New Delhi, April 28: Pakistan is grappling with severe economic difficulties and is now facing additional challenges. A recent report indicates that the International Monetary Fund (IMF) has imposed 11 new conditions on its ongoing $7 billion Extended Fund Facility (EFF) program.
According to Business Recorder, one of the conditions requires the government to amend the Special Economic Zones (SEZ) Act and the Special Technology Zones Authority Act. The aim is to gradually phase out existing tax incentives and replace profit-based relief with cost-based assistance.
The report also raises concerns about the government’s plan to lease 6,000 acres of land in Karachi to SEZ developers without any fees.
However, documents from the IMF in October 2024 highlighted that Pakistan’s tax system has been utilized to grant exemptions to specific sectors such as real estate, agriculture, manufacturing, and energy, which lacks transparency. Additionally, the number of Special Economic Zones has significantly increased.
As a result, the condition has been set to gradually eliminate existing SEZs over the next ten years, with no new SEZs to be established. Another new requirement is the creation of a regulatory registry to improve the business environment.
The report also noted that the October 2024 conditions included ensuring complete transparency in all government procurement at both the federal and state levels. This will be achieved using the Electronic Pakistan Acquisition and Disposal System (e-PADS), developed with the assistance of the World Bank.
Meanwhile, Pakistan’s fragile economic situation has come under scrutiny again, especially in light of changing global circumstances. While Pakistan seeks to present itself as a voice for peace in the world, its internal economic condition remains under significant strain.
Amid rising tensions between the U.S., Israel, and Iran, Pakistan has made diplomatic efforts, but its economic vulnerabilities have also become apparent.
The report states that the United Arab Emirates (UAE) has withdrawn its $3.5 billion deposits from Pakistan, which has immediately increased pressure on the country’s foreign exchange reserves.
Although inflation has somewhat decreased, interest rates remain high as per IMF recommendations. This situation is affecting both investment and exports, leaving the economy in a slow recovery phase. Overall, Pakistan’s external economic position remains considerably weak.
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My name is Ganpat Singh Choughan. I am an experienced content writer with 7 years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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