Islamabad: The government has accepted a major condition imposed by the IMF. According to sources, the IMF has stipulated that the government will no longer establish new Special Economic Zones (SEZs) or Export Processing Zones (EPZs), nor will it grant additional incentives to existing zones after their current terms expire.
This condition will adversely affect the government’s plan to establish an Export Processing Zone on the land of Pakistan Steel Mills.
Government sources told the media that this condition will apply to the federal government as well as the four provincial governments. However, Khyber Pakhtunkhwa (KP) has refused to comply with this condition.
The IMF’s condition highlights its influence over the country’s economic policies. This will not only impact the nation’s economic development but also hinder efforts to attract Chinese industries to economic zones.
Despite the government’s fulfillment of various IMF conditions, including imposing heavy taxes amounting to 1.8 trillion rupees and increasing electricity prices by 51%, it has still been unable to secure a $7 billion bailout package from the IMF.
KP’s Finance Advisor, Muzammil Aslam, defended the rejection of the ban on establishing SEZs, stating that the expansion of industries is a provincial matter, and setting up industrial zones is crucial for development in underdeveloped regions like KP.
The IMF cannot dictate terms in this matter, Aslam mentioned in an interview with the media. It is worth noting that last fiscal year, the government provided 7 billion rupees in incentives to Special Economic Zones.