$3b Saudi rollover 'all good': FinMin

ISLAMABAD

Finance Minister Muhammad Aurangzeb said on Thursday that it was "all good" on the rollover of the $3 billion debt that Pakistan owed to Saudi Arabia and matured early this week, ensuring stability of foreign exchange reserves at their existing levels.

"We are all good on that," the finance minister briefly said while responding to a question about whether the Kingdom of Saudi Arabia rolled over the $3 billion cash deposit matured this week. He was speaking to the media soon after attending a meeting of the Senate Standing Committee on Finance.

The Kingdom had extended the $3 billion loan in April this year for a three-month period to help Islamabad pay off debt to the United Arab Emirates. The spokesman of the Ministry of Finance did not reply to questions about the Saudi rollover even after one week. The finance minister, along with Power Minister Sardar Awais Leghari, visited Saudi Arabia last weekend to discuss bilateral economic and financial matters. It was the first brief statement the finance minister made after his return.

Under the $7 billion International Monetary Fund (IMF) programme, the UAE, Saudi Arabia and China had committed to maintaining their combined $12.5 billion in cash deposits with the State Bank of Pakistan at least until the programme expires in September next year. But the UAE withdrew support, and the gap was filled by Saudi Arabia, which increased its exposure to $8 billion.

Sources said Pakistan was working on multiple options to extend the longevity of its short-term external debt and also stagger the upcoming payments of energy debt being obtained by Chinese firms to set up power plants under the China-Pakistan Economic Corridor (CPEC). Pakistan has also requested Saudi Arabia to provide a $6.7 billion oil facility on deferred payments for a period of 15 years to ensure the nation's energy security in the midst of the renewed Middle East conflict.

Saudi Arabia has already extended the repayment period of another cash deposit. Pakistan's gross official foreign exchange reserves stand at $18.5 billion, equal to three months of import cover. The spokesperson of the central bank did not reply to questions regarding the Saudi rollover despite repeated reminders since July 9.

Income support programme

Headed by Senator Saleem Mandviwalla of the Pakistan Peoples Party (PPP), the standing committee also took up the agenda of over 1,300 vacant positions in the Benazir Income Support Programme (BISP), which is equal to 38% of its sanctioned strength. There were visibly divergent views expressed by the finance minister and BISP Chairperson Senator Rubina Khalid, who belongs to the PPP.

Aurangzeb opposed discussing BISP vacancies in the finance standing committee and said the matter should be referred to the poverty standing committee. But Khalid said that since the Finance Division had opposed the hiring process, the matter was brought to the finance committee by a senator. There has been no new hiring in BISP since 2014, and as a result, the programme's working was suffering, Khalid said.

Aurangzeb said that in light of the decision that BISP's entire funds of Rs838 billion for the current fiscal year would be digitally disbursed, there was no need for fresh recruitments. Instead of new recruitments, there should be attrition in the BISP workforce, he said.

Khalid said due to a lack of workforce, people from other government departments were working on deputation for five years, which was creating institutional memory problems for the organisation.

She stated that while digital payments are being made through banking channels, the programme requires dedicated operational staff to effectively manage its expanding responsibilities. She also expressed concern at the suggestion that BISP does not require additional employees, emphasising the operational needs of the programme. Aurangzeb said the government was digitising all BISP payments to enhance transparency, efficiency and service delivery. He stated that financial assistance to beneficiaries would be disbursed through digital wallets as part of the ongoing digital transformation initiative.

The minister further noted that the government was promoting the use of technology across public sector institutions, including BISP, and referred to an unfortunate incident that occurred during the disbursement of BISP payments last year, underscoring the importance of strengthening digital payment mechanisms.

The committee decided to refer the matter to the austerity committee to review the need for new hiring and then make a decision. The committee was told that the sanctioned strength of BISP was about 3,486, but about 1,300 positions were vacant.