$1.5b Saudi gift declared ‘statistical discrepancy’

Published: May 23, 2014
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According to officials, who in the past have remained involved in fiscal operations, if the Saudi Arabia money had been an aid, the government would have treated it as part of foreign grants, which is considered non-tax revenues. ILLUSTRATION: JAMAL KHURSHID

According to officials, who in the past have remained involved in fiscal operations, if the Saudi Arabia money had been an aid, the government would have treated it as part of foreign grants, which is considered non-tax revenues. ILLUSTRATION: JAMAL KHURSHID

ISLAMABAD: 

Unlike any foreign grant, Pakistan has not treated $1.5 billion (Rs157 billion) gift from Saudi Arabia as non-tax revenues and instead declared the huge sum a statistical discrepancy in its budgetary books, fuelling speculations about the purpose of the aid.  

According to the summary of the fiscal operations for July 2013-March 2014, there was a statistical discrepancy of Rs171.4 billion in the budgetary books. The head of statistical discrepancy deals with revenues and expenditures whose source and purpose are not known for the time being.

Ministry of Finance officials told The Express Tribune that the federal government decided to park the proceeds of the Saudi Arabia grant in the statistical discrepancy head, ballooning the size of the entry from Rs12 billion at the end of December 2013 to Rs171.4 billion by March 2014.

It is for the first time that the statistical discrepancy has swelled to that extent, which is 13.2% of net federal receipts during first nine months of the fiscal.

In February-March this year, Saudi Arabia had given $1.5 billion in aid to Pakistan in two equal tranches. The aid came following visits of top Saudi government officials to Pakistan.

The $1.5 billion came in Pakistan Development Fund (PDF) account, maintained in the State Bank of Pakistan (SBP). The SBP gave Pakistan rupees in exchange of dollars to the federal government.

The Pakistan Peoples Party had suspected that the aid flew in return of a change in foreign policy – a charge that the sitting government denies.

According to officials, who in the past have remained involved in fiscal operations, if the Saudi Arabia money had been an aid, the government would have treated it as part of foreign grants, which is considered non-tax revenues.

The same fiscal operation summary shows Rs12.3 billion foreign grants as part of its Rs666.5 billion non-tax revenues during the first nine months, raising a question mark over the two different kinds of treatments with the grant.

One possibility could be that the money has been given as advance payments for procurement of goods. In that case, the government will gradually move out the sum from the statistical discrepancy head, explained officials. If government sells goods to Saudi Arabia, the entry will be added to the balance of payments account. Currently, the entry is in the balance of payments table.

However, Finance Minister Ishaq Dar has made it clear that the $1.5 billion was a gift to Pakistan.

But according to a finance ministry official, the govt has not realised the amount as a grant. It will gradually start treating it that way as it starts spending the sum against development projects.

He added that the development projects will be decided in consultation with the donor country.

According to a former federal finance secretary, when the source and purpose of the transaction is clear, it is never placed under the statistical discrepancy head.

During the last couple of days, The Express Tribune made many attempts to get the official version of the Ministry of Finance. Till the filing of story, Rana Assad Amin, the ministry spokesman, was not available for comments.

Published in The Express Tribune, May 23rd, 2014.

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Reader Comments (20)

  • Kala_bacha
    May 23, 2014 - 5:29AM

    Pmln and PPP keep people fooling and Pakistani awam getting fool everyday by government, cronies political leaders and so called azad adlia.

    Recommend

  • Rabia
    May 23, 2014 - 6:16AM

    Amazing! the Sharif brothers are displaying lunatic behaviour and they are not being prescribed the right medicines. somebody help them please.

    Recommend

  • Jibran
    May 23, 2014 - 6:16AM

    Fudging the books is what Munshi Ji is trained to.

    Recommend

  • Muddassir
    May 23, 2014 - 7:01AM

    Addition of two new terms in ‘Feroz-lugat-e-NunLeague:

    ‘Typing Error’ – a term to shamelessly describe massive rigging in general election
    ‘Statistical-discrepancy’ – a term used to cook the books by CAs to account for foreign funding to enhance foreign agenda.

    Recommend

  • observer
    May 23, 2014 - 7:37AM

    “One possibility could be that the money has been given as advance payments for procurement of goods“. “If government sells goods to Saudi Arabia, the entry will be added to the balance of payments account.”

    “Goods”? Euphemism for nukes?

    Recommend

  • Arindom
    May 23, 2014 - 7:57AM

    If it was just a ‘discrepancy’ can I volunteer to take the money and correct the discrepancy – I will do this free-of-charge too…….

    Recommend

  • May 23, 2014 - 9:16AM

    Part of price for a nuclear bomb.

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  • J
    May 23, 2014 - 10:02AM

    Saudis don’t give gifts for free!

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  • Zaka
    May 23, 2014 - 10:17AM

    The worst rulers Pakistan ever had.

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  • Name
    May 23, 2014 - 12:17PM

    Mysterious money. I have a theory too. I think the money is from the Americans but the credit is being given to Saudi Arabia. The reason is that domestic public opinion and politics in the US does not favour giving more money to Pakistan. At the same time Pakistan desperately needed dollars and it was in America’s interest to bail us out. So what to do? Give the money via the puppet Saudi government who will be happy to take credit for it.

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  • wiseguy
    May 23, 2014 - 12:19PM

    This money will help the poor, i wish they would just spill the beans…..Recommend

  • kulwant singh
    May 23, 2014 - 12:26PM

    Advance payment for Mangoes.

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  • ZUBAIR
    May 23, 2014 - 3:28PM

    The Govt itself is a Major Discrepancy .
    Came into power through Major Statistical Discrepancy of Votes.

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  • Sardar
    May 23, 2014 - 4:04PM

    There is another theory regarding this money in the underground circles; that being that this money is actually shareef family money being brought back to Pakistan via Saudi Arabia

    Recommend

  • riz
    May 23, 2014 - 5:11PM

    So Dar and Nawaz faked and lied about the $1.5B story.

    Recommend

  • May 23, 2014 - 6:50PM

    This dollar fund has come from Israel via Saudi Arabia, to stand straight against Iran. Now the government should clarify whether this money is alms/grants-in-aid/deposit account/letter of credit or for future services against Iran or Syria.

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  • ahmer salman qazi
    May 23, 2014 - 8:30PM

    Good going discrepancy league.

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  • May 23, 2014 - 9:39PM

    bravo et, you have shown your strength and blocked my freedom of speech again (it was a simple comment asking questions nothing as bizarre as some of your articles)

    Recommend

  • faisal
    May 24, 2014 - 12:11AM

    Where is Mr. Ch. Allah Dad today? Hope he can enlighten us on this magic too.

    Recommend

  • May 24, 2014 - 10:53AM

    @Nizamuddin: syria and iran are responsible for the holocaust of sunni muslims and advocating them is like praising the likes of hitler

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