On Saturday, the announcement about the budgetary support was first made by Planning and Development Minister Makhdoom Khusro Bakhtiar at a news conference and then reconfirmed by Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh through his official Twitter account after a meeting with two senior officials of the ADB.
However, the ADB’s country office in Islamabad took a rare step on a public holiday, Sunday, to issue a statement distancing itself from the government’s pronouncement, DAWN reported.
In its statement, the ADB confirmed the meetings with the government members and discussions on loans. “These discussions are ongoing and details of the plans as well as the volume of ADB’s financial support, once finalised, will be contingent upon the approval of ADB management and its Board of Directors,” said ADB’s Country Director for Pakistan Xiaohong Yang in the statement.
According to DAWN, informed sources said the ADB management was embarrassed by the government’s premature announcement about the ongoing discussions on loan programme which the bank had not even taken up with its board of directors and had to take an extraordinary step to downplay the discussions.
The sources said the ADB delegation which had met Dr Shaikh was also not authorised at its own to finalise any loan programme that normally involved long-drawn discussions. Moreover, the ADB had also linked its loans for budgetary support to the approval of $6 billion bailout package from the International Monetary Fund for a 39-month reforms programme.
In its statement, the ADB said it was “discussing with the GoP [government of Pakistan] plans to provide budget support programmes, results-based and project assistance to help improve Pakistan’s competitiveness and fiscal sustainability”.
It said the bank could help the government manage external debt and balance of payments and maintain the momentum of macroeconomic and structural reforms to support economic stability and expansion. “ADB is pleased with the progress of discussions with the Government of Pakistan on these issues,” concluded the statement.
The sources said the statements by the cabinet members focused on the exchange rate as the rupee has been losing its value against the dollar for more than a year with no let-up even after the announcement of the federal budget last week.