Foreign Assistance to Pakistan Drops by 62%

Pakistan provisionally received $2.941 billion foreign assistance in the first eight months (July-February) of current financial year 2018-19 against $7.608 billion during the same period of last year (2017-18), showing a reduction of about 62 percent.

The assistance received as tabulated by the Economic Affairs Division (EAD) does not include the 3 billion dollars received from Saudi Arabia, 2.2 billion dollars from China and 2 billion dollars from United Arab Emirates this year with another one billion dollar pledges by UAE in the current fiscal year.

EAD data shows that the Pakistan Tehreek-e-Insaf (PTI)-led government did not borrow from foreign commercial banks in February, 2018-19. However, the country borrowed a total of $$499.44 million from foreign commercial banks during the first seven months of the current fiscal year compared to $1.777 billion during the same period last year.

The PML-N government had estimated foreign assistance of $9.69 billion for 2018-19 including $394.34 million grant and $9.297 billion loans, as shown in the EAD data.

The country received $11.486 billion against the budgeted assistance of $8.094 billion for 2017-18 including $3.716 billion from foreign commercial banks.

According to the latest figures, the country provisionally received $225.15 million including $220.51 million loans and $4.64 million grants in February.

Asian Development Bank (ADB) disbursed $19.25 million in February bringing the total disbursement to $376.11 million in the current fiscal year against the budgeted estimates of $1.38 billion for the entire year.

The country received $85.32 million from China in February, bringing the total to $1.209 billion in the current fiscal year against the budgeted estimate of $840.99 million. The amount does not include the 2.2 billion loan recently received form China.

USA disbursed $51.46 million, International Development Association (IDA) $142.83 million, IDB (S-Term) $388.82 million, UK $76.42 million, France $44.14 million, Japan $47.75 million and Germany $14.15 million in the current fiscal year so far.

The previous government had budgeted $2 billion from foreign commercial banks for 2018-19. The country received $25 million from the consortium-led by Suisse AG, UBL and ABL in December, besides $50 million received in November from the consortium.

Pakistan borrowed $159.5 million in October from Dubai Bank. According to the EAD data the loan agreement of $160 million was signed on September 26, 2018 by the PTI government of which $159.5 million has been received so far. Noor Bank disbursed $20 million in July out of the total committed amount of $130 million. The loan agreement was signed on June 21, 2018 i.e. during the caretaker government.

The Suisse AG disbursed $50 million out of its total commitment of $750 million in July. This loan agreement was signed during the PML-N government on May 9, 2018. However, no commercial loans were taken during August 2018. The country received $170 million in September from consortium-led by Suisse AG, UBL and ABL.

According to the EAD data the loan agreement of $200 million was signed on September 24, 2018 i.e. by the PTI government, but the government has crossed the figure and received $245 million so far.

Finance Minister Asad Umar on March 13, 2019 informed the National Assembly Standing on Finance that the government expects to borrow more than last year’s total and would be around $5.6 billion from multilaterals in the current fiscal year. Umar rejected the impression that multilateral sources have slashed the funding for Pakistan. However, the current pace of inflow is indicating that the country is unlikely to achieve foreign assistance estimated for the current financial year.