WASHINGTON, June 16: Pakistan does not meet the minimum requirement of fiscal transparency, an official US report has said, alleging that the country did not adequately disclose all government-guaranteed debt obligations, including financing to state-owned enterprises for the projects under the USD 60 billion China-Pakistan Economic Corridor.
The CPEC is a planned network of roads, railways, and energy projects linking China’s resource-rich Xinjiang Uyghur Autonomous Region with Pakistan’s strategic Gwadar Port on the Arabian Sea.
Launched in 2015 when Chinese President Xi Jinping visited Pakistan, it is the flagship project of Xi’s ambitious multi-billion Belt and Road Initiative (BRI).
In its annual “2020 Fiscal Transparency Report” issued on Monday, the US State Department said Pakistan was one of the countries that made no significant progress in meeting the minimum requirements of fiscal transparency.
Bangladesh is the other country from south Asia to figure in the list that also includes Saudi Arabia, Sudan, and China.
In the report, the state department concluded that of the 141 countries evaluated, 76, including India, met the minimum requirements of fiscal transparency.
“Two governments, Samoa and Togo, met minimum requirements in 2020 after not meeting minimum requirements in 2019. Sixty-five governments did not meet the minimum requirements of fiscal transparency. Of these 65, however, 14 governments made significant progress toward meeting the minimum requirements of fiscal transparency,” it said.
During the review period, the government of Pakistan made its executive budget proposal, enacted a budget, and end-of-year report widely and easily accessible to the general public, including online. The government published limited information on debt obligations, the report said.
“The government did not adequately disclose all government and government-guaranteed debt obligations, including financing to state-owned enterprises for China-Pakistan Economic Corridor (CPEC) Projects,” it added.
The US has been critical of the CPEC, saying there is no transparency in it and the firms blacklisted by the World Bank have got contracts under the project, which will increase the country’s debt burden.
Pakistan has rejected US criticism and maintains that the project has helped the cash-strapped country to “fill the gaps” in energy, infrastructure, industrialisation and job creation.
Some of the projects have already been completed but others are facing delays as Pakistan and China are working on operational and funding details.
According to the report, publicly available budget documents provided a substantially complete picture of most of the government’s planned expenditures and revenue streams, including natural resource revenues.
“The budget of the intelligence agencies was not subject to adequate parliamentary or other civilian oversight,” it said, adding that the information in the budget was considered generally reliable and subject to audit by Pakistan’s supreme audit institution.
While audit reports are made publicly available within a reasonable period of time, the reports did not provide substantive findings, recommendations or narratives on the completeness or correctness of government accounts, the state department said.
It said Pakistan’s fiscal transparency would be improved by making complete and timely information on government and government-guaranteed debt obligations publicly available, subjecting the intelligence agencies’ budgets to parliamentary or other civilian oversight and including substantive findings and recommendations in the supreme audit institution’s audit report on the government’s annual financial statements. (PTI)
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