THE EXPRESS TRIBUNE, ISLAMABAD, 12th SEPTEMBER 2013:
Pakistan will soon receive over $360 million from the United States under the Coalition Support Fund (CSF), as both nations gear up for the resumption of strategic dialogue later this year.
Talking to reporters on Wednesday, Finance Minister Ishaq Dar said so far only $362 million worth of claims have been processed by the US under the CSF programme. He was speaking after attending a function at the Institute of Chartered Accountants of Pakistan (ICAP).
For the current fiscal year, Pakistan has budgeted $1.2 billion under the CSF.
Islamabad will, meanwhile, receive $300 million in each quarter of the fiscal year from the International Monetary Fund, under the technical memorandum of understanding signed with the international lender.
Dar also spoke about the Pakistan-IMF agreement and the lender’s requirement of deep fiscal consolidation of 2.5% of gross domestic product or Rs655 billion in the current fiscal year. He said the government had set the budget deficit target at 6.3% of GDP, but the IMF wanted it to be fixed at 5.8%. He hoped that the government will be able to achieve the revised deficit target.
As a contingency measure, the government will slow down releases in the first nine months of the fiscal year to spare Rs130 billion aimed at achieving the revised budget deficit target of 5.8%, according to the Memorandum of Economic and Financial Policies.
The finance minister said that the government had curtailed expenditures for bringing down the budget deficit from 8.8% of GDP to 8.2% in the last fiscal year after it assumed the office in early June. However, independent economists challenged Dar’s assertion and argued that the deficit was reduced due to less-than-targeted development spending because of a ban imposed by Election Commission of Pakistan ahead of the general elections.
Dar, meanwhile, said in the next fiscal year, the budget deficit target will be set at 5.3% of GDP.
Resumption of strategic dialogue
Earlier in the day, a US delegation, led by Special Representative for Afghanistan and Pakistan Robin Raphel, informed Finance Minister Dar that the US special envoy of international energy affairs has convened a meeting of the working group on energy for November this year.
The meeting of the working group will mark the resumption of strategic dialogue between Pakistan and the US. The process was derailed following the deaths of Pakistani troops in a US airstrike in Salala in November, 2011.
Raphel is visiting Islamabad to discuss cooperation in the energy sector between Pakistan and the US. During her meeting with Dar, the latter sought US support for work on both the Diamer-Bhasha and Dasu dams.
The US envoy said Washington had in principle agreed that both the projects were crucial for Pakistan and as such, it would support both initiatives, according to a finance ministry handout.
Pakistan has been facing problems trying to shore up funds for the $14 billion Diamer-Bhasha dam after the World Bank refused to finance the project.