Collect more taxes from the wealthy, protect the poor: IMF chief to Pakistan

International Monetary Fund (IMF) Managing Director (MD) Kristalina Georgieva urged Pakistan to “collect more taxes from the wealthy and protect the poor”, stressing that the lender believes this is “in line with what people there would like to see”.

“What we are asking in our programme is that please collect more taxes from the wealthy and please protect the poor people of Pakistan,” she said while responding to a query on the sidelines of the ongoing 78th United Nations General Assembly (UNGA) session in New York on Wednesday .

“I do believe this is in line with what people in Pakistan would like to see for the country.”

Separately, Georgieva also posted on social media platform X, formerly known as Twitter, after meeting with Pakistan’s caretaker prime minister Anwaar-ul-Haq Kakar.

“Very good meeting with Pakistan’s PM today on Pakistan’s economic prospects,” she said. “We agreed on the vital need for strong policies to ensure stability, foster sustainable and inclusive growth, prioritise revenue collection, and protection for the most vulnerable in Pakistan.”

Meanwhile, as per a statement released by the Prime Minister’s Office (PMO) on Thursday, the caretaker prime minister expressed gratitude for the IMF’s approval of a $3-billion Stand-By Agreement (SBA) to support Pakistan’s economy.

The arrangement was given the IMF’s Executive Board approval in July, and will see its second review in November.

“He briefed the MD IMF on various measures taken by the Government of Pakistan to stabilise and revive the country’s economy,” read the statement.

Kakar affirmed that the initiatives aim to create a stable and conducive environment for sustainable economic growth and investment in the country. Additionally, a strong focus had been placed on protecting the vulnerable segments of society, added the statement.

“MD IMF Kristalina Georgieva appreciated Pakistan’s concerted efforts in implementing policies and reforms to revive the economy. She assured that the IMF remained committed to continued engagement with Pakistan,” read the statement.

Back in July, Pakistan inked a last-minute SBA with the Washington-based lender amid default fears. The nine-month agreement then paved the way for inflows from multilateral and bilateral partners including Saudi Arabia, UAE and World Bank, providing a cushion to the depleting foreign exchange reserves position.

The IMF programme also gave some breathing room to Pakistan’s economy that has been struggling with a boom-and-bust cycle for decades in the absence of meaningful structural reforms.

Runaway inflation and a balance-of-payments’ crisis are also currently causing severe economic distress and prompted the Asian Development Bank (ADB) to downwards revise its growth outlook for the country this fiscal year.

A low level of foreign exchange reserves also meant Pakistan’s central bank imposed import restrictions as debt payments remain high and avenues of dollar inflows remained limited.

Earlier, Kakar called upon the world to find a durable solution to the debt problems being faced by 59 countries in debt distress.

Addressing the Leaders’ Dialogue on Sustainable Development Goals (SDGs) organized by the United Nations in New York, the caretaker PM said proper implementation of the development agenda is only possible with global and regional cooperation.

“In this regard, we welcome the endorsement of the UN secretary-general that could help generate over 500 billion dollars for the countries facing liquidity challenges,” he added.

Kakar said that resources must be provided to developing countries to achieve sustainable development goals. He also reiterated Pakistan’s determination to fully support the Global Development Initiative.

“The implementation of the Global Development Initiative is a milestone, China’s Belt and Road Initiative (BRI) and China-Pakistan Economic Corridor (CPEC) are important in achieving sustainable development goals,” he said.