Belt-tightening ordered to avert economic storm

Prime Minister Shehbaz Sharif has asked his ministers and advisers to forego their salaries, benefits and luxury cars and fly economy class as part of an austerity drive aimed at saving the government Rs200 billion a year. The belt-tightening comes as the government is trying to resume a stalled loan programme of the International Monetary Fund (IMF) to secure funds worth $1 billion. The premier said an agreement with the Fund was in its final stages. — Rehan Ahmed. The expenditure cuts are part of an effort to stave off an economic meltdown as the country is facing a balance-of-payments crisis, State Bank’s foreign exchange reserves have fallen below a three-week import cover, and inflation remains consistently high. “Far-reaching results of these (austerity) measures will come to the fore. We will save around over Rs200 billion due to such measures,” the prime minister told reporters after a cabinet meeting on Wednesday. Flanked by nine federal ministers, the premier said that although these measures would not give any significant relief to already inflation-hit people, they would give them a sense that the government realised their pain and agony. He said these measures would be implemented immediately, adding that “additional steps” would be taken at the time of the budget for the new fiscal year. Some of the decisions taken in the federal cabinet meeting included the withdrawal of salaries, security vehicles, perks and privileges of cabinet members; a ban on the import of luxury items and official vehicles for over a year; fewer foreign visits; a ban for cabinet members on staying in five-star hotels; only one official plot for a government employee; selling spacious houses given to government officers; the opening of government offices at 7:30am to save electricity and gas, etc.