On Saturday, the World Bank‘s Board of Executive Directors approved a $200 million loan to help Pakistan’s agricultural industry.
The money will be used to transform the agricultural industry by implementing climate-smart technologies that will increase small farmers’ incomes, increase water use efficiency, and increase their resilience to extreme weather events.
Agriculture sector
Punjab’s agricultural sector, which produces 73 percent of all the food produced in Pakistan, is essential to the nation’s economy and food security.
The Punjab Resilient and Inclusive Agriculture Transformation Project (PRIAT) will boost agricultural output by providing small farms with equitable and effective access to water.
World bank
According to a statement released by the World Bank, “it will assist farmers at the community and household levels to adopt climate-smart farming practises and technologies that improve crop yields and conserve water resources in Punjab.”
Najy Benhassine, the Pakistan country director for the World Bank, stated: “In recent years, Pakistan’s agriculture sector has suffered from losses in crop yields and livestock, harm to irrigation infrastructure, and food shortages due to climate change, particularly severe droughts in the Punjab province.
The Punjab Agriculture Policy 2018 supports the massive expansion of water conservation efforts, improving sustainability and resilience in the face of climate change, and private sector involvement to help increase the productivity of the sector. This project is in line with that policy.
In order to help the Punjab government achieve economies of scale and transform the agricultural sector, the lender noted that PRIAT will assist farmers in implementing cutting-edge, climate-smart technologies.
To enhance water conservation practises and agricultural productivity, the project will work with the private sector to find suitable technologies and offer training specifically designed for water user associations and individual households.
According to Guo Li, the project’s task team leader, “the agriculture sector has a huge opportunity to both build climate resilience and improve economic conditions by generating access to domestic and international markets.”
Through market-oriented production activities that add value, boost competitiveness, and increase farmer incomes, PRIAT will aid in accelerating the government’s efforts to transform the agri-food system.
Multilateral creditors
Pakistan has made plans to obtain $9 to $10 billion in loans from other multilateral creditors, such as the World Bank, Asian Development Bank, and Islamic Development Bank during the current fiscal year after reaching a staff-level agreement with the IMF. These creditors include the World Bank, Asian Development Bank, and Islamic Development Bank.
A Letter of Comfort (LoC) from the IMF and the resumption of program/policy lending from the WB, ADB, and IDB will be made possible by the revival of the IMF programme.
After the second week of August 2022, the IMF’s Executive Board is anticipated to meet to discuss the release of the $1.17 billion tranche under the Extended Fund Facility and the combined approval of the seventh and eighth reviews (EFF).
The IMF did not mention any desired structural reforms for removing economic bottlenecks that ultimately led to the surfacing of twin deficits, known as the budget deficit and the current account deficit. Instead, the revival of the IMF programme depends solely on price increases.
The IMF blatantly ignored the rising inflation in its statement on the occasion of reaching a staff level agreement with Pakistani authorities, strengthening the impression that the Washington-based lender is completely oblivious to the suffering being experienced by middle-class salaried workers and pensioners who are suffering from inflation.
Since there is a total electricity billing of Rs1,600 billion, the flow of circular debt reaching Rs850 billion has sparked concern among policymakers. The accumulation of circular debt of Rs850 billion has shocked them and set off alarm bells.
In addition, the IMF statement confirmed that the government had allocated only a pittance—Rs68 billion to Rs72 billion—for the supply of Sasta Petrol and Sasta Diesel in the wake of rising inflationary pressures.
Miftah Ismail, the minister of finance, said on Thursday that the IMF’s executive board meeting would be held after the second week of August 2022 to approve Pakistan’s request for the release of the $1.17 billion tranche.
Miftah Ismail responded to another question about the resumption of programme loans from other multilateral creditors by saying that Pakistan was anticipating $9 billion as budgetary/project loans and that there would also be a separate amount from the IMF. Overall, there are signs that Islamabad will secure $10 billion in dollar loans from multilateral creditors during the current fiscal year 2022–2023.
