The International Monetary Fund (IMF) has advised Pakistan to reassess itsPublic Sector Development Programme, citing its current unaffordability.The Fund communicated to the Pakistani government that the cost of ongoingprojects amounts to Rs10.7 trillion.
However, the allocated budget for the year 2022-23 is only Rs727 billion,implying a potential 14-year completion timeline for existing projects,without factoring in new ones.
In a report titled “Pakistan: Technical Assistance Report–Public InvestmentManagement Assessment–PIMA and Climate PIMA,” the IMF expressed concernthat such practices could lead to suboptimal decision-making by thegovernment.
Additionally, the reported costs may be underestimated, considering thatunfunded and flood-related projects are not included, and the calculationdoes not account for cost increases due to delays.
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The Planning Commission acknowledges that project costs can escalate due tofactors such as inflation, damages, and funding delays impacting builderexpenses. A notable issue highlighted by the IMF is the absence ofmedium-term planning, preventing authorities from clearly outlining howfunding will be secured and disbursed.
Furthermore, the IMF pointed out that development spending has consistentlybreached debt limits over the years, adding another layer of concern to theexisting imbalance in the country’s financial planning.