PM ready to sacrifice ‘political capital’ at IMF altar

Prime Minister Shehbaz Sharif said the government has clearly conveyed its intentions to complete the ninth review to the IMF.


Prime Minister Shehbaz Sharif addresses the launch of ‘PM Youth Loan Scheme for Busi­ness and Agriculture’ in Islamabad on Tuesday. — PID photo

January 26, 2023

ISLAMABAD– Prime Minister Shehbaz Sharif on Tuesday indicated that the government was finally ready to swallow the bitter pill of the International Monetary Fund’s (IMF) “stringent” conditions to revive the loan programme.

The ruling Pakistan Democratic Movement (PDM) alliance was ready to sacrifice its political career for the sake of the country, he said, addressing the launch of ‘PM Youth Loan Scheme for Busi­ness and Agriculture’. Mr Sharif said the government has clearly conveyed its intentions to complete the ninth review to the IMF.

“We are ready and want to sit down regarding your [IMF’s] conditions so that [the review] can be concluded and Pakistan moves forward,” he said.

“I spoke to the IMF managing director two weeks ago and we have proactively approached them… so that the programme moves forward, in addition to other multilateral and bilateral programmes,” he added.

He said Pakistan has been given a clear message “from left and right” that it would not be abandoned, but it should “stitch” the IMF programme.

This was an apparent reference to reports that friendly nations and other global lending institutions are looking at the fate of the programme to provide financial aid to Pakistan.

As the economic crisis worsens, Islamabad has been making hectic efforts to convince the IMF to complete the review — pending since Sept 2022 — which will be followed by the release of funds.

However, the strings attached to the move have been a sticking point between the global lender and Pakistan.

The conditions include the withdrawal of subsidies of electricity subsidies, rationalising of gas tariffs in line with prices in the international market, market-determined exchange rate and removal of the ban on the opening of LCs.

As it enters the election year, the ruling coalition is wary of implementing the demands as it would lead to a further surge in inflation, already clocking 24.5pc for December.

Talking about the collective responsibility to solve problems plaguing Pakistan, the PM said as Pakistanis and Muslims, the rulers should respond to the difficult situation.

“The people at the helm of affairs – the politicians and the rich – have to set an example, as is unfair to burden the poor with price hikes while the elites and governments splurge loans,” he added.

“What legacy will we leave behind if these issues are not being addressed? It is clear that Pakistan is facing huge challenges and if we have taken responsibility, we will make all-out efforts to steer the country out of the difficulties.”

Energy conservation

The prime minister urged the nation to conserve resources like water, gas and electricity and help the government to reduce its import bill which had increased significantly in the past few years.

Pakistan was spending $27bn on the import of oil for energy generation and it could be reduced by half if we take practical steps, the PM noted.

In an apparent reference to the PTI’s government in Punjab and Khyber Pakhtunkhwa – which now stand dissolved – the prime minister said two provincial governments impeded the implementation of the Centre’s energy conservation plan.

One government approached the high court for a stay order while another government “in the north” delayed the implementation, the PM said.

He said the PML-N and other allied parties were committed to overcoming the current challenges.

He also beseeched political parties to shun politics at the time of crisis. “To save Pakistan, they would have to sacrifice politics.”

Loan scheme

The PM said the loan scheme was aimed at promoting entrepreneurship among youth by providing them loans on softer terms with less markup.

He added that 15 commercial, Islamic and SME banks will facilitate the government in providing the capital.

All Pakistanis, aged between 21 and 45 years, with entrepreneurial potential are eligible to apply for the loan under the scheme.

The prime minister, while expressing optimism in the abilities of the youth, said they were full of potential and talent. “They would steer Pakistan out of the current issues.”

Under the scheme, he said loans would be extended to young people in different categories, to provide them with an opportunity to excel in different fields.

He added the government was also mulling a scheme to distribute 100,000 laptops on merit among students.

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