Pakistan highlights economic reforms at Global Finance Conference

July 01, 2025 (MLN): Pakistan showcased its initiatives to expand access to green and Islamic finance, deepen financial inclusion through digital infrastructure, and attract foreign direct investment via a new investment policy and the Special Investment Facilitation Council.

These efforts were highlighted by Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, as he represented the country at the plenary session of the Fourth International Conference on Financing for Development (FFD4) held in Sevilla, Spain.

The conference, convened to address the widening gap in financing for sustainable development, served as a global platform for countries to present national perspectives and outline their contributions and expectations regarding sustainable development financing.

In his address to the conference, Senator Aurangzeb articulated Pakistan’s priorities, challenges, and reform efforts, while calling for urgent and coordinated global action to strengthen the international financial architecture in line with the principles of equity, solidarity, and inclusivity.

The Finance Minister acknowledged the scale of global challenges currently facing developing countries and pointed to a confluence of pressures deepening debt vulnerabilities, accelerating climate impacts, and the reversal of hard-won development gains that have further widened the global SDG financing gap.

He stressed that while the Monterrey, Doha, and Addis Ababa conferences laid the foundations of a more inclusive global financial system, much remains to be done to translate those commitments into effective mechanisms that deliver tangible support to countries most in need.

Senator Aurangzeb welcomed the renewed resolve demonstrated through the ‘Compromiso de Sevilla’ and appreciated its practical and forward-looking proposals.

These include pledges to double support for domestic resource mobilisation, reverse aid cuts, and increase concessional financing through new metrics beyond GDP.

Additional commitments involve expanding the lending capacity of multilateral development banks, scaling up local currency lending, and re-channeling unutilised Special Drawing Rights (SDRs) through structured frameworks.

He called for the early implementation of these commitments, particularly in the area of debt reform.

Key proposals include establishing an institutional platform for liquidity and debt management support, creating a borrower-focused platform to amplify the voice of developing countries, and initiating an intergovernmental process under the UN to address gaps in the existing debt architecture.

The Minister informed the global audience that Pakistan, despite facing multiple external shocks ranging from pandemics to climate-induced disasters, is undertaking robust domestic reforms to align with global aspirations.

He outlined Pakistan’s new five-year National Economic Transformation Plan, titled ‘Uraan Pakistan,’ which rests on five pillars: Exports, E-Pakistan, Environment, Energy & Infrastructure, and Equity.

He noted that through consistent macroeconomic measures, Pakistan has achieved a primary budget surplus, reduced inflation, and lowered its debt-to-GDP ratio.

Further, the country is enhancing domestic resource mobilisation through tax base expansion, digitalisation of tax administration, and improvements in public financial management, with a goal to raise the tax-to-GDP ratio to over 13% in the medium term.

Earlier in the day, Senator Aurangzeb co-chaired the Multi-Stakeholder Roundtable 2 on “Leveraging Private Business and Finance” alongside Canadian Deputy Minister of International Development, Mr. Christopher MacLennan.

The session examined how private finance, innovation, and investment can be more effectively mobilized for sustainable development and economic resilience, as per the press release issued today.

In his opening statement, Senator Aurangzeb emphasized that public resources alone cannot bridge the vast financing gap and that private finance when combined with sound public policy holds the key to unlocking development at scale.

He called for decisive actions to improve domestic resource mobilisation, deepen capital markets with SDG-linked instruments, and create policy environments that attract and de-risk private capital in critical sectors such as climate resilience, housing, and SME finance.

The Finance Minister highlighted the importance of regulatory coherence, predictability, and targeted incentives to enable private investment.

He stressed the need to mainstream mechanisms such as credit guarantees, outcome-linked bonds, debt-for-climate swaps, and catalytic first-loss instruments, urging that public funds should be used strategically to leverage greater volumes of private and philanthropic capital.

In his closing remarks at the roundtable, Senator Aurangzeb reinforced that the objective must be to mobilize not just more finance but smarter and fairer finance.

He outlined clear action points at both national and global levels, including institutional strengthening, aligning fiscal policies with SDG priorities, and reforming credit rating methodologies to reflect climate vulnerabilities and development trajectories.

He also called for scaling up multilateral support for blended finance and technical assistance, and for embedding innovative financing tools into national SDG strategies and investment frameworks.

Senator Aurangzeb concluded both his plenary address and roundtable interventions with a strong call for global solidarity, emphasizing that sustainable development requires an international financial system that is fair, inclusive, and responsive to the real needs of developing countries.

He reaffirmed Pakistan’s commitment to the principles of the Compromiso de Sevilla and to working collaboratively with the global community to ensure that no country is left behind in the pursuit of shared prosperity and sustainable progress.

Copyright Mettis Link News