ISLAMABAD: Prime Minister Shehbaz Sharif stressed the need to honour the International Monetary Fund (IMF) commitments, insisting that the government could not bid farewell to the programme just yet.
In July last year, Pakistan and the IMF reached a three-year, $7 billion aid package deal, giving much-needed respite to the cash-strapped nation.
Under the programme, the global lender mandated Pakistan prioritised better public spending, fairer and more efficient taxation — especially from under-taxed sectors — and creating fiscal space for increased spending on health, education, and social protection programmes.
That aside, it asked the country to impose a substantial levy on gas supply to industrial captive power plants (CPPs) to eliminate any cost-benefit between the grid power and their in-house electricity generation. The IMF also called for restructuring state-owned enterprises (SOEs) and improving public services, along with governance and transparency measures.
While talking to the business community at the Pakistan Stock Exchange today, the premier said, “We need to honour IMF commitments — we can’t just say tata bye bye (dismiss the programme on a whim) once we take off.
“We will say goodbye to it forever once the time is right,” he said.Regarding the business community’s role, the premier insisted that the government and the business leaders needed to “build their relationship to achieve those targets”, giving the example of their tax targets.
“If you look at what IMF stated [their target as]10.6 tax-to-GDP ratio, we have achieved 10.8,” he said. “It’s something to celebrate but this is not enough — this is just the beginning.”The premier insisted that there was a need for investment now, recounting that the State Bank of Pakistan’s (SBP) interest rate went from a record-high of 22 per cent to 13pc.
“Investors here say there is still a gap of 8 points — I would want it to go to 6pc,” he stressed, “But it has to be done with an alert mind, with prudence, so we don’t get trapped in the future.
“We have to move bravely but with caution,” he added. “Regarding that, how do we actualise export-led growth? Everyone says growth should be export-led, that FDI [foreign direct investment] should be export-led so that profits come and dollars are present so we can retain them — all very well said but I need tangible proposals on how to implement export-led growth.”
The prime minister went on to compare Pakistan with Saudi Arabia “in a different context to the world”, highlighting that the country had mines and minerals while Saudi Arabia had “black gold”.
