Pakistan to take fiscal measures set by IMF to meet budgetary targets

The seal for the International Monetary Fund is seen near the World Bank headquarters (R) in Washington, DC on January 10, 2022. (Photo courtesy: AFP)
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Updated 11 January 2023
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Pakistan to take fiscal measures set by IMF to meet budgetary targets

  • Finance Minister Ishaq Dar expresses hope the country will achieve its budgetary targets
  • The IMF wants Pakistan to review farming, export subsidies and shed energy sector debt

ISLAMABAD:  Pakistan will take fiscal measures set by the International Monetary Fund (IMF) to meet its budgetary targets for the 2022-23 financial year, finance minister Ishaq Dar said on Wednesday.

The measures included reviewing subsidies in the farming and export sectors and shedding energy sector debt, he said.

The minister told a news conference in Islamabad that a "detailed discussion" had taken place with the IMF on the sidelines of a climate conference in Geneva on Monday, where the lender had emphasized a need to take fiscal measures.

A 9th IMF review to clear the release of the next tranche of funds to Pakistan has been pending since September, as the country faces a severe economic crisis with its central bank foreign reserves falling to a critical level of below $5 billion, which is barely enough for three months of imports.

"They (IMF) think that we should take some fiscal measures, like if there are some un-budgeted subsidies," he said, adding the latest discussion had narrowed down the issues on the IMF's agenda.

"We will achieve all our budgetary targets," he said.

Dar said that the IMF had taken up the subsidies in the export, farmers sectors, and the energy reforms, adding: "We will do it but it wouldn't burden any common man, it will be very targeted and categorical."

The minister did not elaborate on whether the subsidies would be cut or withdrawn altogether, saying it would be worked out, adding that the gas sector debt would be reduced from the dividends of the companies.

Pakistan's power regulator has already allowed Sui Northern Gas Pipeline Ltd (SNGPL) and Sui Southern Gas Company (SSGC) to hike rates up to 75%, which is subject to cabinet approval.

The IMF approved the seventh and eighth reviews of Pakistan's bailout program, agreed in 2019, together in August to allow the release of more than $1.1 billion.

Pakistan secured a $6 billion bailout in 2019, which was topped up with another $1 billion last year.


Pakistan’s capital picks concrete over trees, angering residents

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Pakistan’s capital picks concrete over trees, angering residents

  • Between 2001 and 2024, Islamabad lost 14 hectares of tree cover, according to Global Forest Watch 
  • Officials justify removing trees to tackle seasonal pollen allergies that are especially acute in spring

ISLAMABAD: Pakistan’s capital Islamabad was once known for its lush greenery, but the felling of trees across the city for infrastructure and military monuments has prompted local anger and even lawsuits.

Built in the 1960s, Islamabad was planned as a green city, with wide avenues, parks and tree-lined sectors.

Many residents fear that vision is steadily being eroded, with concrete replacing green spaces.

Muhammad Naveed took the authorities to court this year over “large-scale tree cutting” for infrastructure projects, accusing them of felling “many mature trees” and leaving land “barren.”

The World Wide Fund for Nature (WWF) blamed major infrastructure development, including road construction and monuments, for the mass razing of trees and natural vegetation in Islamabad.

Between 2001 and 2024, the capital lost 14 hectares of tree cover, equal to 20 football pitches, according to Global Forest Watch, though the figure does not account for tree cover gains during the same period.

For Kamran Abbasi, a local trader and resident since the 1980s, it feels like “they are cutting trees everywhere.”

“It is not the same anymore,” he told AFP.

“Trees are life. Thousands are cut to build one bridge.”

SMOG AND POLLEN

Meanwhile, air quality in Islamabad continues to deteriorate.

Pollution is a longstanding problem, but plants can help by filtering dirty air, absorbing harmful gases and cooling cities.

“Forests act as powerful natural filters... cleaning the air and water, and reducing the overall impact of pollution,” Muhammad Ibrahim, director of WWF-Pakistan’s forest program told AFP.

There were no good air quality days in Islamabad last month, with all but two classed as “unhealthy” or “very unhealthy” by monitoring organization IQAir.

While some trees are felled for infrastructure, officials justify removing others to tackle seasonal pollen allergies that are especially acute in spring.

That problem is largely attributed to paper mulberry trees, which were planted extensively during the city’s early development.

“The main reason is pollen allergy,” said Abdul Razzaq, an official from the Capital Development Authority (CDA) in Islamabad.

“People suffer from chest infections, asthma and severe allergic reactions. I do too,” he told AFP.

The government plans to remove 29,000 pollen-producing trees and plants, according to a recent WWF report.

However, critics argue that pollen allergies are an excuse to justify broader tree-cutting, particularly linked to military and infrastructure projects.

The solution lies not in indiscriminate tree removal, but careful urban planning, experts say, replanting with non-allergenic species — and greater transparency around development projects in the capital.

CAPITAL UNDER AXE

In recent months, large bulldozers have been spotted levelling former green belts and wooded areas, including near major highways.

According to WWF and unnamed government officials, some of the cleared land is tapped for monuments commemorating the brief but intense armed conflict between Pakistan and neighboring India last May.

Other plots were razed to make way for military-linked infrastructure.

“We know that trees are being cut for military-related projects, but there is not much we can do,” a government source told AFP, requesting anonymity for security reasons.

“The people in power, the military, can do whatever they want.”

Pakistan’s powerful military has ruled the country for decades through coups and is deeply involved in the country’s politics and economy, analysts say.

At a proposed military monument site along the city’s express highway, WWF recorded more than six hectares of land clearing last year, with work continuing in 2026.

It saw “no active plantation... indicating that the clearing is infrastructure driven.”

The military did not respond to AFP’s request for comment.

Naveed’s court case seeking to halt the widespread felling, which is still being heard, argues there is “no excuse” for the tree loss.

“If a monument is deemed essential, why was it not placed in any existing park or public place?” he argues.

In reply to Naveed’s petition, authorities said roads and infrastructure projects were approved under regulations dating back to 1992.