The Ministry of Finance has not yet given the budget of Rs400 million to the newly setup civil-military led Special Investment Facilitation Council (SIFC) due to fiscal constraints and instead asked the body to meet its needs out of the budget allocation for the Prime Minister’s Office.
The executive committee of SIFC – a hybrid body established to remove obstacles in the way of foreign investment – on Thursday could not approve its budget due to the lack of resources, according to sources.
It was the first meeting of the executive committee that discussed investment proposals, the SIFC budget and waiver from austerity policy for procurements.
Planning Minister Ahsan Iqbal chaired the meeting, which was also attended by the chief of general staff of the GHQ.
Sources told The Express Tribune that the SIFC Secretariat needed around Rs400 million, including Rs200 million immediately, for setting up the secretariat at the PM Office and meeting other operational needs.
A finance ministry representative informed the meeting that SIFC could get funds either out of the budget of the Board of Investment (BOI) or the PM Office. However, the BOI secretary refused to extend any financing, citing that his organisation’s resources were already limited.
The military’s representative argued that in the absence of funds, the SIFC could not properly function. The PM Office was also reluctant to provide funding due to the limited fiscal space.
When contacted, SIFC Executive Committee Chairman Ahsan Iqbal said that the Ministry of Finance did not refuse to provide funds but said that the speediest way to get the budget was through re-appropriation.
Responding to a question, Iqbal said that the BOI and PM Office both could jointly share the fiscal burden of SIFC.
Pakistan has recently locked its budget and has told the IMF that it will not issue any supplementary grant to ensure fiscal discipline. IMF Managing Director Kristalina Georgieva also emphasised on Wednesday that Pakistan needed to contain its non-essential expenditure.
“Whatever will be the requirement of funds, it will be met through re-appropriation,” remarked Secretary Finance Imdadullah Bosal while responding to a question. Sources said that the finance ministry did not want to give an impression of adopting a loose fiscal policy by starting approving supplementary grants in the first month of current fiscal year and just after the approval of a new loan package.
It was also of the view that the PM Office could spare Rs400 million out of its annual allocation for non-employees related expenditures.
Last month, Prime Minister Shehbaz Sharif had set up SIFC on the advice of the army.
The executive committee will meet again next week before a meeting of the SIFC apex committee, which is headed by PM Sharif. Chief of the Army Staff General Asim Munir is also part of the apex committee.
Various ministries and provincial departments gave presentations to the executive committee, which were general in nature and lacked specific and bankable proposals.
Provinces had been asked to give briefings in the areas of agriculture, mining and minerals, information technology and energy, particularly where joint ventures could be agreed with Gulf countries.
Sources said that the apex committee was expected to meet next week and clear some projects for Saudi Arabia and Qatar. A delegation of investors from Saudi Arabia is also likely to visit Pakistan by the end of July and before that SIFC has to fine-tune its proposals.
Published in The Express Tribune, July 14th, 2023.
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