THE IMF’s Executive Board has approved the third review of Pakistan’s 37-month Extended Fund Facility (EFF), adding 11 new conditions and raising total structural conditionality to 75. In addition, there are 30 standing commitments, bringing total compliance requirements to 105. These span fiscal, governance, monetary, foreign exchange, financial, energy, state-owned enterprises, trade, investment, deregulation, social protection, and anti-corruption measures — many extending well beyond the IMF’s core mandate and institutional competence. The sheer breadth of this conditionality now touches almost every sphere of economic activity and governance, steadily eroding Pakistan’s policy autonomy and economic sovereignty.

Parliament is required to approve the FY27 budget in line with the IMF’s stringent and intrusive policy advice and targets, effectively reducing the legislature to a rubber stamp. Pakistan is to phase out fiscal incentives for Special Economic and Technology Zones, publish an action plan to mitigate corruption vulnerabilities in government departments, amend the NAB ordinance to enhance the appointment process for NAB chairman, publish asset declarations of civil servants, amend the Companies Act to improve corporate governance structures, adopt a national policy for sugar market liberalisation, and lift restrictions on commercial import of used cars.

Equally worrisome is the IMF’s approach to energy taxation amid persistently high inflation. Governments facing high energy costs ordinarily reduce or suspend fuel taxes to shield citizens from cost-of-living pressures. In Pakistan, the opposite has occurred: petrol prices are now carrying roughly Rs145 per litre in taxes and levies — nearly one-third of what consumers pay at the pump. These levies have intensified inflation, raised........

© Dawn