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  • Writer's pictureShahida Kauser Farooq

Pakistan needs realistic austerity measures


Shahida Kauser Farooq

As the dust settles following the February 8 general elections in Pakistan, with a familiar federal setup resuming power amidst severe economic critiques and a staggering inflation peak of 38% in May 2024, the pressing need for stringent austerity measures, as pledged with a 15% expense cut in February 2023, becomes undeniably crucial to alleviate the national exchequer's burden and stabilize the economy.

In the aftermath of the February 8 general elections in Pakistan, and with new governments having taken charge in respective provinces and at the federal level, almost the same setup has taken charge of the country at the federal level, which came into power after the no-confidence motion in April 2022. This setup has been criticized for its infamous decisions in economic sectors, resulting in all-time high inflation in the country, which peaked at 38% in May 2024. 

In February 2023, the Pakistan government announced that it would cut its expenses by 15% to help reduce the burden on the national exchequer. Then Prime Minister Shehbaz Sharif asked his ministers and advisers to fly economy class and forgo luxury cars and their salaries as part of an austerity drive that will save the government $766 million a year. "These austerity measures will save us 200 billion rupees annually," Sharif told a news conference in Islamabad. He said all federal ministries and government offices had been directed to reduce expenditure by 15% and that he had asked his ministers and advisers to forgo salaries, allowances, luxury cars, foreign trips, and business class travel. Though these decisions looked lucrative in a country not famous for cutting its government expenses, unfortunately, they did not bring any positive change to its economy.

Since Shehbaz Sharif has again taken charge as the Prime Minister of Pakistan with a much better mandate and support, it is high time that he turned to austerity and simplicity to showcase the government's resolve to solve the country's economic woes. Austerity measures are often adopted to stabilize the economy and restore investor confidence. Austerity usually involves cuts to public sector wages and employment.

Here, we suggest some realistic small steps for austerity and simplicity that may bear significant results in overcoming our economic crisis.

1-   Ban on luxury dinners and lunches.

The government should discourage hosting luxury dinners and lunches, which have become a norm in the public sector. These are only showpiece networking events that cost hundreds of thousands of rupees for nothing. We need to change the culture to help reduce the burden on a commoner's pocket.

2-   Reducing the number of government vehicles

A federal minister in Pakistan keeps a convoy of at least 3 to 4 luxury cars to roam around during and even after office hours. Similarly, people in the administration are used to having dozens of vehicles for official and personal use. This trend should be discouraged, and the number of vehicles assigned to the ministers, administrators, and other sectors should be curtailed. This will help save fuel costs for the national exchequer and reduce air pollution, another big issue in the country.

3-  International tours

Pakistan's prime ministers and presidents are known for touring other countries with big delegations, which burdens the national exchequer. Mian Shehbaz Sharif should not only have a cut on the number of such tours but also should shrink the size of the delegations to show some seriousness in solving the economic problems of the country.

4-  Saving the energy

Energy costs are peaking in the country with every coming day and have reached the highest level in the region. The government sector is famous for using energy resources in abundance. Buildings like the President's house, Prime Minister's, Chief Minister's houses, governors' houses, and assemblies’ buildings use electricity resources indiscriminately. The Prime Minister should have an exclusive check on this trend.

Pakistan's adoption of austerity measures will reflect a commitment to addressing economic challenges and achieving fiscal sustainability. While these measures may be necessary for long-term stability, careful planning and consideration of their impact on various sectors are crucial.

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