ISLAMABAD: The Asian Development Bank will provide a loan of $200 million to Pakistan for a resource mobilisation programme, and an ADB fact-finding mission will arrive in Islamabad next week to discuss the proposed loan with authorities, it was learnt here on Sunday.

The proposed ‘Improved Domestic Resource Mobilisation Reform Programme’ will help the government address major binding constraints to mobilise larger resources to enhance productive investment by improving domestic revenue mobilisation; quality of public expenditure and cash management for improving allocation efficiency of scarce public resources; and mobilisation and utilisation of domestic savings and foreign direct investment (FDI).

These key reform areas were closely aligned with the government’s reform agenda for public sector management outlined in the ‘Vision 2025’, the national development strategy, the medium-term budget strategy, and ADB’s country partnership strategy for Pakistan covering 2021-2025 period.

Prior to finalising the loan, the ADB had approved a technical assistance to Pakistan to prepare the improved domestic resource mobilisation reform programme to ensure fiscal sustainability and generate fiscal space to finance critical invest­ments in human capital, infrastructure and poverty alleviation.

With a large informal economy, macroeconomic shocks such as the Covid-19 pandemic in 2020 and the global supply chain disruption in 2021 have pushed the country’s poor deeper into poverty.

ADB said the country’s ability to mobilise adequate domestic resources, including the creation of fiscal space through better expenditure management, remain critical to ensure quality investments in essential public services such as health and education and promote equitable development across its provinces.

The transaction technical assistance will focus on the first and third key reform areas. Through the Ministry of Finance and Federal Board of Revenue (FBR), the technical assistance will

support the implementation of critical tax administration, pension system, and institutional and capacity development reforms in Pakistan.

The assistance for the development and implementation of the second key reform area, for improving the quality of public expenditure and cash management, will be provided through an ongoing regional technical assistance facility for supporting public financial management and tax policy.

According to details, the technical assistance coverage of all key reform areas will ensure not only adequate support for implementation of complex reforms but also strong demonstration of ADB value-addition.

The technical assistance will be implemented by four international and seven national experts.

Published in Dawn, August 8th, 2022