnerships. domestic resource mobilisation would help the government create fiscal space through enhanced revenue collection and overcome the challenge of fiscal deficit. Furthermore, both sides also agreed on enhancing investments in road sector, agriculture, renewable energy, digital connectivity, vocational education, and the social sector.

Mr. Omar Ayub Khan, Minister for Economic Affairs and Mr. Shixin Chen, Vice President, ADB agreed to continue discussing ways to further deepen ADB and Pakistan’s development partnership.

Nianshan Zhang, Deputy Director General, Aiming Zhou, Senior Adviser, Yong Ye, Country Director, Asad Aleem, Deputy Country Director, & Nasruminallah Mian, Senior Project Officer of ADB also joined the meeting.

In a separate meeting, Federal Minister for Finance and Revenue Shaukat Tarin met with Shixin Chen, Vice President Asian Development Bank (ADB) at Finance Division today. Country Director ADB, Mr. Yong Ye, Secretary Finance, and senior officers participated in the meeting.

The finance minister gave an overview of the country’s economic situation and emphasised the government was committed to introducing reforms in various sectors, in the face of various challenges, to address the long outstanding structural issues and to attain sustainable and inclusive growth.

Chen appreciated and supported the efforts taken by the present government in social and economic sectors for improvement in the economy of Pakistan. He reaffirmed ADB’s commitment to continue support for strengthening reform programmes and implementation of the country’s development agenda including fiscal management, building resilience, and boosting competitiveness, and development of the private sector.