Planning Minister Ahsan Iqbal has called for a revision of the current resource distribution formula under the National Finance Commission (NFC) Award, criticizing its focus on population and poverty as criteria. He argued that these factors were regressive and led to the wrong incentives for provinces.
Iqbal made these remarks while delivering the keynote address at the launch of the Asian Infrastructure 2025 report, authored by the Asian Infrastructure Investment Bank (AIIB). The event, organized in collaboration with the Pakistan Institute of Development Economics (PIDE), focused on the theme “Infrastructure for Planetary Health” and gathered policymakers, economists, development partners, and climate experts to discuss strategies for building resilient and sustainable infrastructure.
In response to a question about the NFC formula, the minister emphasized the need to change the existing system, explaining that prioritizing population growth as a key criterion for resource allocation was problematic. He pointed out that such a formula misincentivized provinces and hindered the effective distribution of resources.
He emphasized the need for sustainable and eco-friendly development in Pakistan, stressing infrastructure that supports growth while ensuring environmental conservation.
Congratulating PIDE and AIIB on their strategic partnership, the minister highlighted the government’s efforts under the 5Es framework, including zero-emission electric buses, restoration of flood-prone riverbanks, and climate-proofing healthcare facilities. He noted that the Planning Commission now mandates all projects to incorporate climate resilience, environmental sustainability, and updated building codes.
“The cost of inaction—whether through lives lost, health crises, or economic setbacks—is far greater than the investment required for green, future-proof solutions,” Prof. Iqbal said. He advocated the use of green bonds, resilience bonds, and public-private partnerships to bridge the climate finance gap by mobilizing domestic and international capital.
The minister also stressed the importance of investing in climate-literate professionals such as engineers, planners, architects, and economists to design a future-proof Pakistan. He called for continued collaboration with PIDE and AIIB to embed climate resilience in national policy frameworks.
Dr. Nadeem Javaid, Vice Chancellor of PIDE, highlighted the severe impact of climate change on Pakistan, citing the 2022 floods that caused $32 billion in losses, erased two decades of development, and pushed over six million people into poverty. He warned that environmental degradation, insufficient water storage, and climate-vulnerable agriculture increase risks that demand collective action and long-term planning.
Dr. Jang Ping Thia, Lead Economist at AIIB, presented the report’s findings linking weak infrastructure to worsening health outcomes in Asia. He noted that climate change disproportionately affects low-income and marginalized communities, underscoring the need to treat nature as critical infrastructure.
He cited examples such as wetland restoration, urban green buffers, and nature-based solutions as cost-effective and essential for public health and economic resilience.
The conference featured an expert panel including Dr. Imtiaz Ahmad, Chief Economist at the Ministry of Planning, and Dr. Muhammad Faisal, Research Fellow at PIDE, who stressed integrating climate risk into infrastructure planning, scaling green finance, and adopting adaptive agriculture and resilient urban development.
Dr. Shujaat Farooq, Director of Research at PIDE, closed the event by calling the agenda a survival strategy, emphasizing that policy decisions made today will shape the wellbeing of future generations.
