Flood losses top $30bn in initial estimate: minister

ISLAMABAD: Minister of State for Finance Dr. Aisha Ghaus Pasha said Friday the recent floods caused total accumulated losses of over $30 billion in accordance with an initial assessment.

Talking to reporters after attending the NA Standing Committee on Finance, she said the World Bank, Asian Development Bank and the UN were conducting a Damage Need Assessment (DNA) to assess the exact losses and construction costs. Dr Pasha also said Pakistan would request the IMF and multilateral as well as bilateral creditors for loans after ascertaining the exact losses caused by the severe floods.

For the upcoming Ninth Review under the Extended Fund Facility, the IMF has slapped conditions for raising electricity prices further and discouraging more tax exemptions. It also imposed conditions to achieve a primary surplus of Rs153 billion for the current fiscal year.

The National Assembly’s Standing Committee on Finance and Revenues held its meeting under the newly-elected Chairman Qaiser Sheikh here at the Parliament House on Friday. The chairman of the NA panel showed his annoyance over the absence of secretary finance and governor State Bank of Pakistan from the meeting. Some committee members asked the chairman to issue summons for governor SBP.

Minister of State for Finance Aisha Ghaus Pasha stated that the price increase was due to higher POL prices and commodities in the international market and depreciation of exchange rate. She said the IMF had so far disbursed $3.9 billion while Pakistan would get $2.6 billion in the remaining period till June 2023. After extending the Extended Fund Facility (EFF) program, the total accumulated size had increased to $6.5 billion.

The chairman asked about the conditions imposed by the IMF. Pasha replied the government did not have sufficient foreign exchange reserves and there was no other option but to go back to the IMF program. She said the revival of IMF program remained a priority of the government. The IMF asked to slash down the circular debt under Management Plan, Public Finance Management, Single Treasury Accounts, controlling SOEs losses and implementing other conditions.

The minister of state said that the IMF program was revived after implementing the tax reforms in the budget for 2022-23, throwing revenue surplus by provinces and increasing energy prices. The government, she said, had to withdraw subsidies on POL and electricity and petroleum levy was imposed. If the IMF program would not have been revived, then the country might have plunged into default. The FBR target is fixed at Rs7,400 billion while the power sector will also be overhauled. She said the IMF’s tenth review under the EFF would be done in February 2023 and the eleventh review would be accomplished in June 2023.

The Member Operation, NDMA, Brig Umar Chattha, said that flood related survey for Balochistan would be completed on September 25 while it would be done in Gilgit-Baltistan till September 20.

Meanwhile, a separate meeting of the Senate Standing Committee on Economic Affairs was held on Friday at Parliament House, Islamabad. The meeting was chaired by Senator Faisal Saleem Rehman.

While deliberating on agenda item pertaining to legislative cover to NGOs receiving foreign funding in the light of Sindh High Court judgment, the committee was informed that EAD only deals with NGOs receiving foreign funding. Moreover, out of total 16,000 NGOs, only 1,000 receive foreign funding and fall under the purview of the Economic Affairs Division. The committee directed that details of these 1,000 NGOs should be shared with it.

The committee was also informed that following Covid, the Government of Pakistan was able to reschedule US$3,686 million of bilateral debt under debt service suspension initiative offered by the G20 countries.