Latest from IMF


INTERNATIONAL Monetary Fund (IMF) Managing Director Kristalina Georgieva has urged Pakistan to take necessary steps “to be able to function as a country” and avoid “getting into a dangerous place where its debts need to be restructured”.  Speaking to German broadcaster Deutsche Welle at the Munich Security Conference she said the IMF is emphasizing two things: number one raising tax revenue, as those who are making good money in public or private sectors, they need to contribute to the economy. Number two, to have a fairer distribution of precious resources by removing subsidies only towards the people who really need it.

No one would differ from the informal remarks made by the IMF chief but regrettably these are not reflected in the terms being dictated by her institution to Pakistan as the steps being taken by the Government under the deal would add more burden on the poorer sections of the society. The demand to raise more revenue by taxing the rich is perfectly the right prescription for recovery of the ailing economy and it has also been demand of the people of Pakistan that instead of increasing rates of the utility services and POL products, the Government should make tax-evaders and under-taxed segments to pay their due taxes. In fact, the successive governments made endeavours towards this end but all of them ended up in failure in the face of intensive pressure from the influential lobbies. Both the industrialists and the business community resist all attempts aimed at documentation of the economy and instead try to squeeze benefits on different pretexts without reflecting the relief so achieved in their end products.

Minister of State for Petroleum Musadik Malik claimed on Sunday that the tariffs of gas and electricity would be lower for the poor and higher for the rich, in future.  However, the practical moves make mockery of such claims as gas rates were raised by 124% only a few days back and it is an open secret that the burden will fall on the end consumer. Similarly, electricity tariff has also been hiked while prices of petroleum products are at the highest in the history of the country. It is a fallacy that an increase in allocations for Benazir Income Support Programme (BISP) would provide any worthwhile relief to the poor as every item and service under the sun would cost more to the common man.

Increase in the rate of GST under pressure from the IMF is yet another contradiction in the public statement and the deal being forced on Pakistan and the same is true in the case of massive devaluation of rupee. We hope genuine efforts will be made in the forthcoming budget to tax the rich and help the poor.