Pakistan approved Friday formally buying 1.1% shares in non-western New Development Bank (NDB) for $ 582 million in one step that will help the nation in the long run to reduce dependence on the highly politicized West’s Bretton Wood Financial System.

The Cabinet’s Economic Coordination (ECC) approved the purchase of the NDB shares created by five-nations: Brazil, Russia, India, China and South Africa.

The ECC also approved to transfer the shares in Power Distribution Companies (Discos) in the name of Pakistan’s president to prepare these entities for privatization.

Federal Finance Minister Muhammad Aurangzeb was chairman of the ECC meeting.

ECC approved Pakistan’s membership of NDB, created by the BRICS Member States, according to a statement from the Ministry of Finance after the meeting.

It added that the ECC “approved purchase of 5,882 shares in NDB, equivalent to $ 582 million, with $ 116 million as paid capital”.

The 5,882 shares are equal to 1.09% of the bank’s total shareholding. Pakistan had shown the interest in participating in NDB last May.

The government made the decision to join the new bank as part of its plans to reduce the dependence on the World Bank (WB) and International Monetary Fund (IMF), which provides loans with political strings attached, according to Pakistani authorities.

BRICS promotes an alternative financial architecture with NDB and the conditional reserve scheme. NDB has approved almost 100 projects worth $ 33 billion over the past nine years.

The NDB membership is open to all members of the United Nations with such terms and conditions determined by a special majority of the Board of Directors.

The special majority is defined as an affirmative vote of four basic members simultaneously with an affirmative vote of two -thirds of the bank’s total voting effect.

Pakistan-India rivalization cannot refuse Islamabad membership of the NDB as it plans to gain support from the other four members, government sources said.

Russia recently informed Pakistan that the name has been added to the list of potential members of the NDB during the annual meeting of the board of Johannesburg in 2024, and Pakistan is entitled to hold a subscription to 5,882 shares in the bank.

Transfer of discosing

The Ministry of Finance said the ECC also approved to transfer the shares in Power Distribution Companies in the name of Pakistan’s president.

The committee approved the transfer with the observation that the approval is subject to confirmation that the transfer has no financial consequences, it added.

The government remains in the infant with privatizing the three discos – Faisalabad Electric Supply Company (Fesco), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Supply Company (IESCO).

At the time of setting up discos, it had been decided that these companies’ shares will be transferred from WAPDA to the name of Pakistan’s president after approval of the Pakistan government.

So far, only Islamabad, Lahore and Multan Power Distribution Companies have partially completed the process of issuing the shares in the name of WAPDA. But Wapda subsequently did not transfer these shares in the name of Pakistan’s president.

The World Bank has identified 13 steps needed before any disco can be sold, including the transfer of ownership of the name of Pakistan’s president.

Other decisions

The ECC also approved the incorporation of an international joint trading company in Singapore by Pakistan State Oil (PSO) and State Oil Company of Azerbaijan Republic (Socar). The Committee instructed the Ministry of Oil to ensure due diligence in terms of specific investment approvals, especially stock injections, as well as timeline for operationalization of the company.

ECC approved RS27 billion worth supplementary grants for various projects, including RS84 million to purchase five transport vehicles for the president’s secretariat. It approved RS19.2 billion under the financial division for 133 schemes for the closed Pakistan Public Works Department. The funds are now transferred to respective ministries, departments and provincial governments.

The government had decided to close Pakistan Public Works Department and transfer its projects and funds to other ministries, departments and provincial governments.

The ECC also approved RS5.4 billion funds for the discretionary expenses for parliamentarians’ schemes in Sindh and Khyber Pakhtunkhwa (KP). SINDH Province gets RS4.3 billion, and the remaining RS1.1 billion will be given to parliamentarians from KP.

ECC approved RS1.9 billion in favor of Nadra for the previous FATA project, ensuring the transition to 43 Citizen Facilitation Centers (CFCS) in KP. The award is surrendered by the division of financial affairs and registered under the domestic department without further financial burden on the government, the Ministry of Finance said.

It approved RS500 million to the Ministry of National Health Services for the purchase of life -saving medicines and vaccines. The ECC instructed the Ministry of Health to devise a structural solution for future payment of the subject pension.

The ECC approved the RS84 million to the president’s secretariat (public) to replace the outdated official transport, enabling the purchase of two Hino Coaster Mini-Buses and three Toyota Hiace vans as part of a phase replacement plan.

The fleet of official vehicles in the president’s secretariat (public) is very old and outdated. The majority of staff cars and other operational vehicles are 12 to 30 years old, resulting in exorbitant maintenance costs as well as difficulty performing official tasks for the head of state. Out of a total of 47 authorized vehicles, 43 vehicles must be replaced over a period of three years.

ECC also approved less than half a billion rupie to Digital Economy Enhancement Project (DEEP) under the Investment Council (Boi) to facilitate the creation of Pakistan Business Portal (PBP) aiming to streamline rules, which removes redundant laws and delivers and delivers A comprehensive digital platform for businesses.

The ECC approved a proposal from the Ministry of Commerce regarding the involvement of new custom customs codes recently notified mandatory items in Pakistan Standards and Quality Control Authority (PSQCA) in the import policy. The decision incorporates specific PVC and polymer-based products into the compulsory regulatory framework, ensuring compliance with Pakistan standards.