ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistan to seek parliamentary approval on major economic reforms related to the energy, power, tax sectors and on the privatization of state-owned enterprises (SOEs) before starting formal talks for another loan program, a finance ministry official said on Thursday. 

Facing low foreign exchange reserves, currency devaluation and high inflation, Pakistan last month completed a short-term $3 billion IMF program that helped stave off a sovereign default. However, the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer-term program with the global lender. 

An IMF mission reached Islamabad last week to negotiate with Pakistani authorities for a fresh bailout program, holding talks with officials on reforms in key economic sectors. The mission is wrapping up its visit today, Thursday, without reaching any staff-level agreement with Islamabad. 

The government would present the economic reforms demanded by IMF or “prior actions” in parliament in the Finance Bill 2024-25 likely to be presented on June 7, the finance ministry official with knowledge of the negotiations, said on condition of anonymity. 

“The IMF has suggested authorities to get parliamentary approval for the new loan program’s targets and conditions before initiation of the formal talks,” the official told Arab News. 

“In fact, these are the prior actions that Pakistan is required to take care of before reaching a staff-level agreement with the Fund for the new bailout package.”

The international lender has urged Islamabad to overhaul its SOEs and introduce tax, energy and power reforms. Pakistan has had to take painful measures in line with the IMF’s demands since 2022, which included hiking fuel and food prices. 

The finance ministry official said the government intends to introduce key reforms in the energy and power sectors in line with the IMF’s demands, besides broadening the tax base through progressive initiatives. 

“The government will take all parliamentary parties into confidence over the digitalization of the Federal Board of Revenue and the privatization of the SOEs,” he added. 

Sajid Amin, a senior economist and deputy executive director at the Sustainable Development Policy Institute (SDPI), said the government had “no option but to secure the IMF loan program.” He said the IMF’s program was critical in helping Pakistan meet its external financing needs of around $80 billion in the next three years. 

“The IMF wants political ownership of the loan program and that’s why it is pushing the government to get all the targets and conditions approved by the parliament,” Amin told Arab News.

“The biggest challenge for the government is to convince the coalition partners and opposition over its reforms agenda to secure the IMF loan,” he said. 

Amin warned the upcoming IMF program would be the “toughest” one for the government as it would not be easy for it to complete it. 
 

LAHORE, Pakistan: Half of Pakistan’s pupils will be shut out of schools for a week as the nation takes crisis measures to lessen the effect of a series of heat waves, officials said Thursday.

Some 26 million students will be out of lessons from Saturday in Punjab, Pakistan’s most populous province, which has ordered schools to close for the summer break one week early because of the soaring temperatures.

The early closure was confirmed by a spokesperson for Punjab’s Education Department.
Pakistan’s meteorological office has forecast three heat waves — one already underway and two more set to hit in early and late June.

Temperatures in Punjab are currently six to eight degrees Celsius above normal, the disaster management agency said, with the provincial capital Lahore due for 46 degrees Celsius (111 degrees Fahrenheit) at the weekend.

The government’s Coordinator on Climate Change and Environment told journalists in Islamabad on Thursday that “global warming is causing a sudden change in weather patterns.”

Parts of Pakistan are facing power cuts of up to 15 hours as demand for fans and air conditioning surges, leaving students sweltering at their desks.

The Save the Children NGO said the 26 million Punjabi schoolchildren with lessons canceled account for 52 percent of pre-primary, primary and secondary students in Pakistan.

“Prolonged exposure to intense heat impacts children’s ability to learn and to concentrate and this puts their education at risk,” country director Muhammad Khuram Gondal said.

“Excess heat is also potentially lethal to children.”

The UN children’s agency UNICEF said more than three-quarters of children in South Asia — or 460 million — are exposed to temperatures above 35C (95F) for at least 83 days per year.

It warned that children are at risk of “dehydration, higher body temperature, rapid heartbeat, cramps... and coma.”

Pakistan is responsible for less than one percent of global greenhouse gas emissions.

However, the nation of 240 million ranks high among countries vulnerable to extreme weather events, which scientists have linked to climate change.

A third of Pakistan was submerged by unprecedented monsoon rains in 2022 that displaced millions of people.

It was also battered by above-normal rainfall last month that killed at least 144 people in the wettest April recorded since 1961, with more deluges forecast this summer.

Lahore’s students also saw lessons cut this winter when schools were shut as the megacity was enveloped by choking smog.