WASHINGTON: Finance Minister Ishaq Dar has invited the Pakistani diaspora to invest in a development fund that the government is setting up to channel investment in major infrastructure development projects in the country.
Briefing the Pakistani media on his five-day visit to Washington, the minister said that international financial institutions had also acknowledged “the impressive headway” the nation had made under the current government.
Mr Dar was in Washington to attend spring meetings of the World Bank group but also held bilateral talks with US officials.
The minister said that the proposed Pakistan Development Fund will be set up in partnership with the Asian Development Bank and under this scheme the government will offer $1.3 billion of shares to overseas Pakistanis.
These will be non-convertible dollar shares and will be invested in commercially viable projects in the public sector.
“Since the currency is stable, we hope a positive response,” said Mr Dar while pointing out that the rupee only registered five per cent devaluation in the last five years.
“So, if you invest in a good development fund, you can get a good return,” he said.
The government is also negotiating with the International Finance Corporation for setting up a proposed fund called the Pakistan Infrastructure Bank.
In the proposed bank, IFC is expected to have a 20pc share while the government of Pakistan will also match IFC’s shares. The remaining 60pc will be raised by private sector investment and the management of this bank will rest with the private sector.
The minister hopes that Pakistan will be able to raise $1 billion for this bank by investing only $200 million.
While the proposed Pakistan Development Fund will be mostly financing projects in the public sector, the Pakistan Investment Bank will primarily facilitate private sector investments.
At a meeting at the IMF, the finance minister also briefed the IMF’s deputy managing director on article IV consultations held in Dubai earlier this month. The annual article IV consultations review the health of a national economy.
Mr Dar reiterated that the government of Pakistan is committed to continue the reform process as it was in our own interest to do so.
The IMF will hold the first post-programme monitoring evaluation (PPM) in fall this year.
The minister said that he has also asked the World Bank to re-evaluate Pakistan’s GDP, which he said was under-estimated by at least 20pc. The bank has asked for 12 to 15 months to complete the re-basing exercise.
The need for re-basing arose as many sectors of the country’s economy have not been added to the GDP calculations despite their robust growth. For instance, call centers or IT-based first in Pakistan are largely unregistered in the system.