The federal government has planned to float $500 million worth of foreign currency sovereign bonds and Rs25 billion worth of rupee bonds in the upcoming financial year aimed at reducing reliance on foreign loans and assistance, an official said.
A finance ministry official said in order to implement the plan the government was formulating a medium-term strategy under which bonds would be floated not only in the upcoming year, but also a year after that when bonds worth Rs40 billion would be issued. Another proposal under consideration, he said, was that Pakistanis working abroad would be offered dollar bonds to generate resources for running the affairs of the government. For encouraging expatriate Pakistanis, the National Savings Organisation will utilise the services of embassies and commercial attaches abroad and also hold roadshows in key international markets. The government is hoping to generate resources from such papers to meet its budget deficit of four per cent for financial year 2011-12.
The ministry official said the government was also planning Sukuk bonds of state-run corporations against the guarantee of their assets, which would reduce the need for government subsidies for such companies. In this regard, the government is working to determine the value of assets of these enterprises, which will help in the bond issue programme.
Published in The Express Tribune, June 11th, 2011.