Pakistan economic crisis: Ministers barred from flying business class, 5-star hotels stay abroad

HIGHLIGHTS

• Pakistan government bars ministers from flying in business class or staying in 5-star hotels abroad
• Earlier, government had cut the salaries of its employees
• The government had also barred purchase of luxury items and cars until next year.

At a time when Pakistan is going through a severe economic crisis, Prime Minister Shehbaz Sharif-led Pakistan government has decided to stop its ministers from flying in business class or staying in 5-star hotels abroad as part of its austerity measures. Besides that, the government expressed gratitude to the ministers for taking salary cuts, reported Bloomberg.

"This is the need of the hour. We have to show what the time demands from us and that's austerity, simplicity and sacrifice," Sharif said in a cabinet meeting in Islamabad.

This comes as the Pakistani economy struggles to cope with rising debt, global inflation and political instability, and has been pushed to the brink of a collapse. The Pakistani government had earlier cut the salaries of its employees, further reducing the count of federal ministers and curbing the expenditure of ministries and divisions. Besides that, the government had also barred purchase of luxury items and cars until next year.

Pakistan has unveiled $764 million plan in cost-cutting measures in order to prevent a financial default and assist revive a $6.5 billion IMF loan.

Following the IMF's request to eliminate subsidies, Pakistan increased tariffs on luxury imports, boosted energy prices, and allowed the currency to fall earlier this week. In addition, the IMF suggested allowing a market-determined currency rate.

Not only did Pakistan’s economic crisis hit the common man but it also affected the army as well. Reportedly, the Pakistan Army is undergoing food shortage issues in messes due to cuts in supply.  As per media reports, the Army was unable to feed soldiers 'two times properly' amid decades-high inflation and cuts in special funds. 

Pakistan Prime Minister Shehbaz Sharif has also asked the foreign affairs ministry to cut the number of foreign missions, and reduce offices and staff, amid its implementation of austerity measures. Pakistan may also cap discretionary grants, and secret service funds of the Inter-Services Intelligence (ISI) and Intelligence Bureau (IB).

Citing ‘deliberate policy mischoices’ Murtaza Syed, former deputy governor at Pakistan's central bank SBP had earlier said that Pakistan’s economic collapse did not happen just by accident but was sown by three major forces - guns, babies, and China.

Also Read: Pakistan economic crisis: State Bank of Pakistan may hike rates by 200 bps