Islamabad, Dec. 10 (Reuters): Pakistan’s new civilian government, commanding only a wafer-thin parliamentary majority, promised today to cut utility and food prices and said this would not affect stringent IMF budgetary targets.
Prime Minister Mir Zafarullah Khan Jamali’s pledge at his first Cabinet meeting to improve living conditions for the poor could help boost his popularity, but it is unlikely to please international lending agencies.
“The Prime Minister very clearly stated that we want to give relief to the poor man,” information minister Sheikh Rasheed Ahmad told a news conference after the meeting.
“This includes electricity, gas, wheat flour, edible oil and sugar, items of daily use... we will reduce them to the extent we can afford to do.”
He said the price of a unit of electricity would be cut 0.12 rupees with immediate effect.
For three years, the military government of President Pervez Musharraf strictly adhered to targets set by the International Monetary Fund and World Bank to cut state subsidies and increase utility charges.
Musharraf handed over executive control to Jamali last month after the first general election since the military seized power.
Ahmad dismissed the suggestion that the government plans would upset the IMF and World Bank. “We are an elected government, we will talk to them,” he said.
He said the finance ministry would carry out a thorough study to see what level of reductions were possible without jeopardising budgetary targets.
A senior finance ministry official said the international financial institutions were more concerned with the overall budgetary targets and would not object to “micro decisions”.
IMF and World Bank officials were unavailable for comment.
Jamali has retained former finance minister Shaukat Aziz as his adviser, a move hailed by the investors as a sign that donor-driven economic reform policies will not change.
More than 450 Pakistani women or girls were killed by relatives this year in socalled “honour killings,” and at least as many were raped, a rights group said.
The private Human Rights Commission of Pakistan said this year “has seen an alarming deterioration in the rights situation for citizens.”