The World Bank's Country Partnership Framework for 2025-2035 outlines a potential $20 billion in funding, emphasizing the importance of strengthening debt management to reduce costs and risks.

With Pakistan's public debt exceeding Rs71 trillion, accounting for 67% of the country's GDP, there is an urgent need for improved debt management practices.

The complexity of managing external debt obligations is exacerbated by loans from international organizations and countries, including the IMF, UAE, Kuwait, and a $4.5 billion facility from China.

The DRMC would report directly to Parliament, thereby ensuring greater transparency and accountability in loan and borrowing decisions.

The committee would include representatives from key institutions such as the Finance Division, Economic Affairs Division, State Bank of Pakistan, and the Debt Management Office.

One of the committee's primary roles would be to assess and mitigate debt-related fiscal risks, including loan guarantees and compliance with sound debt management practices.

The World Bank has urged Pakistan to establish a permanent Debt and Risk Management Committee (DRMC) to enhance its debt management and mitigate fiscal risks.

This recommendation was highlighted during the Revenue Mobilisation, Investment, and Trade Programme (REMIT) meeting, which was chaired by the finance minister.

The proposed DRMC would be co-chaired by the secretaries of the Finance and Economic Affairs Divisions and would hold quarterly and ad-hoc meetings to address significant economic changes.

Currently, coordination within the finance ministry is inadequate, particularly between the external finance wing and the Debt Management Office, indicating a need for a unified approach to debt management.

The establishment of a comprehensive debt strategy is crucial, which includes regular assessments of debt sustainability and the creation of a central debt data repository.

Additionally, the DRMC is proposed to oversee borrowing practices to ensure they align with macroeconomic policies and fiscal needs, promoting sustainable borrowing.