Outcome of IMF assistance is disappointing

ISLAMABAD : Patron Islamabad Chamber of Small Traders Shahid Rasheed Butt on Sunday said $6.7 billion financial assistance deal signed with International Monetary Fund (IMF) in 2013 has not helped to improve economy as expected.

The government continued to avoid structural reforms while IMF ignored violation of the terms of agreement, which aggravated the situation. Speaking to the business community, he said that the IMF’s programme is in the final stage, which brought about some stability on the cost of development as country’s GDP failed to achieve one percent growth during that period.

Shahid Rasheed Butt said that forex situation is far better that 2013, but its credit goes to loans from foreign and domestic sources as exports continue to fall despite getting trade relaxations from the EU. He said that government could not bring deficit to 3.5 percent and the trade gap remained at 7.5 percent while the target of sale of PIA, Pakistan Steel Mills and power distribution companies could not be achieved.

The veteran business leader said that government slapped three different surcharges on electricity bills but could not initiate meaningful reforms, which has pushed circular debt beyond Rs 648 billion. Tax base and tax net could not be broadened, state-run enterprises continue to bleed, central bank could not get autonomy and it missed the net domestic assets target by Rs 172 billion agreed with the lender.

Butt lashed out at the policy of forcing farmers to use seed of multinational companies, which has damaged almost 18 percent of the cotton crop, which can drag down GDP by one percent.

 

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