ISLAMABAD: Pakistan stands as one of the most susceptible nations to the impacts of climate change. Facing an annual loss of $2 billion since 2000 due to the consequences of climate change.
A report from the International Monetary Fund (IMF) highlights that four million individuals are affected by climate change annually. The devastating 2022 flash floods impacting 30 million people and resulting in 1,700 casualties.
Furthermore, there are concerns that by 2050, the country’s economy could witness a significant downturn of up to 9% as a result of natural disasters.
In addition to climate-related challenges, the IMF expresses apprehensions regarding the affordability of Pakistan’s Public Sector Development Programme (PSDP).
The report urges a reevaluation of the initiative, revealing that the total cost to complete PSDP projects amounts to Rs 10.7 trillion—over 14 times the allocated budget of Rs 727 billion for the fiscal year 2022-23.
The IMF underscores the urgency for reforms in establishing a more credible basis for the PSDP budget, noting the addition of new projects and potential inconsistencies in decision-making.
Concerns are raised about the prolonged time frame required to complete approved projects, with an estimation of approximately 14 years based on the current budget.
The report criticizes the ineffectiveness of debt and deficit ceilings, noting consistent breaches since 2012.
It highlights challenges such as the absence of a medium-term planning document and projects in Vision 2025. Emphasizing the need for a five-year planning approach to address fiscal limitations and promote growth drivers.
The IMF recommends a revival of five-year planning in Pakistan. Emphasizing the importance of climate-resilient infrastructure given the country’s exposure to climate risks.
Despite some improvements in public investment management, the report calls for strengthened institutions. The complete implementation of measures outlined in the Public Financial Management Act 2019 and the 2021 Manual for Development Projects.