Pakistan’s Finance Minister Muhammad Aurangzeb Calls for Economic Overhaul to End IMF Dependence
Islamabad [Pakistan], September 30: Pakistan must overhaul its economic foundation to break free from repeated International Monetary Fund (IMF) bailouts, according to Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb. He stressed that the recently approved 37-month Extended Fund Facility (EFF) should be the country’s ‘last’.
While addressing a press conference in Islamabad, Aurangzeb said, ‘We need to adopt a new approach. If we are saying that this is going to be the last programme of IMF, we have just embarked on, we have to change the DNA of the economy fundamentally.’
This call for fundamental change comes as Pakistan faces significant economic challenges, including currency struggles, high inflation, and a substantial trade deficit. Pakistan has availed 25 IMF programmes since becoming a member of the IMF in 1950. The most recent programme is a 37-month EFF approved in September 2024, marking Pakistan’s 25th IMF program since independence in 1947—the highest number of any country.
The IMF package is not just for the federal government but for the entire country, said Aurangzeb. He stressed the importance of implementing tough decisions to ensure economic stability. In the press conference, he was accompanied by the Chairman Federal Board of Revenue, Rashid Mahmood Langrial.
Aurangzeb affirmed that there were two main reasons for going to IMF for EFF: bringing permanence to macroeconomic stability and executing critical reforms under a homegrown economic agenda. He warned that failing to take these measures now would result in further burdening the salaried class and highlighted the need to control the growing population to achieve sustainable development.
Aurangzeb pointed out the ‘inevitability’ of increasing tax revenues but emphasized that tax collection authorities must respect human rights. He also mentioned the government’s plan to extensively use technology and announced the establishment of digital checkpoints to combat smuggling.
Reaffirming the government’s resolve to implement homegrown structural reforms, Aurangzeb emphasized the crucial need to bring fundamental changes in the DNA of the country’s economy, leading to an export-driven model, thereby fostering sustainable growth. He said that macroeconomic stability creates a foundation and ‘if the foundation is not strong, we cannot construct a house.’ He remarked, ‘If we have to go for inclusive and sustainable growth, it has to be on the background of the macroeconomic stability.’
The minister said the macroeconomic stability has continued during the first quarter of the current fiscal year; however, it needed permanence to lead to sustainable growth. ‘Macroeconomic stability is not an end in itself, it is a means to an end,’ he remarked.
Doubts Revealed
Finance Minister -: A Finance Minister is a government official who is responsible for managing a country’s money and economic policies.
Muhammad Aurangzeb -: Muhammad Aurangzeb is the person who is currently the Finance Minister of Pakistan.
Economic Overhaul -: Economic overhaul means making big changes to the way a country’s economy works to make it better.
IMF -: IMF stands for International Monetary Fund. It is an organization that helps countries by giving them money and advice to manage their economies.
IMF Dependence -: IMF dependence means relying on the IMF for financial help whenever the country is in economic trouble.
Islamabad -: Islamabad is the capital city of Pakistan.
Extended Fund Facility (EFF) -: The Extended Fund Facility (EFF) is a program by the IMF that provides financial help to countries for a longer period to support economic reforms.
Macroeconomic Stability -: Macroeconomic stability means having a stable economy with low inflation, steady growth, and low unemployment.
Structural Reforms -: Structural reforms are changes made to the way a country’s economy is organized to make it work better.
Tax Revenues -: Tax revenues are the money that the government collects from people and businesses through taxes.
Population Growth -: Population growth means the increase in the number of people living in a country.
Smuggling -: Smuggling is the illegal movement of goods into or out of a country without paying taxes or following the law.
