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IMF’s Tough New Conditions Weaken Pakistan’s Economic Sovereignty: Report

The IMF has handed Pakistan a list of 11 new conditions for its $7 billion bailout, including a key demand to raise electricity and gas prices. The Express Tribune report says these conditions will weaken Pakistan's economic sovereignty. Pakistan's finance minister agreed to phase out fiscal incentives under the Special Economic Zones Act. The total number of conditionalities now stands at 75, which must be fulfilled in the upcoming federal budget.

Key Points: IMF Conditions Weaken Pakistan’s Economy: Report

  • IMF imposes 11 new conditions on Pakistan
  • Key demand includes raising electricity and gas prices
  • Pakistan agrees to phase out SEZ tax incentives
  • 75 total conditionalities for $7 billion bailout
2 min read

IMF weakens Pakistan's 'economic muscles' with more conditionalities: Report

IMF hands Pakistan 11 new conditions, including raising electricity and gas prices, threatening economic sovereignty, says Express Tribune report.

"The salient features regarding the new conditionalities are startling as they will surely come as a tab on our sovereignty of economic muscles - The Express Tribune report"

New Delhi, April 23

Pakistan has been given a list of additional conditions by the International Monetary Fund, among which the 'most troubling demand' is commitment to raise electricity and gas prices, a new report has said.

"A 'do more' list with a call to 'do it within the timeframe' has been handed over to the Pakistan government by IMF," among which a major demand is to amend laws governing special economic zones, said the report in The Express Tribune.

The IMF wants the government to not go back on its commitment to raise electricity and gas prices, even at the detriment of production units that are struggling to make ends meet, the report argued.

"The salient features regarding the new conditionalities are startling as they will surely come as a tab on our sovereignty of economic muscles," it said.

Pakistan's finance minister agreed in Washington, DC, that it would phase out existing fiscal incentives under the e Special Economic Zones (SEZ) Act and the Special Technology Zones Authority (STZA), the report said.

The minister also agreed to withdrawing privileges for granting tax incentives, prohibiting export processing zones from selling goods in the domestic market, among other similar measures.

"The global lender seems to believe that it's time to walk the talk, and let stringent reforms be ushered in the body politic of an economy that has long been surviving on borrowed money, and wherein ad hocism is the way to go," the report said.

The continuation of the $7 billion bailout package to Pakistan under the Extended Fund Facility now comes at the expense of 75 conditionalities, including 11 new ones which have to be fulfilled to reflect in the upcoming federal budget.

The conditionalities mandated by IMF aims at course-correction in Pakistan's "wayward approach of dealing with things," and to streamline the affairs in the spheres of decision-making, governance and private sector development, the report noted.

- IANS

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Reader Comments

P
Priya S
As an Indian, I can't help but notice the contrast. India took tough decisions like GST and IBC to strengthen our economy. Pakistan seems to keep postponing reforms until forced by IMF. Raising electricity prices will hurt common people, but there's no easy way out when debt keeps piling up.
V
Vikram M
The IMF conditionalities might seem harsh, but they reflect the reality of a mismanaged economy. Pakistan's SEZ policies needed reform - tax incentives without proper oversight just led to rent-seeking. Hopefully this forces some discipline, though the timing for raising energy prices couldn't be worse for their struggling industries.
J
James A
75 conditions for a $7 billion loan - that's a lot of strings attached. But looking at Pakistan's track record, maybe strict conditions are exactly what's needed. The real question is whether they'll actually implement these reforms or just delay them like before.
K
Kavya N
It's sad to see a neighboring country in such economic distress. 11 new conditions including raising energy prices will definitely hurt the common man. India has also faced IMF conditions in the past, but we learned from it and diversified our economy. Hope Pakistan finds its own path to sustainable growth. 🇮🇳
R
Rohit P
The report mentions "surviving on borrowed money" - that's the crux of the problem. Pakistan needs to focus on exports and industrialization rather than depending on external loans. India's success with SEZs like in Gujarat shows what proper policy can achieve. But first, they need political stability and consistent economic policies.

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