No budgetary support provided by donors yet: data

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The Asian Development Bank (ADB) and the World Bank have not provided any on-budget support to Pakistan during the current fiscal year, belying government data which showed the financial assistance being provided by these multinational institutions as 'budgetary/on budget support'.

Official data showed that the World Bank and ADB provided on-budget support of $76.2 million and $78.6 million, respectively, to Pakistan from July this year to-date while the sources in these multinational financial institutions said that not even a single dollar has been provided as 'budgetary support' to Pakistan in the first five months of 2012-13.

An official of the Ministry of Finance said: "On-budget support does not necessarily mean 'program lending' and project inflows provided by the multinational institutions are also usually indicated as 'on-budget' support. It is true that the program lending by two major multinational institutions like World Bank and ADB has been suspended for the last two years. The multinational financial institutions have already demanded the government of Pakistan to get a Letter of Comfort (LOC) from the International Monetary Fund (IMF) prior to receiving further assistance as program lending and the IMF is not satisfied with the pace of our reforms especially with respect to widening the country's tax base and eliminating power subsidies."

ADB's Country Director Dr Werner Liepach stated in September this year: "It depends upon the discretion of the government of Pakistan whether it likes to go for a new loan program or not but one thing must be clear that the country has to ensure macro economic stability through reforms in tax and energy sectors at any cost. Otherwise, it may be deprived of the assistance from the international donors."

Data showed that the ADB, Islamic Development Bank (IDB) and the World Bank (IBRD and IDA) provided on-budget support while Australia, Canada, European Union (EU), Italy, Multi-Donor Trust Fund (MDTF) of the World Bank, USDA, UN-EFW (Extended Funding Window), MDTF -UNDP, UN, ILO (International Labor Organisation), Switzerland and Japan have disbursed off-budget support to Pakistan during the first five months of the current fiscal year.

The World Bank has been the major loan provider among other multilateral financial institutions , according to the data, to Pakistan by releasing $80.6 million (including on-budget and off-budget support) while DFID of the UK has remained the major assistance provider among other bilateral donors, including the US, by releasing $41.3 million.

Financial assistance received from multilateral financial institutions such as ADB, IDB and IBRD is part of the Public Sector Development Program (PSDP).

From July 2012 to date, the ADB released $78.6 million to Pakistan while IDB disbursed $6.2 million at all. USA that has been the major grant assistance provider, has disbursed just $13.1 million, Australia $5.8 million, EU $1.2 million, and Japan disbursed $23.6 million to the country during the first five months of 2012-13.

Courtesy: Business Recorder

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