Islamabad: The entire cabinet of cash-strapped Pakistan, including newly-elected Prime Minister Shehbaz Sharif, has decided to forgo salaries amid a perilous economic situation in the country. The decision was taken during a Cabinet meeting as part of the government's austerity policies aimed at curbing unnecessary expenditures.
According to an official statement, the government's austerity measures are focused on promoting fiscal responsibility and optimizing governmental resources in the face of economic challenges, the Express Tribune reported. In February, Shehbaz said that the austerity policies are the government's "top priority" while addressing a federal cabinet meeting.
The measures include restricting foreign trips funded by the government, ordering federal ministers, parliamentarians, and government officials not to go on foreign trips by using government funds without prior approval. Former president Arif Alvi was drawing over Rs 8 lakh per month, which was fixed by Parliament in 2018. Zardari is one of the richest politicians in Pakistan.
Do these measures impact Pakistan's economy?
Earlier, Pakistan's President Asif Ali Zardari and Minister Mohsin Naqvi on Tuesday decided to forgo their salaries while in office citing the economic challenges faced by the country. The president considered it essential not to burden the national exchequer and preferred to forgo his salary, said the President's Secretariat in a statement.
“In view of the prevailing economic challenges, President Zardari has decided that he will not draw his presidential salary. He took this decision to encourage prudent financial management in the country," according to the statement. In a similar move, the newly sworn-in Interior Minister Mohsin Naqvi also decided against drawing a salary during his service period.
However, these measures are commonly considered cosmetic to show that the government was sharing the burden of the people badly hit by grinding inflation. In reality, the president, the prime minister and most of the ministers belong to the privileged, rich class and are not dependent on their salaries.
IMF reaches agreement with Pakistan
The International Monetary Fund (IMF) on Wednesday announced that it has reached a staff-level agreement with cash-strapped Pakistan for the release of $1.1 billion tranche, the last of the $3 billion financial bailout package, as the global moneylender noted that Pakistan's inflation was above target and economic growth remained modest.
The IMF Executive Board had approved the $3 billion Stand-By Arrangement (SBA) for Pakistan last year. An IMF team, led by Nathan Porter, visited Islamabad from March 14-19 to hold discussions on the second review of Pakistan’s economic programme supported by an IMF. “The IMF team has reached a staff-level agreement with the Pakistani authorities on the second and final review of Pakistan’s stabilization program supported by the IMF’s $3 billion (SDR2,250 million) SBA," the lender said.
“The agreement recognises the strong programme implementation by the State Bank of Pakistan and the caretaker government in recent months, as well as the new government’s intentions for ongoing policy and reform efforts to move Pakistan from stabilisation to a strong and sustainable recovery," the IMF said in a statement.
(with inputs from agencies)
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