Islamabad (Web Desk): The International Monetary Fund (IMF) wants Pakistan to provide subsidies only to the people who need them, saying that the resources should be diverted from the rich and wealthy towards the poor segments of society.
IMF Managing Director Kristalina Georgieva, in an interview with an international broadcaster on Sunday, asked Pakistan to take steps to be able to function as a country and not to get into a dangerous place where it needs debt restructuring.
“My heart goes to the people of Pakistan. They have been devastated by the floods that affected one-third of the population of the country,” said the managing director.
“We are emphasising two things: one raising tax revenues, as those who are making good money in public or private sectors need to contribute to the economy. Number two is to have a fairer distribution of precious resources by moving subsidies only towards the people who really need them. It shouldn’t be that the wealthy benefit from subsidies. It should be the poor [who] benefit from them,” she said and added, “And there the Fund is very clear. We want the poor people of Pakistan to be protected.”
The revival of the IMF programme for Pakistan will be a pre-requisite step for seeking any debt restructuring, so the government is focusing on it at the moment, said the sources. When the stage would come across after the revival of the programme, then debt restructuring — especially from non-Paris Club countries — might be considered for moving towards the desired objectives, they added.
Pakistan will require external debt servicing both in the shape of principal and mark-up amounts to the tune of $27 billion in the next financial year. The ongoing IMF programme of $6.5 billion under the Extended Fund Facility (EFF) will expire on June 30, 2023, and there is no possibility of any further extension in the ongoing EFF arrangement.