ISLAMABAD: The IMF said on Wednesday the COVID-19 pandemic had exacerbated existing debt vulnerabilities and led to a surge in financing needs across the Middle East, North Africa, Afghanistan, and Pakistan (MENAP).
The Fund uploaded four questions about debt and financing risks from COVID-19 in MENAP as well as responses on its website on Wednesday.
“Across the Middle East, North Africa, Afghanistan, and Pakistan (MENAP), countries responded to the COVID-19 pandemic with unprecedented scale and urgency,” the IMF said. “While this strong response helped save lives and cushion the economic blow, it also exacerbated existing debt vulnerabilities and led to a surge in financing needs.”
Many countries were already facing high debt before the pandemic, the Fund said. By the end of 2019, one-half of MENAP countries had government debt ratios above 70 percent of GDP and one in four countries faced public gross financing needs above 15 percent of GDP annually.
With limited access to external financing, governments and large state-owned enterprises turned to domestic banks. This expanded banks’ exposure to the public sector in several of MENAP’s emerging markets— ranging from over 20 percent of total banks’ assets in Iraq, Jordan, and Qatar, to above 45 percent in Algeria, Egypt, and Pakistan, and up to 60 percent in Lebanon. By contrast, banks in emerging markets elsewhere had a public sector exposure of 12 percent, the Fund added.
The collapse in economic activity led to losses in fiscal revenues, as countries increased government spending to mitigate the pandemic’s impact.
“Although one-third of MENAP countries tapped international financial markets— representing 25.5 percent of worldwide emerging market issuances— domestic financing played a critical role, particularly during the first phase of the crisis when international markets were disrupted,” the Fund said. “For instance, governments in Egypt, Jordan, Pakistan, and Tunisia covered more than 50 percent of their public gross financing needs with domestic bank financing in 2020.”
Responding to a question of what challenges MENAP’s emerging markets would face due to higher financing needs ahead, the Fund said “if domestic banks fund these unexpected needs, in addition to the expected financing needed during 2021–22, Egypt, Oman, Pakistan, and Tunisia would absorb an additional 10 to 23 percent of banks’ assets as government debt by the end of 2022. As a result, Egypt and Pakistan’s banks could reach levels of public sector exposure similar to those currently seen in Lebanon.”
COVID-19 worsened debt vulnerability in Middle East, North Africa, Afghanistan, Pakistan — IMF
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COVID-19 worsened debt vulnerability in Middle East, North Africa, Afghanistan, Pakistan — IMF
- MENAP countries responded to COVID-19 pandemic with unprecedented urgency but also had to face surge in financing needs
- Collapse in economic activity led to losses in fiscal revenues, as countries increased government spending to mitigate pandemic impact
Planning minister says Pakistan to set up advanced technology centers to support economic growth
- Ahsan Iqbal says planned centers to focus on artificial intelligence, quantum computing and nanotechnology
- He also cites satellite technology as key tool for climate monitoring, early warning and disaster management
ISLAMABAD: Pakistan plans to set up technology Centers of Excellence, including facilities focused on quantum computing and nanotechnology, as it seeks to benefit from rapid advances in artificial intelligence and emerging technologies, state media reported on Friday.
The announcement was made by Planning and Development Minister Ahsan Iqbal, who said the government aims to position Pakistan to compete in future technologies that are expected to drive economic growth and reshape global industries.
Quantum computing, which uses the principles of quantum mechanics to process information far more quickly than conventional computers, has applications ranging from complex data analysis and cryptography to climate modeling and materials science. Nanotechnology focuses on engineering materials at the molecular level and is widely used in energy storage, medicine and electronics.
Addressing a ceremony in Islamabad, Iqbal said countries that master artificial intelligence, robotics, quantum computing and space technologies would lead the global economy in the coming decades.
“During the address, the minister said Pakistan’s efforts to align itself with rapid advancements in artificial intelligence, robotics, space innovation and emerging technologies reflect the country’s ambition to participate confidently in shaping the future,” Radio Pakistan reported.
“Ahsan Iqbal further announced that the government plans to establish three Centers of Excellence, including a National Center for Quantum Computing and a National Center for Nanotechnology, aimed at upgrading the national economy,” it added.
He informed the ceremony that measures were underway to develop a new Silicon Valley in Pakistan “to promote cross-fertilization of ideas and innovation by bringing talent, research and industry together under one roof.”
The minister also highlighted the role of technology in tackling climate challenges, noting that satellite systems are increasingly used worldwide for disaster management, early warning systems and climate monitoring.
Pakistan, one of the world’s most climate-vulnerable countries, can benefit from satellite technology to track weather patterns, manage floods and improve disaster preparedness, he said, adding that more than 9,000 satellites currently orbit the Earth and are transforming how economies and governments operate.
Iqbal said the planned centers would support Pakistan’s broader “Uraan Pakistan” vision, which focuses on exports, digital development, energy and infrastructure, environmental resilience and social equity, Radio Pakistan reported.
