WNAM REPORT: US Ambassador Donald Blome on Friday met with Prime Minister Shehbaz Sharif to discuss a broad range of bilateral issues.
According to the Acting US Mission Spokesperson Thomas Montgomery, Blome and Shehbaz discussed various issues including partnering with the government of Pakistan on regional security, US support for continued economic reforms with and through the IMF, trade and investment, education, climate change, and private sector-led economic growth.
Ambassador Blome expressed US support for Pakistan’s democracy and the key role of an independent press.
The ambassador and the prime minister also discussed how both countries can work together to accelerate projects addressing climate change under the US-Pakistan Green Alliance framework.
The meeting comes as the global lender called upon Pakistan to reopen discussions on the National Finance Commission (NFC) award, seeking to address the ongoing imbalance in the distribution of fiscal resources between federal and provincial governments.
During the opening round of discussions for a $1.1 billion loan tranche, Nathan Porter, the IMF Mission Chief to Pakistan, raised concerns over the distribution of resources and responsibilities, underscoring the need for a more equitable arrangement. Representing Pakistan in these talks was Finance Minister Muhammad Aurangzeb.
Government officials disclosed that the IMF emphasised the need to reassess the NFC award, citing disparities in resource allocation between federal and provincial authorities.
The current formula, established in 2010, resulted in provincial shares increasing from 47.5% to 57.5% of total federal taxes, without a commensurate transfer of additional responsibilities. This has led to a sustained fiscal imbalance and a rise in public debt.
The Pakistani authorities informed the IMF that the provincial shares cannot be reduced without bringing a constitutional amendment and making all the provinces agree to a new formula.
The 2010 NFC award had been agreed for a period of five years but since then there has not been any consensus to revisit it.
