Govt Must Balance IMF Conditions with Business Viability

• Strict adherence to governance reforms is vital, but further burdening the industrial sector could stifle recovery

Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan, Chairman Policy Advisory Board FPCCI, and Former Provincial Minister Information Technology, has commented on the 11 milestones recently outlined by the International Monetary Fund (IMF) as part of the ongoing $7 billion Extended Fund Facility (EFF).

In a statement issued today, Mian Zahid Hussain observed that while the recently emphasized milestones aimed at curbing corruption and enhancing transparency are steps in the right direction, the government must ensure that the “structural overhaul” does not translate into further suffocating the already struggling business community.

“The IMF’s demand for asset declarations of high-level civil servants and a crackdown on elite capture in the various sectors of the economy addresses long-standing structural rot that has plagued our economy,” Mian Zahid stated. “However, we must be cautious. The demand for a new tax reform roadmap and aggressive changes in the power sector must be managed without increasing the cost of doing business, which is already regionally uncompetitive.”

The veteran business leader noted that the IMF has expanded its requirements to 64 conditions in just 18 months, signaling a deep trust deficit. He highlighted that while the privatization of DISCOs like HESCO, TESCO, QESCO and SEPCO is necessary to stop the bleeding of national resources, it must be executed transparently to avoid creating private monopolies that could further burden consumers and industries.

Mian Zahid Hussain, warned that if the government resorts to a “mini-budget” or higher excise duties to meet revenue shortfalls—as hinted in the new conditions—it would be disastrous for the manufacturing sector and public at large.

“Our industries cannot bear the burden of further taxation,” he asserted. “The FBR’s reform roadmap should focus on broadening the tax net to include untaxed sectors rather than squeezing the existing taxpayers. We need the Single Digit Policy Rate and reduced energy tariffs to revive industrial activity, not more fiscal tightening.”

He concluded by urging the Ministry of Finance to maintain open communication with the business community while implementing these phased reforms. “To satisfy the IMF, we cannot kill the local industry. The government must demonstrate political will to cut its own expenditures and end the culture of subsidies for the elite, rather than passing the buck to the common man and the business sector,” Mian Zahid added.