Tag: Poverty Alleviation

  • IMF spokesperson urges fair taxation and protection for vulnerable in Pakistan

    IMF spokesperson urges fair taxation and protection for vulnerable in Pakistan

    The International Monetary Fund (IMF) has emphasised that its $3 billion Standby Arrangement (SBA) programme with Pakistan serves as a critical policy framework. This framework addresses both domestic and international economic imbalances while also facilitating financial support from various donors, including the refinancing of outstanding debts.

    According to Geo, during a recent press conference held at the IMF headquarters in Washington, DC, Julie Kozack, the spokesperson for the global lender, fielded questions regarding the IMF’s engagement with Pakistan. These inquiries encompassed Pakistan’s request for relief and permissions within the existing agreement, specifically in relation to rising energy costs, notably electricity bills.

    In response to concerns about potential human rights implications, particularly for minority populations and the vast number of people living below the poverty line (an estimated 92 to 95 million), the IMF spokesperson emphasised that the programme received approval on July 12. It is a nine-month standby arrangement amounting to $3 billion, designed to support the economic stabilisation programme of the Pakistani government.

    The core objectives of this programme revolve around providing a policy framework to address both domestic and external economic imbalances, along with establishing a structure to secure financial support from various donors, both multilateral and bilateral. This includes securing fresh financing and addressing upcoming debt obligations.

    The IMF outlined that policy efforts are focused on implementing the fiscal year 2024 budget, formulating appropriate monetary policies to combat inflation, and continuing reforms to enhance the sustainability of the energy sector.

    These reforms are ultimately geared towards fostering higher, more inclusive, and more resilient economic growth. They also aim to bolster social development and climate resilience by strengthening public financial management, improving tax administration, and enhancing the prioritisation of public investments.

    Furthermore, these efforts are conducted in collaboration with partner institutions, not only the IMF but also the World Bank and the Asian Development Bank, underscoring a collective commitment to Pakistan’s economic stability and development.

    Kozack also highlighted IMF Managing Director Kristalina Georgieva’s strong stance on poverty and inequality. She emphasised the importance of wealthier segments of society bearing a fair tax burden, particularly in a context where Pakistan’s tax-to-GDP ratio is notably low.

    The IMF’s commitment extends to safeguarding the interests of the poor and vulnerable members of society within the programme’s framework, aligning with the goal of achieving a more equitable and inclusive society.

  • World Bank urges urgent economic reforms in Pakistan to tackle rising poverty

    World Bank urges urgent economic reforms in Pakistan to tackle rising poverty

    The World Bank has issued a grave warning regarding Pakistan’s economic state, urging the nation to take swift action. They propose taxing key sectors like agriculture and real estate while reducing wasteful expenditures to stabilise the economy. This endeavour aims for a significant fiscal adjustment, equivalent to over 7 percent of Pakistan’s economic size.

    The World Bank also revealed alarming statistics, with poverty levels surging to 39.4 percent in the last fiscal year, pushing an additional 12.5 million people below the poverty line. Currently, nearly 95 million Pakistanis live in poverty.

    To address these challenges, the World Bank has drafted a set of policy recommendations in collaboration with stakeholders, focusing on low human development, unsustainable fiscal practices, overregulation in the private sector, and issues in the agriculture and energy sectors.

    Immediate measures include raising the tax-to-GDP ratio by 5 percent and reducing expenditures by about 2.7 percent of GDP, primarily targeting previously protected sectors.

    Tobias Haque, the lead country economist at the World Bank, underscores the need for substantial policy changes, given Pakistan’s economic and human development crises.

    According to Express Tribune, the World Bank’s recommendations encompass a range of fiscal reforms, including the removal of tax exemptions, increased taxation on real estate and agriculture, and mandatory use of CNIC for transactions.

    Furthermore, the institution advises cutting energy and commodity subsidies, implementing a single Treasury account, and adopting temporary austerity measures for short-term savings. Medium-term savings entail streamlining federal spending and enhancing the quality of development expenditures.

    Najy Benhassine, the country director for Pakistan at the World Bank, emphasises the importance of political consensus and domestic solutions to address Pakistan’s challenges.

    The World Bank highlights the need to address the human capital crisis, reduce energy subsidies, and promote inclusive, sustainable, and climate-resilient development in Pakistan. These measures are imperative to stabilise the nation’s precarious economic situation and alleviate the growing poverty crisis.

  • Supply of free flour for underprivileged cannot be questioned, says Lahore High Court

    Supply of free flour for underprivileged cannot be questioned, says Lahore High Court

    Lahore High Court has ruled that the government is responsible for providing free flour to those living below the poverty line and unable to purchase it themselves, and therefore the supply of free flour cannot be challenged in court. The court also stated that the supply of free flour under the government’s “Ramzan package” is a policy decision that cannot be interfered with by the court. This ruling came in response to a petition filed by a bar member challenging the government’s fixation of the wheat price at Rs3,900 per 40 kg.

    LHC dismissed the petition, stating that the government has the authority to fix prices and take necessary measures to cater to the needs of the people. The court also observed that the fixation of prices of commodities such as wheat by the government falls within the policy-making domain of the government and that this function must be performed keeping in mind various factors such as the availability of stocks and demand and supply.

    The court further noted that the government’s power to fix prices cannot be ordinarily interfered with by the court in its constitutional jurisdiction and that in the absence of any law or policy, the court cannot issue directions to respondents to provide flour or wheat to consumers at subsidised rates. The court also stated that the government’s purchase and sale of wheat, provision of wheat to flour mills, subsidised value, and framing of policy to provide flour at a particular rate or free of cost to deserving people of the society are all within the policy-making domain of the government.

    The court held that the government’s fixation of the wheat price was within its jurisdiction and powers, and that the government’s decision to fix the price was made after considering various factors, including regulating market forces. According to Brecorder, the court observed that the government’s power to fix prices cannot be challenged by petitioners who do not have access to the relevant data or the capability to determine various aspects of the price-fixing criteria.

    In conclusion, the court ruled that the government has the authority to fix the price of wheat and that the supply of free flour to those in need is a policy decision that cannot be challenged in court. The court also noted that the fixation of prices of commodities falls within the policy-making domain of the government and must be performed in consideration of various factors and that the court cannot interfere with the government’s power to fix prices in its constitutional jurisdiction.