FinMin for moving beyond policy prescriptions

Minister for Finance Muhammad Aurangzeb on Thursday stressed the need for adopting the policies framed to address climate change-related challenges on a fast-track basis by moving beyond "policy prescriptions."

"There is no dearth of policy prescriptions; it is all about how and who. I sincerely hope this conference will address the operationalisation issues," he said at an international climate change conference titled "Breathe Pakistan."

He said Pakistan was one of the most vulnerable countries to climate change and urgently needed to make mitigation efforts. However, the real and bigger issue was the adoption of policies in true letter and spirit.

In that regard, he cited the National Adaptation Plan (NAP) and the National Climate Finance Strategy (NCFS) that Pakistan announced in Baku, Azerbaijan, in November 2024. The launch of the strategy took place at the United Nations-led global climate conference, COP29, setting forth a framework to scale up climate-related investments, attract international financing and strengthen domestic financial systems.

It also called for enhancing resilience of different sectors, clarifying institutional roles and improving access to diverse funding channels. He said the NCFS had been aligned with Pakistan's Nationally Determined Contributions (NDCs) under the Paris Agreement with the aim of closing the estimated $348 billion climate finance gap by 2030. The minister expressed gratitude to the Vulnerable Twenty (V20) group, which was working on a comprehensive climate prosperity plan, expected to be unveiled in April.

Aurangzeb mentioned that the State Bank of Pakistan (SBP) would issue comprehensive guidelines on a green economy framework, including how to structure, monitor and finance green initiatives. "It is important to have a green economy framework as we move forward," he remarked. He also commented on the pledges made by donors, world-leading financial institutions and countries at various sessions of the Conference of Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC).

Turning to the national economy, the finance minister noted that Pakistan had made significant progress on the macroeconomic front in the last 12 to 14 months with inflation dropping to 2.4% in January. "More importantly, on the back of this macroeconomic stability, we are executing structural reforms and strengthening the tax net," he said and praised the provincial governments for passing legislation on the agricultural income tax, which was "a key step towards expanding the tax net."

He talked about the government's austerity measures, highlighting the rightsizing efforts targeted at the federal ministries and attached departments, in addition to abolishing the vacant posts as part of earlier announcements to curtail state expenditures. During the day, Finance Minister Aurangzeb also held separate meetings with former caretaker finance ministers Shahid Javed Burki and Shamshad Akhtar at the Finance Division. In the meetings, views were exchanged on Pakistan's economic progress and the government's strategic efforts to restore macroeconomic stability and lay the foundation for sustainable economic growth.