Pakistan is struggling with its worst economic crisis, with the country's foreign exchange reserves at a 10-year low. Even though Uzbekistan, China and Iran have pledged to assist the Indian subcontinental state to get out of the financial crisis, the Pakistani government was still forced to stop paying salaries to ministers. CNBC reports.
The country changed its policy to meet the conditions set by the International Monetary Fund (IMF) in order to receive economic assistance. The IMF suggested increasing tax revenues and distributing precious resources more equitably by removing subsidies from people who don't need them. Pakistan's National Assembly then unanimously approved the government's Finance Bill 2023, or "mini-budget," and increased taxes on luxury goods and services.
The country has also raised the prices of fuel and basic goods, making it difficult for ordinary people to meet their basic needs. Pakistan's foreign exchange reserves, which fell to $2.9 billion a few weeks ago, are now close to $4 billion. Amid this unstable economic situation, Iran is expanding its trade with Pakistan, and China has extended a new loan of $700 million to the country. Uzbekistan signed a $1 billion trade agreement with the country.
Uzbekistan signed a $1 billion trade agreement with Pakistan
At the 8th meeting of the Pakistan-Uzbekistan Intergovernmental Commission on Trade, Economic and Scientific-Technical Cooperation held in Tashkent on February 24, Uzbekistan agreed to increase the volume of mutual trade with Pakistan by 1 billion dollars.
According to the official statement of the Department of Economic Affairs of the Government of Pakistan, the two countries have signed an agreement to promote the exchange of goods and services. Any investment opportunity is important for Pakistan's economy, which is grappling with the worst financial crisis.
China will provide a loan of 700 million dollars to replenish foreign reserves.
Iran is developing trade with Pakistan amid the financial crisis too.
On February 22, Pakistan's Prime Minister Shahbaz Sharif announced that he would cut the allowances and travel expenses of ministers and advisers in order to save $766 million a year.
The announced measures require Cabinet members and government officials to pay their own utility bills, such as telephone, electricity, water and gas, and return all luxury vehicles to auction. It is also forbidden to stay in five-star hotels while travelling abroad.
Until June 2024, it is decided to strictly ban the purchase of luxury goods, including cars, reduce the number of foreign representative offices and offices, and open government offices at 07:30 in the morning in the summer in order to save gas and electricity. Government events have a one-meal policy, only tea and biscuits are to be served at light lunches, and no security vehicles are provided to government officials.
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