ISLAMABAD: As the government started looking out for grants and aid to fight threat caused by Coronavirus (Covid-19), the International Monetary Fund on Monday agreed not to consider expenditures to be made on deadly virus in deficit targets.

Informed sources told Dawn that the government has contacted the relevant agencies of the United Nations and the World Bank for grants and assistance through quick disbursing windows for initial response to the disease and immediate relief.

Simultaneously, the government was examining the option of approaching the International Monetary Fund (IMF) and the World Bank for larger loans from special funds made available by the two lending agencies for global fight against coronavirus.

Senior government officials, however, explained that no formal request had been made to avail the $50bn IMF fund or the $10bn World Bank loan at this stage.

Spokesperson for Ministry of Finance Omar Hameed Khan confirmed when contacted by Dawn that discussions had already been held with the World Bank for about $200-250m out of its Emergency Response Window as concessional loans under the International Development Assistance (IDA). He hoped the board of directors of the bank would approve the assistance within weeks for quick disbursal.

IMF, World Bank already approached

Pakistan qualifies for about $100m loan out of the bank’s Early Response Window while another $150-160m would be made available out of other project surpluses.

The government will be releasing about Rs80m on Tuesday to meet requirements of the health agencies and national disaster management authority to be followed by another Rs300m over the next few days. On top of that, the government was also considering providing about Rs5bn out of federal budget to meet any unexpected expenditures.

It was in this background that Finance Adviser Dr Abdul Hafeez Shaikh told media persons on Monday that the IMF had agreed that the funds spent on fighting Covid-19 would not be considered against the fiscal deficit limits.

He said the prime minister had given him the responsibility of preparing a strategy to address economic impacts of the deadly virus. “A strategy will be worked out that ensures economic activities are not affected and efforts will be made to ensure that food items do not face shortages and their prices do not increase,” the adviser explained.

He added that efforts were also being made to avoid the threat of unemployment because of the Covid-19 and farmers continue to get fair price of their produce.

He said the government would try to secure extension in contracts in case there was any danger of exports coming under pressure. Responding to a question, he said Pakistan’s stock market had declined by 10-11pc while the global capital markets had suffered about $1 trillion losses.

The government would secure financial and technical support from various countries and international lending institutions to contain the spread of coronavirus, he added.

Dr Shaikh also presided over a meeting to review the progress being made by the major sectors of the economy. The meeting was also attended by ministers for Energy and Economic Affairs Division, acting chairperson Federal Board Revenue (FBR) and secretaries of Finance, National Food Security and Commerce.

The participants of the meeting shared the details of the ongoing major initiatives of their respective ministries and divisions, their current status of progress to meet the targets set during the current financial year, the impact of the coronavirus pandemic on the economy and the strategy to achieve the targets with maximum success.

“It was agreed that all sectors will work in unison to achieve the economic targets with maximum effort and that the government will ensure that the common man is not affected by any adverse fallout of the epidemic,” an official statement said.

Separately, Secretary Economic Affairs Division Syed Pervez Abbas told a special meeting of the Central Development Working Party that “loan financing is made available by the World Bank and the ADB. However, grant financing should be explored from other multilateral organisations.”

Concept paper

The special CDWP meeting, presided over by Deputy Chairman Planning Commission Jehanzeb Khan had been called to initiate precautionary measures and approve the concept paper of “Pakistan National Emergency Preparedness and Response Plan for COVID-19”.

Chief Health Dr Muhammad Nasir briefed the meeting about the project concept prepared by Ministry of National Health Services, Regulations and Coordination to enhance country capacity for preparedness and response to COVID-19 pandemic. The project aims to establish functional coordination mechanism at the national and provincial levels for preparedness and response to the COVID-19 Pandemic.

The project proposed strengthening the preparedness to identify, diagnose primary cases, effectively respond to minimize impact of COVID-19 through surveillance strengthening, case management, infection prevention and control, risk communication and coordination.

It was agreed to by the meeting strong surveillance would help in prevention of the outbreak. It was noted that Pakistan already had “Emergency Diseases Control Act” that supported immediate measures against outbreak of any diseases and such situations were dealt at national level. The meeting decided that the federal government will fully support the provincial governments to control the pandemic. The CDWP approved the concept clearance proposal.

Published in Dawn, March 17th, 2020