IMF weakens Pakistan’s 'economic muscles' with more conditionalities: Report

New Delhi, April 23 Pakistan has been given a list of additional conditions by the International Monetary Fund (IMF), among which the 'most troubling demand' is commitment to raise electricity and gas prices, a new report has said.

“A 'do more' list with a call to 'do it within the timeframe' has been handed over to the Pakistan government by IMF,” among which a major demand is to amend laws governing special economic zones, said the report in The Express Tribune.

The IMF wants the government to not go back on its commitment to raise electricity and gas prices, even at the detriment of production units that are struggling to make ends meet, the report argued.

"The salient features regarding the new conditionalities are startling as they will surely come as a tab on our sovereignty of economic muscles," it said.

Pakistan’s finance minister agreed in Washington, DC, that it would phase out existing fiscal incentives under the e Special Economic Zones (SEZ) Act and the Special Technology Zones Authority (STZA), the report said.

The minister also agreed to withdrawing privileges for granting tax incentives, prohibiting export processing zones from selling goods in the domestic market, among other similar measures.

"The global lender seems to believe that it's time to walk the talk, and let stringent reforms be ushered in the body politic of an economy that has long been surviving on borrowed money, and wherein ad hocism is the way to go," the report said.

The continuation of the $7 billion bailout package to Pakistan under the Extended Fund Facility now comes at the expense of 75 conditionalities, including 11 new ones which have to be fulfilled to reflect in the upcoming federal budget.

The conditionalities mandated by IMF aims at course-correction in Pakistan’s “wayward approach of dealing with things,” and to streamline the affairs in the spheres of decision-making, governance and private sector development, the report noted.

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