UNDP warns Pakistan on too much borrowing; might increase economic challenges

ISLAMABAD: Pakistan’s economic and political challenges are increasing as the country is borrowing from multilateral and other sources.

The situation calls for an exploration of resources from the private sector, as well as non-traditional regional partners, emphasises the ‘Pakistan SDG Investment Report 2021’ published by the United Nations Development Prog­ramme (UNDP). The report was launched on Wednesday at a ceremony in Islamabad chaired by Foreign Minister Shah Mahmood Qureshi.

A first of its kind report on the country, the publication provides an overview of Pakistan’s policy priorities, regulatory environment, and its private sector development context.

The report notes that the country aims to create strategic partnerships with international investors looking for impact investments, particularly in the areas of climate change and climate financing, SMEs and industrial development, ICTs, healthcare and education, and transportation and logistics.

“Though innovative partnerships seem to be the progressive way forward as some important new donors like China, Saudi Arabia, Qatar and United Arab Emirates are already providing financing to Pakistan’s social sectors, private investors looking for social impact should therefore look at partnering with regional development partners to ensure targeted transactions and mutual learning opportunities,” it adds.

In a message contained in the report, Prime Minister Imran Khan strongly urged private investors to take benefit from the country’s competitive edge and favourable business environment and earn good returns while supporting sustainable development and climate action.

The report suggests that risk guarantees and the securitisation of receivables could provide additional comfort to financial market participants.

The UNDP report went on to say that financing for development is one of the greatest challenges faced by developing countries, and in the case of Pakistan, the pressure of providing jobs and quality of services to a young population, as well as implementing safety nets for the poorest segments of society, requires a much wider pool of financing than what is available through the State.

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