International Monetary Fund (IMF) has linked the government package for the construction industry with stringent conditions of timeline, nature, and goals, aimed at providing support to the most vulnerable segments of the population affected by the COVID-19 crisis.
This was confirmed by Teresa Dabán Sanchez, IMF Resident Representative in Pakistan and government officials.
Prime Minister Imran Khan on Friday announced an incentive package comprising tax exemptions and subsidies of Rs. 30 billion for the construction industry in order to increase employment opportunities in the country in the wake of coronavirus outbreak.
The IMF official said that the Fund is providing advice to member countries in these difficult times.
Our advice is that whatever policy action the government implements have to be targeted, temporary and focused on providing support to the most vulnerable segments of the population. The COVID-19 crisis is posing sizeable challenges to the world economy and to Pakistan. In Pakistan one of the challenges is a large negative impact on daily wage workers and the government is very concerned about it. I think this is a background besides this package. Our advice to Pakistan, as well as to other member countries, has been that whatever policy action the government implement has to be targeted, temporary and focused on providing support to the most vulnerable segments of the population.
Federal Minister for Planning and Development Asad Umar said that the package for the construction industry was approved after consultations with the IMF.
“Yes, Prime Minister Imran Khan contacted Managing Director IMF and took on board on the package for the construction industry”, said Umar, adding that the package came after consultation with the Fund as Pakistan is in the program.
When he was asked for comments on package approval by the IMF without IMF Executive Board’s approval Umar replied, “It is their problem how to deal with their Board and not ours”.
Government officials said that Coronavirus has created extraordinary situations globally where IMF has taken extraordinary measures. The relaxation in IMF program targets is not specific but for all member countries which are currently on the Fund program, the official added.