Islamabad : March 14,2024 : The International Monetary Fund (IMF) mission started its second review of Pakistan’s economy here on Thursday . On the first day , IMF missions held meetings with Finance minister , Mohammad Aurangzeb , Energy minister , Musadiq Malik and reviewed Pakistan’s progress in the Financial and power sectors. Pakistan economic team leaders briefed IMF mission on Pakistan’s economic reforms and strategies aimed at enhancing its revenue collection.
IMF has set targets for Pakistan and these included reforms in power sector , address to long lingering issue of circular debt , setting aside subsidies being enjoyed by powerful elite of Pakistan.
Pakistan is under huge financial problems and its debt liabilities are continuously adding to its economic woes. For example , a huge number of power sector employees is enjoying free electricity and the consumers who are struggling to survive in butting inflation are paying for these employees of power companies. Likewise , the government departments are using either free or subsidized electricity in the offices and residences and the common consumers are paying for their luxuries as power distribution companies are using cross subsidy formula to meet its revenue targets.
IMF is demanding an end to these anti poor subsidies of power sector but since the beneficiaries of these subsidies are the rulers and powerful elite , government is not taking any step to end subsidies of power sector.
IMF is also demanding of Pakistan to sell off those state owned institutions (SoIs) which are costing hundreds of billions to Pakistan. Again Pakistan has done nothing to fulfill IMF conditions in this regards.
Pakistan ‘s political parties have divergent views on privatisation plan and its stopping the decision-makers from selling off those around four dozens SOIs such as Railways , PSM, DISCOs etc which are costing upto Rs 500 billion annually to Pakistan.
Revenue collection is again a grey area and IMF is demanding of Pakistan to step up efforts to increase its revenue collection.
An official handout issued by Finance ministry here said “An IMF mission called on federal minister of Finance and Revenue, Mr. Muhammad Aurangzeb in the Ministry of Finance today. The IMF mission is in Pakistan to conduct the second review of the Stand by Arrangement (SBA).
Federal Minister of Finance and Revenue, Mr. Muhammad Aurangzeb welcomed the mission and expressed the government’s commitment towards working with IMF on the reform agenda for economic growth and stability of Pakistan. IMF mission head Mr. Nathan Porter, congratulated the Federal Minister of Finance and Revenue, Mr. Muhammad Aurangzeb on his appointment. Discussions were held on the overall macro-economic indicators, government’s efforts on fiscal consolidation, structural reforms, energy sector viability, and SOE governance.
Federal Minister of Finance and Revenue, thanked IMF for their continued support and hoped for productive meetings during the second review”..
