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Dams and Diaspora

It appears that the new government finds itself in catch 22 situation to devise a sound public finance policy to clear the mess created by the previous two governments and particularly the five years tenure of PML-N government. A passionate appeal by the Prime Minister Imran Khan to Pakistani Diaspora to donate at least $ 1000 each indicates that PTI government is not sure about getting the required amount of external financing from the sources of bilateral funding and loans from multilateral donors including International Monetary Fund (IMF), the World Bank and Asian Development Bank.

Donations from overseas Pakistanis for dams’ construction and their investment in Sukuk bonds and Oversea Pakistanis certificate will bring reasonable amount of foreign exchange to the country but it will not be sufficient to meet the entire expenditure needed for financing two mega hydropower megaprojects. A huge foreign exchange component and funding from the domestic sources will be required to ensure their completion within the scheduled time period. The government is working on a plan to scale down federal development programme to Rs.775 billion from Rs.1, 030 billion set in the budget 2018-19. The saving of Ds. 255 billion will be used to increase allocations to water sector projects.

During the tail end of tenure of PML-N government Chairman WAPDA had told Senate Standing Committee that finances of $ 2 billion would be obtained from Asian Infrastructure Investment Bank and Swiss Bank for Diyamer Basha Dam. Will foreign banks undertake financial risks when IMF does not issue letter of comfort to Pakistan? Another factor of uncertainty hovering over the possibilities of external financing is the hanging sword of grey-listing of Pakistan by FATF. It remains to be seen how far the government succeeds in implementing all the 26 points of action plan handed down by this international watchdog on anti-money laundering and counter terror financing, particularly the one that pertains to choking the source of funding to the proscribed organisations. The unwarranted exercise of a controversial appointment on the Economic Advisory Council and then hasty backtracking on it should have been avoided, which conveyed a negative message abroad.

The Meteorological Department has issued an alert of low rain fall, intense spell of drought and water crisis. The rainfall has been 30 percent lower in the past three months and there is possibility of low showers in the next three months as well. A comparative data released by Meteorological Department reveals that rain fall was 69 percent lower in Sindh; 49 percent in Baluchistan; 45 percent in Khyber Pukhtunkhwa; and 8 percent in Punjab. The issue necessitates recourse to strict water conservation methods.

 

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