Unsustainability of Pakistan’s Public Sector Development Program
Pakistan’s public sector development program (PSDP) is facing a dire predicament as it grapples with limited financial resources, warns a newly released report by the International Monetary Fund (IMF). The report, which was prepared at the request of Pakistan following an IMF mission visit in March, identifies critical weaknesses in the country’s public investment management and calls for urgent measures to address them.
According to the IMF technical assistance report, the current state of the PSDP is deemed unsustainable due to the protracted completion timelines of approved projects and the subsequent escalation of costs. It reveals that some projects may take up to 15 years to finish, creating a financial burden that makes it increasingly challenging to sustain the program. These findings underscore the need for immediate action to revamp the system and ensure efficient utilization of resources.
The Burden of Unfinished Projects and Mounting Financial Constraints
In a staggering revelation, the report highlights that Pakistan’s government added new projects worth a staggering Rs 2.3 trillion in the last budget, despite facing severe financial constraints and a significant backlog of unfinished initiatives. The cumulative cost of completing the pre-approved projects within the PSDP stands at a staggering Rs 12 trillion, while the allocated budget for the current fiscal year is a mere Rs 727 billion, accentuating the vast discrepancy.
Moreover, the financial pressures faced by the government have been further intensified by the urgent need to allocate funds for flood mitigation measures during the current year. This confluence of factors has created a perfect storm, pushing the development budget to the brink of collapse and necessitating swift action to prevent a deeper crisis.
As Pakistan grapples with the sustainability challenges plaguing its development budget, it is imperative for the government to prioritize fiscal discipline, strengthen public investment management, and streamline project implementation processes. Failure to address these pressing concerns may have far-reaching consequences, impeding the country’s progress and hindering its ability to meet the needs and aspirations of its people.