ISLAMABAD, FEB 22: Prime Minister Shehbaz Sharif on Wednesday announced a slew of austerity measures. The announcement comes as Pakistan is eyeing a staff-level agreement with the International Monetary Fund (IMF) this week which will pave the way for much-awaited credit flows from other bilateral and multilateral lenders.
Addressing a press conference alongside members of the federal cabinet in Islamabad, the premier said that ministers, state ministers and special advisers to the premier had decided to forego their salaries and perks. He said that all ministers would now pay their own telephone, electricity, water and gas bills.
“All luxury cars being used by cabinet members are being called back and will be auctioned,” he said. “Where needed, only one car will be provided for security.”
The premier further said that federal ministers will also travel in economy when going abroad on state visits. He said that support staff would no longer be allowed to go on state visits while cabinet members would not stay in five-star hotels during the trip.
He added that all ministries, departments and sub-departments would reduce their expenditures by 15 per cent.
‘Matters with IMF at last stage’
At the outset of his press conference, the prime minister said that the government had passed the mini-budget under which new taxes were being levied on big corporations so that the common man was protected by inflation to “some extent”.
He said that matters with the Fund were at the “last stage” and hoped that everything went well. He further said that “matters would be settled in a few days” but it would cause further inflation. He said that Pakistan had fulfilled almost all of the IMF’s conditions.
During his speech, he noted that the poor had always had to render sacrifices. He said that the budget for the Benazir Income Support Programme (BISP) was being increased.
He foresaw difficulty in the times ahead after the IMF deal was done, assuring the nation that the government would guide the country during this time.
“We made a committee, which worked day and night, on measures through which we can […] show through our personal example so that it raises awareness.”
‘Austerity will require sacrifices from the privileged’
Addressing the federal cabinet earlier in the day, PM Shehbaz said that only “one or two items” were remaining in the competition of the IMF agreement and asserted that Pakistan would soon strike a deal with the global lender.
PM Shehbaz talked about the country’s economic woes and said that sacrifices from the privileged were required in this difficult time. “It is the joint responsibility of the government machinery, which includes the political face and bureaucratic face, and all the members of the provincial governments to show a performance that is needed in this extremely difficult time,” he asserted.
The premier stated that various reasons, including “imported inflation, IMF conditions and the doings of the previous government”, had led to the economic difficulties that the nation was currently facing.
Shehbaz elaborated that the said performance required “retrenchment, simplicity [and] sacrifices”, citing that the disasters faced by the nation in the past had led the poor to make the most sacrifices.
“I know some affluent people who have stepped forward and made contributions in this time. But have all of them given a sacrifice?”
The premier further called for the nation to “learn from the past and decide to move forward”.
He said the nation was looking towards the government with “critical and questioning views”, admitting that it was “neither easy nor a joke” how the incumbent government was standing together in making decisions.
Shehbaz added that the government was striving at its full capacity but “practical steps” were needed. “As the saying goes ‘leadership by personal example’ […] it is now time to show it.
“We have to stand up and accept the challenge today and let the world know that Pakistan is a strong nation and the government is ready to do everything to face these challenges,” he asserted.
Acknowledging that the measures of entrenchment and simplicity would not reduce the burden of inflation, he reasoned that they would at least reduce the resentment “that is accumulated in the people because of what has been happening for the past 75 years”.
The prime minister said these measures would make the people realise that the “government, politicians and bureaucracy have decided from the core of their hearts to show the spirit of sacrifice”.
“Today is the time for you to stand up and accept the challenge and do it in the name of God, in the name of Pakistan. Let’s not delay it and shame our prosperity,” he added.
The prime minister’s media talk coincides with the start of the opposition PTI’s “Jail Bharo Tehreek” — an organised campaign to court arrests — which is billed by party chief Imran Khan as a counter to the “attack” on the party’s fundamental rights and the “economic meltdown”.
‘Cabinet size must go down’
Meanwhile, Climate Change Minister Sherry Rehman said that structural reforms and fundamental economic reforms were needed rather than “optic” measures.
“Many of us will voluntarily surrender salaries in the interest of further austerity but it’s the size of cabinet too that must go down,” she said. The cabinet size swelled to 85 earlier this month with seven more special assistants. Of the 85 cabinet members, 34 are federal ministers, seven ministers of state, four advisers to the prime minister and 40 special assistants to the prime minister.
