Pakistan seeks U.S. support for energy sector reforms

During a meeting with Geoffrey Pyatt, the U.S. Assistant Secretary of State for Energy Resources, Finance Minister Muhammad Aurangzeb discussed Pakistan’s pressing energy sector challenges and highlighted the government’s ongoing reform efforts, according to a press release from the Finance Division issued yesterday.

The Finance Minister expressed gratitude for the U.S. government’s support for Pakistan’s shift to renewable energy, underscoring the importance of this partnership in advancing sustainable energy solutions.

On the sidelines of the 2024 Annual Meetings of the International Monetary Fund (IMF) and the World Bank, he also met with representatives from S&P Global, where he provided updates on macroeconomic stabilization, fiscal consolidation efforts, and external account improvements, reflected in the strengthening of key economic indicators.

He noted that the government’s financing costs were decreasing, which would help lower debt servicing expenses. He expressed optimism that S&P Global would soon upgrade Pakistan’s credit rating.

The Finance Minister also participated in a panel discussion at the high-level event “Growing Stronger: An Urgent Call to Improve Child Nutrition,” organized by the World Bank. There, he highlighted Pakistan’s high rates of child stunting, particularly in rural areas, and advocated for a multisectoral, whole-of-government approach to address this issue.

He emphasized the need for reforms in taxation, reduction in energy subsidies, and improved management of state-owned enterprises to create fiscal space for increased investment in climate action, population control, and child nutrition.

He thanked the World Bank for incorporating stunting as a priority in the Country Partnership Framework, noting that it represented an investment in Pakistan’s future.

The Finance Minister also met with Masatsugu Asakawa, President of the Asian Development Bank (ADB), where he appreciated ADB’s partnership in supporting Pakistan’s development goals and welcomed the establishment of ADB’s new office in Islamabad.

He expressed hope that ADB’s Country Partnership Framework for Pakistan would be finalized soon and praised ADB for the successful completion of its Capital Adequacy Framework, as well as for exempting Pakistan from surcharges beyond exposure limits for the next three years.

He also acknowledged ADB’s support for a $500 million Policy-Based Loan for the Climate & Disaster Resilience Enhancement Program, scheduled for consideration by the ADB Board on October 29.

Both sides agreed on the importance of domestic revenue mobilization, regional cooperation, and the swift completion of ADB’s office in Islamabad.

In a separate meeting with Ms. Deemah Al Yahya, Secretary General of the Digital Cooperation Organization (DCO), the Finance Minister highlighted Pakistan’s significant potential in the ICT sector.

He shared that the government is investing in a comprehensive digital ecosystem to enhance governance, improve citizens’ quality of life, and promote economic well-being, and he called for closer collaboration in digital infrastructure, the digital economy, foreign direct investment in digital sectors, digital skills development, and digital governance.

Other engagements of the Finance Minister included attending the World Bank Group and IMF Annual Meetings Plenary, giving a media interview with China’s Global Television Network (CGTN), and attending a Joint Constituency Reception hosted by the Executive Directors of the World Bank and IMF.