ISLAMABAD:
Finance Minister Muhammad Aurangzeb has admitted that Pakistan has failed to prepare viable projects to utilize the $11 billion in foreign aid pledged by lenders during the Geneva conference nearly three years ago. This shortcoming has led to a significant gap between the government’s need for foreign aid and its ability to effectively spend it.
“Let’s accept that we could not come up with investable projects to benefit from the billions of dollars pledged in Geneva,” Aurangzeb remarked at a conference in Islamabad on Wednesday. He further questioned whether the state institutions had learned any lessons from the catastrophic 2022 floods, which caused an estimated $30 billion in damages. The finance minister warned that Pakistan is now facing another round of severe flood damages, with “billions of dollars” in potential losses from the ongoing crisis.
Aurangzeb’s statement followed the Economic Affairs Ministry’s report to the Public Accounts Committee, which revealed that out of the $6.4 billion in pledged project financing, only $2.8 billion had been disbursed. The full amount of foreign aid pledged by international lenders amounted to $11 billion, including $4.6 billion for oil financing and $6.4 billion for rehabilitation and reconstruction. However, due to the lack of credible, well-prepared projects, disbursements have remained limited.
According to official data, major international lenders like the World Bank and the Asian Development Bank have released only a fraction of the funds pledged. The World Bank had committed $2.2 billion but disbursed only $1.6 billion. Similarly, the Asian Development Bank pledged $1.6 billion but released only $513 million. China and the Asian Infrastructure Investment Bank (AIIB) pledged $1.1 billion but provided just $250 million, while the Islamic Development Bank committed $600 million but disbursed only $231 million. The United States’ pledge of $100 million saw a disbursement of $70 million.
Meanwhile, as Pakistan faces another natural disaster, the Water Resources Ministry issued a flood alert for Sutlej, Ravi, and Chenab rivers following heavy rains in the upper catchments of the Chenab River, which have swollen downstream flows.
Aurangzeb emphasized that addressing the dual challenges of climate change and population growth is crucial for Pakistan’s future. Without tackling these issues, he said, the country would not be able to achieve its goal of becoming a $3 trillion economy by its centenary in 2047.
