Salaries cut, unnecessary trips prohibited as Pakistan PM Shahbaz unveils austerity steps

Pakistan's government will cut back allowances and travel expenses of ministers and advisers as part of an austerity drive that will save it Rs200 billion ($766 million) a year, Prime Minister Shahbaz Sharif said on Wednesday.

The belt tightening comes as Islamabad — which is facing a balance of payment crisis — thrashes out a deal with the International Monetary Fund (IMF) to secure funds worth $1 billion which have been pending since late last year over policy issues.

Shahbaz said all federal ministries and government offices have been directed to reduce expenditure by 15 per cent and that he had asked his ministers and advisers to forgo salaries, allowances, luxury cars, foreign trips and business class travel. Ministers agreed to the measures voluntarily, he said.

"These austerity measures will save us Rs200 billion annually," Shahbaz told a news conference in Islamabad.

List of the austerity measures:

• All federal cabinet members, advisers and special assistants to forgo salaries and other privileges
• All cabinet members to pay their own utility bills
• All cabinet members to return all luxury vehicles which will be auctioned
• Only one security vehicle to be provided to cabinet members when needed
• Cabinet members and government officers to travel in economy for domestic, foreign trips; support staff not permitted to tag along
• Cabinet members to not stay in five-star hotels during foreign visits
• All division, departments, subordinates and other government entities under the federal government to slash current expenditure by 15pc
• Purchasing luxury items, all types of vehicles banned till June 2024
• Official vehicles being used by government officers availing monetisation scheme will be recalled
• Security vehicles will no longer be provided to government officers
• Teleconferencing will be promoted to reduce traveling expenses
• No administrative unit or division or subdivision to be created for the next two years
• “Single treasury account” to be established
• Offices to open at 7:30am during summer
• Government employees to not be allotted more than one plot
• Only one dish will be served at all government events

The South Asian nation hopes to secure funds from the IMF soon, Shahbaz said, adding the stringent measures were part of the requirements the lender had asked Pakistan to fulfil before finalising a deal.

Talks between Pakistan and the IMF are due to conclude this week, officials say.

Before the talks the IMF had asked Pakistan to take a host of prior actions, which included withdrawal of subsidies, hiking energy tariffs, and raising extra revenues.

Reuters