P.M. Sharif addresses maiden meeting of his federal cabinet on March 11, 2024. Photo courtesy PID
Prime Minister Shehbaz Sharif on Monday vowed to rid the country of the begging bowl and steer it out of prevailing economic challenges, including mounting circular debt and rampant inflation.
“We will get rid of IMF [International Monetary Fund] InshaAllah,” he told the maiden meeting of his newly formed 16-member federal cabinet after their oath-taking. Sharif has already directed officials concerned to expedite their negotiations with the IMF to secure a fresh extended facility, as all economic experts agree Pakistan has no choice but to proceed to a new program to avoid default. However, government officials have maintained that they would undertake necessary reforms to ensure they do not have to return to the IMF for yet another loan after the next one expires.
Referring to the challenges posed by rising foreign debt, the prime minister said he had informed ambassadors of foreign states that his government would seek investments, not loans, to tackle its economic crises. “We have to fight against poverty instead of quarrelling within,” he said, referring to political and societal polarization, with the Pakistan Tehreek-e-Insaf (PTI) continuously claiming is mandate was “stolen” and describing the incumbent government as “illegitimate.”
During his address, Sharif also called for ending subsidies for elite, saying there was no justification to continue the practice while the poor continue to be crushed under inflation. “The sooner we eliminate it [subsidies] the better it would be for the people,” he said.
The prime minister reiterated his concerns with mounting circular debt in the gas and electricity sectors, noting it had crossed Rs. 5 trillion, and backed using indigenous resources as a major reason for the boost was expensive imported fuels. He also regretted that global lenders were now demanding Pakistan impose taxes on retailers who were already bearing the brunt of prevailing inflation. He suggested bringing wholesalers into the tax net as an alternate strategy to boost revenues.
Acknowledging the inflationary challenges facing the public, Sharif said reducing prices would be the new government’s first major test. “A handful of elite control 90% of the country’s resources,” he lamented, reiterating that all subsidies for them must end.
“It is now do or die. It’s now or never. Perform or perish!” he added.