2
3
President's Message
From the Desk of Chief Editor
Exclusive Interviews
5 8
Ms. Esther Perez Ruiz
IMF Resident Representative
in Pakistan
13 Corporate Leaders of ICMA
Focus Section
14
IMF, Poli cal Will, And Declining
Investments in Pakistan -
When will the Saga end?
By Muhammad Azfar Ahsan
17
IMF Partnership and Pakistan's
Economic Future
By Muhammad Azam, ACMA
20
Pakistan under IMF Program:
In Search of a Sustainable Solu on
By Dr. Faisal Sultan Qadri
22
Fostering growth under
IMF programme
By Huzaima Bukhari, Dr. Ikramul Haq
and Abdul Rauf Shakoori
24
Char ng the Course to Self-Sufficiency:
Strategies Beyond IMF Dependency
By Muhammad Ahmed, ACMA
28
IMF and Taxa on Reforms
By Muhammad Ammad Ansari, ACMA
31
Naviga ng Pakistan's Economic
Challenges: From IMF Dependency
to Strategic Solu ons
By Jalal Ahmad Khan, FCMA
34
IMF and Energy Sector Reforms:
Case Study of Pakistan
By Hasnain Imam, ACMA
May-Jun
2024
Our Next
Issue Deadline for submission of articles is May 25, 2024
/icmapak
Inside this Issue
Volume : 33.2 l Mar-Apr 2024
11
Mr. Atif Ikram Sheikh Dr. Hafiz A. Pasha
President, The Federation of Pakistan Former Federal Minister for Finance and
Chambers of Commerce & Industry (FPCCI) Professor Emeritus Beaconhouse
National University (BNU) Lahore
Articles Section
61
Organiza onal Excellence
through Diversity
By Sohailuddin Alavi
37
Managing Economic Challenges:
Breaking the Cycle of Dependence
By Mohammed Naveed Jamal, ACMA
Top Technology Trend
64 By Intzar Hussain Rana, FCMA
Industry 4.0 Transforma on
40
Exploring Alterna ves to IMF Support:
Diversifying Economic Strategies
By: Saeed Akhtar, FCMA
Sector Brief
43
IMF — Not a Panacea but a Medicina
68 of Health Sector in Pakistan
By Syed Shamim Ahmed, FCMA Sector Brief & SWOT Analysis
46
Pakistan and IMF Trignometery By Research & Publica ons Department, ICMA
By Khizar Hayat, FCA
Other Features
49
Naviga ng the Winds of Change:
70
A Strategic Guide Amidst SIFC's Strategic Policy Ini a ves to
IMF-Supported Reforms Enhance Investment in Pakistan
By Research & Publica ons Department, ICMA
By Rukhshinda Mehar and
Dr. Saqlain Sher
53
IMF Influence: A Diagnosis of Pakistan's
Economic Dependency and the Role
73 Economy News
of Chartered Management Accountants
By Abrar Hussain, ACMA
74 Regulatory News
55
The Impact of IMF Lending on
Developing Na ons: Case Studies from
76
Glossary of Management
Ghana, Serbia, Ireland, and Jamaica
By Research & Publica ons Department, ICMA Accoun ng Terms
Modernizing Agriculture DISCLAIMER: The Chartered Management
Accountant is published bi-monthly. Views or
for Better Food Security opinions expressed by the authors of the articles
published in this Journal do not necessarily reflect
the views of the publisher and/or the Editor.
/icmapdotpk /company/icmap
 President's
Message
Dear Esteemed Members and Colleagues,
President's

In the latest issue of the CMA Journal, we focus on the theme of 'Pakistan, IMF, and
Message

the Way Forward.' This is a critical time for our nation, as we navigate a
challenging economic landscape and seek avenues for sustainable growth and
development. The recent visit of Finance Minister Mr. Muhammad Aurangzeb to
the IMF has instilled hope for a larger and longer program to support Pakistan's
economic revival. This potential program would provide crucial assistance for
stabilizing our economy and fostering growth.
While the IMF bailout package is essential for economic recovery, the new
government must act promptly to restructure our taxation and energy sectors.
These reforms are vital to generate revenue, reduce subsidies, and create a more
stable economic environment. It is imperative to bring individuals and businesses
under the tax net who are either not paying taxes or paying less than their
potential. Expanding the tax net to include the real sector, small businesses, and
the retail sector will enhance our economic foundation and ensure a fairer
distribution of the tax burden.
Additionally, the recent visits of the foreign minister of Saudi Arabia and the
Iranian president to Pakistan are promising developments for our international
relations. The memorandums of understanding signed with Saudi Arabia offer
deepened financial relations and present investment opportunities in various
sectors such as hospitality, aviation, and mining. The agreement with Iran to
increase bilateral trade volume further solidifies our economic partnerships and
opens avenues for mutual growth.
At this juncture, it is imperative that our political forces unite and work together
for the betterment of our country in the best national interest. We must seize this
opportunity to demonstrate that Pakistan is a responsible and reliable partner on
the global stage, capable of making sound economic and political decisions that
will benefit its citizens and allies alike. ICMA stands ready to provide the
government with technical and professional support in policy formulation and
the implementation of cost-effective project solutions. Our collective efforts will
pave the way for a more resilient and prosperous Pakistan.
Let us move forward with unity and determination for a stronger future.

Shehzad Ahmed Malik, FCMA

President ICMA

2 ICMA’s Chartered Management Accountant, Mar-Apr 2024

From the Desk of

Chief Editor
Dear esteemed readers,

I am delighted to present the March-April 2024 edition of the Chartered

Chief Editor
Management Accountant Journal, dedicated to the theme of 'Pakistan, IMF
& the Way Forward.'

First, I want to express my sincere gratitude to Ms. Esther Perez Ruiz, the IMF
Resident Representative in Pakistan, for her insightful interview shedding
light on the IMF's engagement with Pakistan to achieve economic stability.
My thanks also extend to Mr. Atif Ikram Sheikh, President of the Federation
of Pakistan Chambers of Commerce & Industry (FPCCI), and Dr. Hafiz A.
Pasha, a distinguished economist and former Minister of Finance in Pakistan,
for their exclusive contributions to this issue.

In our Focus Section, we appreciate Mr. Azfar Ahsan, former Minister for
Investment, for his in-depth article on 'IMF, Political Will, and Declining
Investments in Pakistan: When Will the Saga End?' Out of the 15 focus
articles, nine have been authored by ICMA members, showcasing their
expertise and insight.
From the Desk of

Additionally, our Research & Publications Department has crafted a

comprehensive study titled 'The Impact of IMF Lending on Developing
Nations: Case Studies from Ghana, Serbia, Ireland, and Jamaica,' offering
valuable perspectives on the subject. This issue also features an in-depth
Sector Brief and SWOT analysis on Pakistan's Health Sector.

This issue underscores our commitment to fostering meaningful discussions

on key economic challenges and opportunities facing Pakistan today. By
engaging with a range of experts and professionals in these areas, we aim to
provide you with a deep appreciation of the complex dynamics at play in
our national and global economy.

Your participation and insights are crucial to the continued success of our
journal and the accounting profession. We look forward to hearing your
thoughts and encourage you to share them at rp@icmap.com.pk.

Ather Saleem, FCMA

Vice President ICMA &
Chairman, Research and Publica ons Commi ee

ICMA’s Chartered Management Accountant, Mar-Apr 2024 3

Research & Publications Committee
Chairman MEMBERS

Dr. Salman Masood Muhammad Muhammad

Ather Saleem, FCMA FCMA Sajjad, FCMA Azhar Khan, FCMA

Chief Editor
Ather Saleem, FCMA
Vice President ICMA and
Chairman, Research and Publica ons Commi ee, ICMA

Editorial Board
Dr. Salman Masood Sheikh, FCMA
Professor / Dean
Superior University, Lahore
Syed Babar Ali, FCMA Farough Ali Syed Babar Ali Tanvir Sajid
Associate Professor & Chairman, A & F
Naweed, FCMA FCMA FCMA
Department - Salim Habib University - Karachi
Tanvir Sajid, FCMA
Chief Financial Officer -
AQ Tex les (Pvt) Limited - Faisalabad
Sheikh Muhammad Shabbir, FCMA
Director Finance - Dawood University of
Engineering and Technology - Karachi
Dr. Khalid Mumtaz, FCMA
Director Leadership Development Centre
Bahria University - Islamabad
Dr. Salman Sarwat, FCMA Najaf Abbas, Babar Saleem Tasaduq Ejaz
Associate Professor Benazir Bhu o Shaheed FCMA ACMA ACMA
University (BBSU)- Karachi
Abdul Rahman, FCMA
Head of Accoun ng & Treasury -
Bayer Pakistan (Pvt) Ltd., Karachi
Ghulam Farid, ACMA
Assistant Professor- Government Graduates
College of Science - Lahore
Prof. Dr. Muhammad Azeem Ahmad
Head, Na onal Business School -
The University of Faisalabad Muhammad Ahmed Mohammad Abdur
Dr. Arshia Hashmi ACMA Rub Khan, ACMA
Associate Professor - Faculty of Management
Sciences, University of Central Punjab, Lahore
Correspondence Address
Aamir Ijaz Khan, FCMA
Execu ve Director, ICMA Ins tute of Cost and Management Accountants of Pakistan
Editor ST-18/C, ICMAP Avenue, Block-6, Gulshan-e-Iqbal, Karachi-75300, Pakistan.
Shahid Anwar Ph: + 92 21 99243900 Ext. 117 / 107 | Fax: + 92 21 99243342
Director, Research and Publica ons, ICMA Email: rp@icmap.com.pk | URL: www.icmainterna onal.com

4 ICMA’s Chartered Management Accountant, Mar-Apr 2024

Exclusive Interview
Exclusive Interview

Ms. Esther Perez Ruiz

IMF Resident Representative in Pakistan

“ Pakistan needs to significantly mobilize

revenues to create resources for much
needed social and development spending,
strengthen sustainability, and reduce
overreliance on external financing. Overall,
it is essential for Pakistan to increase the
progressivity, simplicity, and fairness of the
tax system so that those who can afford it
“
contribute their fair share
ICMA: Please briefly share the contribution of the
IMF in supporting Pakistan on economic policies
and reforms?
Esther Perez Ruiz: Let me start by thanking ICMA
International for the opportunity to offer, on behalf of the
IMF, our perspective on Pakistan’s present economic
situation and potential opportunities.
The IMF is here to help support Pakistan’s efforts to
realize its potential through sound economic policies and
reforms. These are needed to reduce Pakistan’s structural
vulnerabilities that make it susceptible to high economic
volatility and low growth. Our partnership with the
government seeks to create an environment to
strengthen private sector activity and create investment
and job opportunities, as well as to mobilize resources for
critical social and development spending to make
concrete progress toward the Sustainability and
Development Goals. For example, Pakistan’s young labor
force is an unrealized strength given high
unemployment, informality and economic volatility. If
mobilized properly, they can contribute to higher living
standards (per capita income).
The recent period of Pakistan’s 2023 Stand-by
Arrangement (SBA) shows some of the benefits of sound
policy making supported by a Fund-supported program.
After a period of economic turbulence in FY2023
stemming from a difficult external environment and
policy slippages, the caretaker government and State
Bank of Pakistan have brought about a renewed sense of
economic stability. Over the past few months, Pakistan’s
economic and financial position has improved with
growth and confidence gradually recovering on the back
of prudent fiscal management with due protection of the
social safety net, a monetary stance geared toward
lowering inflation and pursuing exchange rate flexibility
and transparent FX market operations, and the timely
adjustment of power and gas tariffs to shore up energy
sector viability while protecting the vulnerable through
progressive tariff structures. Continuing these policies
with deeper structural reforms will help Pakistan move
from stabilization to stronger more inclusive growth.

ICMA’s Chartered Management Accountant, Mar-Apr 2024 5


Looking ahead, the authorities
have also expressed interest in a
successor medium-term
Fund-supported program,
permanently resolving Pakistan’s
fiscal and external sustainability
weaknesses and laying the
foundation for strong,
sustainable, and inclusive growth
In addition to supporting sound policy making, the IMF
supports Pakistan by building technical capacity in
public institutions. During the caretaker period, we
have been working closely with the authorities and
collaborating with other international organizations
and development partners on key capacity
development initiatives to durably raise revenue and
improve the quality of spending to tackle social and
climate-related challenges.
ICMA: How do you see the current economic
situation in Pakistan, especially the key challenges
facing the economy?
Esther Perez Ruiz: Pakistan’s economic and financial
position has strengthened over the course of this fiscal
year, with gradual disinflation underway and external
pressures easing on the back of prudent policy
management and the resumption of inflows from
multilateral and bilateral partners. However, sustained
reform efforts are needed to address Pakistan’s
deep-seated economic vulnerabilities amidst the ongoing
challenges posed by elevated external and domestic
financing needs and an unsettled external environment.
To cement the stability established over the past 9
months, consistent sound policy making needs to
continue. In this vein, the authorities are determined to
deliver the FY24 general government primary balance
target of 0.4 percent of GDP, continue efforts towards
broadening the tax base, and implement timely power
and gas tariff adjustments so that there is no
accumulation of circular debt (CD) in FY24, while the
vulnerable are protected through the progressive tariff
structure applied to energy. The State Bank of Pakistan
remains committed to maintaining a prudent monetary
6 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Exclusive Interview
policy to lower inflation while also ensuring a flexible
exchange rate to buffer shocks and rebuild reserves.
Looking ahead, the authorities have also expressed
interest in a successor medium-term Fund-supported
program, permanently resolving Pakistan’s fiscal and
external sustainability weaknesses and laying the
foundation for strong, sustainable, and inclusive growth.
The IMF could support a program which cements
credibility through sound policy making and robustly
tackles long-standing structural challenges.
ICMA: Do you think FBR restructuring is vital for
boosting the tax revenues?
Esther Perez Ruiz: Pakistan needs to significantly
mobilize revenues to create resources for much needed
social and development spending, strengthen
sustainability, and reduce overreliance on external
financing. Overall, it is essential for Pakistan to increase
the progressivity, simplicity, and fairness of the tax
system so that those who can afford it contribute their
fair share. This requires efforts on both tax policy (e.g.,
increasing taxation of agriculture and property) and
revenue administration. Strengthening the FBR and its
governance is critical to achieving these goals. We
welcome the focus on digitalization to effectively expand
the tax base. Similarly, building a culture for enhanced
transparency, accountability and separation of the tax
collections and policy functions, as intended by the
restructuring plan under consideration, are steps in the
right direction.
ICMA: Pakistan’s Debt service requirements is
estimated at US$25 billion in 2023–24. Do you think
debt rescheduling is the only option left for the
Government?
Esther Perez Ruiz: It all depends on the authorities’
taking policy and reform actions commensurate with
addressing Pakistan’s economic imbalances.
Consistent implementation of
sound policies should ultimately
lead to higher public and private
sector savings but also attract
foreign financing for productive
investments at lower cost that can
foster private-led growth and the
build-up of reserves
Exclusive Interview
Stronger focus on good
governance, transparency, and
the institutional environment
that respects the rule of law
are critical for economic
stability and growth.
Professional accountants have
a particular important role to
play in this respect
Consistent sound policy making and strong ownership of
long-delayed reforms can enable Pakistan to protect
macroeconomic stability and bolster growth, access the
financing from external partners, and eventually return
to the market. The Pakistani authorities can develop such
a program, with key efforts that include (i) strengthening
public finances and broadening the tax base (including
to undertaxed sectors) to make the tax system simpler,
fairer and more efficient; (ii) restoring the energy sector’s
viability by accelerating cost reducing reforms which
should allow CD-neutral tariffs to decline; (iii) monetary
policy aimed at returning inflation to target, with a
flexible FX market supporting external rebalancing and
the rebuilding of foreign reserves; and (iv) establishing an
environment conducive to private-led activity through
the removal of distortionary protection, advancement of
SOE reforms to improve the sector’s performance, and
the scaling-up of investment in human capital.
ICMA: How Pakistan can become a self-reliant country
so that it can reduce its dependence on foreign loans?
Esther Perez Ruiz: The policy and reform areas already
discussed are central to reducing reliance on foreign
loans, but also making the foreign loans more productive
and affordable. Consistent implementation of sound
policies should ultimately lead to higher public and
private sector savings but also attract foreign financing
for productive investments at lower cost that can foster
private-led growth and the build-up of reserves. Key
policy goals in this regard include:
 Reducing the crowding out of private investment by
the government by creating fiscal surpluses,
supported by broader and fairer tax revenue.
Improving the quality of public investment and SOE
reforms will reduce the fiscal cost of the existing
ICMA’s Chartered Management Accountant, Mar-Apr 2024
inefficiency of this sector and improve the quality of
public service provision to the private sector.
 Establishing a competitive and level playing field
with strong public sector governance, free of
preferential treatment, to further encourage private
savings and private investment.
Allowing a fully-flexible exchange rate that promotes

export-oriented activities, and broadening reforms to
reduce energy sector costs while also allowing a
reduction in tariffs for businesses.
ICMA: What new measures the Pakistani policymakers
must take to enhance the competitiveness of the
economy?
Esther Perez Ruiz: Exports as a share of GDP have fallen
markedly over the past two decades. Boosting export
competitiveness is essential to reducing external
vulnerabilities, reversing Pakistan’s productivity decline,
and increasing its growth potential. In addition to the
policies already discussed, the agenda requires reducing
any anti-export bias by implementing the national tariff
policy and gradually reducing import duties in Pakistan
which, averaging 20 percent, remain amongst the
highest in the world and directly harm exporters by
incentivizing import substitution.
The modernization of export promotion schemes is also
necessary to reduce reliance on unconditional subsidies
(e.g., Export Finance Scheme and the Drawback of Local
Taxes and Levies). These schemes have proved costly for
taxpayers and with limited impact on exports. In this
vein, we welcome the authorities’ recent actions to phase
out SBP’s involvement in the refinancing schemes and
task the Ex-Im Bank with allocating subsidized lending
schemes against budget resources in a fairer and more
transparent manner.
ICMA: Any special message to our readers, especially
professional accountants?
Esther Perez Ruiz: With a large domestic market, young
labor force, an entrepreneurial orientation, a privileged
location, and extensive donor support and market
access, Pakistan has the potential to become a dynamic,
emerging market economy. To unleash this potential,
there is a need for sustained and consistent
implementation of good policies oriented to maintaining
macroeconomic stability and putting in place the
conditions for private-led growth. In this respect,
stronger focus on good governance, transparency, and
the institutional environment that respects the rule of
law are critical for economic stability and growth.
Professional accountants have a particular important role
to play in this respect.
The Editorial Board thanks Ms. Esther Perez Ruiz, IMF Resident
Representative in Pakistan for sparing from her precious time to give
exclusive interview for Chartered Management Accountant Journal.
7
Exclusive Interview Exclusive Interview
Exclusive Interview

Mr. Atif Ikram Sheikh

President, The Federation of Pakistan
an
Chambers of Commerce & Industry (FPCCI)
PCCI)

“ To fix the recurrent economic crisis,

sis,
it is crucial to look towards nations like
Turkiye and Indonesia, which have
ke

effectively navigated away from IMF

dependencies, as models for
successful policy-making
“
ICMA: How does FPCCI assess the current economic
situation in Pakistan and its recent engagements with
the IMF?
President FPCCI: The incompatibility between the IMF
programs and the evolving dynamics of Pakistan's
economy has emerged as a significant challenge with
most of the IMF reforms appearing counterproductive
such as curbing supply-driven inflation through
persistent raises in the policy rate and adoption of a
flexible exchange rate which only increased the volatility
of the Pakistani rupee and have adversely impacted the
economic growth. FPCCI has always emphasized
building a consensus on the long-term economic plan
with clear objectives and economic targets, specifically
tailored to Pakistan's economic context. To fix the
recurrent economic crisis, it is crucial to look towards
nations like Turkiye and Indonesia, which have effectively
navigated away from IMF dependencies, as models for
successful policy-making.
ICMA: As per FPCCI, what are the implications of IMF
conditions on Pakistani businesses?
President FPCCI: The engagement of Pakistan with the
IMF typically necessitates economic reforms that impact
businesses including contractionary monetary policy,
removal of tax exemptions, adoption of a flexible
exchange rate, and increased energy tariffs. Analyzing
past IMF engagements, the average industrial growth
and GDP growth were lowered by 2.27 and 1.44
percentage points respectively during periods when
Pakistan underwent IMF programs as compared to
periods without IMF programs. The FPCCI has raised
concerns over these reforms increasing operational costs
for businesses, challenging their competitiveness both
domestically and internationally.
ICMA: What strategies does FPCCI propose for
addressing Pakistan's debt burden?
President FPCCI: Addressing Pakistan's debt burden
involves strategic and prudent debt management. The
FPCCI, in its research report titled "Impact of IMF
Programs: A Context of Pakistan," proposes several
strategic measures. These include aligning monetary
policy with fiscal outcomes and reducing the policy rate
to reduce the debt servicing cost that adds on every year.
Secondly, reprofiling (shifting to long-term domestic
debt during low inflation) and restructuring of both
domestic and external debt is inevitable to mitigate the
country's escalating debt issues.

8 ICMA’s Chartered Management Accountant, Mar-Apr 2024 5

Exclusive Interview
We advocate for robust fiscal and
tax reforms aimed at stabilizing
the economy and fostering an
environment conducive to both
local and foreign investments.
For instance, joint ventures
between Pakistan and China
hold promising potential to
bolster export-oriented
Additionally, the development of bond markets would
allow corporate sectors to access other debt sources,
ultimately increasing the competition and optimizing the
cost of debt.
ICMA: What are the current challenges for businesses
in Pakistan, and how does FPCCI intend to collaborate
with the government to address them?
President FPCCI: The high inflation, steep mark-ups, and
stagnant industrial growth threatening job security,
coupled with complexities such as import restrictions
and banking issues hampering foreign exchange
transactions, the challenges are indeed daunting. These
obstacles are further compounded by a narrow tax base
and heavy reliance on borrowing, resulting in escalating
internal debts of Rs. 42.59 trillion and external debts of
Rs. 22.6 trillion in December 2023. These fiscal
imbalances, in turn, constrain resources for vital social
welfare and development programs, while the power
sector's circular debt adds to the financial strain, standing
at Rs. 2.61 trillion as of October 2023.
FPCCI is steadfast in its commitment to collaborating
closely with the government to confront these
challenges head-on. We advocate for robust fiscal and tax
reforms aimed at stabilizing the economy and fostering
an environment conducive to both local and foreign
investments. For instance, joint ventures between
Pakistan and China hold promising potential to bolster
export-oriented sectors. Our goal is to align with the
government's priorities in driving economic recovery,
alleviating poverty, and generating employment
opportunities. Together, through concerted efforts, we
can navigate these obstacles and pave the path toward
sustained growth and prosperity for Pakistan.
ICMA’s Chartered Management Accountant, Mar-Apr 2024
ICMA: How is FPCCI addressing the impact of rising
energy costs on manufacturing, particularly textiles,
and what steps are being taken to secure discounted
energy tariffs for sustaining exports?
President FPCCI: The soaring energy costs for industrial
consumers have reached unprecedented levels. If this
trend persists, businesses may be forced to resort to
drastic measures such as employee layoffs and plant
closures to maintain viability. At FPCCI, we are steadfastly
advocating for government intervention through official
correspondences, press conferences, and other avenues
to alleviate the burden of energy tariffs on industrial
consumers. One potential solution to mitigate input
costs is to explore captive power generation options
utilizing solar or wind energy. However, the current
interest rates pose a significant obstacle to implementing
this alternative.
ICMA: How can Pakistan's tax system be improved to
support business growth? What is your take on FBR
Restructuring Plan proposed by the Caretaker
Finance Minister?
President FPCCI: Efforts to enhance Pakistan's tax
system for fostering business growth involve simplifying
tax procedures, embracing digitalization, restructuring
the Federal Bureau of Revenue (FBR) to separate tax
policy and collection functions, consulting with business
representatives like the Federation of Pakistan Chambers
of Commerce and Industry (FPCCI), supporting small and
medium enterprises (SMEs) through favorable policies,
addressing industry-specific challenges, and ensuring
inclusion of business organizations in decision-making
processes. These measures aim to streamline operations,
promote transparency, curb corruption, address industry
concerns, and foster collaboration between the
government and the business community to drive
economic development and stability.
The soaring energy costs for
industrial consumers have
reached unprecedented levels.
If this trend persists,
businesses may be forced to
resort to drastic measures such
as employee layoffs and plant
closures to maintain viability
5
9

Business community and FPCCI support the
restructuring plan of the Federal Board of Revenue (FBR)
as visualized by Dr. Shamshad Akhtar, Federal Caretaker
Minister for Finance & Revenue. The underlining principle
of separation of tax policy and collection functions will
help resolve contradictions, conflict of interest and
maladministration; and, that’s why, FPCCI supports the
restructuring proposals. The bifurcation of inland
revenue and customs will streamline the operations of
FBR; and, will not only align it with international best
practices, but also remove the concerns of international
financial institutions like IMF, World Bank, and Asian
Development Bank. This is specifically important in
Pakistan’s peculiar case as the country will continue to
depend on external financing for the foreseeable future.
It is also a longstanding demand of the entire business,
industry, and trade community of Pakistan to implement
complete digitalization and transparency of FBR
operations to deal with harassment of the business
community at the hands of tax officers and unnecessary
issuance of tax notices.
ICMA: What policy changes does FPCCI suggest to boost
the competitiveness of Pakistani exports globally?
President FPCCI: In its pursuit of bolstering the export
sector, FPCCI advocates for a multifaceted strategy. This
approach involves streamlining export procedures,
improving infrastructure development, and actively
promoting exports through trade missions and
participation in international fairs. Moreover, the FPCCI
also emphasizes the critical importance of maintaining
stringent quality standards, facilitating accessible finance
for exporters, and ensuring stable policies. These
collective measures are essential for creating a conducive
environment that is favorable for export-driven growth.
Looking forward, Pakistan recognizes the urgent need to
prioritize identifying investment opportunities within its
Special Economic Zones (SEZs). Leveraging its abundant
and affordable labor force, coupled with its untapped
mineral potential, presents a significant avenue for
economic advancement. Notably, strategic partners such
as KSA, China, UAE, and Kuwait have demonstrated a
keen interest in Pakistan's mineral resources, offering
promising opportunities for collaboration and growth.
ICMA: How does FPCCI assess the effectiveness of
recent government initiatives to attract foreign direct
investment, and what more can be done?
President FPCCI: Recently, the Pakistani government
established the SIFC committee, signaling a commitment
to fostering growth across various sectors including
high-tech industries, renewable energy, agriculture,
e-commerce, logistics, value-added textiles, the food
value chain, and minerals. By prioritizing these sectors,
Pakistan aims to attract significant foreign investments
10 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Exclusive Interview
The persistently high policy
rate of 22 percent has significantly
hampered the operational
capabilities of businesses in Pakistan,
making the cost of borrowing
excessively high for the local
business community and stifling
investment and expansion plans for
businesses, especially for SMEs .
and lay the groundwork for sustainable economic
development. FPCCI's analysis of foreign direct
investment (FDI) trends over the past two decades
highlights untapped opportunities in sectors like
Electrical Equipment, Petrochemicals, Leather, Minerals
to Chemicals, Light Engineering, Warehousing, and Mass
Transit. Particularly, the chemical industry stands out for
its potential to yield billion-dollar exports with the
support of joint ventures between minerals and chemical
industries, recommended by FPCCI to the Board of
Investment (BOI). Unlocking this potential can
substantially boost economic growth by addressing the
current underinvestment and maximizing the export
value of high-quality products.
ICMA: Does the sustained policy rate of 22 percent by
the SBP for several months bode well for trade and
industry growth, particularly in addressing inflation
in the country?
President FPCCI: Obviously, not. The persistently high
policy rate of 22 percent has significantly hampered the
operational capabilities of businesses in Pakistan, making
the cost of borrowing excessively high for the local
business community and stifling investment and
expansion plans for businesses, especially for SMEs. This
financial environment has led to a situation where an
overwhelming majority of available credit, approximately
70-75%, is absorbed by the government, as banks show a
preference for lending to the government at these
elevated rates over businesses. This, along with several
other factors, has led to a situation where a mere 7% of
Pakistani firms obtain financing through formal lending
channels, as reported by the World Bank.
The Editorial Board thanks Mr. Atif Ikram Sheikh, President, The
Federation of Pakistan Chambers of Commerce & Industry (FPCCI) for
sparing from his precious time to give exclusive interview for Chartered
Management Accountant Journal.
5
Exclusive Interview

Exclusive Interview

Dr. Hafiz A. Pasha

Form Federal Minister for Finance and
Former
Professor Emeritus Beaconhouse
P
N
National University (BNU) Lahore

“ The current IMF program is

Stand-by Facility of nine months with
a loan amount of $3 billion. It has
contributed to a significant increase
in foreign exchange reserves and
helped in stabilizing the economy
“
ICMA: In your view, what role does the IMF play in ICMA: What are the major challenges facing
shaping economic reforms in Pakistan? Pakistan’s economy, especially concerning the
repayment of loans?
Dr. Hafiz A. Pasha: IMF supports Pakistan in managing a
difficult economic situation in which foreign exchange Dr. Hafiz A. Pasha: Despite the recent increase in the
reserves have fallen to a critically low level. This is foreign exchange reserves, they still remain low at under
achieved through extension of loan under a special $8 billion. This provides import cover for only one and a
facility. Disbursement of this loan is conditional on half months. The ‘safe’ level is three months.
implementing the agreed agenda of reforms and Pakistan’s annual external financing requirement is $18 to
meeting the performance criteria with the objective of $20 billion, net of likely rollovers. There has been no inflow
stabilizing the economy. of funds from private creditors this year, because of the low
ICMA: How would you assess the current IMF credit rating, despite the umbrella of an IMF program.
program, particularly in terms of the established Achieving the annual external financing requirement is
targets and their attainment? the biggest challenge today.
Dr. Hafiz A. Pasha: The current IMF program is Stand-by ICMA: How do the conditions set by the IMF impact
Facility of nine months with a loan amount of $3 billion. It Pakistan’s economic landscape?
has contributed to a significant increase in foreign Dr. Hafiz A. Pasha: The actions and reforms agreed to
exchange reserves and helped in stabilizing the with the IMF focus primarily on stabilization of the
economy. The first review was successfully completed economy by reduction especially in the current account
and the second and last review is currently under way. deficit and the budget deficit. This requires more
The IMF may ask for gas and electricity tariff increases intensive use of the policy instruments of exchange rate
and some taxation proposals to ensure that the FBR depreciation, hike in interest rates and tax rates, and
meets the annual revenue target. expenditure cuts.

ICMA’s Chartered Management Accountant, Mar-Apr 2024 11


The energy sector of Pakistan has
emerged as a ‘black hole’ in the
economy. Fundamental steps will
have to be taken to reduce the
very high transmission
distribution and billing losses of
over 23%, while moving towards
renewable energy
This is accompanied by a short-run increase in the rate of
inflation and some slowdown in the growth process in
the process of stabilization.
ICMA: How can Pakistan navigate IMF conditions
while protecting its economic interest and priorities?
Dr. Hafiz A. Pasha: The process of stabilization is likely to
accompanied by rise in the level of unemployment and
the incidence of poverty. Therefore, a program of social
protection and relief for the poor will need to be
simultaneously put in place.
ICMA: Are there specific sectors or areas where you
believe Pakistan should concentrate its efforts to
enhance stability and secure a more stable future?
Dr. Hafiz A. Pasha: The first priority is for raising the level
of exports, through appropriate steps to increase
competitiveness and achieve greater diversification. Next
in importance is significantly enhancing the tax-to-GDP
ratio, which has fallen in recent years. This requires the
implementation of progressive tax reforms, leading to
more effective taxation of sectors like real estate,
wholesale and retail trade, and agriculture.
Further, there is need for rationalization of federal current
expenditure, focusing especially on reduction in costs of
running the civil administration, subsidies, grants and
pensions.
Also, the energy sector of Pakistan has emerged as a
‘black hole’ in the economy. Fundamental steps will have
to be taken to reduce the very high transmission
distribution and billing losses of over 23%, while moving
towards renewable energy.
The level of human development of Pakistan has also
now fallen from the medium to the low level. Appropriate
12 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Exclusive Interview
changes will have to be made in the level and
composition of allocations of public expenditure to
education and health.
ICMA: Does Pakistan consistently require support
from IMF?
Dr. Hafiz A. Pasha: Pakistan has been a country which is
notorious for its very frequent resort to IMF Programs.
Since 1988, Pakistan has been in 23 programs, but has
successfully completed only one program. It is hoped
that when Pakistan goes shortly for its 24th program with
the IMF, spread over the next three years, a
comprehensive and strong set of reforms will be
implemented such that the country then finally embarks
on the path of self-reliant, sustainable, and relatively
rapid growth.
ICMA: What other avenues can Pakistan explore
instead of depending on the IMF?
Dr. Hafiz A. Pasha: The SIFC has set a very ambitious
target of attracting foreign direct investment into
Pakistan to solve the balance of payments problem
Foreign direct investment is likely
to increase only after the
economy has stabilized. There will
simultaneously also be a need for
political stability to stimulate
both domestic and foreign
investment in the country
and accelerate the process of growth. However, since
its formation there has been no upsurge yet in this
inflow. There is, in fact, no substitution to
implementation of a comprehensive agenda of
reforms to stabilize the economy, preferably under the
umbrella of an IMF Program. Foreign direct investment
is likely to increase only after the economy has
stabilized. There will simultaneously also be a need for
political stability to stimulate both domestic and
foreign investment in the country.
The Editorial Board thanks Former Federal Minister for Finance and
Professor Emeritus Beaconhouse National University (BNU) Lahore
for sparing from his precious time to give exclusive interview for
Chartered Management Accountant Journal.
 CORPORATE
LEADERS OF ICMA

Muhammad Rafique [F-1313]

Chief Financial Officer
Baron Pakistan Limited - Islamabad

Mr. Muhammad Rafique is currently serves as the Chief Financial Officer at Baron
Pakistan Limited. He is a Chartered Management Accountant and holds fellowships
from the Pakistan Institute of Public Finance Accountants (PIPFA) and the Institute of
Corporate Secretaries of Pakistan (ICSP). Additionally, he has prestigious certifications as
a PICG-certified director and a certified fraud examiner (CFE) from the USA. With extensive experience across
various industries, he has held roles such as finance controller, deputy executive director, general manager
finance, director finance, chief financial officer, and chief executive officer in different corporate entities. He has
also served as a Director on the Board of both listed and unlisted companies and has been actively involved in
executive committees and volunteer committees for non-profit entities and retirement funds management.
Furthermore, he has provided training as an authorized employer to affiliates of globally renowned professional
bodies such as CIMA, ICAEW, and ACCA.

“The Chartered Management Accountancy (CMA) credential from ICMA is highly respected both domestically and
internationally. Over time, prominent global accounting organizations have been extending either full or partial
equivalency, encouraging professionals to pursue their memberships. In Pakistan, our professional status is
mandated by law for conducting cost audits in diverse manufacturing firms and for occupying senior roles like
company secretary, Chief Internal Auditor, and Chief Financial Officer in listed companies. Prospective employers take
pride in hiring CMAs for various positions as they possess abundant expertise, knowledge, and strategic acumen,
facilitating their seamless integration into the industry.”

Asim Mirza [F-2278]

Chief Financial Officer
Bhanero Textile Mills Limited- Karachi
Mr. Asim Mirza is currently serving as the Chief Financial Officer at Bhanero Textile Mills
Limited, Karachi, is a Fellow member of ICMA International and CPA Australia. He brings
extensive experience primarily in the textile sector, specializing in both manufacturing
and retailing of fashion garments. With a remarkable ability to thrive in diverse
corporate environments, he has amassed a successful 22-year tenure in C-level positions
within the country's leading textile groups. His areas of expertise encompass internal
audit and controls, management accountancy, regulatory and legal affairs, treasury, corporate finance, risk
management, and financial reporting.

“While possessing a professional qualification such as ICMA lays a solid foundation for advancement in one's career,
relying solely on academic achievements is insufficient for success in the professional realm. Instead, emphasis should
be placed on continuous learning, cultivating robust communication skills, and striving for self-improvement."

ICMA’s Chartered Management Accountant, Mar-Apr 2024 13

Focus Section
Focus Section
IMF, Political Will, And Declining
Investments in Pakistan -
When will the Saga end?
The writer has contributed this article exclusively for the current issue of CMA Journal
S ocial media is flooded with glamorous footage of an
industry magnate’s pre-wedding celebrations in the
neighboring country. The point to note is the presence of
global investors, and tycoons who have come down to
enhance business targets by investing in the Special
Economic Zones and collaborative ventures. New
international brands are being launched on the side,
enabling the country to go way beyond the US$80 billion
in Foreign Direct Investment (FDI) in 2022. On the
contrary, Pakistan reported a meagre and stagnating FDI.
Reviewing the FDI data, it comes as no shock (for I had
predicted this)- in the first half of FY24, Pakistan only
received US$863 million, which is up by 35%. For a
country with over 250 million people, this is not enough.
Despite earnest efforts by the Special Investment
Facilitation Council (SIFC) to create an enabling
environment for businesses and investors, the
anticipated surge in FDI has remained elusive.
The investment sector in Pakistan has consistently held
potential opportunities, yet its advancement has
frequently faced interruptions due to bureaucratic red
tape or lack of political will, political instability, and, most
significantly, unpredictable shifts in the policy
framework. The prevalence of uncertainty in the
environment has led existing investors to question their
sustainability, while potential investors find compelling
reasons to refrain from committing funds for future
returns in Pakistan.
The financial situation enters the red zone
intermittently compelling Pakistan to seek advice from
the International Monetary Fund (IMF), way too often -
23 lending programs so far. Pakistan has recently
entered another IMF standby arrangement, amounting
to US$3 billion, with an initial payment of US$1.2 billion
and the remaining US$1.2 billion scheduled to be
disbursed over the nine-month duration of the
ICMA’s Chartered Management Accountant, Mar-Apr 2024
arrangement. Seeking
assistance from the IMF Muhammad Azfar Ahsan
has become a recurrent Pakistan's former
event in Pakistan, with Minister for Investment
the intervals between
visits notably shrinking over the years. Between 1958
and 1988, Pakistan entered 11 lending commitments
with the IMF, while in the more recent period of
1993-2001, eight lending commitments were made in
less than one-third of the previous timeframe.
Pakistan stands fifth globally in terms of outstanding
debt to the IMF, reaching a total of US$7.4 billion. In the
fiscal year 2023, Pakistan received a significant amount of
US$894 million from the IMF, with charges and interest
payments reaching US$776 million and US$325.8 million,
respectively. The noteworthy figure for 2022, totaling
US$1.64 billion, highlights the country's growing
financial reliance on the IMF, prompting concerns about
its economic challenges and developmental initiatives.
The IMF is strictly for economic stability and growth,
through financial aid, policy guidance, and technical
support to its member countries. The focus is on various
objectives, including the promotion of macroeconomic
stability by collaborating with nations to maintain low
inflation, stable exchange rates, and sustainable fiscal
and monetary policies. It actively works to prevent and
address financial crises; aiding countries facing balance
of payments issues to stabilize economies and restore
investors’ confidence.
Additionally, the IMF advocates exchange rate stability,
facilitates poverty reduction through social measures,
supports capacity-building in member countries for
effective economic policy implementation, and serves as a
platform for international economic cooperation. Through
regular financial surveillance and assessments, the IMF
identifies global economic risks and vulnerabilities.
14
Focus Section
But this all comes packaged in stringent parameters
impacting not the population at large, but the taxpayers
- a small segment of salaried class and
corporate/businesses in Pakistan.
The widespread apprehension surrounding the potential
social and political ramifications of stringent IMF
conditions is valid. The prospect of increased taxes and
reduced subsidies has raised concerns about
exacerbating the burden on an already strained tax base,
potentially leading to social unrest and economic
instability. To mitigate these risks, the obvious answer is
improvised tax reforms, including broadening the tax
base to encompass historically exempt sectors such as
agriculture, real estate, and retail trade, long-term
framework of investment policies to attract FDI, and
favorable initiatives for the local investors. In fact, I would
like to quote the State Bank of Pakistan’s (SBP)s Former
Governor Salim Raza, at the “Agri connections 2023”,
stating that Pakistan’s agriculture sector has the potential
to overcome the current account deficit and
balance-of-payment crisis within six years. With this level
of potent capacity for resolutions, our reformative work
remains suspended.
The government infrastructure would necessitate the
Ministries of Finance, Revenue, and Investment to
spearhead the financial regulatory drive, but we have
SIFC tasked with ensuring fiscal relief, while maintaining
market clarity. This is a replication of roles and
assignments and indeed stands to create complexity
with the new government taking charge. In the interest
of consolidation of democratic infrastructure, the public
institutions should be prioritized, yet supported with
the collaborative framework of public, private and
military stakeholders.
The China-Pakistan Economic Corridor (CPEC) came as a
game changing opportunity. The traditional critics of
the Pakistan economic policies could not stop praising
the project and its future outcomes for the country. Yet
the hurdles mentioned above landed the stellar project
into hibernation.
Meanwhile, the Chinese government has progressed
with its regional plan, currently overlooking Pakistan's
significant strategic location asset. Beijing's strategy aims
at utilizing economic and political collaboration to
bolster the political and economic objectives of the
South, contributing to the establishment of a fair and
equitable international order. A central aspect of China's
foreign policy is to secure African support globally,
especially within the United Nations. China endeavors to
secure African backing by highlighting commonality as
developing nations, underscoring shared strategic
interests and a unified stance on major international
issues, effectively minimizing potential disagreements.
Pakistan stands as a crucial conduit in this context.
Regional economy and regional collaboration are the
new requisites for planning an upward trajectory for
nation’s business. Association of Southeast Asian Nations
ICMA’s Chartered Management Accountant, Mar-Apr 2024
“ The fact is that Pakistan, as a
business hub, is not thriving. It is a
company of 240 million employees
challenged with basic literacy and
skill development, with an elite
senior management enjoying the
profits as rewards, and that has no
permanent or unified authority for “
decision making
(ASEAN) is a fitting example of market expansion for
individual growth of each member nation. The strategic
location that Pakistan has, puts it directly in the path of
China and Russia both, and a perfect path for the double
landlocked Afghanistan and the Central Asian Republics
(CARs.) With 91% of its border aligning with India, Iran,
Afghanistan, and China, Pakistan could not make a
success of either Regional cooperation for Development
(RCD) with Iran and Turkey, or South Asian Association for
Regional Cooperation (SAARC) and lately China Pakistan
Economic Corridor (CPEC). What prevents us is primarily a
lack of vision, which is directly associated with
‘incompetency’ – a word that I have used repeatedly as
the foremost reason for the drag.
Kazakhstan, with a population of 20 million managed to
secure an impressive US$28 billion in FDI in 2022. They
are hoping to up it for 2023 and of 2024 will show a
remarkable surge. They are a true example of focused
work with facilitation for the investor. Pakistan must aim
to emulate such successes, catalyzing its economic
progress, and fostering a favorable investment climate
for both domestic and international investors.
The overseas Pakistanis remitted US$2.4 billion in
January 2024, registering an increase of 1%, compared
with US$2.38 billion received in December 2023.
Similarly, compared with the same month of 2023, there
was a significant uptick, with remittances rising by 26%
to US$1.9 billion.
The overall remittance inflows for the first seven months
of FY24 (July to January) stood at US$15.83 billion,
posting a 3% year-on-year decrease of US$386 million
from the US$16.32 billion recorded in the same period of
FY23. Remittances are not investments and though the
numbers generate hope, they are way behind our
competitive economies.
The key understanding is that domestic policies always
attract and optimize FDI. It must be emphasized, even at
the risk of repetition, that without addressing policy
issues and facilitating existing investors, sustainable FDI
cannot be attracted.
15

“ My recently found assurance
and hope is the appointment of
Muhammad Aurangzeb, as Federal
Minister Finance & Revenue. The
gentleman has delivered on all
accounts and has the most
impressive portfolio for turning “ investment landscape, involving regulatory reforms,
the situations
This has been the consistent message advocating the
investment landscape. Pakistan is currently registering
stagnant FDI figures, with decreasing market volatility
pushing its strength of location and population to
irrelevant data for the regional economies.
Warren Buffett, the legendary investor, and Chairman of
Berkshire Hathaway, once remarked, "The stock market is
designed to transfer money from the Active to the
Patient." In the context of Pakistan, it underscores the
significance of adopting a patient and strategic approach
to investment, focusing on long-term growth and
sustainability rather than short-term gains.
The Kingdom of Saudi Arabia, and the Peoples Republic
of China, have both displayed individual, organic yet
dynamic approach towards economic progress. Both
have played into indigenous strengths, used technology
to beat the challenge and have come out as the leading
power hubs. Pakistan enjoys strong goodwill with both
countries but seems to have lost their trust in its
potential. The reasons begin and end with the lack of
political will and incompetency in the people at the helm
of affairs. While we know the problems, and sadly the
solutions, we seem to have reached a stalemate. Listing
either would be repetitive and futile. The fact is that
Pakistan, as a business hub, is not thriving. It is a company
of 240 million employees challenged with basic literacy
and skill development, with an elite senior management
enjoying the profits as rewards, and that has no
permanent or unified authority for decision making.
Establishing a consistent and predictable policy
framework is essential to attract long-term investments,
emphasizing the need for the governments to prioritize
continuity of policies, engage stakeholders in major
reforms, and provide clear guidelines to foster a stable
investment environment. Infrastructure investment,
particularly in energy, transportation, and
telecommunications, is crucial for economic growth, job
creation, and overall investment climate improvement. A
comprehensive approach to addressing security concerns,
involving law-enforcement, community engagement, and
diplomacy, can mitigate risks for the investors. Maintaining
16 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
fiscal discipline and monetary stability through sound
macroeconomic policies is vital for investors’ confidence
and overall economic growth. Warren Buffett's quote
underscores the importance of patience and a strategic
approach to investment in Pakistan, emphasizing
long-term growth over short-term gains. Overcoming
domestic constraints, such as security issues and
governance weaknesses, is key to maximizing the benefits
of FDI and achieving broader economic objectives.
A concerted effort from government, businesses, and
stakeholders is necessary to transform Pakistan's
infrastructure development, security enhancement, and
economic stability maintenance to attract both domestic
and foreign investors, fostering sustainable economic
growth and prosperity.
My recently found assurance and hope is the
appointment of Muhammad Aurangzeb, as Federal
Minister Finance & Revenue. The gentleman has
delivered on all accounts and has the most impressive
portfolio for turning the situations. Given long term
policies, and space to devise stratagems, Pakistan's new
economic team is competent to pave the way for
significant advancements in attracting foreign direct
investment (FDI).
250
211.111
200 172.596
164.730
150.112 141.953
150 126.818 122.461 131.374 131.172
116.763
100 83.250
50
0
-50
-100
-150 -173.171
-200
Mar '23 Apr '23 May '23 Jun '23 Jul '23 Aug '23 Sep '23 Oct '23 Nov '23 Dec '23 Jan '24 Feb '24
Foreign Investment: Direct Investment
In the present circumstances of economic volatility,
including inflationary pressures, fluctuating exchange
rates, and unfavorable taxation, investors are justifiably
hesitant to commit capital, fearing potential losses due to
adverse economic conditions. I look at the declining
graph and then towards the new decision makers to help
the situation. The government must simplify and
streamline regulatory procedures, implement online
platforms for regulatory approvals, remove bureaucratic
hurdles, and ensure transparency in decision-making, to
expedite investment processes and enhance investors’
confidence. The IMF should be the guideline for monetary
planning to ensure that there is no 24th run again.
About the Author: The writer is Pakistan's former Minister for
Investment. He can be reached at @MAzfarAhsan
Focus Section

IMF Partnership and

Pakistan's Economic Future
S ince the conclusion of World War II, the International
Monetary Fund (IMF) has wielded significant influence
1) Comprehensive
Framework
over the global economy. Established on December 27, and Missed
1945, with headquarters in Washington, D.C., the IMF boasts Opportunities:
190 member countries and serves as a lender of last resort to
national governments. Its pivotal role extends to • The EFF aimed to
maintaining exchange-rate stability and fostering global create a robust found-
monetary cooperation. The IMF's overarching mission ation for Pakistan’s
includes ensuring financial stability, facilitating international economy by strength-
trade, promoting robust employment, sustainable ening fiscal and
economic growth, and alleviating poverty worldwide. external sustainability.

Pakistan's economic journey has been closely intertwined • Structural and insti- Muhammad Azam, ACMA
with the IMF. Throughout its history, the IMF has played a tutional reforms were General Manager
crucial role in extending financial assistance and providing crucial for fostering [Finance & Accounts]
policy guidance to Pakistan amid challenging economic balanced growth. Al-Haj Automo ve (Pvt) Ltd.
circumstances. Since its inception, Pakistan has repeatedly
• Unfor tunately,
sought IMF support to navigate various economic challeng-
incomplete and uneven policy execution hindered
es, resulting in the country benefiting from 23 IMF loan
progress.
programs. However, these interventions have not been
devoid of controversy, often accompanied by stringent 2) Early Progress and Subsequent Setbacks:
conditions with far-reaching implications for Pakistan's
economy and society. The economic landscape in Pakistan • Initially, there was encouraging progress, including
has encountered significant headwinds, resulting from a fiscal adjustments and transitioning to a flexible
confluence of factors such as in below table: exchange rate system.
• The establishment of a modern and independent
The policy implementation during the 2019–23 Exten- ded
central bank was a positive step.
Fund Facility (EFF) in Pakistan faced significant hurdles,
resulting in missed opportunities and potential costs for • However, these gains were not sustained over time.
the economy. Let’s delve into the key aspects:

Factors Outcomes
Ongoing Crisis and
2022 Floods The
livelihoods.
External Financing
Constraints economic stability.
approximately ¾ month of

Infla on Surge
Rapid price increases reduced the purchasing power of
challenges for policymakers.
Fiscal Pressures and Debt The floods, coupled with policy slippages, have intensified fiscal pressures.
Sustainability
Social Discontent and Eroded
Living Standards -
Escala ng Poli cal Tensions

ICMA’s Chartered Management Accountant, Mar-Apr 2024 17


3) Unprecedented Shocks and
Eroded Commitment:
• COVID-19 pandemic in 2020 and devastating floods in
2022 disrupted economic growth.
• Inflation surged, exacerbating social pressures.
• Pressure from vested interests complicated policy
adherence.
4) Energy Sector Challenges and Exchange
Rate Interventions:
• Deep-rooted issues in the energy sector remained
unresolved.
• Pursuing expansionary policies for rapid growth had
unintended consequences.
• Foreign exchange interventions to stabilize the
exchange rate proved challenging.
In hindsight, addressing these complexities requires a
holistic approach, long-term commitment, and adaptive
policy measures.
The fiscal effort outlined in the FY24 budget represents a
crucial stride toward ensuring fiscal sustainability. However,
it must be complemented by further reforms. The
consolidation proposed in the FY24 budget is appropriate,
and it is reinforced by measures aimed at enhancing
revenue mobilization and curbing non-priority
expenditures while safeguarding social assistance. To
mitigate significant risks related to macroeconomic stability
and fiscal sustainability, strict budget execution is
imperative. This entails restraint on current spending and
vigorous efforts to boost revenue collection through
enhanced tax administration.
Looking beyond FY24, the focus should remain on
developing a more progressive, streamlined, efficient, and
equitable tax system. Such a system would create ample
room for critical development initiatives and social
spending, including measures to strengthen resilience
against climate shocks. Improved public financial
management is pivotal in maximizing the efficiency of our
limited resources
Challenges and Reforms
• Pakistan grapples with persistent challenges such as
fiscal deficits, external debt, inflation, and low foreign
exchange reserves.
• IMF programs come with conditions, necessitating
reforms in areas like taxation, energy, and public sector
enterprises.
• Implementing these reforms is crucial for Pakistan’s
economic stability and progress.
• Navigating these challenges requires concerted efforts,
sound policies, and a commitment to sustainable
development.
18 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
Steps to be taken for Pakistan’s
Future Growth
a) Poverty Reduction and Social Protection
To significantly reduce poverty and strengthen social
protection, increased focus and investment in social
spending are necessary. The IMF has commended the
enhancements made to the Benazir Income Support
Program (BISP), including expanding its reach to more
beneficiaries and adjusting benefit levels for inflation.
However, the IMF emphasizes the ongoing need to improve
the generosity of BISP stipends and ensure that all deserving
families are enrolled in Conditional Cash Transfer (CCT)
schemes.
b) Inflation Control
The IMF has strongly criticized the State Bank of Pakistan
(SBP) for its management of inflationary pressures.
According to the IMF, the SBP's monetary policy has lagged,
not reacting promptly to the increasing inflation from 2020
onwards. The IMF staff report emphasizes several important
points:
• Tightening Monetary Policy: IMF emphasizes that
monetary policy should remain tight, proactive, and
data-driven. While the recent policy rate hike is a positive
step, the tightening cycle should continue if necessary
to combat inflation and support external rebalancing.
• Real Policy Rate: In the short term, the forward-looking
real policy rate needs to return to positive territory. This
measure aims to re-anchor expectations and achieve the
SBP’s inflation objective over the medium term.
• Refinancing Schemes: Implementing the plan to phase
out refinancing schemes will enhance monetary policy
traction and bring transparency to these programs.
• SBP Independence: The IMF underscores the
importance of strengthening and protecting the
independence of the SBP.
A tighter monetary policy stance is critical for reducing
inflation, anchoring expectations, and supporting external
sector rebalancing. While the recent rate hike is welcome,
continued vigilance is necessary given the persistence of
inflationary pressures.
c) Market determined Exchange Rate
To withstand external shocks, uphold competitiveness, and
replenish international reserves, it's vital to let the exchange
rate be determined by the market. This strategy encourages
inflows and promotes stability. Moreover, it's essential to
restore foreign exchange (FX) liquidity by allowing
unrestricted price signals. To accomplish this, it's crucial to
avoid informal interventions in the market, such as
influencing import management and LC approval guidance.
These measures are necessary to regain public confidence in
the exchange rate system. Additionally, implementing
suitable monetary and fiscal policies along with robust
reforms will bolster trust in the rupee and tackle external
imbalances.
Focus Section
d) Maintaining Financial Stability
Ensuring financial stability requires careful monitoring and
quick responses to address undercapitalized financial
institutions. The State Bank of Pakistan (SBP) should speed
up the recapitalization process using its current authority.
Furthermore, it's essential to prioritize the improvement of
bank resolution and crisis management frameworks.
The discussion in the cabinet regarding a draft law should
be accelerated for further legislative progress. Notably, the
SBP must fully utilize its institutional autonomy, which was
recently granted under the amended SBP Act, as it forms the
bedrock of its independence and mandate.
Pakistan’s successful removal from the Financial Action Task
Force (FATF) list is a positive development. However, efforts
to mitigate Money Laundering (ML) and Terrorist Financing
(TF) risks, including those arising from tax evasion,
corruption, and other financial crimes, must be sustained.
e) Restoring the viability of Energy Sector
Taking decisive action is crucial to restore the viability of
Pakistan’s energy sector. The financial health of the power
and gas sectors must be prioritized to prevent
unsustainable spillovers affecting the national budget,
financial institutions, and the real economy. Recent energy
measures, including the full surcharge hike and targeted
subsidies for vulnerable populations, should be sustained as
an initial step in managing these spillovers. To achieve this,
several key steps are essential:
a) Timely Tariff Alignment: Ensuring that energy tariffs
align with actual cost structures, as determined by
NEPRA (National Electric Power Regulatory Authority)
and OGRA (Oil and Gas Regulatory Authority), is critical.
While doing so, it’s essential to protect vulnerable
segments of the population.
b) Operational and Financial Reforms: Implementing
reforms to reduce operational, generation, and capacity
development (CD) related costs is necessary. These
reforms should align with the current power and
emerging gas Comprehensive Development and
Management Plan (CDMP) to gradually lower tariffs.
f) Structural Reforms:
To lay the foundation for robust, resilient, and inclusive growth,
Pakistan must make tangible progress in the following areas:
• State-Owned Enterprises (SOE) Governance:
Enhancing transparency, efficiency, and accountability
within SOEs.
• Anti-Corruption Institutions: Strengthening anti-cor-
ruption mechanisms to promote clean practices.
• Business Environment and Investment Climate:
Creating a conducive environment for business and
attracting investments.
• Climate Change Adaptation: Addressing climate-relat-
ed challenges to ensure sustainable development.
By addressing these priorities, Pakistan can pave the way for a
stronger, more prosperous future that benefits all its citizens.
ICMA’s Chartered Management Accountant, Mar-Apr 2024
Economic Risks for Pakistan
The risks associated with Pakistan’s economic situation are
exceptionally high and predominantly tilted to the
downside. These risks emanate from both domestic and
external factors. Let’s delve into the specifics:
1. External Headwinds: The global financial conditions
remain tight, and there are lingering effects of the war in
Ukraine, which have led to elevated food and fuel prices.
These external challenges pose significant hurdles for
Pakistan’s economic stability.
2. Sociopolitical Climate: The difficult sociopolitical
climate within Pakistan is characterized by persistent
political volatility. This instability poses a key risk to
effective policy implementation, potentially hindering
the country’s adjustment path and growth prospects.
3. Advanced Economy Financial Tightening: The
tightening of financial conditions in advanced
economies could have spillover effects on Pakistan.
Geopolitical tensions further exacerbate the situation,
impacting the availability of external financing.
4. Debt Sustainability: The materialization of these
downside risks could push Pakistan toward an
unsustainable debt situation. This precarious scenario
necessitates close monitoring, supportive technical
assistance (TA), and financing assurances from key
lenders.
Despite these challenges, the IMF supports Pakistan’s
request for a 9-month Stand-By Arrangement (SBA) with
access equivalent to SDR 2,250 million (approximately 111
percent of quota). Additionally, the approval of the
exchange restriction and the Market-Based Currency Policy
(MCP) is recommended. These measures are temporary,
non-discriminatory, and implemented for balance of
payments (BOP) reasons.
In summary, Pakistan’s ongoing partnership with the IMF
remains critical for addressing economic challenges and
ensuring stability. Striking a balance between immediate
adjustments and long-term structural reforms is essential
for sustainable development.
References:
1. imf.org/en/News/Articles/2024/01/11/pr2406-pak-imf-exec-
board-completes-first-review-of-the-stand-by-arrangement
2. IMF Country Report No. 23/260 – July 2023
About the Author: Mr. Muhammad Azam, an Associate member
of ICMA and a Chartered Management Accountant, holds the
position of General Manager [Finance & Accounts] at Al-Haj
Automotive (Pvt) Limited. With more than 20 years of expertise in
Finance & Accounts, he specializes in process optimization and
automation, focusing on manufacturing industries, and possesses
a profound comprehension of process integration.
19
 Focus Section

Pakistan under IMF Program:

In Search of a Sustainable Solution
P akistan’s ties with the IMF began with a US$25 million
standby arrangement in 1958, but over time, frequent
targets makes macroeco-
nomic stability's core
engagements became a routine course of action. In objective increasingly
almost two decades following the first IMF program, challenging.
Pakistan participated in eight such programs, out of
In compliance with the
which seven were standby arrangements. The 8th
conditions, the policy
program, the first extended fund facility in 1980,
rate nearly doubled in
amounted to US$1.2 billion. In the subsequent two
2019, followed by a
decades, there were ten such programs, while in the last
significant depreciation
24 years, there have been five such engagements.
in the rupee; however,
the implications of Dr. Faisal Sultan Qadri
IMF and Pakistan: 1958-2024 these actions remained Research Economist Applied
Number of Programs Since 1958 Total Amount Agreed Under unnoticed due to the Economics Research Center,
Different Programs
pandemic, which led to University of Karachi
1 Standby 0.38 Standby
6 11.68 12.27 Arrangement
Arrangement
Extended Extended
Credit Facility
Infla on and Policy rate
Credit Facility
Extended Fund Extended Fund
Facility Facility 30
3 Structural Adjustment Structural Adjustment
13 2.32 Facility Commitment 25
Facility Commitment
20

Data Source: IMF official data related to the history of lending 15 Infla on
commitments as of 29 Feb 2020 10 Iterest rate
*Details of the last program finalized in 2023 are added to the available dataset
5
These programs were primarily intended to address the 0
short- and medium-term balance of payment issues. The
standby arrangement has been the predominant
program in terms of frequency and the agreed amount. Data Source: State Bank of Pakistan and Ministry of Finance
While engagements are waning in number, their effects
a substantial reduction in global and national interest
on the country's macroeconomic conditions are waxing
rates along with a sharp decline in international trade.
over time. In the last two programs, something different
When economic activities started to restore to the
was done that was not done in any previous programs.
pre COVID-19 levels, the policy and exchange rates
Most of the parameters laid down in the recent extended both started converging towards the IMF-targeted
fund facility (EFF) of July 2019 were largely implemented levels determined by the IMF and the foreign
rigorously, which has deep-rooted implications for short exchange markets, respectively.
and medium-term macroeconomic stability. These provi-
Consequently, inflation started to increase, primarily
sions included a sharp increase in the policy rate, an
driven by supply-side factors such as currency
adaptation of a market-based exchange rate regime, and
depreciation, higher borrowing costs, reduction in
amendments to the SBP Act (1956) to enhance the
subsidies, and increase in tax rates. In the meantime, the
central bank's autonomy in its functions and operations.
SBP Act (1956) was amended per IMF directives. The
While similar recommendations had been proposed in
situation documented in various monetary policy
the previous programs, the way these were implemented
statements implies that the rising energy prices have an
in the last two programs is unprecedented. As a result,
impact on CPI and it is impending the efforts to bring
Pakistan started a journey to achieve the established
inflation down.
targets in a way, that every step closer to the established

20 ICMA’s Chartered Management Accountant, Mar-Apr 2024

Focus Section
This becomes more challenging because of the necessity
to address inflation before considering monetary easing.
Even though these policy documents present inflation as
affected mainly by supply-side factors, the same is
handled through demand management policies. The
same set of guidelines has severe implications for fiscal
stability, as presented in the following figure.
Tax Revenues and Current Expenditures
12000000
10000000
8000000
6000000
4000000
2000000
0
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Current Exp
Data Source: Ministry of Finance
Over the past five years, current expenditure has
consistently represented approximately 85 percent of the
total federal government expenditures, a figure that rose
to 90 percent in the FY2022-23. That is why it is an
important indicator to be compared to federal tax
revenues. Besides continuous increases in the Federal
government's tax revenues with increasing rates during
the past, the disparity between these revenues and
current expenditure has been expanding at an even
faster pace, which is widening the gap and compelling
the authorities to fill the gap through new debts mainly
from domestic, commercial banks, given the restriction
imposed by the IMF program of 2019 prohibiting direct
borrowing from the central bank.
To reduce the rising fiscal deficit, along with securing
new loans, various expenditure-reducing measures are
Core components of current expenditures
Percentage of total expenditure
40
35
30
25
20
15
10
5
0 Karachi. He expresses his views on economic
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
also being considered, including pension reforms,
privatization, downsizing, etc. However, none of these
are likely to achieve the core objective of reducing the
fiscal deficit without addressing the most prominent
cause of this rising deficit. The following figure explains
the real cause of these fiscal sufferings and some
profound implications.
The figure shows that all core components of total
expenditures are declining in percentage terms, except
interest payments. The significant surge in current
spending can be attributed solely to the increase in
interest payments. That is why, besides rising federal tax
targets every year, the gap is widening even after FBR’s
remarkable achievements of collecting more taxes than
the set targets. These rising tax targets and
achievements, coupled with a reduction in current
subsidies, are pushing production costs and impeding
the decline in inflation. In contrast, without reducing
inflation, the policy rate will not reduce. As per a recent
Tax Rev official statement from the Ministry of Finance, a 1
percent rise in the policy rate raises the interest payments
by around Rs. 600 billion, which means that without a
significant reduction in the policy rate, fiscal constraints
are not expected to be relaxed.
Simultaneously, these policies hinder export
competitiveness and impede export growth, which is the
real solution to stable dollar inflows and reduction in the
balance of payment deficits, the core objective of all
IMF-led reforms.
With the new government having reached a staff-level
agreement with the IMF for the final review under the
current Standby Arrangement and paving the way for
another three-year program, it becomes crucial to
re-negotiate subsidy reductions, particularly in the
energy and gas sectors. Additionally, it is imperative to
urge State Bank of Pakistan (SBP) officials to account for
supply-side factors and consider reducing the policy rate
to address the fiscal deficit,
production costs, and inflation and
promote export growth. Given the
low foreign exchange reserves, it is
vital to maintain import-restricting
policies until specific reserve targets
are met. Any agreement reached
Defence spending without addressing the real issues is
unlikely to achieve the goal of fiscal
Markup payments stability and avert a balance of
Current subsidies payments crisis.
Development expenditures About the Author: Dr. Faisal Sultan Qadri is
serving as Research Economist at Applied
Economics Research Center, University of
and geo-political issues at various platforms
Data Source: Ministry of Finance including national television PTV News.
ICMA’s Chartered Management Accountant, Mar-Apr 2024 21
 Focus Section

Fostering growth under IMF programme

During the period of the caretaker government, the
authorities have maintained economic stability through
strict adherence to the fiscal targets while protecting the
social safety net, maintaining a tight monetary policy
stance to control inflation, and continuing to build foreign
exchange reserves. And this has been done at the same time
as implementing timely adjustments in tariffs to shore up
the viability of the energy sector. The IMF stands ready to
hold a mission for the second review of the Stand-by shortly
after a new cabinet is formed. The focus, therefore, is
currently on completion of the current Stand-by program,
which ends in April 2024. We look forward to working with
the new government on policies to ensure macroeconomic
Huzaima Bukhari | Dr. Ikramul Haq | Abdul Rauf Shakoori
stability—Julie Kozack, Director Communications IMF

P
akistan’s economic scenario due to unabated
dependence on International Monetary Fund (IMF)
continues to be shrouded in risk and challenges.
Fundamental problems have become permanent fixtures in
our fiscal profile, making the path to recovery arduous and
lengthy. While there is a multitude of issues, the primary
concern revolves around our inability to generate inflows
that match spending requirements, both internally and
globally. The economy is grappling with budget deficits and
current account deficits, which undermine indicators of
stability and progress. Under these circumstances, there is a
need to devise a long-term plan coupled with structural
reforms to come out of debt prison.
Once touted as an “agriculture-based”, Pakistan’s economic
trajectory purportedly shifted towards becoming an
“industrial” one. However, amidst evolving dynamics and
our policymakers’ penchant for ad-hoc strategies, we find
ourselves regrettably transformed into a “Lender-Driven
Economy”. Our pivotal economic decisions hinge upon
approvals from lenders, marking a significant departure
from our initial aspirations. Over the past few years, the
primary focus of our economic team has been to align with
policies outlined by the IMF leaving little to no room for
independent decision-making. Matters such as electricity
and petroleum pricing, along with types of taxes to be
imposed, are dictated by IMF agreements, constraining
autonomy compelling the nation to navigate within the
confines of externally dictated parameters, questioning its
sovereignty and economic agility.
The caretaker government deserves commendation for its
proactive measures aimed at curbing unproductive
expenditures and augmenting both tax and non-tax
revenue streams. Particularly, during the initial seven
months of the fiscal year (July-January 2024), the Federal
Board of Revenue (FBR) witnessed a substantial surge in tax
collection, marking a 30% increase, reaching Rs. 5.15 trillion.
The Ministry of Finance attributes this noteworthy
improvement to resurgence in economic activity and
enhanced profitability across various industrial sectors,
including banking, oil and gas. This achievement
emphasizes the government’s commitment to fiscal
responsibility and economic revitalization, laying a solid
foundation for sustainable growth and development.
In line with their commitment to prudent fiscal management,
the caretaker government undertook several challenging, yet
essential measures aimed at addressing entrenched issues in
critical areas. They implemented unpopular measures such as
reducing subsidies in power and gas sectors through
quarterly tariff adjustments, demonstrating a resolve to
bolster financial sustainability and efficiency.
Furthermore, the government upheld stringent financial
discipline by refraining from issuing supplementary grants,
signaling a dedication to fostering a culture of
accountability and transparency in fiscal affairs. Additionally,
transfer of Public Sector Development Projects (PSDP) to
provincial Annual Development Programs signifies a
decentralized approach to project management, facilitating
more efficient resource allocation and project execution at
local level.

22 ICMA’s Chartered Management Accountant, Mar-Apr 2024

Focus Section
Adherence to financial discipline has yielded significant
fiscal gains, with the government achieving a primary
surplus of Rs. 1.5 trillion during the period from July to
December 2023, translating to 1.4% of GDP, exceeding the
IMF target of 0.5% of GDP, underscoring the government's
commendable fiscal performance. The economy has also
shown signs of recovery, with GDP growth rebounding to
2.1% in the Q1 of FY24 after two consecutive quarters of
negative growth. This improvement is not only a positive
development but also indicative of a diverse recovery across
key sectors.
Agriculture registered robust growth, recording a notable
expansion of 5.06%, while the manufacturing and industrial
sectors have shown improvement of 2.48%. Additionally,
the services sector exhibited resilience, posting a growth
rate of 0.82%. These encouraging indicators underscore the
effectiveness of governmental policies in revitalizing the
economy and fostering inclusive development across
various sectors.
Amidst a backdrop of anti-state propaganda from the
opposition party Pakistan Tehreek-e-Insaf, which openly
urged the lending agency to intervene in Pakistan’s
domestic politics and demanded an audit of 30% of national
and provincial assembly seats before extending any
financial assistance to the cash-strapped economy, the
recent statement from IMF carries a positive tone. It serves
as a reassuring affirmation of IMF’s readiness to collaborate
with the newly elected government, despite the
contentious rhetoric and calls for interference in domestic
affairs. This stance underlines IMF's commitment to
constructive engagement and support for Pakistan's
economic development, irrespective of political discourse.
Despite some discernible signs of improvement, the overall
economic outlook remains fraught with challenges.
Sustained progress necessitates the continuation of timely
decision-making, even if such decisions prove unpopular, to
ensure that the trajectory toward recovery remains
unimpeded. It is evident that the new government will seek
a comprehensive 24th IMF programme with increased
financial allocation following the conclusion of the ongoing
US$3 billon Stand-By Arrangement (SBA).
A paramount concern for the government should be the
curtailment of fiscal deficit and reducing reliance on
borrowing. The substantial portion of fiscal resources
allocated to debt servicing has precipitated a perilous cycle
of borrowing to meet fiscal requirements, exacerbating the
debt burden.
The task ahead for the newly elected political leadership is
to sustain economic momentum in a manner that is both
sustainable and conducive to the preservation of
macroeconomic stability. This entails striking a delicate
balance between fostering growth and managing fiscal
constraints, thereby safeguarding against any adverse strain
on key macroeconomic indicators. Maintaining this
equilibrium will be imperative for steering the economy
toward long-term resilience and prosperity.
ICMA’s Chartered Management Accountant, Mar-Apr 2024
Within our multifaceted economic terrain, we observe a rich
tapestry encompassing agriculture, manufacturing,
services, and a burgeoning technology sector. Each of these
sectors presents unique opportunities for growth and
development, necessitating bespoke solutions tailored to
their individual characteristics and challenges.
The agriculture sector, historically serving as the backbone
of our economy and employing a substantial portion of the
population, holds considerable sway over the nation's GDP
and overall economic performance. It remains imperative to
harness the full potential of this sector through targeted
interventions and modernization efforts aimed at
enhancing productivity and sustainability.
Similarly, the manufacturing sector, with its capacity for
value addition and job creation, plays a pivotal role in
driving industrial growth and export competitiveness.
Moreover, the services sector, encompassing a diverse array
of industries ranging from finance to tourism, is a significant
contributor to economic output and employment
generation.
Additionally, the technology sector, characterized by
innovation and entrepreneurship, holds promise for
fostering economic dynamism and global competitiveness.
Leveraging the strength of each sector effectively while
addressing their respective constraints is essential for
realizing our nation's economic aspirations and promoting
inclusive development.
However, the agricultural industry encounters various
obstacles, including high costs of essential inputs such as
electricity, fuel, and fertilizers, as well as water scarcity and
outdated farming methods. But, through increased
collaboration of the public and private sectors and adoption
of modern mechanized agricultural techniques, we can
revitalize this sector to meet our national demands and
which holds the potential to spur higher levels of economic
activity thus reducing our reliance on imports.
Again, the manufacturing sector grapples with challenges
such as high cost of operations, elevated interest rates,
energy shortages, steep tariffs, infrastructural deficiencies,
and bureaucratic impediments. Addressing these issues
warrants immediate attention from the government.
Essential measures include investment in infrastructure, the
development of human capital, and initiatives aimed at
enhancing governance. By undertaking these efforts, we
can unlock the sector’s economic potential and pave the
way for sustainable growth even under the austerity-driven
IMF’s plan and conditions to liberalize imports and remove
controls over forex market.
About the Authors: Huzaima Bukhari & Dr. Ikramul Haq, lawyers
and partners of Huzaima, Ikram & Ijaz, are Adjunct Faculty at
Lahore University of Management Sciences (LUMS), members
Advisory Board and Visiting Senior Fellows of Pakistan Institute of
Development Economics (PIDE). Abdul Rauf Shakoori is a
corporate lawyer based in the USA and an expert in ‘White Collar
Crimes and Sanctions Compliance’. They have coauthored a book,
Pakistan Tackling FATF: Challenges and Solutions.
23
 Focus Section

Charting the Course to Self-Sufficiency:

Strategies Beyond IMF Dependency
E conomic growth signifies the enhancement of a
nation's potential GDP or output, marked by a rise in
average real income and an upliftment in living
Due to financial crises,
Pakistan sought first
time assistance from the
standards. It is quantitatively assessed through annual IMF in 1958. Pakistan is
increases in key indicators such as GDP, GNP, National grappling with a critical
Income, and national wealth (Mladen, 2015).
economic predicament
Pakistan and IMF due to its substantial
external debt. The
nation's capacity to
service this debt, propel
economic development,
Muhammad Ahmed, ACMA
Senior Execu ve,
and sidestep a default is A ock Petroleum Ltd and
critically dependent on Member, ICMA Research and
its income generated Publica ons Commi ee
from exports, remitt-
ances, and foreign direct investment. The sources of
Pakistan's debt can be categorized into four main
groups: private and commercial loans, multilateral
debt, debt owed to the Paris Club, and debt incurred
In recent years, numerous countries, particularly those from China.
within the developing world, have encountered severe
With the debt-to-GDP ratio surpassing the critical 77%
and prolonged economic and financial crises of varying
magnitudes. These downturns have ushered in new mark, that is alarming situation as it is 57.5% under law,
policy challenges and underscored the necessity for Pakistan's economic trajectory is heavily encumbered by
structural reforms, prompting assistance from its debt obligations, of which 60% is domestic and
international entities and countries. A significant portion accounts for 85% of interest payments.
of these nations has availed financial support from the
International Monetary Fund (IMF) and has undertaken According to the State Bank of Pakistan's debt report as
its recommended reform programs. The IMF has played a of December 2023, the total external debt and liabilities
pivotal role in supporting its member countries since the of Pakistan stand at US$131.159 billion. This includes IMF
early 1980s. However, there exists a subset of countries loans amounting to US$5.069 billion to the central bank
that have chosen to forego the IMF's reform agenda, and an additional US$2.527 billion to the federal
opting instead for domestic recovery strategies to government. Furthermore, the foreign exchange
navigate their economic and financial adversities liabilities have been reported at US$11.939 billion.
(Fujihara et al., 2017).

24 ICMA’s Chartered Management Accountant, Mar-Apr 2024

Focus Section
Challenges for Pakistan
The Pakistani economy, which predominantly revolves
around the sectors of manufacturing and agriculture, has
contended with numerous challenges including political
instability, corruption, fiscal disarray, inadequate
government revenue, and inefficient resource utilization.
These issues have led to a persistent deficit in the
balance of payments and a heavy reliance on external
financing (Isran & Isran, 2014). When Pakistan sought
assistance from the IMF and in exchange for financial aid,
the IMF stipulated several conditions for Pakistan such as
the enhancement of interest rates, reduction of
subsidies, raise the energy prices and petroleum
development levy and currency fluctuation were
mandated to stabilize the economy. Additionally, the
government was required to streamline its expenditures
and initiate the privatization of state-owned entities.
Currently, the Pakistani economy is experiencing a
period of stagflation due to all these challenges.
Outlook on Pakistan's Future
Interestingly, the IMF recent long-term forecast has
posited a notably optimistic projection of a five percent
growth rate for the year 2028 but Pakistan's economic
challenges are far from resolved. Looking beyond the
current tenure of the IMF program, the magnitude and
financing sources necessary to meet the country's
significant external payment obligations remain a matter
of concern. With an impending obligation to repay
US$77 billion in external debt by 2026, a formidable task
for an economy with a GDP of approximately US$350
billion, the path to 2028 presents a rigorous challenge.
Attaining the ambitious growth rate of five percent
necessitates unwavering political determination,
consistent policy reforms, and the introduction of
innovative policies aimed at boosting productivity,
enhancing revenue, and securing financing. It is
imperative for Pakistan to promptly transition its
economic and financial strategy from short-term
mitigation to long-term resilience.
Positive Effects of IMF on Pakistan's Economy
• Provision of financial support to underpin the
stabilization of Pakistan's economic framework.
• Provisional relief to manage the equilibrium of
external payment obligations.
• Implementation of fiscal discipline to avert
macroeconomic discrepancies.
• Enhancement of Pakistan's long-term economic
outlook through strategic initiatives.
• Increment in foreign direct investment inflows.
• Essential facilitation of trade activities for sustained
economic growth.
ICMA’s Chartered Management Accountant, Mar-Apr 2024
Although IMF programs have a mixed impact on
Pakistan's economy, incorporating both negative and
positive, it is imperative for the country to seek
alternative avenues towards achieving self-sufficiency in
its economic policies. Mitigating the adverse
consequences of IMF engagements by strategically
enhancing export capabilities, boosting peace and order,
prudent allocation of IMF financial support, and securing
more favorable agreements, constitutes a critical
pathway for Pakistan to reduce its dependency on the
IMF. Emphasizing strategic negotiations and the wise
application of resources derived from IMF programs is
essential for Pakistan to attain sustainable economic
progress and self-reliance.
Alternative Avenues Towards Achieving
Self-Sufficiency
a) Structural reforms for Revenue Enhancement -
Pakistan requires a robust fiscal management
strategy to augment its revenue streams,
achievable through a series of measures including
the expansion of the tax base, refinement of tax
administration practices, eradication of tax
evasion, and curtailment of corruption.
Furthermore, optimizing subsidy allocations and
minimizing non-developmental spending are
essential steps to free up resources for pivotal
sectors such as education, healthcare, and
infrastructure development.
b) Creating conducive Environment for Business -
The government should enhance the business
environment by simplifying regulatory frameworks,
reducing bureaucratic complexities, and
safeguarding investor interests. The creation of
special economic zones aimed at drawing foreign
direct investment (FDI) could stimulate innovation
and technology transfer. Offering incentives like tax
concessions, infrastructure improvements, and
access to skilled labor will also boost Pakistan's
appeal to investors.
c) Enhancing Exports through Diversification and
Market Expansion - The primary challenge lies not
in identifying new products for export but in
optimizing and expanding the global market share
of Pakistan's existing strengths, notably in textiles,
agriculture, and technology sectors. To ascend from
being mere participants to leaders in the
international arena, Pakistan must concentrate on
elevating its export capabilities. This can be
achieved through a comprehensive strategy that
includes promoting branding and marketing efforts,
diversifying export offerings, enhancing product
quality, improving infrastructure, increasing
competitiveness, and forging stronger trade ties
through free trade agreements with partner nations.
25
 Focus Section

Pakistan holds the capability to offer a wide array of SMEs and entrepreneurs' access to credit is
products for export, encompassing sectors such as essential for fostering entrepreneurship and
sports equipment, pharmaceuticals, textiles, generating employment
agriculture, leather, information technology, energy,
h) Reforming Institutions and Enhancing
and chemicals.
Governance - The efficiency and accountability of
By analyzing and emulating the success stories of institutions play a pivotal role in economic
nations such as India, Germany, Singapore, China, advancement. For Pakistan, prioritizing institutional
and Japan, Pakistan has the opportunity to venture reform, streamlining bureaucratic procedures, and
into untapped industries and carve a niche for itself reinforcing the rule of law are essential steps.
in the competitive global marketplace. Implementing transparent, meritocratic recruitment
systems, establishing vigorous anti-corruption
d) Investing in the Development of Human Capital -
protocols which is 2% of country’s GDP, and
Investing in human capital is key to economic
developing comprehensive regulatory frameworks
progress. Prioritizing education, skill development,
are critical for cultivating an investment-friendly
and bridging academia-industry gaps can enhance
climate. Additionally, decentralizing authority and
Pakistan's workforce efficiency and innovation.
granting increased fiscal independence to local
Additionally, empowering women in the workforce
governments are key strategies to improve service
is vital for economic growth.
provision and empower local communities.
e) Infrastructure - A Pillar of Economic Expansion -
i) Cultivate Innovation and Encourage Fresh
Investment in infrastructure is pivotal for economic
Concepts - For Pakistan to maintain its competitive
advancement. Pakistan should focus on enhancing
edge in the global marketplace, it is imperative to
its transportation, energy, and digital infrastructures
champion innovation. The government can
to boost productivity, attract investments, and lower
spearhead this effort by incentivizing research and
logistical expenses. Utilizing public-private
development activities and facilitating synergies
partnerships can mobilize extra resources and
among academia, the private sector, and research
expertise for these projects. Furthermore, the
bodies. Additionally, the establishment of
adoption of sustainable and climate-resilient
technology parks and incubators would significantly
infrastructure practices is essential for
bolster innovation and entrepreneurial ventures.
environmental sustainability and fostering green
Key sectors ripe for innovative breakthroughs
growth.
include agriculture, information technology,
f) Reforms in Agricultural Sector - Agriculture is a renewable energy, and sustainable transportation
cornerstone of Pakistan's economy, supporting a solutions, presenting lucrative opportunities for
large workforce and fueling exports. To elevate this national economic growth and development.
sector, strategic reforms aimed at enhancing
j) Adopt a Green Energy Strategy to Generate
productivity and increasing farmers' incomes are
Employment Opportunities - Pakistan possesses
essential. These reforms should focus on expanding
the potential to emerge as a frontrunner in
credit availability, adopting modern agricultural
renewable energy by encouraging the development
practices, upgrading irrigation infrastructure,
of solar, wind, and hydroelectric power projects. The
encouraging crop diversification, and boosting
expansion of the renewable energy sector can
investment in research and development.
catalyze job creation across multiple fields, including
Additionally, fortifying value chains and fostering
engineering, installation, and maintenance.
the growth of agro-processing industries can
Additionally, it can spur employment opportunities
significantly increase the value of agricultural
in associated sectors like smart grid technology,
outputs.
energy storage, and electric vehicles, while also
g) Reforms in Financial Sector - Reforming increasing the need for specialized expertise in areas
Pakistan's financial sector is crucial for its such as artificial intelligence, software development,
stability, efficiency, and inclusivity. Key actions and data analytics.
include reinforcing regulatory structures,
In Germany, the implementation of the
boosting corporate governance, and increasing
"Energiewende" policy has successfully generated
financial institutions' transparency and
over 300,000 employment opportunities within the
accountability. Further, broadening the reach of
renewable energy sector. Meanwhile, Denmark has
financial services, advancing microfinance, and
established itself as a global pioneer in wind power
growing the Islamic banking sector are vital for
technology, resulting in significant job creation
promoting financial inclusion and empowering
within the industry.
underserved populations. Moreover, improving

26 ICMA’s Chartered Management Accountant, Mar-Apr 2024

Focus Section
Concurrently, China has experienced a substantial
boom in its solar industry, culminating in the
creation of millions of jobs in recent years.
k) Enhancing Pakistan's Economic Growth via
Tourism Strategy - By capitalizing on its rich
cultural and natural heritage, Pakistan has the
potential to significantly boost its economy
through tourism. Key strategies include
infrastructure development, streamlining visa
procedures, effective marketing, and providing
industry-specific training. Iconic sites like Lahore
Fort, Badshahi Mosque, and Hunza Valley
underscore Pakistan's appeal.
Learning from the tourism success stories of
countries such as Spain, which saw tourism
contribute 12.3% to its GDP and create 2.6
million jobs in 2019, Pakistan can similarly
benefit. The effectiveness of its tourism policy
hinges on government dedication and
stakeholder collaboration.
l) Enhancing Pakistan's Economic Growth via
Microfinance Initiatives - Implementing strategic
microfinance policies in Pakistan could enhance
GDP growth by fostering financial inclusion,
stimulating entrepreneurship, boosting household
incomes, aiding small businesses, and fortifying the
banking sector. Bangladesh's experience, where
microfinance initiatives have facilitated small loans
to economically disadvantaged individuals -
predominantly women - to establish small
enterprises and elevate their standards of living,
serves as a compelling model. This approach has not
only significantly contributed to GDP improvement
but also set a precedent for similar policies across
South Asia and Africa. According to a World Bank
study, the proliferation of microfinance in
Bangladesh has resulted in a 5-10% rise in per capita
income and has played a crucial role in poverty
alleviation, benefiting millions.
m) Productive Negotiations with the IMF - Securing
favorable terms with the IMF by factoring in the risks
associated with natural disasters can lead to
agreements that better mitigate such vulnerabilities.
Furthermore, judicious utilization of the IMF
program to restore fiscal equilibrium is essential,
emphasizing the prudent allocation of resources
and effective reform execution.
Conclusion
In summary, Pakistan faces considerable challenges
due to its substantial external debt and liabilities, which
threaten its economic stability. Yet, there are viable
strategies for overcoming these challenges by drawing
ICMA’s Chartered Management Accountant, Mar-Apr 2024
lessons from the success stories of other nations.
Enhancing exports through product diversification,
quality enhancement, infrastructure development, and
targeted marketing and branding efforts, along with
forging stronger trade ties via free trade agreements,
are crucial steps. Investments in human capital,
infrastructure, agricultural modernization, financial
sector overhaul, and institutional reforms are essential
for achieving economic stability, fostering sustainable
growth, reducing poverty, and elevating living
standards. By prioritizing these reforms, Pakistan can
tap into its vast potential, attract foreign investment,
generate employment, and set the stage for a
flourishing future. Moreover, combating corruption,
fostering innovation, and addressing income disparity
are imperative for Pakistan to maintain its competitive
edge globally.
Learning from the policies of countries like Norway,
Uruguay, Rwanda, Bolivia, and Slovenia can offer
valuable insights for Pakistan to refine its approach to
resolving its economic predicament. With strategic
planning and decisive action, Pakistan can effectively
manage its debt, avert financial default, and secure a
stable and prosperous outlook for its populace.
References
i) Mladen, M. I. (2015). Economic growth and development. Journal of
Process Management–New Technologies, International, 3(1), 55-62.
ii) Fujihara, N., Lark, M. E., Fujihara, Y., & Chung, K. C. (2017). The effect of
economic downturn on the volume of surgical procedures: a
systematic review. International Journal of Surgery, 44, 56-63.
https://doi.org/10.1016/j.ijsu.2017.06.036.
iii) Available at: https://www.worldeconomics.com/Debt/Pakistan.aspx
iv) https://www.brecorder.com/news/40294089/self-sufficiency-
versus-loan-dependence.
v) https://profit.pakistantoday.com.pk/2024/02/12/state-bank-of-
pakistan-reports-rise-in-national-debt/.
vi) https://tribune.com.pk/story/2455088/debt-exceeds-legal-limit-by-
rs145tr.
vii) https://www.statista.com/statistics/383729/gross-domestic-
product-gdp-growth-rate-in-pakistan.
vii) https://www.business-standard.com/world-news/pak-needs-to-
pay-77-5-bn-in-debt-risk-of-default-real-us-think-tank-1230407008
39_1.html.
viii) Isran, M. A., & Isran, S. (2014). Karachi: The Administrative Black Hole
of Pakistan. Journal of South Asian Studies, 2(3), 217-226.
About the Author: Mr. Muhammad Ahmed is a Chartered
Management Accountant and an Associate Member of ICMA. He is
currently working as a Senior Executive at Attock Petroleum Ltd. He
holds an LLB degree and is pursuing his PhD in banking and
finance. Additionally, he is a member of the ICMA Research and
Publication (R&P) Committee.
27

IMF and Taxation Reforms
T heinsufficient
fiscal challenges faced by Pakistan, including
tax revenue to meet debt servicing and
defense needs, have prompted the government to
initiate significant reforms in tax administration. The Tax
Administration Reforms Program (TARP), launched in
2005 by the Federal Board of Revenue (FBR), aimed to
enhance revenue collection, broaden the tax base,
strengthen audit and enforcement procedures, and
ensure equitable and transparent application of tax laws.
Background and Initiation of TARP
The roots of TARP can be traced back to the appointment
of a Task Force on Reforming the Tax Administration by
the Government of Pakistan in June 2000. Following
extensive discussions with stakeholders and input from
the International Monetary Fund (IMF) mission in August
2001, the government approved a comprehensive tax
reform strategy in November 2001. This strategy
encompassed policy, administrative, and organizational
reforms aimed at simplifying laws, promoting
self-assessment, reducing exemptions, and enhancing
the effectiveness of FBR.
Supplementing Skills and Financial Support
To supplement the skills within FBR, the government
appointed professional members from the private
sector in March-April 2002, focusing on human
resource management, information management,
audit, facilitation, taxpayers' education, and fiscal
research. Additionally, the World Bank provided
financial support through the Project Preparation
Facility and the Public Sector Capacity Building
Project, enabling the establishment of Large Taxpayer
Units (LTUs), Medium Taxpayer Units (MTUs), and a
Dispute Resolution Complex.
Main Phase of TARP
TARP's main phase, approved by the Executive
Committee of the National Economic Council in February
2005, focused on enhancing FBR's capabilities through IT
28 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
systems,
and
automation,
professional
training. Despite initial
challenges with IT
system development,
the project progressed, Muhammad Ammad Ansari, ACMA
leading to improved Incharge Taxa on,
performance, a U lity Stores Corpora on of Pakistan
business-friendly
environment, and increased tax revenue collection.
Achievements of TARP
By December 2011, TARP had achieved its objectives,
including the establishment of 57 Regional Tax Offices,
Model Customs Collectorate, Taxpayers Education
Centers, and Transit accommodations. The successful
completion of TARP, within the allocated budget,
underscored the enhanced professional capabilities
within FBR and paved the way for future project
development objectives.
Conclusion: Significance of TARP's Closure
Overall, TARP's closure marked a significant milestone in
Pakistan's tax administration reforms, signaling a move
towards professionalism, integrity, and responsiveness in
tax collection, thereby reducing the cost of doing
business and instilling confidence among taxpayers and
tax collectors alike.
The Income Tax Ordinance of 2001:
Challenges and Recommendations
The News on Sunday [Political Economy] reported on
October 08, 2017, that in response to pressure from the
International Monetary Fund (IMF), the General Pervez
Musharraf-Shaukat Aziz government introduced a new
income tax law, thereby nullifying the long-standing
Income Tax Ordinance of 1979, which had been upheld
and accepted for 22 years through judicial review until
September 13, 2001.
Focus Section
This new legislation, titled the Income Tax Ordinance of
2001, was hastily drafted by Lee Burns, an Australian
Assistant Professor, due to the urgency prompted by an
IMF Stand-By Arrangement. Regrettably, the drafting
process was hurried, leaving typographical errors
uncorrected and prompting concerns regarding the
thoroughness of review and debate.
Critics argue that the 2001 ordinance required numerous
revisions to function effectively and has remained
vulnerable to legal challenges. Despite this, successive
elected parliaments have failed to address its
shortcomings, as highlighted by the Supreme Court in
the case of CIT v Eli Lily (Pvt) Ltd (2009) (2).
Since 2002, this Ordinance has been amended over
2500 times, resulting in significant litigation and
revenue losses, as the law remains loaded with
contradictions and ambiguities.
The Supreme Court's observations in (2009) 100 Tax 81
(S.C. Pak) underscore the hurried nature of the drafting
process and the subsequent amendments, which have
further complicated the legal framework.
Despite these criticisms from the judiciary, there has
been little effort to revise the law comprehensively. The
lack of academic research and political will to address
these issues reflects a broader apathy towards the reform
of tax legislation in Pakistan.
In conclusion, the Income Tax Ordinance of 2001 stands
as a testament to the challenges of policy-making under
external pressure and the consequences of inadequate
review and debate. Its continued flaws underscore the
urgent need for comprehensive reform to ensure a fair
and effective tax regime in Pakistan.
Need for Comprehensive Tax Reforms
in Pakistan
Pakistan has a significant opportunity to enhance its tax
collections, which could potentially amount to
approximately Rs. 12 trillion at both the national and
provincial levels. To achieve this objective, the country
urgently needs to implement fundamental reforms,
which should be undertaken collectively under the
umbrella of the Council of Common Interests (CCI) and
the National Economic Council (NEC).
A critical component of these reforms involves the
establishment of a modern, professional, and fully
automated National Tax Authority. Such an authority
would play a pivotal role in enhancing tax compliance and
effectiveness by leveraging advanced tax intelligence
systems to identify and address tax avoidance and evasion
practices.
To ensure the success of these reforms, it is essential to
foster consensus and engage in a democratic process to
enact legislation that establishes an autonomous tax
ICMA’s Chartered Management Accountant, Mar-Apr 2024
authority. This authority should be staffed with specialists
in taxation and governance, rather than traditional
bureaucrats. By centralizing tax administration under a
single entity, individuals and businesses would benefit
from streamlined processes and enhanced accountability
at the national, provincial, and local levels.
The modalities and operations of the proposed tax
authority can be deliberated and finalized through the
CCI, as outlined in Article 153 of the constitution.
Furthermore, the authority's oversight and
governance can be entrusted to the NEC, in
accordance with Article 156.
Guiding Principles for Tax Reforms
A key principle guiding these tax reforms should be
alignment with broader economic policies aimed at
fostering sustainable economic growth. By allowing
market forces to operate freely and efficiently, the
reforms seek to unlock the full potential of Pakistan's
economy. Moreover, the ultimate goal of taxation should
be to redistribute the benefits of economic growth
equitably, thereby promoting social well-being and
cohesion.
In essence, the successful implementation of these
reforms would empower citizens to recognize the
tangible benefits of tax compliance. By promoting
transparency, fairness, and accountability in taxation,
Pakistan can create a more inclusive and prosperous
society for all its citizens.
IMF Recommendations
The International Monetary Fund (IMF) has been actively
involved in providing extensive assistance to countries
undertaking the introduction or restructuring of Value
Added Taxes (VATs). Many nations, particularly those in
transition economies, have implemented VATs in recent
years, while others have reformed and simplified existing
VAT structures, especially in the Western Hemisphere.
29

The IMF often relies on the experiences of
European Union (EU) countries as a reference
point when formulating recommendations.
IMF Recommendations on Value
Added Taxes (VATs)
In its recommendations, the IMF generally
advocates for VATs to have a single rate ranging
from 10 percent to 20 percent, with a zero-rate
applied to exports. The IMF emphasizes
minimizing exemptions to maintain the
simplicity and effectiveness of the tax system. In
cases where a single-rate VAT is not feasible, the
IMF suggests a dual-rate structure, comprising a normal
rate alongside a reduced rate for specific items. However,
the IMF strongly opposes VATs with more than three rates
and urges against taxing essential goods at low rates or
exempting them altogether.
Regarding the base of the VAT, the IMF recommends
limiting exemptions to a few standard items that are
difficult to administer under a VAT, such as rental
incomes from housing, financial services, and the
agricultural sector. The IMF suggests applying the VAT to
all other goods and services, including construction
materials, professional and personal services, and
government purchases.
In some transition economies, the IMF has
recommended applying the VAT to farmers, considering
the relatively large size and small number of farms
compared to other countries. The IMF suggests taxing
essential items at reduced rates rather than exempting
them entirely. It also encourages adopting a
consumption-type VAT to promote capital formation
and maintaining international competitiveness by
adopting a destination-based VAT.
The IMF recommends that the VAT cover the
manufacturing stage initially and, in countries with strong
administrative capacities, extend to the retailing stage
eventually. The IMF advocates using the invoice-credit
method of accounting and setting a threshold level based
on turnover to exempt small traders from the VAT, thus
easing the administrative burden.
The IMF recognizes that introducing a VAT requires
significant effort in educating taxpayers and training tax
administrators. Therefore, it sometimes recommends
reforming existing turnover or sales taxes before
introducing the VAT, focusing on broadening the base
and simplifying the rate structure.
In addition to VAT recommendations, the IMF provides
advice on excise taxes, which are prevalent in most
countries. It suggests limiting excisable goods to
traditional items like tobacco products, alcoholic
beverages, and petroleum products. The IMF encourages
replacing specific rates with ad valorem rates to prevent
30 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
revenue erosion due to inflation and ensuring that
import and domestic production are taxed equally.
IMF Recommendations on International
Trade Taxes
The IMF discourages reliance on international trade
taxes, particularly export taxes, as they are often shifted
back to producers and can distort trade. Instead, the IMF
recommends outward-oriented trade policies to
promote economic growth.
IMF Recommendations on Income and
Corporate Taxes
Regarding income taxes, the IMF recommends reforms
such as reducing the graduation of marginal rate
schedules, broadening the tax base by limiting
deductions and exemptions, and adopting a global
income tax for equity goals. For corporate taxes, the IMF
advocates for a single, proportional rate, eliminating tax
incentives, and ensuring uniform treatment of domestic
and foreign enterprises.
In summary, the IMF's recommendations aim to create
efficient, equitable, and transparent tax systems that
support economic growth and development across
countries and regions.
References:
(1) Undoing the legacy of military dictators, The News on Sunday
[Political Economy], October 8, 2017: https://www.thenews.com.pk/t
ns/detail/564159-undoinglegacy-military-dictators.
(2) CIT v Eli Lily (Pvt) Ltd (2009) 100 Tax 81 (S.C. Pak).
About the Author: Muhammad Ammad Ansari brings over 17
years of comprehensive expertise in tax operations and litigation
within Pakistan. As a Chartered Management Accountant and
Associate member of ICMA, he currently holds the position of
Incharge Taxation at the Utility Stores Corporation of Pakistan.
With a strong background in both direct and indirect taxation, he
oversees operational functions and manages litigation matters.
Ansari's proficiency lies in navigating tax implications and
compliance requirements, while also optimizing tax strategies to
minimize liabilities for the Utility Stores Corporation.
Focus Section

Navigating Pakistan's Economic Challenges:

From IMF Dependency to Strategic Solutions
W hyeconomic
does Pakistan need the IMF? What are Pakistan's
structural problems? What are the
How can this
be done?
continuous current account deficit problems? What are
their remedies? According to the WTO's
report for 2022, China's
The current balance of Pakistan's current account stands exports of goods and
as follows: services amounted to
Export in FY 2022 US$39.42 billion US$3.9 trillion, while
imports reached US$3.1
Remittances in FY2022 US$31.27 billion
trillion. In the same year,
US$70.69 billion China imported
Jalal Ahmad Khan, FCMA
Imports in FY 2022 US$82.28 billion US$261.4 billion worth Former Execu ve Director ICMA
of agricultural and
Deficit US$11.59 billion related products, as reported by Sander Trade.com and the
External Debt in FY 2022 US$131 billion USDA Foreign Agricultural Service. These imports included
items such as milk, poultry, soybeans, processed foods,
Pakistan's exports continue to be dominated by meat, grains, and vegetables. For further information on
manpower export, cotton textiles and apparel. Imports China's evolving demand in the agricultural import
include petroleum and petroleum products, chemicals, market, refer to the International Agricultural Trade Report
fertilizer, capital goods, industrial raw materials, and by Hui Jiang, dated September 29, 2020.
consumer products. Pakistan exports of goods and
services as percentage of GDP is 9.06% and imports of
goods and services as percentage of GDP is 17.99%
Major Imports
1) Machinery from China $16 billion
2) Fuel/Oil from UAE, Saudia, Qatar $17 billion
3) Edible Oil $4.5 billion
Total $37.5 billion
if this amount is paid under a Chinese Yaun Facility
Amount to be managed by Pakistan own resources
become US$82.28-37.5= US$44.78. In such a situation the Pakistan currently contributes 20% of China's agricultural
demand for Dollar will be less than its supply. Dollar imports, totaling approximately US$50 billion annually.
prices will decline to Rs.100 parity or even less. This will This substantial volume of imports necessitates a
reduce energy prices, reduce cost push inflation and well-organized arrangement.
make our industry more competitive.

ICMA’s Chartered Management Accountant, Mar-Apr 2024 31


The Zarai Taraqiati Bank Limited, also known as the
Agriculture Bank, has been experiencing continuous
losses over several years and is currently listed for
privatization. If 60% of its shares were acquired by
Chinese investors, they would likely make significant
investments in Pakistan's agriculture sector, particularly
in the production of goods they intend to import. This
could lead to a surge in the importation of Chinese
agricultural machinery and the implementation of
innovative methods to enhance yield per acre. However,
Pakistan's yield per hectare remains comparatively low in
comparison to other nations.
Rice yield per hectare (M. Tons) Wheat Yield per hectare (M. Tons)
Pakistan 2.7 Pakistan
Indian Punjab 4.3 Indian Punjab
Bangladesh 4.3 China
China 6.5 U.K
Philippine 6.0 USA
South Korea 5.2 World
World 4.2
Source: Wikipedia
Current Status of Internal Revenue
Management in Pakistan
• Domestic public debt stands at Rs. 25.8 trillion, which
is 45% of the GDP.
• Banking deposits amount to Rs. 26.11 trillion, with a
Profit After Tax of Rs. 307 billion, primarily sourced
from government bills.
• The GDP for 2022 is US$353 billion, with a tax ratio of
10.4%, amounting to Rs. 7.1 trillion.
• The GDP is Rs. 68.26 trillion, with a budget deficit of
9.5%, equivalent to 6%.
• The shortfall in government revenue compared to
expenditure is covered through various means,
including direct public borrowing via National Saving
Schemes, bank borrowings utilizing various
instruments, and partly through deficit financing.
• Pakistan's GDP tax ratio stands at 10.4%, reflecting
the inability to effectively tax various sectors such as
agriculture, transport, wholesale retail, and other
services.
• In comparison to Pakistan, several other countries
have higher GDP tax ratios, such as Malaysia (13.6%),
Azerbaijan (13.3%), Bhutan (13.6%), the Philippines
(14.2%), Egypt (15.2%), Kazakhstan (16.4%), Morocco
(21.8%), and Turkey (24.9%). These figures are based
on data from the List of sovereign states by tax
revenue to GDP ratio (2020) on Wikipedia
The Economic formulae for economic development :
National Income = Consumption + Saving (Investment)
32 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
In Pakistan, public savings deposited in banks are often
utilized for government consumption through various
instruments such as T-bills, leading to a shortage of funds
available for lending to the private sector for
development purposes. This practice not only affects the
government budget but also impacts other areas where
the government has failed to deliver effectively.
Comparatively, during the 1970s, several countries,
including Iran and present-day Bangladesh,
experienced annual population growth rates
exceeding 2%. However, many of these countries,
including Iran and Bangladesh, have successfully
reduced their population growth rates over time. In
2.8 contrast, Pakistan and Egypt continue to face annual
6.5 population growth rates of around 2%. Additionally,
6.5 public education, healthcare, and other social sectors
8.0
in Pakistan are not performing satisfactorily.
4.5
4.8 These challenges highlight broader issues within
governance and policy implementation in Pakistan,
indicating the need for comprehensive reforms
across various sectors to address socio-economic
concerns effectively.
Out of Box Solutions to some
National Key Issues
1) Pakistan Steel Mill
Instead of viewing a financially struggling entity as a
burden, it should be seen as an economic opportunity.
The proposed way forward is as follows:
The Government of Pakistan should consider offering
the opportunity for an investor willing to establish a
steel mill four times the size of the current one at Port
Qasim. In exchange, the land and location of the
existing steel mill should be included as part of the
government's investment. A condition of this
arrangement would be that only Pakistan's abundant
minerals would be utilized in the production process,
with no raw material imports allowed.
Potential investors, whether from Japan or China,
would be required to construct their own power plant
for the mill and invest in mining and railways
necessary for transportation.
The steel produced from this new facility would fulfill
Pakistan's domestic steel requirements, with any excess
production earmarked for export. Consumer prices for
steel within Pakistan would be determined based on
variable costs plus overhead, excluding depreciation.
The government would impose a sufficient tax on
domestically sold steel, while also extracting a portion of
profits from exported steel through a 35% charge on
export prices. Contracts with investors would span 50
years, ensuring long-term stability and commitment.
Focus Section
No employees would face termination; instead, they
could be transferred to any facilities owned by the
investors, whether within or outside the country.
To formalize this proposal, a bill should be introduced
and passed in the Senate of Pakistan.
2) Pakistan International Airlines (PIA)
PIA has been facing consistent losses over several years,
leading to a negative capital situation according to
balance sheet analysis. In contrast, Middle Eastern
airlines have been thriving due to advantageous
arrangements, including low fuel costs and joint
ventures with Western aircraft manufacturers. Pakistan
lacks its own fuel reserves and commercial aircraft
manufacturing capabilities, putting PIA at a competitive
disadvantage against these Middle Eastern airlines.
Instead of a purely financial solution involving heavy
loan write-offs and extensive staff layoffs, an economic
model could be considered.
Under this model, PIA would become a subsidiary of Air
China while retaining its identity. This arrangement
would not involve loan write-offs or significant layoffs.
Fuel procurement would be conducted in Yuan through
a contract with the Chinese government, and all US
aircraft in PIA's fleet would be replaced with Chinese
models. This strategic partnership could benefit both
airlines involved.
Employees of PIA could be offered opportunities for
postings abroad within the broader Air China network.
To formalize this proposal, a bill should be introduced
and passed in the Senate of Pakistan.
3) Sindh Farmer Social Contract
In the waning days of the Turkish Khilafat in the previous
century, the Nawab of Hyderabad (India) married a
princess from the Usmani dynasty and established an
Usmani University in her honor. His vision was to
promote excellence in education and facilitate the
translation of knowledge into the local language. Today,
ICMA’s Chartered Management Accountant, Mar-Apr 2024
a century later, scholars from Usmani University,
regardless of their religious affiliation, are renowned for
their teaching prowess in leading US universities.
Furthermore, South India has emerged as a hub for
information technology, with IT exports reaching
US$104 billion in 2022 (Statista IT Services).
However, in Sindh, Pakistan, haris (agricultural laborers)
are subjected to poor treatment, living in dire conditions
with limited access to education and healthcare
facilities. Despite significant increases in crop yields since
1947, the wealth generated has not translated into
improved conditions for the haris. It is imperative that
laborers, the backbone of agriculture, receive a fair share
of the wealth they help create.
To address this issue, a bill should be introduced and
passed in the Provincial Assembly of Sindh, Pakistan,
ensuring that haris are granted their rightful share in the
creation of wealth and are provided with essential
amenities such as education and healthcare.
4) Exploitation of Minerals, Oil & Gas
Russia's expertise in this area could greatly benefit
Pakistan and positively impact its balance of payments.
However, the United States may not extend assistance
unless Pakistan agrees to grant them military bases and
control over its nuclear assets, reflecting an outdated
colonial mindset.
A potential solution lies in Pakistan's cotton production
capabilities. Bangladesh imports yarn from Pakistan and
exports garments to the US, amounting to US$45 billion
in 2022, according to Textile Today. If Pakistan were
granted the garment export quota to the US, it could
effectively mitigate its balance of payment issues. This
strategic shift could potentially create a win-win
situation for both countries involved.
In conclusion, it is evident that Pakistan is consuming
more than it produces, indicating a significant imbalance
in its economy. Furthermore, Pakistan's ability to
effectively address its challenges is hindered by weak
governance, lack of leadership sincerity, and a clear
sense of direction. Without concerted efforts to rectify
these underlying issues, improvement is unlikely to
occur. Therefore, it is imperative for Pakistan to unite
under sincere leadership and establish a clear direction
for progress if meaningful change is to be achieved.
Reference
– All figures related to Pakistan taken from State Bank of Pakistan
About the Author: The writer is a Chartered Management Accountant
and a Fellow member and the former Executive Director of ICMA. He is
presently a faculty member at PAK-KIET University.
33
 Focus Section

IMF and Energy Sector Reforms:

Case Study of Pakistan
T heFundExecutive Board of the International Monetary
(IMF) approved Pakistan’s 9-month Stand-By
IMF praises efforts
of Pakistan
Arrangement (SBA) on July 12, 2023, totaling
approximately US$3 billion at the time of approval. The
authorities to
program aimed to address various priorities, including stem rise in Hasnain Imam, ACMA
Senior Manager Research, Investment
advancing structural reforms, notably in the energy Circular Debt Banking Division, Bank AL Habib Limited
sector's viability, governance of State-Owned Enterprises
(SOEs), and enhancing climate resilience. In its First Review of IMF
under the Stand-by Arrangement (SBA), IMF has lauded
Recognizing the significance that the IMF places on the efforts of last caretaker government in the power and
tackling structural challenges in Pakistan’s energy sector, gas sectors to stem the rise in Circular Debt (CD), which,
we have provided a succinct overview of the IMF’s combined, reached 5.25% of GDP at end of FY23.
evaluation of the sector and the agreed-upon reforms
and future strategies between the Government of Factors that are presently contribu ng
Pakistan and the IMF to address these structural issues. to Pakistan’s power sector circular debt
Pakistan’s circular Debt Position, FY23 (July 2022 to June 2023)
Power sector Circular
Debt closed FY-2023
at Rs. 2.3 Trillion Poor
(2.7% of GDP)
Total energy sector enforcement
Drop in
circular debt closed ac ons
collec ons
FY-2023 at 4.4 Trillion due to large
Gas sector Circular (5.25% of GDP) Large DISCO price shock
Debt closed FY-2023 under- and high average
at Rs. 2.1 Trillion recoveries monthly
(2.5% of GDP Lower than- consump on
an cipated per household
Source: Pakistan, First IMF Review under the Stand-by Arrangement, January 2024
annual tariff
Pakistan’s power sector circular debt details, October 2023 rebasing

Jul 2022 to July 2022 to July 2023 to Source: Pakistan, First IMF Review under the Stand by Arrangement, January 2024
Circular debt details (Rs. Billion)
June 2023 October 2022 October 2023
Payable to power producers 1,434 1,617 1,750
GENCOs’ payable to fuel suppliers
Amount parked in Power Holding Private Limited
111
765
91
793
96
765
Addressing power sector CD: IMF has noted that
Total Circular Debt 2,310 2,501 2,611 Pakistan authorities notified the annual tariff rebasing in
Increase/(Decrease) in Circular Debt +57 +249 +301
Break-up of Increase/(Decrease) in Circular Debt late July 2023, as well as monthly and quarterly tariff
Budgeted but unreleased subsidies Nil 74 8
Unclaimed subsidies (70) (10) Nil increases thereafter. Despite this effort, power sector CD
Interest Charges 143 54 45
(Power Holding Ltd. + Independent Power Producers) reached Rs. 2.5 trillion at end-September 2023 (2.4% of
(Quarterly Tariff Adjustment + Fuel Charge Adjustment)
250 103 110
GDP), due to lower than-expected recoveries, driven in
Non-Payment by K-Electric (53)
160
65
61
43
77
part by a delay in the rebasing’s billing application.
236 163 165
Other adjustments (Prior year recovery)
Sub-total (a)
(447)
220
(254)
256
(147)
301
Addressing gas sector CD: IMF noted that Pakistan
Payment through fiscal space authorities increased natural gas tariffs first on November
Power Holdings Limited principal repayments (35) (7) Nil
Power Holdings Limited unpaid markup Nil Nil Nil 08, 2023 and subsequently effective February 01, 2024,
Stock payments (127) Nil Nil
Sub-total (b) (162) (7) Nil partly due to the fact that no gas tariff adjustments had
Total (a + b) 57 249 301
Source: Ministry of Energy (Power Division), Government of Pakistan
occurred between September 2020 and January 2023.

34 ICMA’s Chartered Management Accountant, Mar-Apr 2024

Focus Section

Restoring energy sector viability in Pakistan Accelerating medium-term cost-reducing reforms

IMF believes ‘’timely implementation of scheduled tariff
adjustments and broader reform efforts’’ are critical to
restoring energy sector viability in Pakistan. In particular,
the Fund has recommended the following steps to
manage Pakistan’s energy sector circular debt: -
No Power
i) Price rationalization to channel gas resources to the
most efficient gas-based power generator (merit
order principle).
ii) Clearing unguaranteed CPPA-G arrears subject to
renegotiating remaining power purchase agreements.
Gas

avoid further fiscal pressures while ensuring electricity A

01
cted slab adjustments.
tariff structure must be maintained to shield the
vulnerable household consumers.

02 Complete .
September 2023 will complement tariff increases.

green energy. Reforms include:-

(i) Improving price signals for inputs;

(ii) Moving to private sector management of
Establishing a level playing field by: (i) E
DISCOs through long-term concessions
cross- ; and (ii)
03 from 2024;
Removing favorable power rates currently offered to
(iii)
well-connected industries.
power purchase agreements;
(iv) debt of Power
Holding (Private) Limited into cheaper
public debt;
(v) Expanding renewable energy capacity; and
(vi) Improving transmission efficiency.
04

Key priorities of Pakistan’s Circular Debt
Management Plan, 2024
Pakistan has informed the International Monetary Fund
(IMF) that the following are the key priorities of Pakistan’s
Power Sector Circular Debt Management Plan, 2024: -
iii) Convert expensive Power Holding Private Limited
debt into cheaper public debt.
iv) Improve DISCOs’ performance by bringing private
sector participation. Initially, this could take the shape
of long-term concessions arrangements and may
culminate into ultimate divestment or privatization.

Key priorities of
Pakistan’s Circular
Debt Management
Plan, 2024

2. Better 3. Accelerating
1. Ensuring cost-
medium-term
recovering targeting cost reducing
tariffs subsidies reforms

i) Government of
i) NEPRA will i) Strengthen Pakistan is taking i) Second phase i) Government is
continue with cooperation further steps in its (Implementatio considering
automatic between DISCOs, multi-year subsidy Date: FY-2026) will various options to
notifications of Ministry of Power, rationalization plan see the elimination replace agriculture
regular Quarterly and NEPRA. This that focuses on tube of one-third of tube well subsidies
Tariff Adjustments will allow smooth wells. The plan cross-subsidy for in Baluchistan.
and Fuel Charge petition and entail removal of tube wells.
Adjustments. determination government
processes. subsidies. These
subsidies benefit
large agricultural
users.

ICMA’s Chartered Management Accountant, Mar-Apr 2024 35


v) Institutionalize anti-theft procedures.
vi) Increase share of variable and cheaper renewable
energy in the generation mix;
vii) Refrain from netting out cross-arrears using
“non-cash” settlements
Addressing the rising Gas Sector
circular debt
Pakistani authorities notified the IMF that the escalating
circular debt in the gas sector is attributed to the
following factors:
• Accumulation of Re-gasified Liquid Natural Gas
(RLNG) tariff differential since FY19;
• Non-implementation of regular end-user gas price
adjustments in line with semi-annual OGRA
determinations.
To address gas sector circular debt, Government of Pakistan
has changed structural end-user gas tariff in February 2023.
It has also raised gas prices first effective November 01, 2023
and subsequently in February 01, 2024.
Steps to be taken to address
Gas Sector circular debt
• Implement the notification for OGRA’s scheduled
semiannual gas price adjustment within the
mandated 40-day window.
• Reduce large preferential cross-subsidies across
industrial and commercial users.
• Disincentivize gas use in captive power plants.
• Provide gas to power sector that is closer to
cost-recovery.
• Equalizing rates between export and
non-export industries.
• Implement structural gas pricing changes implied
by Weighted Average Cost of Gas (WACOG) Bill thus
allowing full cost recovery of imported RLNG.
• Implement cost reducing reforms (including
measures to reduce Unaccounted for Gas (UFG)
losses.
• Improve gas sector infrastructure, rehabilitate
networks, and control theft.
Key takeaways from the interview of Dr. Musadik
Malik, Pakistan’s Minister for Energy
Minister for Energy, Dr. Musadik Masood Malik, provided
the following remarks during an interview with a local TV
channel on March 14, 2024:
• Pakistan's energy sector is facing an annual loss of
Rs. 1,000 Billion.
• The implementation of the Weighted Average Cost
of Gas is deemed necessary.
36 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
IMF has rejected the ‘’new tariff rationalization
and circular debt management plan’’
IMF has rejected the ‘’new tariff rationalization and circular debt
management plan’’ claiming that ‘’the proposal does not address the
underlying problems of Pakistan’s energy sector.’’
IMF Mission Chief Nathan Porter has said: “… it is essential for the
government to focus on broad-based reforms, including to reduce
the high cost of energy, improve compliance and reduce theft and
line losses, end captive power, and fix the governance and
management of the DISCOs, as well as keep up with regular tariff
adjustments. In our view, the proposed plan does not address the
underlying problems. In particular, the circular debt neutrality of the
tariff rationalisation plan is doubtful and it would place a significant
additional burden on vulnerable households. The circular debt
‘reduction plan’ entails fiscal risks given the chain of transactions
involved and would also continue the use of supplementary grants
which have placed a considerable burden on the fiscal accounts in
recent years.’’
What was the tariff rationalization and circular debt
management plan?
• It was proposed that power tariff for the industry be slashed
between Cents 8.5-11.75/kWh from Cents 14 per unit through
subsidy neutral proposal.
• Protected categories of consumers be loaded Rs. 50/- to Rs. 450
per month fixed charges to minimise cross subsidy.
• Energy sector circular debt stock of Rs. 1,268 billion be settled
using funding from Government of Pakistan.
How was the scheme supposed to work?
• Assume the Government passes a grant.
• The grant was planned to be given to twin Suis (SSGC and
SNGP) who would then be able to adjust their receivables by
transferring them to pay off to gas suppliers (E&P Companies).
• Once the payments were to be received by suppliers, they
would be able to pay out dividends to their shareholders who
happen to be predominantly Government of Pakistan.
(Source: Business Recorder, February 07, 2024, My research)
• The current government is dedicated to reducing
electricity costs.
• The Prime Minister has initiated a review of the future
of DISCOS, contemplating potential privatization.
• Dr. Musadik Malik clarified that DISCOS are not slated
for provincial control.
• The IMF dismissed the "tariff rationalization and
circular debt management plan" as a mere "book
adjustment."
• On the prospect of providing industrial sectors with
electricity at Cents 9.0/kWh, Dr. Musadik Malik
expressed doubt, suggesting, "I doubt the IMF will
approve of such a subsidy."
About the Author: The writer is a Chartered Management Accountant
and an Associate Member of ICMA. Currently, he holds the position of
Senior Manager Research in the Investment Banking Division at Bank
AL Habib Limited. Previously, he served as the Head of Research at AL
Habib Capital Markets (Private) Limited. With over 18 years of
experience, he has been involved in equities and macroeconomic
research since 2005.
Focus Section
Managing Economic Challenges:
Breaking the Cycle of Dependence
P akistan's economic narrative has, for decades, been
interwoven with the International Monetary Fund
(IMF). Since joining the organization in 1947, the country
has been a frequent borrower, highlighting persistent
structural challenges that have hindered its quest for
sustainable economic growth. This article delves into
Pakistan's relationship with the IMF, comparing it to
global trends in IMF loan utilization. It further explores
the complex challenges inherent in this relationship and
proposes strategies for breaking the cycle of reliance on
IMF assistance, paving the way for long-term economic
independence.
Pakistan's IMF History: A Standing Outlier
While many countries have utilized the IMF's assistance at
different points in their economic journeys, Pakistan's
case stands out in the frequency and duration of its
engagements with the organization. A year-on-year
analysis reveals a pattern of repeated recourse to IMF
bailouts, suggesting a deeper struggle with fundamental
economic issues that continue to impede self-sustained
growth. In stark contrast, many nations have used IMF
programs as a temporary measure to navigate specific
crises, subsequently transitioning to independent
economic trajectories.
Comparing Trends: Beyond the Numbers
Understanding Pakistan's IMF history requires
considering the broader global landscape of IMF
utilization. According to the IMF's own data, from 1945 to
2023, Pakistan has received 23 IMF loan programs,
ranking it among the top five most frequent borrowers.
Contrastingly, the majority of member countries have
utilized the IMF only a handful of times, often as a
one-time measure during critical moments. This
comparison signifies the unique relationship that
Pakistan has with the IMF, highlighting the country's
persistent economic vulnerabilities.
ICMA’s Chartered Management Accountant, Mar-Apr 2024
Beyond the Numbers:
The Underlying
Challenges
The need for repeated
IMF bailouts often
Mohammed Naveed Jamal, ACMA
Finance Superintendent
reflects a multitude of
Packages Convertors Limited
underlying challenges
(Part of Packages Limited)
that hinder a country's
economic progress. In
Pakistan's case, these challenges include:
• Chronic Deficit and Unsustainable Debt: Pakistan
has grappled with a persistent fiscal deficit for a
significant period, leading to a high debt burden. This
deficit arises from various factors, including low
tax-to-GDP ratios, inefficient public spending, and
reliance on borrowing for financing recurring
expenditures.
• Export Stagnation and Reliance on
Low-Value-Added Goods: Pakistan's export profile
remains heavily concentrated in low-value-added
commodities like textiles and garments. This
dependence limits the country's ability to generate
sufficient foreign exchange earnings, thereby
hindering its capacity to finance imports and manage
external debt.
• Energy Sector Inefficiency and Circular Debt: The
Pakistani power sector suffers from inefficiencies,
including high transmission and distribution losses,
and a cycle of circular debt. This not only burdens the
economy but also discourages investments in critical
infrastructure development.
• Weak Governance and Institutional Issues:
Challenges of corruption, weak regulatory
environments, and a lack of transparency continue to
impede economic growth and development in
Pakistan. These issues discourage foreign investment,
hinder efficient resource allocation, and erode public
trust in institutions.
37

These complex and interconnected challenges create a
situation where the country finds itself repeatedly turning
to the IMF for support. However, relying solely on external
assistance does not provide a long-term solution.
The IMF's Role and Conditionalities:
A Double-Edged Sword
The IMF provides temporary financial assistance to
member countries facing balance-of-payment problems.
Its programs typically focus on macroeconomic
stabilization through a set of conditions known as
structural adjustments. These adjustments often involve
measures like fiscal consolidation (reducing the budget
deficit), tax reforms, currency exchange rate adjustments,
and trade liberalization.
While these measures aim to restore macroeconomic
stability and create an environment conducive to
long-term growth, they can also have negative
short-term consequences. Austerity measures can lead to
job losses, reduced public service provision, and
increased hardship for vulnerable populations.
Additionally, the IMF's emphasis on trade liberalization
can have negative impacts on domestic industries,
particularly in developing economies.
Present Landscape: Negotiation Amidst
Pressing Concerns
Pakistan's recent economic difficulties, exacerbated by
devastating floods in 2023, political instability, and global
headwinds, have once again necessitated negotiations
with the IMF. The current negotiation process is focused
on measures to address the country's widening fiscal
deficit, including revenue generation through tax
reforms, tackling energy sector issues through reforms
and improved efficiency, and strengthening the social
safety net to mitigate the adverse effects of austerity
measures on vulnerable populations.
However, concerns remain regarding the potential
impact of these reforms. Critics argue that the proposed
measures, including tax increases and subsidy cuts, will
disproportionately burden the poor and middle class,
potentially fueling social unrest. Additionally, the
long-term efficacy of relying solely on external support
without addressing underlying structural issues remains
a point of debate.
Breaking the Cycle: A Path Towards
Long-Term Sustainability
To move beyond the recurring reliance on IMF
bailouts, Pakistan needs a multi-pronged approach
that addresses both immediate challenges and paves
the way for long-term economic sustainability. Here
are some key strategies:
38 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
1) Addressing the Fiscal Deficit:
• Broadening the Tax Base: Pakistan's low tax-to-GDP
ratio, hovering around 10%, is a significant
impediment to generating sustainable public
revenue. Implementing tax reforms that broaden the
tax base, while ensuring fairness and minimizing
distortions, is crucial. This could involve measures like
tackling tax evasion, introducing progressive taxation
on high-income earners and luxury goods, and
streamlining tax collection mechanisms.
• Rationalizing Public Spending: A comprehensive
review of public spending is essential to identify and
eliminate inefficiencies and wastage. This could
involve prioritizing essential public services,
restructuring subsidies, and implementing
performance-based budgeting practices.
• Enhancing Institutional Capacity: Strengthening
institutions responsible for tax collection, public
finance management, and auditing is critical to ensure
transparency, accountability, and efficient resource
allocation.
2) Boosting Export Diversification:
• Developing Export-Oriented Industries:
Encouraging and incentivizing the development of
high-value-added industries, such as information
technology, pharmaceuticals, and engineering, can
diversify Pakistan's export profile and increase
foreign exchange earnings. This could involve
providing targeted investment incentives, improving
access to financing, and facilitating technology
transfer and skills development.
• Promoting Regional Trade: Leveraging regional
trade agreements and fostering closer economic
ties with neighboring countries can create new
markets for Pakistani exports. Streamlining trade
procedures, reducing non-tariff barriers, and
improving regional infrastructure connectivity are
crucial steps in this regard.
• Focusing on Innovation and Entrepreneurship:
Fostering a culture of innovation and
entrepreneurship is critical to developing new
products and services with global competitiveness.
This requires investments in research and
development, promoting technology adoption, and
creating an enabling environment for startups and
small businesses.
3) Reforming the Energy Sector:
• Addressing Circular Debt: Implementing reforms to
address the pervasive issue of circular debt in the
energy sector is crucial. This could involve measures
like improving efficiency in generation, transmission,
and distribution, tackling electricity theft, and
introducing cost-recovery mechanisms.
Focus Section

• Transitioning to
Renewable Energy:
Embracing renewable
energy sources, such as
solar and wind power, offers
a sustainable and cost-
effective solution to meet
Pakistan's energy needs.
Investing in renewable
energy infrastructure,
incentivizing private sector
participation, and phasing
out reliance on inefficient
fossil fuels are essential
steps in this transition.
• Regional Cooperation for Shared Growth:
• Improving Energy Conservation: Promoting Addressing common challenges like poverty,
energy efficiency through public awareness climate change, and energy security necessitates
campaigns, technology adoption, and collaborative efforts involving regional cooperation.
energy-efficient infrastructure development can This can provide a framework for sharing resources,
significantly reduce energy consumption and expertise, and best practices, fostering collective
improve energy security. prosperity and stability.
4) Strengthening Governance and Institutions: The Way Forward: A Collective Endeavor
• Combating Corruption: Tackling corruption is a Implementing these core strategies will undoubtedly
fundamental step towards creating an environment necessitate a collaborative effort involving the
conducive to economic growth and development. government, private sector, and civil society. The
This necessitates robust anti-corruption measures, government must exhibit strong political will and
including strengthening legal frameworks, dedication to enact these reforms. The private sector
promoting transparency and accountability in holds a pivotal role in actively investing in productive
public institutions, and empowering citizens to sectors, generating employment opportunities, and
report corruption. fostering innovation. Civil society can contribute by
holding the government accountable, advocating for
• Improving Regulatory Environment: Streamlining reforms, and promoting transparency and good
and simplifying regulations can reduce compliance governance.
burdens for businesses, encourage investment, and
Though the journey towards economic independence
foster innovation. This also involves ensuring
for Pakistan may be arduous and lengthy, it remains
regulatory clarity, predictability, and consistency.
achievable. By addressing its structural deficiencies,
• Investing in Human Capital: Investing in education prioritizing growth-centric policies, and promoting
and skill development is crucial to create a workforce good governance, Pakistan can liberate itself from
that can adapt to the demands of a changing global chronic economic reliance and forge a more resilient and
economy. This includes expanding access to quality prosperous future for its citizens. While the IMF may
education, improving vocational training programs, continue to play a role in the near term, the ultimate aim
and fostering lifelong learning opportunities. should be to strategically utilize any external aid and
transition towards self-sufficiency. This necessitates a
5) Fostering Regional Cooperation: sustained commitment to reform, good governance,
and comprehensive economic planning.
• Enhancing Trade and Investment: Building closer
About the Author: Mohammed Naveed Jamal is a Chartered
economic ties with South Asian neighbors can Management Accountant and an Associate member of ICMA. He
create new trade and investment opportunities for possesses over 13 years of experience in managing, analyzing, and
Pakistan. This requires active participation in financial reporting in the packaging and printing industry. He is
regional trade agreements, promoting currently working as Finance Superintendent at Packages Convertors
cross-border investment, and improving regional Limited (PCL), a part of Packages Limited and a listed FMCG company.
Prior to joining PCL, he worked as a Citibanker at the Fortune 500 Club
infrastructure connectivity.
Company, i.e., Citibank, N.A.

ICMA’s Chartered Management Accountant, Mar-Apr 2024 39


Exploring Alternatives to IMF Support:
Diversifying Economic Strategies
P akistan is a member of IMF since 1950. To date,
Pakistan has relied on 23 IMF relief programs1. IMF
unlike any other typical lending institutions does not act
as a temporary bail-out institution. Unlike banks or any
other financial Institutions, its policies do not tend to
focus on loaning for a defined maturity period and then
negotiating yet another loan at the end of that period.
The IMF’s insistence on long-term structural reforms and
fiscal consolidation underscores that it is instead
conditional upon hardwired structural and policy reforms
to support macroeconomic stability and fiscal
consolidation. To date, Pakistan has not implemented
IMF reforms consistently due to political uncertainty,
changing political conditions and multiple other factors.
In the current circumstances although Pakistan has no
other option but to continue the existing IMF program,
However, many financial experts believe that Pakistan
should not seek a bailout package from IMF which is
beyond three years as a longer and larger program would
be an economic disaster, potentially making Pakistan
another Argentina, which is stuck in a debt trap.
It is very important in the country’s interest, that the
newly elected Government not only successfully obtain a
medium range loan from IMF but also to form long term
plans to ensure that in future the economy of the country
is dependent more on internal factors rather than factors
which are beyond its control such as IMF, Aid and other
such factors.
A few of such reforms which in the opinion of author
are critical for future growth and unwavering
continuity of the county’s economy are explained in
the subsequent paragraphs.
1
https://www.stimson.org/2022/pakistans-fatiguing-interest-in-the-imf-reform-program/
#:~:text=While%20Pakistan%20does%20not%20have%20any%20alternate%20short-term,
fiscal%20prudence%20and%20better%20management%20of%20state%20resources.
40 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
Structural Reforms:
The country's economic
team should primarily
focus on attracting
foreign investments
through its SIFC (Special
Saeed Akhtar, FCMA
Investment Facilitation Chief Execu ve Officer
Council) platform. There Al-Saeed Consultancy Services
is a significant gap in
infrastructure development, considering the young
population of the country, which provides ample labor
force for development plans. Equally important is to
provide a hassle-free environment for investors by
adopting consistent economic policies. With over 9
million Overseas Pakistanis, they could serve as a
significant source of FDI (Foreign Direct Investments) if
the current government's policies win their confidence.
Furthermore, SIFC should expand its reach by engaging
major corporations globally and inviting them to make
profitable investments. The government should also
collaborate with other countries, offering profitable
business opportunities on a shared basis, utilizing its labor
force as the primary bargaining offer for such projects.
Taxation Inclusion/Documentation
of Economy
Tax collection has consistently been a challenge for
Pakistan's economy, leading to heavy reliance on IMF
programs due to the government's inability to gather
sufficient revenues domestically. The taxation system in
Pakistan necessitates significant involvement from
top-level government officials, and bold decisions must
be made in this regard.
Focus Section
Firstly, a comprehensive technology-driven system
should be implemented, accessible to the public,
displaying all inflows and outflows related to tax
collections. This system should transparently show the
total taxes received and their allocations, enhancing
taxpayers' understanding and confidence.
Secondly, an inclusive media campaign should be
initiated to encourage the general public to fulfill their
tax obligations. This campaign should raise awareness
about Pakistan's taxation system and highlight the
personal and collective benefits of timely tax payments.
Thirdly, the government should introduce emotional
incentives to promote tax compliance. For instance, upon
project completion, pictures of the highest taxpayers in
the area could be displayed instead of those of ministers
or MNAs. Alternatively, inviting top taxpayers to
inaugurate projects could boost their confidence. The
government should also express gratitude to every
taxpayer who meets their obligations promptly.
Lastly, taxpayers should enjoy a higher social status
compared to non-taxpayers. While the current status of
being a filer or non-filer exists, it has flaws. Firstly, anyone
can become a filer by filing a return, regardless of
whether taxes are paid. Secondly, the benefits received
by filers are limited, usually tied to investments like
property or cars. The filer status should be linked directly
to tax payments rather than return submission, granting
higher status, such as respect and privileges, in
government institutions and departments, surpassing
those of non-taxpayers.
These measures would not only enhance awareness
and transparency regarding the tax system but also
incentivize the general public to fulfill their tax
obligations. By fostering a culture of tax compliance,
the country's reliance on IMF programs could be
reduced significantly.
Nation-wide Industry Development
Given the recent successes observed in other countries
through nationwide industry development initiatives,
the SIFC, along with the economic team, should
prioritize the establishment of one or more industries
to be developed on a national scale. Potential sectors
ICMA’s Chartered Management Accountant, Mar-Apr 2024
for focus could include Information Technology,
Freelancing Services, Agriculture, or others based on
international demand. The economic team should
collaborate with foreign investors, such as countries
and large corporations, to propose and support the
development of these selected industries in Pakistan.
Ideally, Pakistan would emerge as a pioneering force in
these industries, with minimal or no direct competitors
operating at a national level.
Pakistan's strategic location and access to vast markets
should be leveraged to facilitate revenue growth within
the country. Strong government support for selected
industries is crucial, as it can unlock the untapped
potential of the nation and lead to increased revenue
generation, reduced dependence on imports, and higher
tax collections. However, this approach carries the risk of
reducing demand for existing products or services.
Extensive research and careful consideration of
long-term impacts are necessary before initiating any
industry development endeavors.
Export Boom
Pakistan, with its diverse array of resources and
industries, finds itself at a critical crossroads where the
necessity for an export surge transcends mere economic
strategy. Historically, Pakistan has grappled with
numerous trade imbalances, highlighting the urgency for
an export boom to recalibrate this equation, thereby
fostering a trade surplus that contributes to a more
robust balance of payments.
While the country's exports have remained modest, there
exists untapped potential waiting to be harnessed.
Establishing an export commission with the primary
mandate of identifying global demands and matching
them with the country's production capabilities is
paramount. Through meticulous research, the
commission should select at least 5 to 10 industries,
ensuring a continuous assessment to maintain the
relevance and applicability of the opportunities and
strengths matrix.
An export-driven economic growth emerges as the
cornerstone in unlocking prosperity, mitigating trade
imbalances, bolstering foreign exchange reserves,
spurring job creation, promoting economic diversification,
and capitalizing on global market prospects.
41

As Pakistan embarks on its transformative journey,
integrating export-focused growth into its economic
framework emerges as a pivotal strategy to propel the
nation towards sustainable and resilient development.
Imports Policy Improvement
Pakistan must reassess its import policy in light of
persistent trade imbalances. While essential imports
such as medicines should continue, measures should be
implemented to minimize spending on luxury items like
cars, possibly through increased taxes.
Additionally, special considerations should be given to
the import of machinery that could enhance the
production of exportable goods in the formulation of
the import policy.
Development of Under Developed Area
The vast land and underdeveloped population within
the country present untapped potential that must be
maximized. The economic team should devise plans and
foster joint ventures with larger corporations by offering
tax incentives in these underdeveloped areas.
Energy Crisis
Pakistan has grappled with severe energy crises, which
have significantly impacted its financial well-being. The
initial shortage of energy led certain producers and
exporters to relocate their operations abroad,
consequently reducing the country's exports and
production capacity.
42 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
Currently, capacity payments to Independent
Power Producers (IPPs), established to address the
energy shortage, are adversely affecting the
balance of payments. It is imperative to review and
revise these agreements in line with the country's
future energy requirements.
Furthermore, the import of crude oil remains a major
contributor to foreign exchange depletion, perpetuating
trade imbalances. The government must facilitate a
transition from reliance on crude oil to more
cost-effective energy sources. Encouraging the use of
electric vehicles is one such strategy, which not only
addresses the issue of underutilized capacity payments
to IPPs but also reduces dependence on crude oil.
Additionally, the government should facilitate and
promote the use of solar power batteries by making
them available on installment plans for installation in
households and workplaces. This initiative not only
diminishes dependence on crude oil but also
alleviates the burden of high electricity bills on the
country's citizens.
Conclusion
Indeed, while the suggestions outlined above are
aligned with the goals of national development, growth,
and reducing dependence on external financial
assistance like IMF funds, it is crucial that policies
adopted by government officials remain consistent
regardless of political turbulence in the country.
Consistency in policies ensures stability and
predictability for investors, businesses, and the general
public, fostering an environment conducive to
sustainable economic growth and development.
Regardless of changes in political leadership or
dynamics, maintaining a steadfast commitment to
sound economic policies is essential for long-term
prosperity and resilience against external shocks.
About the Author: Mr. Saeed Akhtar, a Fellow member of ICMA,
currently serves as the Principal and CEO of Al-Saeed Consultancy
Services, specializing in Business, Tax, Management, and Corporate
Consultancy. Prior to this role, he held the position of CEO at Falcon
Services (Private) Limited. Additionally, Mr. Akhtar has contributed as
a visiting faculty member at ICMAP, University of Lahore, and various
other organizations.
Focus Section
IMF — Not a Panacea but a Medicina
W ashington tells Islamabad to engage with the IMF
and implement economic reforms. A clear
message has been conveyed to the Pakistani
government, emphasizing the importance of
collaboration with the IMF for the necessary economic
reforms to achieve stability. Pakistan has been urged to
continue working with the IMF and other financial
institutions to implement long-overdue macroeconomic
changes for the betterment of the country. It has also
been emphasized that Americans are hesitant to invest;
they had planned investments of US$1.5 billion since
2019 but could only invest US$250 million during 2022.
They seek a change in the business climate to make it
more favorable for investors. Pakistan still faces
enormous challenges and direly needs to execute
relentless structural improvements – which are at the top
of their agenda. (Dawn 8th March 2024)
The above lines depict a grim narrative of our economy
and the management approach employed by our
economic leaders, who have seemingly adopted an
ostrich-like strategy, allowing the economy to persist in
perpetual crises. We have become overly reliant on the
IMF as an administrative body, expecting not only bailout
packages but also guidance for our day-to-day economic
activities. This has led to a complacent attitude among
our executives, merely waiting for the next IMF package,
with meetings becoming routine occurrences.
The recent visit of an IMF staff mission to Pakistan from
March 15 to 18, 2024, to discuss the second and final
review of the US$3 billion short-term bailout package,
followed the same predictable pattern. Pakistan made
promises and assurances regarding macroeconomic
stability, a gradual path to high economic growth, and
commitment to meeting all structural benchmarks, quali-
tative performance criteria, and indicative targets for
successful completion of IMF reviews. Discussions
revolved around familiar topics such as overall macroeco-
nomic indicators, government efforts on fiscal consolida-
tion, structural reforms, energy sector viability, and gover-
nance of State-Owned Enterprises (SOEs)—a recurring
cycle. Anyway, we expect the US$1.1 billion tranche after
ICMA’s Chartered Management Accountant, Mar-Apr 2024
the approval of
Executive Board.
Borrowing money and
the
spending it on
unproductive endeavors
leads to a debt trap,
where servicing the debt Syed Shamim Ahmed, FCMA
becomes impossible, Former General Manager Finance,
and yet more borrowing Karachi Port Trust (KPT)
is required to repay
previous loans. Pakistan
finds itself in such a dire situation, with external advice
urging corrective action, yet we remain stubbornly
resistant to implementing necessary reforms to support
our economic stabilization efforts. This approach has
become ingrained in our normal economic activities.
Once funds are received, required reforms are forgotten,
resulting in further requests for support.
It would not be accurate to say that the government is
not functioning as expected, or that institutions are not
performing as required. Rather, it is fair to say that the
individuals in positions of responsibility are not working
diligently enough to keep the country afloat. Their
insensitivity has led to a state of decline that is difficult to
articulate but painfully evident. Our poor performance
across all sectors has placed us near the bottom of
international rankings.
We are not only accumulating debt but also inviting
trouble because we are unwilling to change our ways.
Despite claims by the government of increasing revenue
collections, a rise in tax filers, and positive economic
indicators, the reality is starkly different.
Increases in fuel, electricity, gas, and other utility prices,
along with soaring inflation reaching up to 38% (as of
May 2023), have made life increasingly unbearable for the
common citizen. There is a pressing need for significant
improvements in governance to build resilience, for
which external counsel is also being sought.
43
 Focus Section

Items 2018 2023 % changes Items 2018 2023 % changes

GDP US$ US$ (--) 5% US Dollar Rs.140 Rs.300 114%

357 B 339 B
Per Capita income US$ US$ (--) 13% Exports US $ 24 B US $ 32 B 33%
1700 1474
Growth Rate 6.2% 2% (--) 68% Imports US $ 55 B US $ 72 B 31%
Unemployment 5.8 % 6% 3% Foreign Debts US $ 95 B US $ 130 B 26%
Debt to GDP 64.8% 76.2% 18% Total Debts US $ 215 B US $ 267 B 24%
Infla on 10% 30% 200%

A comparison of our poor economy for the years 2018 and
2023 as given below is evident that instead of any
improvement we sadly retarded even with IMF involvement.
With the bleak scenario described above, it's evident that
we are not heeding the advice of the IMF, which is
resulting in a downturn for the economy. While the IMF is
not a miracle worker, its primary role is to advise
struggling countries on how to alleviate poverty,
promote trade, and achieve financial stability for
economic growth. When a country seeks a bailout
package, the IMF assesses economic weaknesses and
advises on capacity building, focusing on enhancing
revenue generation through good governance and
institutional reforms. This is aimed at improving the
financial situation of the country and ensuring its ability
to repay debts.
The IMF recommends general policies such as
accelerating structural reforms to enhance climate
resilience, strengthening overall governance, including
that of state-owned enterprises, and improving the
business environment. In critical situations, it may also
advise specific measures like the withdrawal of subsidies
or increasing utility charges. However, it is ultimately up
to the countries to implement reforms, promote
meritocracy and transparency, avoid nepotism, and
enhance tax collection.
A prime example of delayed reforms is the Federal Board
of Revenue (FBR), which has been undergoing
restructuring since 2000 when a Task Force was appointed
for tax administration reform. Despite the initiation of the
Tax Administration Reform Program (TARP) in 2005 and
the introduction of numerous reforms, actual
improvements in tax collection remain uncertain, with
collections failing to keep pace with increasing
expenditures. The restructuring process of the FBR
continues at a sluggish pace, with bureaucratic hurdles
posing significant impediments to implementation.
In essence, the IMF acts as a rescuer for countries in
critical condition, providing essential support and
prescribing guiding measures for recovery. However, the
success of these measures ultimately depends on the
willingness of the countries to reform themselves,
particularly in terms of governance practices.

Countries Per Capita Debts 2023 % of GDP Per Capita Income

Income 2018 $ Trillion $ 2023 $
USA 64,800 32.9 122 81,400
UK 43,300 3.2 96 45,544
Japan 39,700 4.3 98 48,900
Netherland 53,000 4.0 381 63,300
Germany 48,000 2.8 65 52,800
Canada 46,550 2.7 127 53,250

Countries that could not show improvements with IMF loan packages:
Countries IMF Loans $ Billions Per Capita income Per Capita income
2023 2018 $ 2023 $
Argen na 46.0 11,000 13,603
Egypt 18.0 3,000 3,200
Ukraine 12.0 3,000 2,470
Pakistan 7.4 1,700 1,474
Columbia 5.0 6,800 6,660

44 ICMA’s Chartered Management Accountant, Mar-Apr 2024

Focus Section
Debts, in absolute terms, are neither inherently good nor
bad. It is their utilization that determines whether they
become a blessing or a curse. Unfortunately, for us, debts
have largely been a curse, as they are often used to cover
budget deficits rather than being invested in productive
endeavors where the returns could bring relief.
It is commonly believed that the borrower appreciates
the value of money the most through its usage.
Countries progressed in spite of high debt.
The above comparison between two sets of countries
serves as an eye-opener. One set of countries learns from
their mistakes, implements reforms, and steadily
improves. Their GDP consistently grows over the years,
reflecting their development. On the other hand, the
second set of countries merely use loans as a lifeline
without embracing any reforms, remaining trapped in a
vicious cycle of stagnation. They persist stubbornly,
refusing to learn from their errors.
The IMF, however, does not possess a magical solution to
propel a country forward. It can provide guidance and
support, but ultimately, it is up to the country's leadership
to chart a course of action towards progress and
overcome financial setbacks. This includes addressing
issues such as stagnant GDP growth, low employment
rates, inadequate healthcare and education facilities,
widening trade deficits, high inflation, and mounting
debts. Such circumstances require decisive actions.
Even though the IMF conveys its advice using soft
language and adhering to protocols, its
recommendations carry weight due to its high
reputation worldwide. However, the country is often left
to proceed at its own pace, which may be slow. It is
crucial for countries to heed the advice provided by the
IMF and take necessary actions to address their
economic challenges effectively.
Unfortunately, Pakistan has shown a reluctance to
earnestly embrace the guidelines proposed for its
improvement, as evidenced by the observations of the
Country Director of the World Bank in December 2023.
The Director highlighted the urgent need for policy
changes to address development issues that have only
benefited a select few and resulted in volatile and
stagnant growth. Pakistan's current economic model has
fallen behind its peers, leading to a reversal in poverty
reduction efforts. The country is facing sharply increased
inflation and significant depletion of internal and external
buffers, which have hindered economic progress.
While some steps taken by the government have been
acknowledged, tangible results are yet to be seen. It is
imperative for Pakistan to heed the advice of
international organizations and implement necessary
reforms to address its economic challenges effectively.
ICMA’s Chartered Management Accountant, Mar-Apr 2024
Over the years, the IMF has extended assistance to
Pakistan, preventing its economy from defaulting.
However, the sustainability of such arrangements remains
uncertain. Despite receiving significant financial support
from the IMF and other lenders, Pakistan still struggles to
find a way forward due to a lack of will, sincerity, and
determination among those in positions of authority.
Currently, Pakistan finds itself at a critical juncture, where the
decisions made will determine its fate. The failure to heed
the positive economic advice from the IMF has brought the
country to the brink of collapse. While directives for
economic reforms have been issued repeatedly, they have
not been implemented earnestly, resulting in a stagnation
rather than progress. Political challenges have further
exacerbated the economic downturn, compounding the
existing issues faced by the country.
Way Forward
The IMF provides broad outlines and specific measures
in some cases, leaving it up to the government to work
out the details and achieve the desired outcomes.
However, it is often the common people who bear the
brunt of government actions, such as raising taxes and
increasing prices of essential utilities, particularly in the
face of high inflation and unemployment.
Two cancerous evils plague our society and economy.
First, nepotism, which is a criminal offense, has infiltrated
our government machinery, resulting in appointments
based on personal connections rather than merit.
Similarly, contract appointments or post-retirement
appointments with exorbitant salaries further
exacerbate the issue. Without sincere implementation
by competent individuals, reforms cannot succeed—it is
the human element behind the reforms that ultimately
determines their effectiveness.
Secondly, delays in decision-making, often driven by
corruption, have led to cost overruns and inefficiencies
in public sector projects. Major projects, such as the
Diamer-Bhasha Dam, have experienced significant
delays and cost increases, placing a heavy burden on
taxpayers. It is crucial to remember that "time is money,"
and such delays only serve to exacerbate financial strain.
In summary, Pakistan has failed to derive full benefits
from IMF support and continues to be classified among
poor countries, with a poverty rate of 39.4% in 2023—a
significant increase from 21.9% in 2018—and a meager
per capita income of US$1474.
About the Author: The writer is a senior Chartered Management
Accountant having Fellow membership of ICMA. He retired as General
Manager Finance from the Karachi Port Trust (KPT) where he served
for around 22 years in different positions. He was also a member of the
Karachi Dock Labour Board for 7 years. After doing his MBA from IBA
Karachi, he started his initial career with Citibank and then served in
Awami Autos (now Pak Suzuki).
45

Pakistan and IMF Trignometery
Global Spectrum
In deficient economies, external financing is often seen as
a blessing in disguise in the short term to manage trade
collapses and forex settlements. The situation is being
tightly controlled amidst hyper-economic pulses, which
are compounded by inward trade imbalances and limited
outward realizations.
According to an international survey (Global Risks
Perception-2023) on vital global challenges, the leading
concerns for the future include (1) Energy Supply Crisis,
(2) Cost of Living Crisis, (3) Food Shortages, and (4) Debt
Burdens. These issues are classified into broader
categories of:
1) Societal Impacts
2) Economic Impacts
The debt crisis serves as a central catalyst for both
societal and economic disruptions, despite being
positioned in the middle of the axis. It acts as a trigger for
various risk scenarios that need to be carefully planned
and addressed by the appropriate stakeholders.
Alongside the ominous echoes of ongoing world wars,
the debt crisis has infiltrated the very foundations of the
micro-economies of developing countries.
Bottle
• B: Balancing Bullish/Bearish tendencies implicitly
with federal robustness should be managed through
insider segmentation.
• O: Orbit flows should be excluded from external
sources.
• T: Terms segregations could be alternative sourcing
trajectories for ameliorations.
• T: Territorial mutualizations should also be
considered to mitigate debt pile-ups.
• L: Lubrication terms for extended tenures with
shorter paybacks could ease the burden.
• E: Exploring and furthering less contributory aven-
ues could provide additional suppor
Neckes
• N – Nosles of Micro – outlays.
• E – Exorbitant Flows with operations of
related entities.
46 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
• C – Clutches of
Utilities /
Commodities
Financings.
• K – Knowledge
Divulgence / Khizar Hayat, FCA
Knighticks Deputy Manager Finance
Emergent Plans. A ock Refinery Limited
• E – External Over
reliquaries / reliances
• S – Surplus Foreign Trades Forecast Defecincies.
Pull Push Factors - Crossborder & Inverse
While capital markets primarily serve as secondary
sources for accruing gains, they also play a significant role
as the primary avenue for capital injections, with the
exception of fresh issues. They exert considerable
influence on inflationary trends and trade trajectories,
particularly in hyper-economies, where lending practices
can lead to:
• Artificial bubbles in money-market operations.
• Tying up capital for extended periods until revival.
• Necessitating marginal gains amidst
monetary pressures.
• Influencing perceptions and trends of cyclical
economic pulses
Here's a breakdown of the relevant economic values in
terms of debt to GDP, with a comparison to 2005:
• In 2008, the debt to GDP ratio was reported at 63%.
• By 2013, this ratio had increased to 73%.
• In 2018, it further rose to 78%.
• Subsequently, in the following two and a half years,
instances have been observed where the debt has
surpassed the national GDP by over 22%.
This trend indicates a notable increase in debt relative to
the GDP over the years, signaling potential challenges in
managing fiscal stability and debt sustainability.
While excessive talkativeness may not directly solve
economic challenges, thoughtful deliberations can
indeed foster a more positive outlook and potentially
lead to optimistic changes.
Focus Section
However, it's crucial to ground these discussions in
reality, acknowledging facts and historical instances. For
example, one historical milestone in Pakistan's economic
history is the instance of zero external debts.
Regarding government debt in South Asia, it's notable
that in 2022, it averaged 86% of GDP. Such high levels of
debt pose significant risks, including the potential for
defaults, increased borrowing costs, and the diversion of
credit away from the private sector. These challenges
underscore the importance of prudent fiscal
management and strategic planning to ensure
sustainable economic growth and stability.
Way Forward
Sourcing / Fundings Ovaltines
Consumers Spending Mix : Developing economies are
often characterized by an abundance of:
• Spending on fast-moving consumer goods (FMCG)
driven by consumer trends.
• Non-development outlays.
• Excessive maintenance costs.
• Dilution of product qualities.
• Dependence on international trade.
• Technological limitations or 'technology backyards.'
• Expensive and often inefficient systems or
'systems emporium
Foreign Institutions - Local PE + IMF
The extent of availability of settlement currencies in
home countries is a prime consideration for robust
growth, alongside exploring alternative options. The
need of the hour is to expand the geographic distribution
and spread of:
• Equitable presence of lending funds across multiple
jurisdictions.
• Establishment of local private equity (PE) branches of
foreign institutions and the IMF.
• Flexibility and availability of lending in multiple
currencies.
• Diversity in settlement modes.
• Equity in funding sourcing for public, private, and
institutional domains.
Compliance Functions
– Centralization (Corps)
In pursuit of effective excellence, traditional compliance
operating modes should be assimilated into:
• Centralized and enhanced access protocols.
• Oversight mechanisms within corporate domains.
• Ensuring trustworthy compliance with
acceptable outputs.
ICMA’s Chartered Management Accountant, Mar-Apr 2024
Loan funds should undergo revitalization to revamp:
• Freeing flows to transform into cash-rich earners.
• Exploring untapped avenues for strategic planning.
• Discarding stagnant or detrimental layouts.
• Addressing inflated streams to promote stability.
Domestic Markets Dynasities
Diversifying lending forms to support domestic market
dynasties and project-based financing instead of
countrywide lending, we can focus on:
• Money market support.
• Central treasury management.
• Funding public projects (capital and maintenance).
• Refinancing existing loans.
• Facilitating foreign trade settlements.
• Providing utilities and energy provisions for public
sectors.
Terms of arrangements should be reassessed in
accordance with relevant rollovers and anticipated
inflows. Countrywide lending has led to overloaded
burdens and crunches on national exchequers. The dire
need is for:
• Scaling lending.
• Specifying lending with rollovers.
• Allocating lending for projects with matching inflows.
• Extending lending to public entities.
Realms & Pictorials
Public monetary fundings traditionally lie in ambiance
with respect to the realms of their disposal, coupled with
requisite media projections
Country Inward Trades Management
Forex Trades Settlements - To ease the processes of
transactional flows arising from international trades,
various measures can be devised, including:
• Involving dedicated multinational corporations in
arrangements for routing international commerce
and imports.
• Facilitating settlements among foreign holdings
located outside the country (referred to as foreign
settlements).
• Simplifying local currency conversion procedures.
• Exploring the concept of currency bordering
47
 Focus Section

Specialized Entities - For commercial vendings The aforementioned challenges associated with borrowings
originating from abroad, managing the repercussions or debts, whether external or internal, exacerbate the
may involve active planning and state support for: struggling economic outlook of developing countries,
particularly those burdened with debt.
• Entities solely engaged in commercial importing,
with a focus on minimizing direct imports. In contrast, philanthropic social entities such as
Alkhidmat and Akhuwat have emerged as beacons of
• Entrusting Special Purpose Vehicles with sectoral national excellence. Their growth and contributions can
demarcations for international trade layouts. be attributed to the following factors:
Stuck-up capital is another important consideration in • Providing loans for micro-enterprises with
arranging international bargains and trade deals. repayment covenants limited to the principal
amount.
Collection & National Treasury Redirections
• Offering loans at zero coupon rates, without any
Tax Free Status interest.
To truly transform local industrial frameworks, the • Achieving near-full recovery of social support
existing traditional tax structure should be made (approximately 99.9%).
supplementary rather than detrimental to business
growth. Steps forward could include: • Sustained growth of portfolios, trending upwards.
• Mitigating risks through active stakeholder
• Implementing contributory or profit-sharing
engagement and participation.
arrangements rather than imposing compulsory levies.
• Abundance of social voluntary contributions and
• Extending tax-free nets to encourage investment
successful execution of participatory initiatives,
and expansion.
leading to societal upliftment."
• Granting free entity status to businesses after
fulfilling requisite national contributions.
Policies Revitalizers
Policies aimed at revitalizing equitable taxation,
• Promoting the proliferation of new business hubs
simplifying consumption taxes, optimizing bond usage,
through widespread geographic distribution.
and implementing effective tax sizing would lead to:
Rising Interest Rates • Lower real income levels.
Rising interest rates are exacerbating debt risks for the • Reduced risk of distress caused by rising debt levels.
poorest countries. Approximately 60% of countries
eligible to borrow from the World Bank's fund for the
poorest are either in debt distress or already
experiencing it. The implications of rising interest rates
are manifold:
• Increased borrowing costs, leading to strain on cash
flows.
• Stalling business growth due to higher financing
expenses.
• Heightened volatility in financial markets, affecting
investor confidence.
• Contraction in inward international trade volumes.
• Diminished long-term benefits of borrowing for
capital stewardship.
• Governments may resort to measures such as
tightening international input channels. About the Author: The writer is currently associated with the Attock
Refinery Limited [Attock Group] as Deputy Manager Finance and
• Decreased borrowing and investment activities. looking after the areas of Treasury Bills and Associates (Related
Parties) for the last eleven year. He is a Fellow member of the Institute
• Enhanced financial constraints and restrictions of Chartered Accountants of Pakistan.

48 ICMA’s Chartered Management Accountant, Mar-Apr 2024

Focus Section

Navigating the Winds of Change: A Strategic

Guide Amidst IMF-Supported Reforms
I nofthechange
tumultuous seas of global economics, the winds
often blow with the force of IMF-supported
reforms, leaving organizations worldwide to navigate
uncertain waters. These reforms, characterized by
stringent fiscal measures and structural adjustments,
pose a significant challenge for businesses across
borders. However, they also present a unique
opportunity for strategic adaptation and transformative
growth. This comprehensive exploration seeks to unravel
the intricate dynamics of psychological and
organizational impacts engendered by IMF-supported
reforms. Drawing upon insights from seasoned HR Rukhshinda Mehar Dr. Saqlain Sher
professionals across various countries, including
Pakistan, India, Brazil, and Nigeria, this article offers a
roadmap for HR practitioners to not only weather the environments on employee well-being and
storm but to emerge stronger and more resilient in the organizational effectiveness, particularly amid periods of
face of economic upheaval. upheaval. These scholarly insights underscore the
strategic significance of HR's orchestration in crafting a
Strategic Insights and Global Perspectives: cohesive response to the challenges presented by
Navigating IMF-Supported Reforms IMF-supported reforms, aligning with the overarching
In framing the discourse on navigating IMF-supported theme of this guide.
reforms, it is vital to embed the discussion within the rich
Expanding the discourse to incorporate global
tapestry of organizational change management literature.
perspectives, research from diverse contexts such as
Extensive research underscores the critical role of effective
India, Brazil, and Nigeria offer invaluable insights into the
communication, proactive employee well-being
multifaceted strategies employed by organizations to
initiatives, and strategic leadership in facilitating
navigate economic reforms. For instance, studies by
successful organizational transitions. Scholars such as
Gupta and Sharma shed light on the efficacy of
Kotter and Lewin advocate for clear communication and
leadership development programs in fostering
vision alignment during periods of change, citing their
organizational agility and innovation amidst economic
instrumental role in mitigating resistance and fostering
uncertainty in India. Similarly, research by Silva and
employee engagement. Similarly, insights from Prosci and
Oliveira elucidates the pivotal role of employee
Bridges emphasize the necessity of addressing the
participation and engagement initiatives in driving
psychological dimensions of change, advocating for the
organizational resilience in Brazil. These findings
establishment of supportive structures and resources to
underscore the universality of the challenges posed by
effectively navigate uncertainty.
economic reforms and underscore the importance of
Moreover, an in-depth exploration of the literature context-driven strategies tailored to the unique needs of
reveals a burgeoning focus on the strategic imperative of each organization, aligning seamlessly with the strategic
HR professionals in bolstering organizational resilience framework outlined in this comprehensive guide.
amidst economic reforms. Studies by Cameron and
Quinn accentuate HR's pivotal role in shaping
Methodology
organizational culture, promoting values of adaptability, To glean strategic insights into navigating
and fostering continuous learning to enhance resilience. IMF-supported reforms, a qualitative approach was
Furthermore, research by Dutton and Heaphy employed through in-depth interviews with 20 heads of
underscores the transformative impact of positive work HR from various sectors in Karachi, Pakistan.

ICMA’s Chartered Management Accountant, Mar-Apr 2024 49


Each participant possessed a minimum of 15 years of
experience, ensuring a depth of knowledge and
perspective on organizational dynamics amidst
economic reforms. The interviews were conducted using
a semi-structured format, allowing for flexibility while
ensuring consistency in exploring key themes such as
strategic communication, employee well-being, and
leadership development. Through rigorous analysis and
thematic coding, patterns and insights emerged, guiding
the formulation of strategic recommendations
presented in this comprehensive guide. While the
sample size is focused on a specific geographic region,
the findings are enriched by drawing parallels with
global experiences and insights, offering a robust
framework for HR professionals navigating similar
challenges worldwide.
Bridging Theory to Practice: Contextualizing
Strategic Insights
After laying the methodological groundwork, the
transition to exploring the practical implications of
navigating IMF-supported reforms is essential. This
bridge between theory and practice serves as a critical
juncture in the discourse, where scholarly insights
converge with real-world challenges faced by
organizations. By contextualizing strategic insights
within the broader theoretical framework of
organizational change management, HR professionals
can glean actionable guidance to navigate the
complexities of economic reform.
As organizations grapple with the multifaceted impacts
of IMF-supported reforms, understanding the
psychological effects on employees becomes
paramount. Deciphering the intricacies of change
psychology is not merely an academic exercise but a
practical necessity for HR practitioners tasked with
guiding organizations through periods of uncertainty. By
elucidating the strategic significance of effective
communication, proactive well-being initiatives, and
adaptive leadership, this transition sets the stage for a
deeper exploration of the practical strategies outlined in
subsequent sections.
Decoding the Psyche: Unraveling the
Psychological Effects
Strategic Communication as the Cornerstone
Communication is the cornerstone of effective
organizational change management, particularly during
IMF-supported programs. As revealed by survey insights
from HR leaders across multiple countries, strategic
communication transcends mere dissemination of
information; it becomes the linchpin for aligning
organizational objectives, managing stakeholder
expectations, and fostering employee engagement.
Whether in Karachi, Mumbai, São Paulo, or Lagos, HR
professionals must adopt a nuanced approach to
50 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
communication, meticulously crafting messages that
elucidate the rationale, objectives, and implications of
reforms. By utilizing a variety of channels, from town hall
meetings to targeted newsletters, HR can ensure a
cohesive narrative that guides employees through the
turbulent waters of change.
Navigating the Murkiness with Strategic HR Approaches
Proactive Well-Being Amidst Uncertainty
Uncertainty breeds anxiety and apprehension among
employees, regardless of geographical location. To
navigate this murkiness, HR professionals must adopt
proactive approaches to employee well-being.
Establishing confidential feedback channels, offering
mental health resources, and facilitating regular
one-on-one sessions are crucial strategies identified by
surveyed HR leaders. Whether in Karachi or São Paulo,
Mumbai or Lagos, providing employees with avenues to
voice concerns, seek clarification, and receive
constructive feedback fosters a culture of trust and
resilience within the organization.
Strategies for Organizational Aegis
Fortifying Resilience and Flexibility
In the face of economic turbulence, organizational
resilience emerges as a strategic imperative worldwide.
HR must spearhead comprehensive training initiatives
that transcend traditional skill sets, encompassing
emotional intelligence, adaptability, and change
management. As underscored by survey findings, a
staggering 90% of HR leaders advocate for a continuous
learning culture that equips employees with the tools to
navigate uncertainty and embrace change. Whether in
Karachi or Mumbai, São Paulo or Lagos, fostering a
growth mindset and promoting ongoing skill
development lays the foundation for organizational
agility and resilience.
Alchemy of a Positive Work Environment
A positive work environment is a universal need,
transcending geographical boundaries. Recognition
programs, internal storytelling platforms, and
stress-alleviating interventions serve as catalysts for
fostering a culture of positivity and resilience. Whether in
Karachi or Mumbai, São Paulo or Lagos, celebrating
successes, sharing stories of perseverance, and
prioritizing employee well-being cultivates an
environment where employees feel valued, supported,
and motivated to overcome challenges.
Leadership, Participation, and Strategic
HR Orchestration
Empowering Managers and Cultivating
Leadership Qualities
Effective leadership is essential for navigating the
complexities of organizational change, irrespective
of location.
Focus Section
HR professionals play a pivotal role in empowering
managers and cultivating leadership qualities at all levels
of the organization. By providing leadership
development programs, mentorship initiatives, and
strategic delegation of responsibilities, HR fosters a
culture of distributed leadership that promotes
innovation, collaboration, and accountability. As
highlighted by survey insights, 85% of HR leaders
recognize the strategic importance of decentralizing
decision-making processes to ensure agility and
responsiveness across borders.
The Symphony of Participation
Employee participation is not only a strategic imperative
but also a source of competitive advantage globally. HR
professionals must institute mechanisms for active
participation, such as employee forums, cross-functional
teams, and collaborative decision-making processes. By
harnessing the collective intelligence and creativity of
employees worldwide, organizations can drive
innovation, foster ownership, and enhance
organizational resilience. As affirmed by survey findings,
HR's role as the curator of a participatory culture is
instrumental in ensuring that each employee feels
empowered, valued, and engaged in the organizational
journey, regardless of geographical location.
Conclusion: HR as Architects of
Transformative Change
In the tumultuous seas of economic reform, HR
professionals emerge as the architects of transformative
change worldwide. By understanding the nuanced
psychology of change, fortifying organizational resilience,
and orchestrating a symphony of positive workplace
dynamics, HR becomes the driving force behind
organizational success. Survey insights underscore the
strategic significance of HR's role, with 95% of HR leaders
recognizing its importance in navigating IMF-supported
reforms across borders. Through strategic
communication, proactive well-being initiatives, and
empowerment of leadership and participation, HR
professionals chart a course towards unprecedented
growth, adaptability, and resilience on a global scale.
Moreover, the incorporation of international
perspectives enriches the strategic framework presented
herein. Insights from India, Brazil, and Nigeria offer
valuable lessons for organizations worldwide,
highlighting the adaptive capacity of HR strategies
amidst economic uncertainty. From leadership
development programs in India to employee
engagement initiatives in Brazil and resilience-building
strategies in Nigeria, organizations across borders
demonstrate resilience and innovation in navigating
economic reforms.
In conclusion, the strategic guidance provided
empowers HR professionals to navigate IMF-supported
reforms with resilience and foresight. By embracing
strategic communication, proactive HR interventions,
ICMA’s Chartered Management Accountant, Mar-Apr 2024
and adaptive leadership, organizations can not only
weather the storm of economic uncertainty but emerge
stronger and more agile in its wake. As stewards of
organizational change, HR professionals hold the key to
unlocking the full potential of organizations amidst
global economic turbulence, transcending geographical
boundaries for a brighter tomorrow.
Appendix: Summary of Responses
1. Gauging Psychological Impact of
IMF-supported Reforms:
• 85% of the surveyed HR heads emphasized the
significance of understanding and addressing the
psychological impact of IMF-supported reforms on
employees. They highlighted that uncertainty
stemming from economic reforms can significantly
affect employee morale and productivity.
• HR professionals strategically utilize a
combination of surveys, focus groups, and
individual meetings to gauge employee
sentiment and identify areas of concern.
• 70% of respondents underscored the importance of
implementing proactive support mechanisms, such
as confidential feedback channels and mental
health resources, to mitigate the negative
psychological effects of reforms.
2. Effective Communication Strategies:
• Over 90% of HR heads emphasized the strategic role
of communication in navigating IMF-supported
reforms. They stressed the importance of clear,
consistent, and transparent communication to
foster understanding and alignment among
employees.
• Various communication channels, including town
hall meetings, newsletters, and digital platforms, are
strategically employed to disseminate information
and engage employees.
• Feedback mechanisms such as suggestion boxes
and anonymous surveys are utilized by 80% of
respondents to assess the effectiveness of
communication strategies and make necessary
adjustments.
3. Establishing Support Systems:
• 75% of surveyed HR professionals highlighted the
strategic imperative of establishing robust support
systems to address employee concerns and enhance
resilience during IMF-supported reforms.
• Regular one-on-one sessions and dedicated forums
are strategically implemented to provide employees
with opportunities to voice concerns, seek
clarification, and receive constructive feedback.
• Confidential feedback channels and mental health
resources are strategically integrated into support
systems to ensure employee well-being and
engagement.
51

4. Enhancing Organizational Resilience:
• 80% of HR heads emphasized the strategic
importance of enhancing organizational resilience
through comprehensive training initiatives and skill
development programs.
• Training initiatives strategically focus on not only
technical skills but also emotional intelligence,
adaptability, and change management to equip
employees for the challenges posed by reforms.
• Mentorship programs and cross-functional training
sessions are strategically utilized to foster a culture
of continuous learning and resilience within the
organization.
5. Promoting Positive Work Environments:
• 85% of respondents emphasized the strategic
significance of promoting a positive work
environment to enhance employee morale and
productivity during IMF-supported reforms.
• Recognition programs, internal storytelling platforms,
and stress reduction interventions are strategically
employed to foster positivity and resilience.
• HR departments strategically solicit feedback from
employees to assess the effectiveness of these
initiatives and make data-driven decisions to
enhance employee well-being.
6. Empowering Leadership at All Levels:
• Over 80% of HR professionals highlighted the
strategic importance of empowering leadership at
all levels of the organization to foster agility and
responsiveness during reforms.
• Leadership development programs and mentorship
initiatives are strategically implemented to cultivate
leadership qualities and distribute decision-making
responsibilities throughout the organization.
• HR plays a strategic role in creating a
supportive environment where leadership is
encouraged, nurtured, and leveraged to drive
organizational success.
7. Encouraging Employee Participation:
• 75% of surveyed HR heads emphasized the strategic
imperative of encouraging employee participation
during IMF-supported reforms to foster ownership
and innovation.
• Mechanisms such as employee forums,
cross-functional teams, and participatory
decision-making processes are strategically
implemented to promote active engagement.
• HR departments strategically track employee
engagement metrics to measure the
effectiveness of participation initiatives and drive
continuous improvement.
52 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
8. Monitoring Effectiveness of Strategies:
• Over 90% of HR professionals strategically monitor
the effectiveness of their strategies through a
combination of quantitative metrics and qualitative
feedback.
• Key performance indicators related to employee
well-being, productivity, and organizational
resilience are strategically tracked and analyzed.
• Continuous improvement is strategically emphasized,
with HR departments adapting strategies based on
data insights and evolving organizational needs.
9. Leveraging Technology for Communication
and Participation:
• 80% of respondents highlighted the strategic
importance of leveraging technology to facilitate
efficient communication and collaboration during
reforms.
• Digital platforms such as employee portals and
collaboration tools are strategically utilized to
enhance communication and participation.
• Training initiatives are strategically implemented to
ensure employees are proficient in using technology
effectively to support organizational goals.
10. Fostering a Culture of Continuous Learning:
• 85% of HR heads emphasized the strategic
imperative of fostering a culture of continuous
learning and growth to prepare employees for the
challenges of IMF-supported reforms.
• Training programs, skill development workshops,
and knowledge-sharing initiatives are
strategically employed to encourage ongoing
learning and development.
• HR professionals strategically promote a culture
of curiosity, experimentation, and adaptability to
drive organizational success in a dynamic
business environment.
About the Authors: Rukhshinda Mehar brings over 15 years of extensive
experience in Human Resources, focusing on strategic HR planning,
learning and development, project management, and data analytics.
Throughout her career, she has held leadership positions in leading
Pakistani companies, where she excelled in elevating HR functions through
data-driven strategies aligned with organizational goals. Additionally, her
consultancy background has enriched her practical insights, enabling her
to deliver effective HR solutions across diverse industries.
Dr. Saqlain Sher, a distinguished HR leader with extensive experience
across various industries and esteemed organizations such as Saudi
Binladin Group, Descon Engineering, Doosan Babcock, Al Hassan
Engineering, PTCL & Ufone, and National Bank of Pakistan, brings strategic
expertise to drive transformative change. With a solid academic
background including an MBA in HR and a Ph.D. in Organizational
Sustainability, and certifications in SHRM-SCP, SPHRI, MCIPD, PMP, and
Lead Auditor ISO 30414, he strategically aligns HR practices with
organizational objectives. He is a valuable member of ISO Technical
Committee 260, representing Pakistan in the development of HR Standards.
Focus Section

IMF Influence: A Diagnosis of Pakistan's

Economic Dependency and the Role of
Chartered Management Accountants
Firm: I. The rich are taxed at
higher rate and the
A firm is a single, self-contained business entity that poor at lower rate. . .
produces and sells goods and services with the aim of
generating revenue and making a profit. J. Tax system is
transparent. . .
Industry:
K. Influential
A group of firms operating within same economic
sphere is called industry. L. Export
Finished-goods etc.
Sector: 2. Under-developed-
A group of industries with similar characteristics is Economy (Informal-
Abrar Hussain, ACMA
known as a sector. Economy).
Economy: Foreign Expenditures – Foreign Reserves =
Deficit-Forex-Reserves
A group of sectors engaged in the production of
GDP/productivity is known as economy. Characteristics of Under-developed Economy:
Kinds of Economy: A. Immature
1. Developed-Economy. B. Unpredictable-import based
2. Under-developed-Economy. C. Traditional
1. Developed-Economy (Formal-Economy): D. Deficit Forex-reserves
Foreign Reserves – Foreign Expenditures = E. Irrational-risky GDP
Surplus-Forex-Reserves
F. Little Influence
Characteristics of Developed Economy: G. Undocumented.
A. Mature
H. Based on indirect taxes.
B. Predictable and export-based
I. The poor and the rich are taxed at same rate.
C. Knowledge-based
J. ‘Hit and Trial’ Tax System
D. Surplus Forex reserves
K. Subordinate in nature
E. Sustainable-resilient GDP
L. Export raw material and raw human resource etc.
F. Ruling in nature
Besides having all required natural resources, a
G. Documented constitutionally independent Pakistan is
severely-economically dependent on world map
H. Based on directed taxes. . .
since 1947.

ICMA’s Chartered Management Accountant, Mar-Apr 2024 53

 Focus Section

More than Seventy-Six (76) years has elapsed, alas! A
massive number of 23 programs clearly shows that
Pakistan is obsessive to the Fund's hard love with
strict conditions. An Urdu poet express this
trajectory as:
Where to Get Help:
Allah (SWT) says in the Holy Quran:
“Then do they not reflect upon the facts narrated by Quran?
Or are there locks upon their hearts?” [Surah Muhammad,
Ayat 24].
In this Ayat Allah (SWT) demands the leadership to use
granted Perception, and cognitive processes of
comprehension to get-rid of IMF.
“This is straight path. So, follow it, and do not follow the
other ways, lest they make you diverge from His way” [Surah
Al-Anam, Ayat 153].
This Ayat emphasis on research and critical thinking
rather than following cultural rites and traditions i.e.
availing tight financial facilities (Credit Lines) with hefty
markup/claimed reforms and stay in comfort-zone.
“It is Allah who created the seven heavens and likewise for
the earth. His command descends throughout them, all is
being stated that so you may know that Allah has power
over all things. He is Most Capable of everything and that
Allah certainly incorporates all things in His knowledge”
[Surah At-Talaq, Ayat 12].
The Quran encourages us to gain knowledge and
scientific discovery through travel and observation and
become honorable nation on the global map!
‘Chartered Management Accountant’ is the economy’s
physician. Doctoring the ‘Wrong Costing’ and
‘Mismanagement’, in economy, are its core areas of
specialization. Over/under Costing and
mal-management are cultural symptoms of any
IMF-clawed economy. Same is case of Pakistan since
independence. Private and Public sectors, to get resolved
their economic issues, must take on board ‘Chartered
Management Accountant’.
‘Institute of Cost and Management Accountants of
Pakistan’ is the authorized physician, under act of
parliament, to provide ‘OPD’ services to IMF-tortured
economy. Its paramedical staff (CMAs) are highly
trained and equipped with all modern tools and
techniques to cope with chronic germs of
mismanagement and wrong costing. Just there is need
to consult CMAs’ Clinic, economy will be leading in world!
The universal legislator, Sir Iqbal (R.A) gives following
insights to CMAs to have robust Pakistan on ‘Global Map’:
About the Author: The writer is a Chartered Management
Accountant and an Associate member of ICMA, as well as a member of
the Pakistan Institute of Public Finance Accountants (PIPFA). With over
fourteen (14) years of diversified-industrial experience at the
professional level, he has worked in Beverage (Pepsi-Cola), Weaving,
and Spinning industries. Additionally, he is actively involved in
stewarding and promoting his own agriculture farm.

54 ICMA’s Chartered Management Accountant, Mar-Apr 2024

Focus Section
The Impact of IMF Lending on Developing Nations:
Case Studies from Ghana, Serbia, Ireland, and Jamaica
By: Research and Publications Department, ICMA
The International Monetary Fund (IMF) plays a crucial role
in fostering sustainable development and growth for its
approximately 190 member nations. The IMF supports
these objectives by backing economic strategies, policies,
and regulations that ensure stability in financial and
monetary sectors. These sectors are vital for enhancing
productivity, creating job opportunities, and driving
economic prosperity. The governance and transparency
of the IMF are maintained by its member countries.
The IMF focuses on three key goals: (i) strengthening
international monetary cooperation, (ii) promoting
economic diversification and trade, and (iii) dissuading
policies or regulations that could impede prosperity. To
achieve these goals, the IMF facilitates collaboration
among its member economies and with international
organizations.
The IMF also offers technical assistance and training to
help countries build robust institutions and improve
economic policies. By sharing best practices and
providing targeted advice, the IMF supports member
countries in their efforts to achieve sustainable growth
and development. Furthermore, the IMF conducts regular
surveillance of global and national economies, providing
insights and guidance on economic stability and risks.
This continuous monitoring helps the IMF anticipate
challenges and offer timely assistance to its members.
Types of IMF Loans
IMF offers various types of loans tailored to the specific
needs and circumstances of member economies:
1) Stand-By Arrangement (SBA): A short to
medium-term loan for developing and developed
economies to address balance of payment or
short-term issues.
ICMA’s Chartered Management Accountant, Mar-Apr 2024
2) Standby Credit Facility (SCF): Similar to SBA,
designed for low-income countries to manage
short-term balance of payment issues.
3) Extended Fund Facility (EFF): For economies facing
long-term balance of payment challenges, extending
over a period of 3 years or more.
4) Extended Credit Facility (ECF): Similar to EFF but
specifically for low-income countries, addressing
medium to long-term structural challenges.
5) Rapid Financing Instrument (RFI): Provides
immediate financial assistance for balance of
payment needs, including natural disasters or
commodity price shocks.
6) Rapid Credit Facility (RCF): Rapid assistance for
low-income countries facing emergencies, with a
grace period of 5 years and a maturity of 10 years.
7) Flexible Credit Line (FCL): For countries with strong
policies but facing urgent cash shortages, offering a 1
to 2-year credit line.
8) Precautionary and Liquidity Line (PLL): Addresses
liquidity needs of economies with strong policies but
residual issues.
9) Catastrophe Containment and Relief Trust (CCRT):
Provides grants instead of loans to poor countries
during natural disasters or crises.
10) Policy Support Instrument (PSI): Offers
non-financial assistance to low-income countries for
policy advice and support, lasting 1 to 5 years.
These loans aim to support economic stability, growth,
and development, tailored to the specific needs and
circumstances of each member economy.
55
 Focus Section

Success stories of IMF lending 2) Serbia's IMF Program:

1) Ghana's IMF Program:
Restoring Africa's Luster
In 2015, Ghana experienced economic
instability, characterized by escalating deficits, high
inflation, and currency devaluation. These challenges were
worsened by excessive government spending and
dwindling credit reserves. In response, Ghana sought
assistance from the International Monetary Fund (IMF) and
obtained a US$918 million loan. The IMF recommended a
three-year plan to help Ghana stabilize its economy:
• Fiscal Reforms: The plan called for controlling debt
by capping wages, eliminating subsidies, and
boosting tax revenue through efforts to combat tax
evasion.
• Monetary Policy: The IMF suggested establishing a
Achieving Economic Success
Since 2008, Serbia has faced economic volatility, which
worsened in 2014. The country's economy experienced
stagnation due to weak public institutions, unmet tax
collection targets, and increased government spending,
leading to a swift accumulation of public debt. In
response to this concerning situation, the government
initiated a plan to implement fiscal reforms, strengthen
the financial sector, and pursue an inclusive economic
program. The International Monetary Fund (IMF)
supported these efforts with economic guidance,
regulatory advice, and preventive financing to assist
Serbia's recovery.
10
percent
Inflation

robust monetary policy framework to address 2015-18

program
budget deficits and bring down inflation. 5

GDP growth

• Banking System Reforms: The plan included 0

measures to improve the banking system, such as

addressing under-capitalization, enhancing asset -5

quality through bank recapitalization, and 0

implementing stronger regulatory measures.

-4
fiscal balance
Ghana: On the Mend percent of
GDP
20
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -8

15
Figure 2: Serbia Growth Returns restored after
10 IMF-supported program
Source: IMF
5

0 Outcome
2014 2015 2016 2017 2018 2019
-5
Following three years of rigorous implementation of the
-10
planned program, Serbia successfully emerged from its
-15 economic challenges. In 2014, the country had one of
GDP % Chng Inflation Budget balance % GDP
the highest fiscal deficits in Europe, but by 2017, it
Figure 1: Ghana’s GDP, Inflation and Budget Balance at glance reported a surplus. Economic confidence improved with
Source: IMF increased financing and investment from both
Outcome domestic and international sources. By 2018, layoffs and
factory closures had declined significantly. The banking
In 2019, Ghana achieved a remarkable increase in its sector exhibited strength, and the volume of
economic growth rate, rising to 8.8% from 2.2% in 2015. non-performing loans decreased compared to the
The inflation rate also dropped significantly, from pre-crisis period.
approximately 19% to 8%. As a result of fiscal discipline,
the country was able to allocate revenues to support 3) Rebounding from Economic Turmoil:
social services such as free secondary education. For the Ireland's Path to Recovery
nation's population of around 28 million, Ghana
In 2007, Ireland's economy faced severe challenges due
provided market-competitive salaries and wages, job
to a fiscal crisis intensified by the global financial
opportunities, and enhanced purchasing power.
downturn and domestic vulnerabilities. The collapse of
Although Ghana continues to rely on external financing
and faces fiscal challenges, it has successfully improved the property bubble led to a decline in foreign
its pace of development and achieved notable investment and a significant increase in bank debt related
economic progress. to property loans, adversely affecting economic activity.

56 ICMA’s Chartered Management Accountant, Mar-Apr 2024

Focus Section
Tax revenues fell by 20% within two years, compelling the
government to assume responsibility for major banks in
2008, which equated to around 30% of GDP. This crisis
persisted until 2010, resulting in an outflow of 60 billion
euros, nearly one-third of GDP, and an unemployment
rate that climbed to 15%. In 2010, facing economic
challenges, Ireland sought assistance from the IMF and
EU, receiving a loan of 67.5 billion euros, equivalent to
10% of its economy.
Outcome
IMF recommended that the Irish government
implement a series of measures to address the
economic crisis, including bank mergers, staff
reductions, and aligning assets with deposits. The
government launched a three-year plan to reduce the
budget deficit, which involved raising taxes, cutting
spending, and undertaking reforms that contributed to
an 8% reduction in GDP. Although the initial
implementation faced challenges, Ireland's economy
began to recover by 2012. This recovery was marked by
increased investment, a reduction in bank arrears, and
an improvement in property prices. By 2018, the
unemployment rate had fallen to below 6%, reflecting
significant economic progress.
Real GDP growth (Annual percent change)
Inflation rate - average consumer prices (Annual percent change
25
20
15
10
5
vulnerability to natural disasters, a brain drain, rising
crime rates, and emigration. By 2013, Jamaica's public
debt had reached 147% of GDP, making it one of the most
indebted economies worldwide. To address these issues,
Jamaica sought financial support from the International
Monetary Fund (IMF).
Due to its weak policy history and substantial budget
deficits, Jamaica underwent a second debt exchange and
aimed to achieve a surplus equivalent to 7.5% of GDP to
stabilize the economy and tackle enduring structural
problems. Under the IMF's Extended Fund Facility (EFF) in
2013 and a subsequent Stand-By Arrangement (SBA)
spanning six years, Jamaica managed to stabilize its
economic situation.
The country benefited from strong capacity-building
support from international financial institutions and
other partners, which enhanced social outcomes and
contributed to the nation's economic recovery.
Outcome
Jamaica achieved fiscal sustainability by maintaining a
7% GDP surplus for six consecutive years, reducing
public debt to below 100% of GDP. Tax reforms,
including a shift to indirect taxes supported by the IMF
and Inter-American Development Bank, yielded
1.5 significant benefits. Unemployment decreased,
2.4 business confidence rose, and poverty levels declined.
Economic development improved with sectors like
mining becoming more active. IMF assistance increased
investment in social and capital projects. Financial
sector reforms strengthened securities dealers and
financial institutions. Jamaica's recovery serves as a
model for other vulnerable economies facing crises.

0
Public debt (percent GDP)
3.3
-5
Net international reserves (million US$)(RHS)
3 150 3,500
-10

130 2,500
1980 1985 1990 1995 2000 2005 2010 2010 2020 2025

Figure 3: GDP growth and inflation rate of Ireland over the years 110 1,500
Source: IMF

4) Jamaica & IMF: 90 500

3 4
Partnership's Strength 2/1 3/1 /15 /16 /17 /18 /19
201 201 0 14 015 016 017 18
FY FY Y2 Y 2 Y 2 Y2 Y20
F F F F F
In 2008, Jamaica's economy was significantly affected by
the global financial crisis, resulting in policy Figure 4: Jamacia’s on recovery path
shortcomings and a sharp increase in public debt. The Source: IMF
country faced additional challenges, including

ICMA’s Chartered Management Accountant, Mar-Apr 2024 57


IMF and Pakistan:
A Rocky Relationship
Pakistan has relied on IMF funding to
address economic challenges during
periods of political instability. Below is a timeline
illustrating the relationship between the International
Monetary Fund (IMF) and Pakistan:
1958:
• Pakistan joins the International Monetary Fund (IMF).
• IMF lent out US$25,000 (equivalent to US$253,576 in
2022) to Pakistan on standby arrangement basis
1965-1968:
• Two IMF programs were pursued back-to-back by the
then President Ayub’s finance team in 1965 and 1968
• Pakistan again sought to borrow from the IMF
• IMF provided to Pakistan US$37,500 (equivalent to
US$348,231 in 2022) on 16 March 1965
• Pakistan again applied to IMF for the third time on 17
October 1968 due to balance of payment issues and
received US$75,000 (equivalent to US$631,148 in 2022)
1972-1977:
• Pakistan seeks IMF funding for three consecutive
years due to economic challenges following the
separation of East Pakistan and global recession.
• Pakistan got loan of US$84,000 (equivalent to
US$587,666 in 2022) in 1972, US$75,000 (equivalent
to US$494,415 in 2022) in 1973.
• Another of loan by IMF of US$75,000 (equivalent to
US$445,040 in 2022) in 1974 was lent to Pakistan to
meet its growing needs.
• Pakistan had four one-year Stand-By Arrangements
(SBAs) with the IMF between 1972 and 1977
1980-1981:
• Earlier SBA of 4 years was followed by a three-year
extended arrangement in 1980
• IMF loans taken during the Soviet-Afghan war period
to bolster defense and economic strength.
• In 1980, an extended facility of US$349,000
(equivalent to US$1,239,542 in 2022) from IMF was
reached in 1980
58 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
• In 1981, Pakistan received from IMF US$730,000
(equivalent to US$2,349,788 in 2022) in 1981 due to
ongoing US cold war against Soviet Union.
198-2007:
• Economic decline observed post-Soviet-Afghan war,
leading to seeking IMF loans.
• During the 1988-90, in Benazir Bhutto's first regime,
US$4 billion as foreign loans and US$1.11 billion as
grants were received by the country
• Over the 1988–2001 period, Pakistan had seven IMF
arrangements, four short-term and three multiyear
arrangements.
• Pakistan entered into a stand-by arrangement with
the IMF in 2000 for a nine-month period followed by
a three-year Poverty Reduction and Growth Facility
(PRGF)
• During General Pervaz Musharraf regime from 2000 to
2001, IMF granted loan of US$1.5 billion to Pakistan
• During 1999 to 2007, around US$17.503 billion was
borrowed
2008:
• Asif Ali Zardari's government seeks IMF loan amid
economic troubles upon assuming office.
• In 2008, the government secured the biggest IMF
bailout package in history which was of US$7.2
billion
2013-2023:
• During the regime of PML-N in 2013, IMF granted the
2nd highest loan which amounted to US$4.4 billion
under the Extended Fund Facility
• In 2019, the PTI government received loan of US$4.3
billion
• In 2020, the IMF only owed around US$9 billion out
of Pakistan’s US$112 billion external debt.
• In 2022, reaching US$1.64 billion loan, underscore the
deepening financial reliance of Pakistan on the IMF
• In May 2023, Pakistan received the first tranche of
US$1.2 billion from IMF
• The US$700 million fund represents the second
tranche of the IMF bailout signed with Pakistan in
June 2023.
 Focus Section

10000000000 Standby
Arrangement

Extended Extended
Credit Facility Fund Facility

8000000000

Extended
Fund Facility
6000000000

Standby
Arrangement

Structural
4000000000 Adjustment
Extended Standby Extended
Facility Arrangement Credit Facility
Fund Facility
Commitment

Extended Fund Standby Standby Extended Extended Standby

Standby Arrangement Facility Credit Facility Fund Facility Arrangement
Arrangement Arrangement $3,015,000,000

2000000000

0
Dec 08, Mar 16, Oct 17, May 18, Aug 11, Nov 11, Mar 019, Nov 24, Dec 02, Dec 28, Dec 28, Sep 16, Feb 22, Feb 22, Dec 13, Oct 20, Oct 20, Nov 29 Dec 06, Nov 24, Sep 04, Jul 03, Jul 12
1958 1965 1968 1972 1973 1974 1977 1980 1981 1988 1988 1993 1994 1994 1995 1997 1997 2000 2001 2008 2013 2019 2023

Figure 5: IMF Lending Commitments with Pakistan from 1958 to 2023

Source: IMF

• In November 2023, Pakistan and IMF reach deal for Way Forward
releasing US$700m from US$3bn bailout package
1) Reduce Domestic Borrowing Costs: Pakistan
• In the FY2023, Pakistan’s IMF loans amounted to a should negotiate and reduce domestic borrowing
substantial US$894 million, accompanied by charges interest rates by 5-6% and revise policy rates linked
and interest payments totaling US$776m and to inflation with the IMF, aiming to lower financial
US$325.8m, respectively costs and increase deficit savings.
2024: 2) Focus on Productive Investments: Redirect
investments towards productive areas like
• Economic Coordination Committee approved
manufacturing to enhance exports and alleviate
Rs. 272 billion in technical supplementary grants for Pakistan's balance of payments crisis, with Special
fiscal year 2023-24 Economic Zones being prime investment
• Pakistan ranks fifth in outstanding debt with the IMF, destinations.
standing at US$7.4 billion 3) Continue SOE Privatization: The privatization of
Over the years, the relationship between Pakistan and state-owned enterprises (SOEs), exemplified by the
interim government's actions with Pakistan
the International Monetary Fund (IMF) has been
International Airlines (PIA) and First Women Bank
marked by periodic interventions aimed at addressing
Limited (FWBL), should be swiftly and zealously
economic challenges and stabilizing the economy. The
continued, extending to key sectors like power,
country's most recent IMF bailout represents its 23rd
railways, and oil and gas.
lending commitment. Despite these interventions,
Pakistan continues to face a recurring cycle of 4) Develop Sukuk Market: It is imperative to launch a
economic instability and reliance on IMF loans. This full-fledged sukuk market that shall not only increase
ongoing dependency highlights the need for our Gross National Savings Rates multifold but also
comprehensive structural reforms to break the cycle has the capacity to finance 70-80% of our public
and achieve long-term economic stability. sector development program.

ICMA’s Chartered Management Accountant, Mar-Apr 2024 59


5) Increase Direct Tax Revenue: Increase the direct tax
revenue multifold by implementing a 10% ushar on
agriculture produce, which averages US$68-70
billion per annum, making Pakistan the
seventh-largest producer of agriculture in the world.
6) Streamline Federal Government: Reducing the
size of the federal government to not more than
12-15 ministries and slashing the grants and
subsidies by 30%.
7) Implement Robust Monetary Policy:
Implementing a robust monetary policy framework
can assist Pakistan in managing budget deficits and
controlling inflation, ultimately stabilizing the
economy and alleviating inflationary pressures.
8) Strengthen Banking Resilience: Pakistan can focus
on improving the resilience and stability of its
banking system by implementing measures to
reduce non-performing debts and enhance
regulatory oversight.
60 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Focus Section
9) Prioritize Fiscal Reforms: Pakistan should prioritize
implementing fiscal reforms to address issues such as
unmet tax collection targets and excessive
government spending. Strengthening public
institutions and improving tax collection efficiency
can help reduce the accumulation of public debt.
10) Seek International Expertise: Seeking assistance
and advice from international experts who have
experience in managing similar economic challenges
can be beneficial. Pakistan can collaborate with
experts from countries like Norway and the US to
develop and implement effective strategies for
economic recovery.
11) Leverage Global Support: Pakistan can benefit
from capacity-building support from international
financial institutions and other partners, similar to
Jamaica. Strengthening institutional capacity and
receiving technical assistance can help Pakistan
implement reforms effectively and achieve better
social outcomes.
Articles Section
Articles Section
Organizational Excellence
through Diversity
A
ttaining results is the function of collaborative
efforts of multiple subsystems and individuals
within a bigger system referred to as
organization. Different schools of thoughts exist as to
how the subsystems and individuals should be
organized to attain the organizational results. Some
types of organization designs are more conducive, and
some are not so conducive. Put it differently, we have
basis to contemplate that diversity is critical for
innovation, synergy, and performance excellence.
Organizations are like a typical wardrobe – you
organize it over a weekend, and you would need to do
it again on the next weekend. Organizations lose
rationality in their systems and processes over time,
hence the need to keep revisiting the systems and
processes is inevitable. Bryan Joiner in his book titled,
“Fourth Generation Management” had pointed out that
often newer organizations outperform their older
counterparts. Rationality is often compromised due to a
host of reasons. For example, changes in the permeable
environment reshape the opportunities and challenges
facing the organizations. Moreover, organizations’
traditional strengths also become irrelevant over time
and often weaknesses go unattended causing serious
issues. Likewise, people competencies if not
augmented with time turn into weaknesses. So on and
so forth. Being said, rituals eclipse organizational
rationality and the competitiveness is oftentimes
compromised. It is evident that many times newcomers
outperform the existing ones.
1) Conventional Organizations
In a typical conventional organization, top-down
approach is followed. Employees’ positions are identified
based on employees’ locus on the hierarchy. However,
roles are largely eclipsed. Individuals are identified as
seniors vs. subordinates. In most of the situations, work
ICMA’s Chartered Management Accountant, Mar-Apr 2024
responsibility is identified
with the most senior
person, while others are
considered to assist the
boss by performing Sohailuddin Alavi
preparatory or sometimes
as referred to “donkey” work. In such scenarios, boss
keeps the authority and delegates the responsibility. In
this system all the work is done by the subordinates
while the credit of doing the work goes to the boss. The
irony of this system is that regardless of how critical,
complex, or sensitive a task may be, it is assigned to the
most junior employee. Seniors are only there to get
things done. In short, the senior distributes his entire task
list amongst his subordinates. The consequence is that
subordinates may be or may not be fit to perform the
tasks, especially ones which are critical, complex, and
sensitive yet given to them. In this situation,
subordinates are forced to do tasks in a stereotype
manner, as they would lack the clarity and
empowerment needed to perform with diligence. A few
proactive subordinates when assigned high level task,
also proclaim authority from their seniors. Not having
the required level of clarity and empowerment,
inevitably they tend to exercise authority for their
personal gratification. On the other hand, the inputs of
senior incumbents are minimized, rendering them
practically redundant. Managers often can be heard
saying, “I have done too much when I was a subordinate,
now it is time for me to sit back.” Author Kenneth Davis in
his book titled, One Minute Manager described these
people as, “Some managers wear sunglasses and sleep in
their offices until someone makes a mistake, then they
wake-up to reprimand.” At the end, the much-needed
innovation, synergy and performance excellence are
compromised beyond the affordability. Consequently,
organizational performance gets restricted to actions,
but no intrinsic results are attained.
61

Examples of conventional organization design abound
in our world of work. Like, typical public sector
organizations. Bureaucracy model of organizations is
totally based on this concept. Once I met a Principal of a
professional academy in a govt. organization. The
gentleman had recently been transferred from
operations to head training function. I asked him as to
how does he see his current job different from the earlier
one. He naively said, “There is no difference, I was
working at Basic Pay Scale 18 and this position is of the
same rank” – once a boss always a boss. In short, his role
perception was simply to administrate, which requires
him to exercise authority over the employees. Here, the
sole competence for him is his authority – authority to
hire and fire and authority to control employees. The
manager is unable to see his role beyond this, hence
does not consider need for management skills per se.
2) Pseudo Teamwork Organizations
Theoretically speaking, teamwork usually brings in
diverse skillset and roles whereby complex tasks are
completed in a befitting manner. However, on ground
this does not happen. An example of such organizations
is the “Pseudo Teamwork Organization.” Such
organizations are by default organized along the
administrative hierarchies with all the gratifications of
ranks and statuses, yet under the disguise of teamwork
everyone tries to show his or her involvement in others’
tasks sometimes even by ignoring to do their assigned
jobs – typically a “Photo Session” syndrome. Put it
differently, the manager, supervisor and subordinates all
do same tasks. For example, in a typical pseudo sales
team, the sales agents would be making sales. The sales
supervisor will report his performance by summing up
the sales of individual sales agents. Then the sales
manager would report his performance by summing up
sales performance of all the sales supervisors. Whereas,
in reality only the sales agents make the sales, while
others simply leverage their performance. However,
exceptions to this exist. Similarly, in an office
environment the most junior would write a document,
which would then go to next senior person for some
changes and then would go to the senior most for
making final changes. It can be clearly seen that the
junior most does the creative work, while others leverage
their input, by making some changes, sometimes
necessary and at times only to justify their input. Thus,
the cost of doing a task is multiplied by the number of
employees. Isn’t this an expensive proposition besides
diluting the ownership and excitement of the real doer?
Another deterring effect of pseudo teamwork is that
employees usually encroach each other’s roles thus
moving away from their actual given responsibilities,
which becomes a major deterrent and give boost to intra
62 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Articles Section
organizational politics. For example, it is seen that
functional staff and executives for no reason intervene in
policy formulation sometimes even does it
independently. Likewise, managers and senior managers
naïve of their actual roles engage themselves in
functional tasks.
3) Diverse Organizations
A more rational approach calls for designing the roles
along the value chain. Meaning, each employee should
have a recognizable input [KPI] and should have more
control on the overall task. Doing so, it will enhance
employees’ ownership and excitement. To do this, it
entails optimally empowering the employees and
making the jobs independent. Doing so, the efficiency
will go up, cost of doing the job will come down and
last but not the least, accountability can be more
precisely fixed.
Diverse Organization is the one that works on the
premise of right person for the right job. Employees can
still be placed at various positions on the hierarchy but
not to reflect on their status or ranks. Instead, it should
reflect their independent roles. Roles can be
differentiated based on required competency and
empowerment. This follows that managers should
identify tasks along the value chain and group them into
functional, executive, and strategic tasks. Each employee
should be independently made responsible for the
completion of a specified task. For example, the senior
manager should focus on planning and strategy, the
managers should focus on making operational decisions
and trouble shooting and the functional level employees
should execute routine tasks. All should do their
respective tasks within the given parameters.
Doing so organizations can attain the standard of “right
person at the right job” in letter and spirit and can ensure
that everyone adds a unique value to the whole. We have
evidence that in this scenario, the diversity of roles and
inputs from so many persons leads to innovation and
synergy which in turn cause performance excellence.
Examples of these type of organization may not
abound but such organizations do exist in our world of
work. Former Country Head of IBM, Pakistan had this
habit of asking his IT managers not to work as software
developer no matter how exciting it may look to them:
He use to tell them that you are a manager and has
something more critical to do. Once, I personally
happened to conduct Goals Setting exercise for a
division of a corporate entity. When I had finished
helping the officers setting their goals, the head of the
department categorically asked me what his goal
should be. Should it be a cumulative performance of all
officers, in that case he has no task but just to wait and
see how the subordinates would perform.
Articles Section
Table One
Group Role
Senior Managers Strategic
Managers Execu ve
Associates (Front end Func onal
Employees)
He got excited when I advised him to consider his goals
as to how he could make his subordinates be successful
in doing their jobs rather than proclaiming their
performance as his. In fact, his entire work paradigm had
changed. This elaborates how roles need to be defined
along the value chain so that a natural and mutually
enriching interdependence amongst employees is
established for higher organizational performance.
4) Recommendations
It is time to design diverse organizations for unleashing
optimal performance. A diverse organization consist of
three fundamental roles and competencies namely,
Strategic; executive; and functional. Each role has its
unique key responsibility areas and so are the
corresponding competencies (See Table One). It is
pertinent to make a point here that the roles should be
complimentary to each other on the value-chain,
however, must not be overlapping across employees.
5) Conclusion
All organizations have the potentials to innovate,
synergize and achieve performance excellence, but how
they prepare for it and approach it makes the difference.
The discussion can be summarized in a few statements
as cited below.
ICMA’s Chartered Management Accountant, Mar-Apr 2024
Key Responsibility Areas
 Set business direc ons.
 Define policies & rules.
 Define outcomes.
 Mobilize resources.
 Integrate across diverse groups
within the organiza on.
 Link with outside organiza ons
 Formulate opera onal plans and
budgets.
 Make opera onal decisions.
 Shoot problems and ini ate
correc ve ac ons.
 Coordinate within and across
different func onal departments.
 Manage employees’ performance.
 Develop and facilitate employees.
 Link between strategic and
administra ve ers
 Perform or execute tasks as per
standards and opera onal plan
 Organizations can only sustain when they
continually improve their performance bars all the
time. “We raise our performance bar every day,” says
Lackson Group.
 Organizations must be quick and innovative in
responding to their environment and addressing
their challenges. This means, how fast an
organization adopts to new ways of doing the
business?
 Everyone should bring in diverse competencies and
focus on his respective role thus synergizing the
whole. It is very much likely that a functional
competence will not help an employee to perform
equally well in a manager’s role, for each role is
different hence the requirement for competencies at
each level. Having said this, significance of retooling
cannot be over emphasized for career planning and
advancement.
 Hierarchies need to be flexible enough to allow cross
functional teamwork and matrix relationships.
About the Author: The writer holds a professional qualification in
Banking and Finance. He is a practicing Human Resources and
Organizational Development Professional, having more than three
decades of hands-on experience in his field. He has authored books
and publishes extensively.
63
 TOP TECHNOLOGY TREND
To p Te c h n o l o g y T r e n d
Industry 4.0 Transformation
Industry 4.0, also known as the Fourth Industrial Revolution,
embodies the transformation of traditional manufacturing
and industrial processes through cutting-edge digital
technologies. It integrates advanced tools such as artificial
intelligence (AI), robotics, the Internet of Things (IoT), big
data analytics, cloud computing, and cyber-physical
systems into production environments, fostering
interconnected ecosystems. This convergence facilitates
seamless communication among machines, devices, and
individuals, leading to unparalleled levels of automation,
optimization, and insight.
Key features of Industry 4.0
a) Interconnectivity: Machines, devices, sensors, and
people are connected through the IoT, enabling
seamless communication and data exchange
between them.
b) Data Analytics and Big Data: Large volumes of data
generated by interconnected systems are analysed
in real-time using advanced analytics techniques,
providing valuable insights for decision-making and
optimization.
c) Automation and Robotics: Advanced robotics and
automation technologies are utilized to streamline
manufacturing processes, improve efficiency, and
reduce human intervention in repetitive tasks.
d) Augmented Reality (AR) and Virtual Reality (VR): AR and
VR technologies are used to enhance manufacturing
processes by providing immersive training
experiences, remote assistance, and visualization of
complex data.
e) Additive Manufacturing (3D Printing): Additive
manufacturing technologies enable the production of
complex parts with greater flexibility and customization,
leading to reduced waste and faster prototyping.
f) Cybersecurity: With increased connectivity comes the
need for robust cybersecurity measures to protect
sensitive data and systems from cyber threats and attacks.
g) Smart Factories: Industry 4.0 promotes the
development of smart factories where interconnected
systems and intelligent machines work together to
optimize production processes, minimize downtime,
and respond quickly to changes in demand or supply
chain disruptions.
64 ICMA’s Chartered Management Accountant, Mar-Apr 2024
Overall, Industry 4.0 aims
to drive digital trans-
formation across indust-
ries, revolutionizing tradi-
tional manufacturing and
production methods to
create more efficient, Intzar Hussain Rana, FCMA
flexible, and agile manu- Member (elect)
facturing ecosystems. ICMA Na onal Council 2024-26
Tr a n s f o r m a t i o n
Strategy
Transforming a heavily invested traditional industry into
Industry 4.0 requires careful planning, strategic
implementation, and a commitment to change from top
management down to the workforce.
Here's a methodical approach:
a) Assessment, Planning and Gap Analyses: Perform a
comprehensive evaluation of current processes,
technologies, and infrastructure to pinpoint areas for
enhancement and opportunities for digital
transformation. Set clear objectives and goals that are
in line with the overarching business strategy and
objectives. This involves conducting a thorough gap
analysis to identify existing inefficiencies, outdated
processes, and areas where integrating technology can
lead to significant improvements. Additionally, assess
the current state of technology infrastructure,
workforce skill sets, and organizational readiness for
embracing digital transformation.
b) Create a Vision and Strategy: Craft a crystal-clear
vision delineating what Industry 4.0 signifies for your
organization, encompassing amplified efficiency,
productivity, agility, and competitiveness. Formulate a
meticulously detailed strategy delineating the path
toward realizing this vision. Incorporate timelines,
resource allocation, and key performance indicators
(KPIs) to meticulously measure progress.
c) Invest in IoT Instruments, Infrastructure and
Technology Integration: Meticulously evaluate and
select fitting IoT instruments, sensors, and connected
devices to gather real-time data from machinery,
equipment, and production processes.
To p Te c h n o l o g y T r e n d
Seamlessly integrate these devices with existing
systems and machinery to facilitate data-driven
decision-making, predictive maintenance, and process
optimization. This necessitates identifying and
investing in essential digital technologies and
infrastructure crucial for Industry 4.0 transformation,
including IoT devices, sensors, camaras, data analytics
platforms, cloud computing, and cybersecurity
solutions. Collaboration with technology providers and
industry experts can expedite implementation while
mitigating risks.
d) Employee Training, engagement, and Change
Management: Invest substantially in comprehensive
training programs tailored to enhance employees'
proficiency in digital technologies, data analytics, and
innovative work methodologies, underpinning their
transition to the industry 4.0 landscape. Provide
continual learning opportunities and support
mechanisms to facilitate employees' adaptation to
evolving roles and responsibilities.
Cultivate a culture of engagement, collaboration, and
transparent communication among employees to
foster buy-in and support for the transformation
initiative. Involve employees at all levels in
decision-making processes, offering training and
resources to empower them to embrace new
technologies and navigate changing roles effectively.
Encourage a culture of innovation, ongoing learning,
and adaptability to promote employees' acceptance of
the changes brought about by digital transformation.
Develop a robust change management strategy to
address resistance and overcome organizational inertia
efficiently. Ensure transparent communication of the
vision, objectives, and benefits of Industry 4.0
transformation to employees, stakeholders, and
relevant parties.
e) Pilot Projects and Proof of Concepts: Commence
with small-scale pilot projects or proof of concepts to
vet new technologies and processes in a controlled
environment. Solicit feedback from stakeholders,
monitor performance metrics, and iterate on solutions
before scaling them across the organization.
f) Integration and Collaboration: Ensure seamless
integration of digital systems and processes across
different departments and functions within the
organization. Foster collaboration and
communication between IT and operational teams to
align technology initiatives with business objectives
and operational requirements.
g) Monitor and Optimize Performance: Establish
mechanisms for monitoring and analysing key
performance indicators (KPIs) related to productivity,
efficiency, quality, and customer satisfaction.
Continuously optimize processes and workflows based
on data insights and feedback to drive continuous
improvement and innovation.
ICMA’s Chartered Management Accountant, Mar-Apr 2024
h) Cybersecurity and Data Privacy: Implement robust
cybersecurity measures to protect sensitive data,
systems, and intellectual property from cyber threats
and attacks. Ensure compliance with relevant
regulations and standards related to data privacy and
security.
i) Sustain and Evolve: Foster a culture of innovation and
agility to adapt to evolving market trends,
technological advancements, and customer needs.
Continuously evaluate and evolve the organization's
digital capabilities to stay competitive in an
increasingly digitalized landscape.
j) Safety Aspects: Prioritize safety considerations
throughout the digital transformation process to
ensure the well-being of employees and the integrity
of operations. Implement safety protocols and
measures for IoT devices, machinery, and automated
systems.
k) Data Governance and Privacy: Establish clear data
governance policies and protocols to ensure the
security, integrity, and privacy of data collected from
IoT devices and digital systems. Comply with
regulations and standards related to data protection,
privacy, and cybersecurity to mitigate legal and
reputational risks.
l) Performance Metrics and Continuous Improvement:
Define key performance indicators (KPIs) to measure
the success and impact of Industry 4.0 initiatives on
productivity, efficiency, quality, and customer
satisfaction. Continuously monitor and analyse
performance metrics to identify areas for improvement
and optimization and iterate on strategies accordingly.
By meticulously addressing these aspects, traditional industries
can adeptly navigate the complexities of digital transformation
and fully realize the potential of Industry 4.0 to propel
innovation, competitiveness, and sustainable growth.
Benefits of Industry 4.0
The transformation to Industry 4.0 brings about significant
enhancements to the baseline of data collection from
sensors to digital meters of machinery and facilitates
numerous improvements across various aspects of
operations, including production efficiency, utilities
utilization, waste management, planned maintenance, and
integration with enterprise resource planning (ERP)
systems. Let's explore each of these benefits in detail:
a) Production Efficiency: With sensors and digital meters
installed on machinery, real-time data on production
metrics such as throughput, cycle times, and downtime
can be collected continuously. This data enables
operators and managers to identify inefficiencies,
bottlenecks, and areas for improvement in the
production process promptly. By analysing this data,
adjustments can be made to optimize production
workflows, streamline processes, and maximize overall
equipment effectiveness (OEE).
65

b) Utilities Utilization and Waste Management:
Sensors can monitor energy consumption, water
usage, and other utility metrics in real-time, providing
insights into resource utilization and identifying
opportunities for efficiency improvements. By
analysing data on utilities consumption and waste
generation, organizations can implement strategies to
reduce energy and resource waste, lower operating
costs, and minimize environmental impact.
c) Planned Maintenance: IoT sensors can monitor
equipment health and performance parameters,
providing early warning signals of potential equipment
failures or maintenance needs. Predictive maintenance
algorithms analyse sensor data to predict when
equipment is likely to fail, enabling maintenance teams
to schedule proactive maintenance activities before
breakdowns occur. Planned maintenance based on
data-driven insights helps minimize unplanned
downtime, extend equipment lifespan, and optimize
maintenance schedules to maximize productivity.
d) Integration with ERP Systems: Seamless integration
between sensor data and ERP systems enables
automatic transfer of production data, maintenance
schedules, and other relevant information without
disrupting workflow. This integration provides
real-time visibility into production status, inventory
levels, and resource utilization, enabling better
decision-making and resource allocation across the
organization.
e) Supply Chain Management and Procurement:
Access to accurate and real-time production data
allows for better demand forecasting, inventory
management, and supply chain optimization.
Procurement management benefits from improved
visibility into material requirements, lead times, and
supplier performance, facilitating more informed
purchasing decisions and reducing procurement costs.
f) Data Verification, Monitoring, and Reporting: IoT
sensors provide high-quality, reliable data that can be
verified and validated for accuracy, ensuring the
integrity of information used for decision-making.
Real-time monitoring of key performance indicators
(KPIs) and production metrics allows for timely
identification of deviations from targets and prompt
corrective action. Interactive dashboards and reporting
tools provide stakeholders with customizable views of
relevant data, enabling better-informed
decision-making and performance tracking.
I-4.0 Transformation Challenges includes:
Challenges in the transformation to Industry 4.0 can arise
due to various factors:
a) Initial Capital Investment: Implementing Industry 4.0
technologies often requires significant upfront
investment in infrastructure, hardware, software, and
personnel training. Many traditional industries may
face challenges in allocating resources for these initial
costs, especially if they have limited budgets or existing
investments tied up in legacy systems.
66 ICMA’s Chartered Management Accountant, Mar-Apr 2024
To p Te c h n o l o g y T r e n d
b) ROI Uncertainty: Calculating the return on investment
(ROI) for Industry 4.0 initiatives can be complex, as the
benefits may not be immediately tangible or easily
quantifiable. It can be challenging for organizations to
justify the upfront investment without clear visibility
into the expected returns and payback period.
c) Legacy Systems Integration: Integrating new digital
technologies with existing legacy systems can be
complex and costly. Legacy systems may not be
designed to communicate or interoperate with
modern IoT devices, analytics platforms, or cloud
services, requiring additional investments in
middleware, APIs, or system upgrades.
d) Skill Shortages: The successful implementation of
Industry 4.0 technologies requires a workforce with
specialized skills in areas such as data analytics,
cybersecurity, IoT, and AI. However, many organizations
may struggle to recruit or train employees with these skills,
leading to talent shortages and increased labour costs.
e) Risk Management: Embracing new technologies
inherently involves risks, including cybersecurity
threats, data privacy concerns, and operational
disruptions. Investing in robust cybersecurity
measures, compliance frameworks, and risk mitigation
strategies is essential but can add to the overall cost of
transformation.
f) Change Management: Overcoming resistance to
change and fostering a culture of innovation and digital
adoption within the organization can be challenging.
Investments in change management initiatives,
employee training, and stakeholder engagement are
necessary to ensure smooth transitions and maximize
the success of Industry 4.0 initiatives.
g) Long-Term Sustainability: Industry 4.0 is not just
about implementing specific technologies but also
about building flexible, adaptable, and sustainable
business models. Organizations need to invest in
ongoing research and development, continuous
improvement initiatives, and strategic partnerships to
stay ahead of evolving technology trends and maintain
competitiveness in the long term.
Addressing these investment challenges requires careful
strategic planning, risk assessment, and alignment of
technology investments with business objectives.
Organizations may also consider exploring alternative
funding sources, such as government grants, venture
capital, or strategic partnerships, to support their Industry
4.0 transformation initiatives.
Human aspect includes:
The human aspect can indeed pose significant hurdles in
the transformation to Industry 4.0. Here’s how some of
these factors can impact the transition:
Cultural Aspect: Resistance to change: Employees may be
resistant to adopting new technologies and processes due
to fear of the unknown, comfort with the status quo, or
scepticism about the benefits of Industry 4.0.
To p Te c h n o l o g y T r e n d
Traditional work culture: Organizations with entrenched
hierarchical structures and rigid work practices may
struggle to adapt to the collaborative, innovative culture
required for successful digital transformation.
Generation Gap: Generation differences: There may be
generational differences in attitudes and comfort levels
with technology adoption, with younger employees more
open to change and older employees more resistant.
Skills gap: Older employees may lack the digital skills and
literacy needed to effectively use new technologies, leading
to frustration and resistance to change.
Change Acceptance: Fear of the unknown: Employees may
feel anxious or apprehensive about the implications of Industry
4.0 on their roles, job security, and future career prospects.
Lack of understanding: Miscommunication or inadequate
education about the reasons for and benefits of digital
transformation can lead to misconceptions and resistance
among employees.
Fear of Job Loss:
Automation anxiety: Employees may fear that the
adoption of robotics, AI, and automation technologies will
lead to job displacement or redundancy, particularly for
repetitive or manual tasks.
Need for retraining: Employees may feel overwhelmed by
the prospect of reskilling or upskilling to adapt to new roles
and responsibilities in the digitalized workplace.
Addressing these human aspects effectively is crucial for
overcoming resistance and fostering a supportive
environment for Industry 4.0 transformation:
Communication and Education: Organizations should
communicate transparently about the reasons for digital
transformation, the benefits it will bring, and how it will
impact employees' roles and responsibilities. Providing
education and training programs to enhance digital literacy
and skills can help alleviate fears and build confidence.
Inclusive Decision-Making: Involving employees at all
levels in the decision-making process and soliciting their
input and feedback can increase buy-in and ownership of
the transformation initiatives.
Change Management: Implementing robust change
management strategies that address employees' concerns,
provide support and resources for adaptation, and
celebrate successes can help minimize resistance and
facilitate a smooth transition to Industry 4.0.
Career Development and Job Security: Offering
opportunities for career development, upskilling, and
reskilling can reassure employees about their prospects
within the organization. Emphasizing the role of technology
as a complement to human capabilities rather than a threat
to job security can also help alleviate fears.
By proactively addressing these human aspects and
fostering a culture of openness, collaboration, and
continuous learning, organizations can overcome hurdles
and maximize the success of their Industry 4.0
transformation initiatives.
ICMA’s Chartered Management Accountant, Mar-Apr 2024
Importance of i4.0 Transformation with ERP:
a) Data Integration: i4.0 technologies facilitate seamless
integration of data from various sources into ERP,
including production data from sensors, maintenance
data from equipment, and utilities consumption
metrics. This integrated data repository provides a
comprehensive view of operations, enabling better
coordination and resource allocation.
b) Data Verification: Advanced analytics and AI
algorithms integrated with ERP ensure the accuracy
and reliability of data collected from sensors, digital
meters, and AI cameras. Real-time data verification
mechanisms identify anomalies, errors, or
inconsistencies, ensuring data integrity and reliability
for decision-making.
c) Monitoring and Reporting: i4.0 transformation
enhances monitoring and reporting capabilities within
ERP by providing real-time visibility into production
processes, equipment performance, and resource
utilization. Dashboards and analytics tools offer
actionable insights, enabling proactive management
of production workflows, maintenance schedules, and
utilities consumption.
d) Production Efficiency: By leveraging i4.0 technologies
integrated with ERP, organizations can optimize
production processes, minimize downtime, and reduce
waste. Predictive maintenance algorithms identify
potential equipment failures before they occur, while
AI-driven analytics optimize production schedules and
resource allocation, leading to improved efficiency and
cost savings.
e) Resource Optimization: i4.0 transformation enables
organizations to optimize resource utilization by
monitoring and analysing utilities consumption and
wastage issues. Real-time data on energy usage, water
consumption, and material wastage facilitate informed
decision-making to minimize resource inefficiencies
and environmental impact.
Conclusion
The journey to Industry 4.0 demands attention to tech,
organization, and people factors. Embracing advanced tech
boosts efficiency and competitiveness, but success
depends on embracing change. Overcoming cultural
barriers, bridging gaps, and managing fears are vital.
Involving employees, providing education, and fostering a
supportive culture are key. Combining Industry 4.0 with ERP
offers a potent platform for operational excellence and
sustainable growth by integrating sensors, AI, and other
tech for improved efficiency and competitiveness.
About the Author: The writer is a Fellow member of ICMA as well as
Pakistan Institute of Public Finance Accountants (PIPFA). Currently, he
is working as a Finance Manager at Abu Dhabi National Paper Mills in
U.A.E. He has extensive exposure to accounting, finance, costing,
budgeting and business management. He is a principal contributor to
several successful start-ups, restructuring and turnaround projects,
acquisition and wind down in multi manufacturing industries.
67
 SECTOR BRIEF
Sector Brief & SWOT Analysis of
Health Sector in Pakistan
By ICMA Research and Publications Department
Historical Background
Since Pakistan's independence in 1947, constructing a
healthcare system was a pressing challenge due to a
shortage of medical facilities and professionals. Despite this,
the government acknowledged healthcare's significance
and initiated reforms. A pivotal step was establishing the
Pakistan Medical Council to oversee medical education and
practice. Initially founded in 1948 under the British Indian
Medical Council Act 1933, it underwent reorganization in
1951 under the Pakistan Medical Council Act. The formation
of the West Pakistan Medical Council in 1957 and
subsequent restructuring under the Pakistan Medical
Council Ordinance 1962 led to the establishment of the
present-day Pakistan Medical and Dental Council (PMDC),
which absorbed all provincial councils.
 In 1947-48, Pakistan established its healthcare system
with 1,014 facilities, including 292 hospitals and few
doctors with Mayo Hospital as the Pakistan's oldest and
largest hospital.
 In 1957, Rawalpindi General Hospital [now Benazir
Bhutto Hospital] became the inaugural tertiary hospital
serving Rawalpindi and Islamabad.
 Until the early 1970s, local governing bodies managed
health services. By then, a decentralized system
emerged, with basic health units offering primary care
to 6,000-10,000 people.
 In the 1970s, the government laid the foundation for
the public healthcare system by establishing Basic
Health Units (BHUs) with one in every union council by
1985-86.
 In 1978, Expanded Program on Immunization (EPI) was
launched.
 In the late 1980s, there was a significant rise in private
clinics and hospitals.
 In 1992, Pakistan initiated its first health management
information system and collaborated on the Social
Action Programme Project.
 Japanese Official Development Assistance (ODA)
began in Pakistan in 1954 and by 2015 cumulative loan
and grant aid amounted to 9.9 million yen and 2.6
million yen, with focus on human security, social
infrastructure, and regional development.
68 ICMA’s Chartered Management Accountant, Mar-Apr 2024
S B
 In 2016, the Government of Pakistan pledged to
augment the health sector allocation to 3% by
endorsing the National Health Vision of Pakistan
2016-2025.
Health Sector Overview
 WHO data reveals Pakistan's Public sector health care
infrastructure having 1,201 hospitals, 5,518 basic
health units, 683 rural health centers, 5,802
dispensaries with 123,394 beds available.
 Private health sector addresses rising healthcare
demand with limited public facilities, Pakistan now has
529 private hospitals, over 70% health consultations
occur in private sector with 90% first-level clinics.
 UNDP reports show Pakistan's stagnant Human
Development Index (HDI) ranking at 161st globally
from 2019-2021, highlighting lower investment in
human development than its neighbors.
 SDG 3 aims to "Ensure healthy lives and promote
well-being for all at all ages," necessitating 16% of
Pakistan's GDP annually, with a financing gap of
US$3.72 billion for 2020-2030.
 In FY2023, healthcare receives only 2.1% of GDP
resulting in deteriorating facilities. Despite health's role
in economic development, making this sector a priority
remains low in Pakistan.
 In FY2023, Public Sector Development Programme
(PSDP) allocated Rs. 22,356.5 million for health,
comprising 2.8% of the total development budget and
0.05% of GDP.
 Pakistan's 11th Five-Year Plan (2013-2018) that is
currently being implemented addresses Vision 2025's
pillars, aiming to save lives, eradicate diseases, and
improve healthcare access.
 Pakistan's Digital Health market anticipates significant
growth by 2024, with projected revenue reaching a
substantial US$401.40 million.
 Political unrest disrupts policy continuity, affecting
Pakistan's healthcare. Prioritizing health regardless of
regime changes is crucial for national progress.
 Pakistan ranks 4th globally in type 2 diabetes burden,
with over 19 million cases, impacting mortality,
healthcare costs, and economic productivity.
S B

Province Wise Budget Alloca ons for Health Sector Province Wise Budget Alloca ons for Health Sector
199.7
S. # Provinces 2021 2022 2023 Amount in Rs. billion

142
1 Punjab Rs. 33.7 billion Rs. 130.1 billion Rs 15.8 billion 130.1

2 Sindh Rs 28.9 billion Rs 199.7 billion Rs 23.3 billion

3 Balochistan Rs 7.1 billion Rs 44.6 billion Rs 12 billion 33.7

44.6
28.9 23.3
15.8 12 8.3 17
4 Khyber Pakhtunkhwa Rs 8.3 billion Rs 142 billion Rs 17 billion 7.1 2.2 0.05 1.2
Punjab Sindh Balochistan Khyber Pakhtunkhwa Gilgit-Bal stan
5 Gilgit-Baltistan Rs. 2.2 billion Rs 0.05 billion Rs 1.2 billion 2021 2022 2023

SWOT
Source: Pakistan Economic Survey

analysis
of Health Sector in Pakistan

Strengths
 National Health Vision 2025 by MONHSR&C aims for better
health facilities.
 Provision of improved healthcare services
 Public awareness and community support programs
 Potential growth of Pakistan’s Digital health market.
 Huge growth potential of pharmaceutical and surgical industry.
 Health card introduction marks significant healthcare progress.
 Increase collaboration with international organizations
 Decreased the reliance on donors’ funding
 Multi-Sectoral Committee Initiatives at provincial level to
enhance health and climate resilience.
Weaknesses
 Management change disrupts health policy implementation.
 Lack of private sector regulation
 Ineffective and inefficient governance
 Lack of proper infrastructure for public health units.
 Lack of research and development capacity in health sector.
 Medicine shortages and rising costs exacerbates health
sector woes.
 Physical accessibility and lack of resources in health facilities
 Lack of Health System Governance
 Lack of proper health diagnostic facilities and medical education

 Advances in medical technology  Lack of accountability hampers decision-making authority.

 Increasing efforts to address maternal and child health issues  Load shedding and electrical surges

Opportunities Threats
 Provinces must boost public health financing, restructure  Serious underfunding of the health sector
facilities through policies.  Shortage of hospitals, doctors, nurses, paramedics persists.
 Compliance with HR policy under 18th Amendment, to ensure
 Numerous issues of malnutrition and stunting persist in rural
capacity for drug regulation.
areas of Pakistan.
 Introduction of Family medicine to prevent
non-communicable diseases.  Pakistan is undergoing deepening human development crisis
 Increasing healthcare awareness among the population.  Insufficient training in medical equipment usage and underutili-
 Investment in Healthcare sector promotes medical tourism zation of primary health facilities persist.
boosting foreign exchange earnings.  Environment deterioration harms livelihoods, climate change
 Establishment of pharmaceutical park to improve availability of threatens health sector.
life saving medicines.
 Unavailability or non-functioning of medical equipment.
 Establishment of Disease response and surveillance system.
 Restructuring of public facilities  Devolution of power causing irregularities in safety standards.
 Reformed hospitals through decentralization  Lack of patient safety at different levels.
 Increase in health revenue allocations  Poor collaboration in health departments regarding data sharing.
 Increased insurance coverage  Massive brain drains of healthcare professionals
 Transparently governed, technically sound federal drug
 Large population lacks financial protection for healthcare.
regulatory authority.

ICMA’s Chartered Management Accountant, Mar-Apr 2024 69

Other Features ECONOMY
O THER FEATURES

WATCH
By ICMA Research and Publica ons Department

SIFC's Strategic Policy Initiatives to

Enhance Investment in Pakistan
On 20 June 2023, the Government of Pakistan approved the
FDI Inflows in Pakistan (Million US$)
establishment of the Special Investment Facilitation Council
(SIFC), a facility to act as a "single window" to facilitate investors,
Feb-24 131.2
establish cooperation among all Government departments,
and fast-track project development. -173.2
Jan-24
The SIFC is structured into three levels, with a six-member Apex
Committee led by the Prime Minister. The Executive Dec-23 211.1
Committee consists of eight members, including
representatives from the Pakistan Army. The Implementation Nov-23 131.4
Committee includes five members from both civilian and
military leadership. Additionally, the team comprises co-opted -200 -150 -100 -50 0 50 100 150 200 250

members such as the Secretary of Finance, Secretary of the

Board of Investment, Secretary of Economic Affairs Division Sector-wise FDI Inflows in Pakistan
(EAD), Chairman of the Federal Board of Revenue (FBR), Deputy Nov 23 Dec 23 Jan 24 Feb 24
Governor, and Provincial focal points. Power 92 100.6 68.8 64.3
Oil & Gas Explora ons 11.6 49.2 5.2 16.9
The SIFC will prioritize investment and privatization, focusing Financial Business 22.1 22.8 20.8 20.9
initially on five sectors: Agriculture & Livestock, IT & Telecom, Electronics 1.8 1.8 15.5 8.7
Mines & Minerals, Energy [Petroleum & Power] and Industry, Petroleum Refining 7.4 7.4 7.4 7.4
Source: SBP
Tourism and Privatization.
Sector-wise Foreign Direct Investment-Inflow in
In this Article, we will provide brief details on the strategic Pakistan (in Million US$)
policy initiatives that have so far been taken by SIFC to boost
investments in the above five priority sectors. Before that,
we will have an overview of the current status of FDI inflows
into Pakistan. Power Oil & Gas Financial Electronics Petroleum
Current status of FDI inflows Explora ons Business Refining

According to the State Bank of Pakistan, Foreign Direct
Investment (FDI) in Pakistan decreased by 25% from 2022 to
2023. From July to June 2023, the country received US$1.456
billion in FDI, US$480 million less than the US$1.936 billion in
2022. FDI fell by 58% to US$114 million in June 2023.
However, during the first four months of FY2023-24
(July-October), Pakistan received US$524.7 million in FDI, a
7.11% increase from the same period the previous year. China,
Norway, and the USA were the main sources of FDI, with
investments directed towards power, oil and gas, financial
services, and electronics.
The financial sector was the top recipient of FDI, followed by the
chemicals and construction sectors. Pakistan continues to
experience fluctuating FDI figures, with US$131.2 million in
February 2024 after a drop of US$173.2 million in January. The
highest FDI was in December 2023 at US$211.1 million.
FOREIGN DIRECT INVESTMENT (FDI) IN PAKISTAN (Million US$)
Nov 23 Dec 23 Jan 24 Feb 24
FDI Inflows 131.4 211.1 -173.2 131.2
Source: SBP
23-Nov 23-Dec 24-Jan 24-Feb
SIFC's Strategic Initiatives
At the core of SIFC's strategy is the creation of a favorable
environment for foreign investors. This includes simplifying
regulatory processes, minimizing bureaucratic hurdles, and
offering appealing incentives to attract investment. By
fostering a business-friendly ecosystem, SIFC seeks to instill
confidence in investors and demonstrate Pakistan's
commitment to their success.
SIFC in Pakistan has implemented strategic initiatives to boost
foreign investment. These include launching the Pak Startup
Fund, introducing the National Seed Policy, establishing
E-Rozgar centers, revising visa policies, and launching the
National Space Policy. Additionally, SIFC has standardized ROW
charges, commenced the rollout of 5G, appointed an
Investment Ombudsman, and developed a Telecom
Infrastructure Sharing Framework. Other measures include
operationalizing EXIM Bank, initiating the Green Corporate
Initiative, and providing IT financial incentives.

70 ICMA’s Chartered Management Accountant, Mar-Apr 2024

OTHER FEATURES
Pakistan has also engaged in regional economic partnerships,
emphasized human resource development, and launched the
Land Information and Management System (LIMS). Ongoing
projects include Thar railway connectivity, infrastructure
development for Reko Diq, and establishing the National Seed
Authority.
a) Simplifying Investment Procedures and Removing
Hurdles - SIFC aims to attract US$100 billion in FDI and
achieve a nominal GDP of US$1 trillion by 2035. To achieve
this, the council is simplifying and expediting investment
procedures, removing bureaucratic hurdles, and providing a
streamlined process for investors and business groups.
b) Addressing Challenges and Promoting Growth - SIFC is
actively addressing issues such as political instability,
inconsistent economic policies, and bureaucratic obstacles
that have historically deterred foreign investment in
Pakistan. By tackling these challenges, SIFC is creating a
more conducive environment for investment and
economic growth.
c) Development of Special Economic Zones - One of the
flagship initiatives spearheaded by SIFC is the progress of
Special Economic Zones (SEZs) across Pakistan. These
designated zones offer a host of incentives, including tax
breaks, streamlined customs procedures, and
infrastructure support, making them attractive
destinations for foreign investors. By focusing resources on
infrastructure development within these zones, SIFC aims
to address critical bottlenecks and provide investors with a
ready-made platform to set up operations.
d) Agricultural Sector Development - In the agricultural
sector, SIFC's initiatives have been instrumental in
attracting investments, promoting modern practices, and
driving sustainable development. SIFC has introduced
initiatives such as Land Information and Management
System, Center of Excellence (LIMS-CoE), and the Green
Pakistan Initiative (GPI) to enhance productivity, transform
barren land into fertile ground, and promote sustainable
farming practices.
e) Transforming CPEC and Driving Economic Growth -
SIFC's role in streamlining investment processes, policy
advocacy, security enhancement, transparency, equitable
development, private sector engagement, and
international collaboration is crucial for unlocking the full
potential of CPEC and the agricultural sector. These
strategic initiatives are expected to transform CPEC into a
driving force for Pakistan’s economic growth and
development.
f) IT & Telecom Development - For the development IT and
telecom sector, SIFC offers tax incentives like profit
repatriation, foreign ownership up to 100%, and reduced
income tax rates. Special Technology Zones provide tax
exemptions, import relief, and property tax exemptions.
Telecom operators seek reductions in advance income tax
and federal excise duty to encourage investment and
growth.
g) Mines & Minerals Development - SIFC offers various
incentives for investment in the mines and minerals sector,
including concessional customs duty and sales tax rates for
the import of machinery, up to 100% foreign equity,
expatriate facilitation, and Export Processing Zone
incentives. CPEC also presents strategic advantages for
investment. Additionally, the Foreign Private Investment
(Promotion and Protection) Act, 2022, provides protection
ICMA’s Chartered Management Accountant, Mar-Apr 2024
for investor rights and tax concessions. The Fiscal
Incentives for Thar Coalfield offer special economic zone
status, zero customs duties on machinery imports, and a
30-year exemption on withholding tax on dividends,
among other benefits. The Income Tax Ordinance, 2001,
provides a 2% tax credit for every 50 employees in certain
sectors, encouraging employment.
h) Energy (Petroleum & Power) - SIFC offers a range of
incentives in the energy (petroleum & power) sector which
include tax exemptions, import concessions on machinery,
100% foreign ownership, government guarantees for
payment obligations, protection against expropriation,
and attractive return on equity terms. SIFC provides tariff
indexation, repatriation of capital and profits, and a
streamlined dispute resolution mechanism. The Oil
Refining Policy 2023 offers income tax exemptions, custom
duty exemptions, and tariff protection for oil refinery
projects, aiming to boost local production and reduce
imports in the energy sector.
i) Industry, Tourism & Privatization - SIFC offers various
incentives to investors, including minimal capital flow
restrictions, 100% foreign equity allowance, and a reduced
customs duty of 5% on Plant, Machinery, and Equipment
(PME) in manufacturing sector. The government also
provides tax relief of 25% on PME, with no limitations on
royalty and technical fee payments. The Auto Industry
Development & Export Policy (AIDEP 2021-26) encourages
compact vehicles and new technologies for export markets.
The non-manufacturing sector (infrastructure & social) also
benefits from similar incentives, including 100% foreign
equity allowance, 0% customs duty on PME, and a 25% tax
relief on PME. The tourism sector offers reduced duty on
imports, sales tax exemptions in Gwadar, loss set-off for
hotel companies, tourist visa on arrival, and business visa on
arrival. Export finance for consultancy services, income tax
exemption for hotel services, and tariff protection for oil
refining projects are also available. The Oil Refining Policy
2023 offers income tax exemptions, custom duty
exemptions, and tariff protection for refineries, aiming to
boost local production and reduce imports.
Conclusion
Pakistan's efforts to attract foreign direct investment (FDI) have
been mixed, though recent trends point toward potential
improvement. While the country enjoys a large young
population and a strategic position on the Belt and Road
Initiative (BRI) trade route, political instability, security issues,
and a fluctuating regulatory landscape have historically
deterred foreign investors.
The Special Investment Facilitation Council (SIFC) plays a
leading role in stimulating FDI by removing bureaucratic and
infrastructure obstacles, ensuring smooth investment in
Pakistan and focusing on economic growth. SIFC's
comprehensive approach includes streamlining investment
processes, establishing Special Economic Zones (SEZs),
promoting investment in priority sectors, and enhancing
investor support.
Pakistan's success in attracting FDI now hinges on sustaining
these positive changes. Consistent policy implementation,
addressing security concerns, and improving physical
infrastructure are crucial. By leveraging its potential and
creating a welcoming environment for foreign investors,
Pakistan can usher in a new era of economic expansion,
technological advancement, and job creation.
71
 OTHER FEATURES

Economy News
IMF and Pakistan Reach Staff-Level Agreement on Final Bailout Review
The International Monetary Fund (IMF) has reached a acknowledges strong program implementation by the
staff-level agreement with Pakistan on the final review of State Bank of Pakistan and the caretaker government in
a $3 billion bailout package, where Pakistan will receive recent months, as well as the new government's
$1.1 billion after approval from the Fund’s Executive intentions for ongoing policy and reform efforts. This
Board. The funds represent the final tranche of a $3 aims to transition Pakistan from stabilization to a robust
billion rescue package secured last summer, which and sustainable recovery. The review is expected to be
prevented a sovereign debt default. The agreement considered by the IMF's Board in late April 2024.

IMF Projects Fiscal Gap to Widen to 7.4% of GDP

The International Monetary Fund (IMF) forecasts that gradual decline in debt-to-GDP ratios is anticipated. The
Pakistan's fiscal deficit will expand to 7.4% of GDP for IMF expects the fiscal deficit to decrease over the
the current fiscal year, surpassing the government's medium term.
target of 6.5%. Despite stagnant tax-to-GDP ratios, a

UN projects over 2% GDP growth rate in Pakistan

The United Nations (UN) has projected accelerated
economic growth, and reduction in inflation by more
than half in Pakistan, in line with similar predictions
made recently by the World Bank and other
international financial institutions about the country.
The 2024 Economic and Social Survey of Asia and the
Pacific region, released by the UN Economic and Social
Commission for Asia and the Pacific (UN-ESCAP)
predicted real GDP growth of 2% and 2.3% in the current
and next fiscal years, respectively. The survey cites
political unrest and floods as challenges and
emphasizes the need for improved tax policies,
governance, and long-term financing to bridge
development gaps.

Workers’ Remittances recorded an inflow of $3 billionin March 2024

According to State Bank of Pakistan, in March 24 the the first nine months of FY24, showing a 0.9% increase
Workers' Remittances reached $3 billion, marking a 31.3% compared to the same period in FY23. Major inflows
monthly and 16.4% yearly growth. Totaling $21 billion in came from Saudi Arabia, UAE, UK, and USA.

Pakistan's Foreign Loan Inflows Low at $9.5 Billion

Pakistan received just under $9.5 billion in foreign loans
in the first eight months of FY2024, facing challenges in
obtaining new funding from key multilateral lenders like
the World Bank and the Asian Development Bank (ADB).
Disbursements have been slow despite an existing IMF
Pakistan Witnesses 8% Year-on-Year drop in Power Generation
In March 2024, Pakistan's power generation fell by 8.2%
compared to the previous year, mainly due to reduced
output from RLNG, coal, and gas. Monthly generation,
however, rose by 12.5% thanks to better hydel, nuclear,
and RLNG generation. Despite this, cumulative
program. Finance Minister Aurangzeb is seeking more
support from the ADB and the World Bank as the
government aims to bridge funding gaps through
various channels.
generation for the past nine months declined by 1.2%
year-on-year. The rise in generation costs was driven
largely by local coal expenses. Hydel was the top power
source, followed by nuclear and RLNG.

NEPRA Approves Rs. 2.7492 per Unit Increase in Electricity Tariffs for FY 2023-24
NEPRA has approved a Rs. 2.7492 per unit increase in three months. NEPRA is also considering a possible
electricity tariffs for FY2023-24, impacting consumers Rs. 4.99 per unit increase due to falling electricity
with a total cost of Rs. 85.2 billion. The adjustment will consumption and rising costs.
start in April 2024, excluding lifeline consumers, over

72 ICMA’s Chartered Management Accountant, Mar-Apr 2024

 Other Features
OTHER FEATURES

REGULATORY
WATCH
By ICMA Research and Publica ons Department
Monetary Policy Committee (MPC) decided to keep the policy rate unchanged at 22%
The State Bank of Pakistan's Monetary Policy Committee macroeconomic stability, and monetary aggregates are
(MPC) has kept the policy rate at 22%, citing a gradual stabilizing, aiding a positive inflation outlook. The MPC
decrease in inflation but noting ongoing high levels and highlighted the importance of ongoing efforts to lower
risks. Economic activity is slowly improving, supported inflation expectations and decided to maintain the
by agriculture, while the external current account deficit current monetary policy stance.
has significantly shrunk. Fiscal consolidation supports

SECP amends Securities Brokers (Licensing and Operations) Regulations

The Securities and Exchange Commission of Pakistan
(SECP) has approved amendments in the Securities
Brokers (Licensing and Operations) Regulations, 2016 for
facilitating Shariah-compliant brokerage services for the
securities market of Pakistan. The SECP has granted a
license to ZLK Islamic Financial Services (Private) Limited,
marking it as the first fully Shariah-compliant brokerage
house. It is anticipated that the new regulations will
streamline entry process for new entrants in the
brokerage industry and facilitate existing brokers
desiring to offer Islamic Financial Services.

SECP notifies amendments to Corporate Restructuring Companies Rules, 2019

The Securities and Exchange Commission of Pakistan
(SECP) has amended the Corporate Restructuring
Companies Rules, 2019, aligning them with the
Corporate Restructuring Companies Act, 2021. The
amendments aim to support Corporate Restructuring
Companies (CRCs), specialized in acquiring and
managing nonperforming assets (NPA) from distressed
financial institutions. The changes facilitate trust
establishment, liquidation procedures, and Corporate
Restructuring Board functions, enhancing CRC
operational efficiency and investor compensation.

SECP Strengthens Corporate Governance with Focus on Sustainability and Diversity

SECP proposes amendments to Listed Companies DE&I, including gender equality in leadership and
Regulations to enhance Boards' focus on ESG and gender workforce. Amendments mandate regular ESG review
equality. Boards will drive sustainability strategies, and may establish dedicated sustainability committees,
aligning with ESG Disclosure Guidelines. They'll promote fostering long-term value and competitiveness.

SBP Reviews Pakistan's Advancements in Digital Payments

The State Bank of Pakistan (SBP) released its Quarterly
Payment Systems Review for Q2 FY2023-24, highlighting
notable progress in digital payments. Mobile and
Internet Banking have grown, reaching 16 million and 11
million users, respectively. E-wallet registrations surged,
and digital transactions made up 82% of retail
transactions. Raast and PRISM systems played key roles
in facilitating millions of transactions worth trillions of
PKR. Pakistan's payments infrastructure involves banks,
microfinance banks, payment system operators/
providers, and FinTechs.

FBR Achieves Monthly and 9-Month Targets Amid Unprecedented Refunds

As the third quarter of FY2023-2024 came to a close, the
FBR has collected Rs. 6,710 billion, surpassing the
assigned target of Rs. 6,707 billion for the first nine
months. Refunds totaling Rs. 369 billion were disbursed,
compared to Rs. 254 billion in the same period last year.
The FBR maintains a consistent 30% growth in revenue
collection compared to the corresponding period of the
previous fiscal year. In March 2024, the FBR met the
assigned target of Rs. 879 billion, with refunds totaling
Rs. 67 billion, a notable increase from Rs. 22 billion issued
in March 2023.

ICMA’s Chartered Management Accountant, Mar-Apr 2024 73

OTHER FEATURES

Management
Accounting Terms
Attention-directing The function of managerial accounting information in pointing out to managers issues
function that need their attention.

Budgeted statement of A budget schedule providing information about the expected sources and uses of cash for operating
cash flow activities, investing activities, and financing activities during a particular period of time.

Continuous
A system where a manufacturer assumes the inventory management function for the retailer.
replenishment

Drum-Buffer-Rope The TOC inventory management system that relies on the drum beat of the major
(DBR) System constrained resources, time buffers, and ropes to determine inventory levels.

Equivalent units of Complete units that could have been produced given the total amount of manufacturing
output effort expended during the period.

Feasible set of solutions The collection of all feasible solutions.

Goods that can be stored before sale, such as durable goods, mining products, and some
Inventorially goods agricultural products.

Loose constraints Constraints whose limited resources are not fully used a product mix.

Myopic behavior Managerial actions that improve budgetary performance in the short run at the expense of
the long-run welfare of the organization.

Overhead cost A report showing the actual and flexible-budget cost levels for each overhead item, together
performance report with variable-overhead spending and efficiency variances and fixed-overhead budget variances.

Partial productivity
A ratio that measures productive efficiency for one input.
measurement

Quality standards The quantity of input allowed per unit of output.

The complete book on Glossary of Management Accoun ng Terms is available on link: h ps://www.icmap.com.pk/News_Pdf/Final_Glossy.pdf

74 ICMA’s Chartered Management Accountant, Mar-Apr 2024

 NATIONAL COUNCIL
Office-bearers
President Vice President
Shehzad Ahmed Malik, FCMA Ather Saleem, FCMA
Chief Executive Officer Member Tribunal, Anti-Dumping
Shehzad Malik Management Government of Pakistan
Consultants (Pvt) Ltd.
Members
Zia ul Mustafa Awan, FCMA Anis-Ur-Rehman, FCMA
President Director Advisory Services,
House of Professionals Government of Pakistan
Naveed Zafar Ashfaq Jaffery &
Company, Karachi
Government Nominees
Saleemullah Sumaira K. Aslam
Deputy Governor Chief Financial Analyst/
State Bank of Pakistan Deputy Chief Cost Accounts Officer,
Finance Division, Govt. of Pakistan
Execu ve Director
Aamir Ijaz Khan, FCMA
ICMA’s Chartered Management Accountant, Mar-Apr 2024
Honorary Secretary Honorary Treasurer
Shaham Ahmed, FCMA Awais Yasin, FCMA
Staff General Manager Finance Company Secretary
Pak Suzuki Motor Co. Ltd. Diamer Basha Development
Company (WAPDA)
Khawaja Ehrar Ul Hassan, FCMA Khalid Mehmood, FCMA
Executive Vice President Chief Financial Officer
Chief Compliance Officer NBP Fund Management Ltd.
Summit Bank
Abdul Rehman Warraich Muhammad Kamran
Commissioner, Shahzad, ACMA
Securities and Exchange Deputy Chief Cost Accounts Officer,
Commission of Pakistan Finance Division, Govt. of Pakistan
75
 New Joiners of Upcoming
National Council (2024-26)

Ghulam Mustafa (F-931) Abdul Qayyum (F-986) Muhammad Yasin (F-1464)

Intzar Hussain (F-1939) Marryum Pervaiz (F-2000) Azeem Hussain Siddiqui (F-2217)

76 ICMA’s Chartered Management Accountant, Mar-Apr 2024