The MD of the International Monetary Fund (IMF), Kristalina Georgieva, has called on Pakistan to enhance tax collection from the rich while ensuring the protection of vulnerable citizens as the nation grapples with a staggering inflation rate. Pakistan’s year-on-year inflation soared to 27.4 percent in August, straining household budgets, and leading to protests fueled by exorbitant electricity bills.
Georgieva conveyed this message during a meeting with Pakistan’s caretaker Prime Minister Anwaarul Haq Kakar on the sidelines of the United Nations General Assembly. She emphasized that the IMF’s program aligns with the aspirations of the Pakistani people, urging the government to collect more taxes from affluent individuals while safeguarding the interests of the economically disadvantaged.
In a statement posted on social media platform X (formerly Twitter), Georgieva highlighted the importance of strong policies to ensure economic stability, sustainable and inclusive growth, prioritized revenue collection, and the protection of vulnerable segments of the population. The interim Prime Minister Kakar echoed similar sentiments in his own social media post, underlining the commitment to bolstering economic stability and growth in Pakistan.
The Prime Minister’s Office released an official statement expressing gratitude for the IMF’s approval of a $3 billion standby agreement to support Pakistan’s economy. Prime Minister Kakar briefed Georgieva on the government’s measures aimed at stabilizing and revitalizing the country’s economy, with a strong focus on safeguarding vulnerable sections of society.
https://x.com/KGeorgieva/status/1704621901643944115?s=20
The IMF’s approval of the $3 billion bailout program in July immediately disbursed approximately $1.2 billion to Pakistan, providing much-needed support to the nation’s foreign exchange reserves. Saudi Arabia and the United Arab Emirates had previously deposited $2 billion and $1 billion, respectively, with the State Bank of Pakistan, further boosting these reserves.
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In his address during the Financing for Development Dialogue at the UNGA, Prime Minister Kakar proposed measures to assist struggling economies within the United Nations framework. He suggested the formation of an investment entity to identify viable sustainable development goal (SDG)-related projects in developing countries. Additionally, he proposed the development of regulatory frameworks to incentivize private investment, measures to reduce SDG-related investment risks, and a revised method for calculating risk with credit rating agencies.
These proposals aim to create professionally managed project units, utilizing the UN’s extensive country offices and specialized agencies to enhance the capacity of developing countries to prepare and implement SDG-oriented projects. They also seek to attract private investments and expedite the preparation of national projects, ultimately contributing to economic development and stability.
The IMF chief reiterated the organization’s commitment to continued engagement with Pakistan, recognizing the nation’s efforts in implementing policies and reforms to revive its economy.