ISLAMABAD: The government has requested a $250 million loan from the Asian Infrastructure Investment Bank (AIIB) to improve fiscal management and regulatory framework to foster growth and competitiveness.
The ‘Resilient Institutions for Sustainable Economy’ (Rise) programme will promote social protection and economic resilience to prevent long-term damage to the productivity capacity, including human capital of the national economy.
The Rise programme will be under the AIIB’s Covid-19 Crisis Recovery Facility and will be co-financed with the World Bank as a development policy financing.
The programme constitutes one element of the country’s response to and recovery from the impact of pandemic, focusing on economic revitalisation, crucial health and social sector spending.
It will also help in policy and institutional actions to mitigate the adverse health and economic shocks. These actions will promote medium-term reforms in macroeconomic management, institutional strengthening in addition to fostering growth and competitiveness for economic resilience.
The fiscal space provided under the programme will deliver social protection to the poor and vulnerable and expand health sector response in addition to providing a pro-poor fiscal stimulus package to ensure recovery in growth and employment.
The Rise programme is part of an integrated package of immediate efforts by the government to mitigate the significant negative health, social and economic impacts of the Covid-19 pandemic.
It will focus on the government’s efforts for socio-economic recovery and increased spending in health and social sectors while putting in place foundations for sustained economic growth around two policy pillars.
The first of which will focus on reforms to enhance macro economic stability and fiscal management by improving fiscal policy and sustainability through effective institutions; strengthening intergovernmental arrangements; enhancing debt transparency and management; broadening the tax base and reducing distortions in tax policy; and reducing fiscal risks emanating from the energy sector.
Measures under the second pillar will support growth and competitiveness by harmonising the nationwide general sales tax; enhancing transparency and deepening of the financial sector; supporting digital financial inclusion; and promoting better regulated real-estate developments, and competitiveness.
Published in Dawn, July 5th, 2020