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Home Op-Ed Editorial

Case of unutilized loan

byDr. Aftab Afzal
22/03/2017
in Editorial, Latest News, Op-Ed
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The country is drastically in need of capacity building programmes for the bureaucracy and others who work in various organs of the government to face new challenges and situations as an emerging economy. Pakistan is passing through a transitionary period and not only its social structure and traditional values are changing, but trends of trade, business and economy are also passing through a critical process. However, the bureaucratic machinery is either incapable of understanding the new requirements of the changing world or it is reluctant to leave the colonial legacy of redtapism. Unfortunately, the bureaucratic cadre is still not willing to rid itself of the rigid conformity to the colonial rules which have no place in the modern government structure and are the things of the past. Sticking to the redundant bureaucratic rules seems to be a big hindrance in the way of decision-making. The latest example of incapacity of the government is its promptness to acquire $6.4 billion loan from the Asian Development Bank, but failed to utilize it in proper manners. Newspaper reports suggest the government could utilize only $1.8 billion and rest of $4.6 billion, which is around three-fourths of the total loan, is still unutilized and the nation has to pay extra charges as demurrage.

The loan was acquired for various developmental projects, but the allocation of the money is facing not only bureaucratic hindrances, but also difficulties in compliance of the complex requirements of the bank. As a result, nation is paying 0.15 percent as commitment charges on the unutilized loan. The bureaucracy is not responsible for the financial chaos alone, but the inability of the political leadership is also an equal partner in the matter. If the country lacks a full time finance minister, it also lacks a crew of politicians having modern visions and understanding. China has swiftly shifted its economy from communism to liberalism and secured high rate of progress within years. Pakistani leadership is still groping in the dark and is taking extra time to understand the emerging situation. The ADP issue is a tip of the iceberg as hundreds of other projects are waiting the government funding and are lying in limbos. If the bureaucracy needs refresher courses, the financial sector also needs reforms. The State Bank of Pakistan as the reserve bank is also facing bureaucratic rigmarole and is always seemed to be behind the schedule in decision making.

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