ISLAMABAD: Federal Finance Minister Muhammad Aurangzeb has said that instead of relying on foreign assistance in the form of grants or loans, Pakistan should tap into international capital markets through green bonds.
He made this remarks while addressing the climate conference titled ‘Breathe Pakistan‘, being held in Islamabad on February 6-7. Aurangzeb shared that the government is aiming for improving efficiency in all aspects, and that is why some of the vacant posts that have become redundant are being abolished. Speaking on the issue of climate change and the challenges that Pakistan is facing, he said “The existential issue at hand is population – controlling and protecting population”.
He said that there is a lot of discussion around climate and environment but the issue remains in the “whats and hows” of the policies. “There is no death of policy inspection, but ultimately it is about the implementation, and I hope that this conference will shed light on the whats and the hows of climate action in Pakistan.”
The finance minister said that the National Adaptation Plan is already in place which also deals with the contingencies. He added that the National Climate Finance Strategy, which was prepared during COP29 is also at the disposal of the government. “The climate prosperity plan will also be issued soon,” he added.
Talking about the policies that Pakistan is currently formulating, he said that they are keeping in view the challenges of today and are meant to be focused on sustainability, adaptability and disaster mitigation. Without directly speaking on previous policies or lack thereof, he said, “Der aye, durust aye” [translated as “better late than never”].
Speaking more about the current approach of the government towards climate financing he said, “It is very important that we have a national green economy framework as we move forward.” He said that some operationalisation of the plan came through in COP29, but “[Pakistan’s] bureaucracy needs to think through the initial process of [the plan of] climate financing because we need to fast track this process.”
He shed light on Pakistan’s external collaborations on climate financing, primarily the yearlong partnership with the World Bank (WB). Aurangzeb said, “We entered into a partnership framework with the World Bank too. Their opinion during initial discussions was that if Pakistan were to come with a focused approach [instead of being all over the place], it will be more suitable for the yearlong partnership plan.” He said that the government is working with the international donors with focused approach on protecting Pakistan from the climate emergencies.
However, he said that financing and loans are not supposed to be prioritised. “Loans are loans, even if they are concessional because we have to pay them back.” He said that the international capital markets are another source of financing, for instance green bonds.
“Pakistan is not a stranger to green bonds and that offers us another opportunity to raise financing for climate,” he said, adding that the entire policy framework of climate financing needs to be moved away from being “distressed focused”. He said that the policies should not be implemented only when a disaster hits, rather they should be continuous in approach and should target adaptability and resilience as well.
“Capacity building is equally crucial,” the finance minister said, adding that this is where the private sector becomes crucial.
Former caretaker finance minister Shamshad Akhtar also spoke at the event and said that it is imperative that the finance minister takes the lead when it comes to international financing. “The finance minister should be the one who ultimately decides where the money goes, and we are very proud that [Aurangzeb’s] leadership is really up to the mark when it comes to International financing.”
“Pakistan ranks as the second lowest on the GDP per capita among the countries that received climate financing last year.“
Shamshad Akhtar
She said that Pakistan climate finance requirements are in the range of $30-40 billion annually by 2030. “Climate is not a one-time periodic risk. Rather it is a continuous and involving challenge that requires apt policies as well. And the current allocations simply do not suffice,” she added.
Speaking on the policy side of things, she said that local policies and the international finance institutions should prioritise sustainability and resilience. “Developing countries need to re-evaluate their development budgets and allocate significant resources to climate and environment,” Akhtar said.
Former State Bank of Pakistan (SBP) governor Salim Raza also spoke on the occasion and stressed the need for the private sector to step up.