PM says another IMF bailout is inevitable

ISLAMABAD: Prime Minister Shehbaz Sharif Thursday said the government was going to take tough economic decisions to steer the country out of crises and pledged to protect the downtrodden segments of society.

However, he made it clear that the burden of tough decisions would primarily be borne by the wealthy and elite, with safeguards in place to protect the interests of the poor and vulnerable.

Chairing the introductory apex committee meeting of the Special Investment Facilitation Council (SIFC) here, Shehbaz said deep-rooted structural reforms were inevitable to ensure macroeconomic stability and to put the country on the path to development and progress.

He said another IMF bailout is inevitable, Reuters quoted Shehbaz as saying. He said there was a need to introduce structural reforms, including digitalisation of the Federal Board of Revenue (FBR), to bridge the gap between receipts and expenditures.

Former caretaker prime minister Anwaar-ul-Haq Kakar, Chief of the Army Staff General Asim Munir, members of the former caretaker federal government and incumbent federal cabinet, chief ministers and government officials attended the meeting. The meeting was conducted for briefing the incumbent cabinet in the presence of caretaker cabinet, marking a historic moment of seamless transition, the PM media wing said in an official statement.

The PM demonstrated an unprecedented gesture by inviting the former caretaker premier and his cabinet members to the high-level meeting. The committee was briefed about the SIFC initiative and major contributions made towards investment, privatisation and overall microeconomic stabilisation of the country. The committee admired the leadership of PM Shehbaz Sharif for envisioning and launching the SIFC in June 2023, which has now moved from its formative phase and evolved progressively under the caretaker government.

The committee underscored the need for continuing a consensual approach under the SIFC to navigate the myriad of challenges being faced by the country. The committee also vowed to ensure the continuation of policies and take tough decisions in the larger interest of the country by setting correct economic priorities.

Anwarul Haq Kakar congratulated PM Shehbaz Sharif, his cabinet and chief ministers on assuming their responsibilities and wished them luck in dealing with economic challenges and transforming Pakistan into one of the top economies of the world. The army chief reassured the fullest support of Pakistan’s armed forces to backstop the economic initiatives of the government and ensured the provision of a safe, secure and conducive environment to nurture the country’s true economic potential.

The PM said the SIFC was the way forward in the challenging times and an iron resolve was needed to serve the country like never before. He urged the federal cabinet to join hands, keep political differences aside, and work as a cohesive team to keep the momentum of economic stability. He also thanked the caretaker government for the continuation of the larger national economic agenda in a befitting manner.

Shehbaz said the International Monetary Fund (IMF) had concluded the review for the last tranche of US$1.1 billion that hopefully would be received by next month. He said Pakistan also wanted to start another programme with the IMF for a period of two or three years during which the government would take strict measures to bring deep-rooted structural reforms in the country. “Along with getting another IMF programme, we also need to do deep-rooted structural reforms,” he added.

Shehbaz sought the support of all political parties and provincial governments to successfully implement the agenda of macroeconomic stability in the country. “For this, we will have to work together. With the support of all provinces, we will together resolve all challenges and difficulties faced by the country,” he added.

He mentioned that the presence of civil and military leadership at the forum demonstrated that all were united for the development and progress of the country. Shehbaz said the presence of chief ministers of all the provincial governments, army chief, and other officials concerned conveyed a clear message to the nation that all had gathered here for the cause of the country’s development, prosperity and integrity. He said the SIFC was formed in June 2023 to remove bottlenecks in the investment process and since then nine meetings of the apex committee have been held besides more than 200 relevant meetings.

Consequent to the meetings, he said several important decisions had been taken and implemented under the umbrella of the Council. The PM pointed out that when the PDM [Pakistan Democratic Movement] government took over the charge in 2022, Pakistan was on the brink of bankruptcy, but all coalition partners decided to save the country from plunging into default by putting their politics at stake. He particularly mentioned that the army chief, along with his team, played a key role in extending cooperation to his last government and the interim setup. He said unfortunately a major chunk of the country’s resources drained in the shape of corruption, pointing out the target of tax collection of Rs9 trillion, which actually should be Rs13-14 trillion if there were no leakages.

Similarly, he said the cases of taxes worth Rs2.7 trillion were pending either with the tribunals or courts, which should be resolved at the earliest. He said the annual power theft was estimated at around Rs400 billion in the country, while the combined circular debt of electricity and gas was over Rs5 trillion.

About the achievements of the interim government regarding the SIFC, he said the caretaker setup, due to its measures against power theft, saved Rs87 billion, while strict measures were also taken to curb smuggling besides introducing reforms in the land information system. Besides, it also successfully concluded the privatisation process of the Heavy Mechanical Complex (HMC). He pointed out that annually hundreds of billions of rupees were lost in the state-owned enterprises as the PIA alone owed debt of Rs825 billion.

He said the interim government also signed many important agreements with different countries to bring investment into the country, including one with the United Arab Emirates (UAE) worth $10 billion. He pointed out that during his recent meetings with envoys of friendly countries, Pakistan did not seek more rollover of deposits but called upon them for investment in the country.

Prime Minister Shehbaz Sharif also held a separate meeting with four chief ministers and assured them of full support in advancing development and prosperity in their respective provinces. The visiting CMs included Maryam Nawaz (Punjab), Murad Ali Shah (Sindh), Ali Amin Gandapur (Khyber-Pakhtunkhwa), and Sarfraz Bugti (Balochistan). Following the discussions, a group photo was taken with PM Shehbaz Sharif.

In a related development, Chief of Army Staff (COAS) General Asim Munir called on PM Shehbaz Sharif separately before the start of the SIFC apex committee meeting. He took the PM into confidence on his visit to Saudi Arabia. The premier expressed satisfaction with relations between Pakistan and Saudi Arabia.

Sources said the two sides exchanged views on the outcome of ongoing intelligence-based operations against terrorism and the overall national and internal security situation. The matters related to the Pakistan Army’s operational matters were also discussed in the meeting.