Policies essential for new programme’s success: IMF representative

IISLAMABAD: The International Monetary Fund (IMF) representative in Pakistan Esther Perez has said that Pakistan has made policy mistakes in the past, and now robust policies awere re crucial for the successful implementation of the new loan programmeme.

Speaking at an event organized by the Sustainable Development Policy Institute (SDPI), Perez explained that the IMF programmeme will broaden the scope of taxation, including bringing the agricultural sector under the tax net.

The IMF representative noted that, despite some stability in recent years, Pakistan continues to face structural challenges due to past policy mistakes. Each IMF programme aims to improve policies, and therefore, strong policies are essential for the success of the new loan programme.

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The programme also aims to reduce support prices for food grains, eliminate government controls in income determination, and increase tax revenues from the retail and real estate sectors.

She highlighted that an improved and more effective tax system is necessary while ensuring the protection of the social sector. The new IMF programme focuses on promoting private sector-led growth and reducing energy prices through structural reforms. Downsizing in the public sector is also part of the programme, she said.

Perez further mentioned that while energy and industrial policies support the domestic market, distortions occur when special treatment is provided to specific sectors.

In response to a question, Perez said that the IMF has always sought to assist Pakistan in various ways, maintaining neutrality by staying away from politics. The IMF’s primary focus is on policies and the economy.

She also pointed out the importance of a robust tax system for any country. While the IMF is not questioning or seeking to reverse the National Finance Commission Award, she stressed that it remains a significant factor that has not been fully implemented.