Pakistan's Bold Move: 150,000 Jobs Cut and Six Ministries Dissolved in IMF Deal
In a dramatic bid to reduce administrative costs, Pakistan announced on Sunday that it will eliminate approximately 150,000 government jobs and dissolve six ministries, merging two others, as part of reforms tied to a $7 billion loan agreement with the International Monetary Fund (IMF).
Minister for Finance Muhammad Aurangzeb, speaking to the media upon his return from the US, confirmed that a final program with the IMF has been established, emphasizing the importance of implementing policies to ensure this is indeed the last such arrangement for Pakistan.
The IMF approved the assistance package on September 26, releasing over $1 billion as the initial tranche, contingent on Pakistan’s commitment to cut spending, boost the tax-to-GDP ratio, and broaden the tax base to include non-traditional sectors like agriculture and real estate. The government is also tasked with limiting subsidies and transferring some fiscal responsibilities to provincial authorities.
Aurangzeb highlighted ongoing “right-sizing” efforts within ministries, with plans to implement the closure of six ministries and the elimination of 150,000 positions. He also noted a surge in tax revenues, reporting an increase from 1.6 million to 3.2 million taxpayers, thanks to 732,000 new registrations this year alone.
Furthermore, he announced the abolishment of the non-filers category, stating that those who do not pay taxes will no longer be able to purchase property or vehicles. The minister expressed optimism about the economy’s trajectory, citing increased foreign exchange reserves, significant growth in national and IT exports, and a surge in investor confidence as key indicators of progress.
