Pakistan bracing for austere budget under IMF, finance chief says

A Pakistani man counts Pakistan’s rupees at his shop in Karachi on May 16, 2019. (AFP)
Updated 25 May 2019
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Pakistan bracing for austere budget under IMF, finance chief says

ISLAMABAD: Pakistan is preparing a belt-tightening budget to tame its fiscal deficit, the de facto finance minister said on Saturday, adding that both civilian and military rulers agreed austerity measures were needed to stabilise the economy.
But Hafeez Shaikh, Prime Minister Imran Khan's top finance adviser, declined to say whether the military's hefty budget would be cut following last week's agreement in principle with the International Monetary Fund for a $6 billion loan.
The IMF has said the primary budget deficit should be trimmed by the equivalent of $5 billion, but previous civilian rulers have rarely dared to trim defence spending for fear of stoking tensions with the military.
Unlike some other civilian leaders in Pakistan's fragile democracy, Khan appears to have good relations with the country's powerful generals.
More than half of state spending currently goes on the military and debt-servicing costs, however, limiting the government's options for reducing expenditure.
"The budget that is coming will have austerity, that means that the government's expenditures will be put at a minimum level," Shaikh told a news conference in the capital Islamabad on Saturday, a few weeks before the budget for the 2019/20 fiscal year ending in June is due to be presented.
"We are all standing together in it whether civilians or our military," said Shaikh, a former finance minister appointed by Khan as part of a wider shake-up of his economic team in the last two months.
In the days since last week's agreement with the IMF, the rupee currency dropped 5% against the dollar and has lost a third of its value in the past year.
Under the IMF's terms, the government is expected to let the rupee fall to help correct an unsustainable current account deficit and cut its debt while trying to expand the tax base in a country where only 1% of people file returns.
Shaikh has been told by the IMF that the primary budget deficit -- excluding interest payments -- should be cut to 0.6% of GDP, implying a $5 billion reduction from the current projection for a deficit of 2.2% of GDP.
The next fiscal year's revenue collection target will be 5.55 trillion rupees ($36.88 billion), Shaikh told the news conference, highlighting the need for tough steps to broaden the tax base.


16 dead in crush at Madagascar independence day rally

Updated 26 June 2019
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16 dead in crush at Madagascar independence day rally

  • The accident occurred outside Mahamasina Stadium, where several thousand people had gathered for a concert following the traditional military parade held to mark National Day

ANTANANARIVO: At least 16 people were crushed to death and dozens injured in Madagascar on Wednesday at a stadium hosting national independence day celebrations in the capital Antananarivo.
The bodies of sixteen victims, including three children, were stored at the mortuary of HJRA hospital in the city, AFP journalists said.
Hospital director Oliva Alison Rakoto had earlier reported 15 dead and 80 wounded.
According to witnesses at the hospital, the accident occurred in the afternoon outside the Mahamasina stadium, where several thousand people had gathered for a concert following the traditional military parade held to mark the national holiday.
At the end of a military parade, security forces opened the gates to allow spectators to leave the enclosure, causing the crowd to mass outside the stadium, witnesses said.
The police then immediately closed the gates and blocked the crowd, witnesses said, causing a deadly pile up.
“When the organizers opened the gate, we were in the front row, in the queue,” said Jean Claude Etienne Rakotoarimanana, 29, who suffered bruises from the crush.
“Suddenly people ran to get in front of us. They shoved us, some even punched us and pulled us,” he added, saying he then fainted.
In September 2018, a deadly crush killed one person and injured 30 people in similar circumstances at the entrance of the same stadium during a football match between Madagascar and Senegal.