ISLAMABAD – Pakistani government is taking stern austerity measures to fix the broken economy as the country is facing massive financial deficits, declining foreign exchange reserves and rising public debt.
To deal with these matters, the federal government imposed ban on several; expenditures, including buying of new vehicles, machinery, and state-funded medical treatments abroad.
A notification shared by cabinet division cited broader efforts to address criticism over the government’s strict federal budget and rising energy costs as it seeks a $7 billion bailout from the International Monetary Fund (IMF).
It mentioned dissolution of regulatory bodies for health and education, the elimination of federal transport facilities, and the phase-out of non-executive staff. Additionally, the aviation and maritime divisions will be merged with the defense ministry as part of the restructuring process.
Under the latest measures, the purchase of new vehicles will not be allowed, except for operational needs such as ambulances, fire trucks, buses for schools, and waste management vehicles. The acquisition of machinery and equipment will also be restricted, with exceptions for hospitals, laboratories, schools, and sectors like agriculture and mining.
The notification also includes a ban on creating new government posts, including temporary ones, and mandates the abolition of positions that have been vacant for three years. Furthermore, government-funded medical treatments abroad and non-essential foreign trips will be prohibited.
Ministries and divisions are instructed to implement these guidelines strictly. Prime Minister Shehbaz Sharif will formally announce the final details of the austerity and restructuring measures, which are expected to eliminate regulatory councils.
New hiring will be limited to academic positions in federal universities and hospitals, with staff being hired on fixed-term contracts. Recruitment for support staff in grades 1-16 will be frozen, with positions phased out as they become vacant, in favor of adopting digital tools and artificial intelligence.
Provincial governments have also taken steps to cut costs. For instance, Khyber Pakhtunkhwa has banned new positions, vehicle purchases, foreign training, and luxury seminars, while restricting foreign medical treatments at provincial expense. In contrast, the Sindh government recently approved the purchase of 138 luxury vehicles for assistant commissioners, justifying the expenditure as crucial for provincial administration.
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