Pakistan finance minister discusses energy, tax reforms with senior World Bank official

Pakistan Finance Minister Muhammad Aurangzeb in a meeting with World Bank’s Regional VP for South Asia, Martin Raiser in Washington on April 19, 2024. (Photo courtesy: @Financegovpk/X)

• Pakistan has vowed to broaden its tax base, reform energy sector and privatize loss-making state-owned entities
• Pakistan’s finance minister is in Washington to attend spring meetings by the International Monetary Fund, World Bank

KARACHI: Pakistan’s Finance Minister Muhammad Aurangzeb underlined the government’s resolve to carry out reforms in the energy and tax sectors in his meeting with a senior World Bank official this week, the finance ministry said on Saturday, as Islamabad grapples with an economic crisis amid surging inflation and low foreign exchange reserves.
Reeling from a macroeconomic crisis, Pakistan has assured international financial institutions and bilateral partners it would take concrete measures to broaden its tax base, carry out reforms in the energy sector and overhaul loss-making state-owned enterprises (SOEs).
Aurangzeb has been in Washington since last week to participate in spring meetings organized by the IMF and World Bank. His tour is an important one for the South Asian country as Pakistan’s ongoing nine-month, $3 billion loan program with the International Monetary Fund (IMF) designed to tackle its balance-of-payments crisis, expires this month.
Th Pakistan finance minister met with Martin Raiser, the World Bank’s regional vice president for South Asia, on Friday to discuss the government’s economic reforms.
“Underlined the reform thrust of the government in the areas of energy, tax reforms and SOEs,” the finance ministry said. “Informed that government was pursuing short and long-term goals in these sectors.”
Aurangzeb said the World Bank’s focus on climate change, digitalization and human development aligns with Islamabad’s priorities, highlighting the government’s vision to realize the country’s true potential for economic growth.
“Agreed on the need for reforms in the agriculture sector, water management and waste-water treatment,” the ministry said.
The development came amid Pakistan’s efforts to seek a new three-year, multi-billion-dollar bailout program from the IMF. The finance minister has expressed his hopes that the outline of the new program will be agreed next month. 
Separately, Aurangzeb met with President of the Asia Infrastructure Investment Bank (AIIB), Jin Liqun, in Washington DC and told him that broadening the tax base, fixing the energy sector, and undertaking SOE reforms were key priorities of the government.
He apprised the AIIB president of Pakistan’s positive economic indicators, including improving foreign exchange reserves, a stable currency, declining inflation rates, and a surging stock market.
“Muhammad Aurangzeb reaffirmed Pakistan’s commitment to continue working closely with AIIB on the infrastructure development of the country,” the state-run Radio Pakistan broadcaster reported.
In his meeting with Makhtar Diop, managing director of the International Finance Corporation (IFC), Aurangzeb expressed gratitude to the IFC for its support in outsourcing the Islamabad airport, which he said would be followed by similar initiatives in Lahore and Karachi.
“He noted with satisfaction the uptick in IFC activities in the country and requested the corporation’s support in assisting the government in shifting its Public Sector Development Program (PSDP) to PPP (Public-Private Partnership) mode,” the report read.
The finance minister also met with Brent Neiman, the US Department of Treasury’s deputy under-secretary for international finance, and briefed him on Pakistan’s improving economic indicators in the wake of the $3 billion stand-by arrangement with the IMF.