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

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.


Pakistan couple arrested for allegedly murdering seven-year-old maid

Updated 9 min 32 sec ago

Pakistan couple arrested for allegedly murdering seven-year-old maid

  • Hassan Siddiqui and his wife employed Zohra Bibi at their home in a middle-class suburb of Rawalpindi
  • Some 8.5 million people — including many children — are employed as domestic workers in Pakistan

RAWALPINDI, Pakistan: A Pakistan couple have been arrested for allegedly murdering their seven-year-old maid after she was blamed for letting a pet bird escape, police said, the latest case of violence against child domestic workers in the country.
Hassan Siddiqui and his wife employed Zohra Bibi at their home in a middle-class suburb of Rawalpindi, near the capital Islamabad, to care for their son of a similar same age.
“The poor girl was subjected to torture by Siddiqui and his wife who accused her of freeing one of the four pet Macao parrots,” investigating officer Mukhtar Ahmad said on Thursday.
“Siddiqui kicked her in the lower abdomen which proved fatal.”
Some 8.5 million people — including many children — are employed as domestic workers in Pakistan, according to the International Labour Organization.
Theoretically it is illegal to employ anyone under the age of 15, but it remains common practice.
Zohra was taken to hospital by the couple on Sunday, but died the following day. The incident was reported to the police by staff at the hospital.
The young girl’s body was handed over to her parents, who live in Muzaffargarh, near the city of Multan, more than 500 kilometers away from where she was working.
Human rights minister Shireen Mazari confirmed the arrests in a tweet and said the ministry was in touch with police.
“Violence and physical torture against children will not be tolerated and all those involved in such incidents will be dealt with,” city police chief Muhammad Ahsan Younus added.
Domestic workers frequently face exploitation, violence and sexual abuse, with Pakistan’s patriarchal and rigid social-class structure leaving them without a voice.
Children are particularly vulnerable, and Bibi’s case is the latest in a growing number of incidents involving minors.
In December 2018, the rising number of abuse cases led the provincial legislature in Punjab to set regulations for the employment of domestic workers, which theoretically grants them rights such as sick leave and holidays.