IMF has demanded a complete removal of electricity subsidy

International Monetary Fund (IMF) team has demanded a complete removal of electricity subsidy, raising GST on all products and goods from 17 per cent to 18 per cent

Differences between Pakistan and IMF on the issue of power sector subsidies, petroleum development levy target and GST continue, due to which technical-level talks have been extended for two days. has been done.

According to sources, technical-level talks of the IMF team were scheduled till Friday, but technical-level talks were extended to further consider some issues so that a final conclusion could be reached in the policy-level talks.

Pakistan and the IMF have not been able to agree on some issues, Pakistan has presented various alternative proposals to overcome the fiscal deficit, the IMF has also demanded to end the subsidy given on electricity to the export sector so that the circular debt of Rs 952 billion can be reduced due to the increase in electricity prices. Trying to convince the team.

Regarding the subsidy, the two teams have agreed in principle and pakistani authorities have prepared to reduce the basic deficit and under the revised circular debt management plan, the amount of additional subsidy has been reduced to Rs 605 billion

Europe’s TERRIBLE Catastrophe: The Energy CRISIS In Europe Is Becoming A Nightmare!” on YouTube

Europe has been facing a disastrous energy crisis, with energy costs skyrocketing and threatening the stability of the entire continent.

Europe is at a crossroads, and its choices in the coming years will determine the continent’s energy future.And one of the main challenges is the high cost and limited natural gas supply, which is a crucial energy source for many European countries.

And experts believe these bottlenecks in regasification capacity have several impacts on Europe’s energy market.Now, Europe must invest in new infrastructure and modernize existing facilities to address the bottlenecks in regasification capacity.

Has previous privatization activity benefited underperforming institutions?

The International Monetary Fund (IMF) has given the government more things to do, like privatize public institutions that lose money and raise the prices of electricity and gas. Has previous privatization activity benefited underperforming institutions?

According to the sources, the IMF and Pakistan have concluded their technical negotiations. During the talks, the IMF asked Pakistan to raise its prices for electricity and gas, put an 18% value-added tax on oil, and privatize its public institutions that were losing money.

According to sources, the IMF has also demanded that state intervention in the economy be limited through privatization and routine audits of government institutions. In addition, the IMF has called for the eradication of corruption and bureaucracy, as well as the promotion of business and tax cultures. They have asked for LNG power plants, and the House Building Finance Corporation to be sold to private companies.

While trying to cut down on losses at PIA, steel mills, and other institutions, the IMF is said to have said that institutional flaws should be fixed for economic growth, investment, and job creation, and that public and private institutions should have the same opportunities and facilities. According to sources, Pakistan and the IMF will now engage in policy-level discussions.

Governments have privatized state-owned enterprises (SOEs) for decades to enhance their performance and reduce fiscal risk. The performance of SOE was frequently disappointing. Reforms for state-owned enterprises aimed to enhance their financial and operational performance and bolster their balance sheets. However, they rarely generated profits or dividends. It was decided to reduce the flow of public funds to SOEs, to separate commercial and noncommercial objectives, to obtain commercial financing, to strengthen oversight and monitoring, to improve SOE boards and management, and to minimize political interference. Some actions were successful, but the majority were not.

Is the IMF really a savior for our economy

Pakistan’s rulers want to restart the IMF agreement, which has been suspended for a year. People in Pakistan think the IMF is against the people, helps the elite, and is to blame for increasing poverty. However, it is seen as their only hope after years of economic crises.

There is only one option left: the IMF, as is repeatedly stated in every newspaper column and on every talk show. These words have been used so frequently that people are accustomed to hearing them.

“We” will be destroyed, go bankrupt, and no one will provide financial support for “us” if we don’t accept the IMF’s “reforms,” These phrases have developed into the new hymn that is sung in front of us every day.

Some economists warn that our current inflation rate of 25% could rise to 35% if we accept the IMF’s stringent conditions. If the IMF’s demands are met, the value of the dollar will exceed 300 rupees. In recent months, it has been rumored to be worth more than 200 rupees. If electricity and gas are made available to the general public, their costs will increase. Everything will increase in price, including gasoline, which is vital to our economy. Imports will also be significantly more expensive, and our aristocracy cannot survive without them.

Some analysts argue that accepting the IMF’s tough conditions will worsen the situation, but if we don’t we will most likely default. Inflation rates range between 35% and 70% in Pakistan; 2,200 luxury cars have been imported into the country despite a dollar shortage.

The IMF is Pakistan’s military and civilian elites’ only option. The elite has failed to implement effective reforms and create a substantial economic reform policy for years. Our elites looted our nation to the brink of default. Neither “we” nor “saving the country” are concepts. Class distinctions are crucial. All economic factors and interventions—inflation, austerity, fiscal discipline—are unevenly distributed.

The IMF is not a savior here for ‘us’ or ‘our’ country but for ‘some people’ and ‘their country’. The agreements under negotiation benefit only the capital and the people who benefit from it. Structural reforms such as distribution of energy or capital along class, gender and regional lines have never been part of our adjustment program.

Zaidi, S. Akbar. “کیا واقعی آئی ایم ایف ہماری معیشت کے لیے نجات دہندہ ہے؟.” Dawn News Television, 3 Feb. 2023, www.dawnnews.tv/news/1196138.