Finance Minister Muhammad Aurangzeb has highlighted green finance, SME reforms and regulated digital assets in a meeting with IFAC, underlining climate change as an urgent economic reality for Pakistan.
Climate Change Treated as an Economic Reality
A resurgence in its commitment to climate change, Pakistan has reiterated that climate change is no longer a far-off environmental threat but it is an immediate economic reality that is already altering development strategies. The argument was presented by the Finance Minister Senator Muhammad Aurangzeb when he held a meeting with a high level delegation comprising of Jean Bouquet, President of International Federation of Accountants (IFAC).
Disaster flooding, he observed, will only take nearly half a percentage point off GDP, but that is a sobering reminder of how climate shocks can be converted directly into lost output and increased fiscal burdens. This, he opined, is the reason why green finance and climate resilience have become the core element of the economic policy in Pakistan.
The Minister informed the delegation that Pakistan is quickening its routine with respect to green taxonomy, sustainability disclosures and climate-sensitive financial frameworks. The resilient infrastructure and clean energy are supposed to be directed to with the help of these tools aimed at assisting investors to determine truly green projects and investor in these.
Sustainability Disclosures and Digital Finance Regulation
Aurangzeb stressed that sustainability drive among Pakistanis is inextricably connected with a wider reform of financial sector. He also emphasized the work on the sustainability reporting in order to make banks, publicly traded companies and governmental organizations more transparent regarding their impact on the environment.
The Minister also mentioned the advances made by Pakistan in controlling digital assets. According to him, the Pakistan Virtual Asset Regulatory Authority and a new crypto council have been developed to implement a licensing-based approach with powerful know-your-customer and anti-money laundering protections.
His point, he emphasized, is not to close the door to innovation but to introduce virtual assets to the formal economy and secure consumers. Through responsible regulation, he argued, it would be possible to have new products developed without compromising financial stability.
Closing the SME Reporting and Documentation Gap
One of the most active discussion parts was the contribution of small and medium enterprises to the development of Pakistan. According to Aurangzeb, there are still huge gaps in capabilities of SMEs in industrial and export clusters in the area of financial reporting and documentation.
He observed that a great number of small businesses still use informal practices and obsolete systems, which complicates the process of obtaining a credit, finding investors or being connected to global supply chains. It is thus necessary that Pakistan modernises their reporting in order to increase their tax base as well as exports.
The Minister requested institutionalised support to assist SMEs in moving to documented and standardised practices such as training, less complex reporting tools, as well as closer collaboration with professional bodies.
IFAC Priorities, AI and Public Sector Reforms
The federation priorities to the global financial reporting standards were presented to the Finance Minister by IFAC President Jean Bouquot who also discussed the issue of artificial intelligence and its effects on the professional and public sector financial reforms. He maintained that the need to assure non-financial information is on the increase all over the world.
Public finance reforms of Pakistan were also described by Auditor General Maqbool Ahmad Gondal that informed the delegation of the transition of cash-basis to accruals based IPSAS standards using new ERP systems. He has also added that the current fiscal year will see end-to-end electronic payments and receipts.
The chairman of the Securities and Exchange Commission of Pakistan (SECP) Akif Saeed emphasized alignment of regulations with IOSCO, insurance and pensions reforms, and rolling out sustainability reporting of listed and unlisted companies. He confirmed that IFRS in Pakistan has been fully embraced.
Regional Cooperation and Long-Term Partnerships
There were also the opinions of representatives of regional organizations, such as SAFA and ICMAP, who touched upon the cooperation in the region, the introduction of AI into the financial education and the positive economic perspectives of Pakistan.
Concluding the meeting, Pierre thought of the IFAC delegation, Finance Minister Aurangzeb expressed gratitude and promised Pakistan to strengthen partnerships in the spheres of accounting, sustainability and digital governance.
The message of the talks to both policymakers and professionals was quite clear, though, that in the coming years climate resilience, sound reporting standards and closely monitored digital finance will become the backbone of the Pakistani economic strategy.
