The government will renegotiate the conditions of the hiking of the power tariff and the raising of tax revenues with the International Monetary Fund (IMF).
This was stated by the new Minister for Finance, Shaukat Tarin, during his first address at a meeting of the National Assembly Standing Committee on Finance at the Parliament House. The meeting was chaired by Faiz Ahmed Kamoka.
Minister Tarin said that the IMF has imposed very harsh conditions under its $6 billion Extended Fund Facility (EFF) program, and that the economic consolidation that has been going on since 2019 has caused difficulties on the economic front. He added that he has been trying to convince the IMF to be lenient to Pakistan in consideration of the third wave of the pandemic.
“Now we will have to stand up to talk to the IMF as their demands for hiking electricity that has resulted in hiking inflationary pressures and causing corruption,” he said.
Minister Tarin was also of the opinion that increasing the tariffs will not be the correct way to achieve a reduction in the circular debt. He remarked that the government would privatize the state-owned enterprises that cannot be run efficiently in the public sector as an alternative approach.
The allocation for the development projects through the Public Sector Development Program (PSDP) is another solution to Pakistan’s economic woes, according to him.
He said that the growth of the GDP alone, even if it reaches 4-5 percent, will not suffice and that the government needs to shift towards a higher growth trajectory.
He said that the government has identified some of the major sectors in which economic experts have been appointed to prepare a roadmap to achieve growth and stability. These include agriculture, industry, tax revenues, housing, social protection, services sector, and debt management among others.