Pakistan Government Orders Foreign Office To Slash Missions Abroad As Part Of Austerity Measures: Report

Pakistan Prime Minister Shehbaz Sharif has ordered the foreign ministry to slash the number of missions abroad and reduce their offices, staff and initiate other measures to cut down expenditures of the debt-ridden nation by 15 per cent, a media report said on Wednesday.

In a directive titled "Rationalisation of Foreign Mission Abroad" issued by the Prime Minister's Office (PMO) on Tuesday, Sharif also demanded a well-considered proposal/plan from the foreign ministry in concern to the matter within two weeks positively, The News International newspaper reported.

The move to slash the missions abroad was recommended by the National Austerity Committee (NAC), which was constituted by Prime Minister Sharif to suggest austerity measures for the country in the wake of the current financial crisis it is witnessing. "In view of the ongoing economic constraints and the consequent need for fiscal consolidation and control of external deficit, the prime minister was pleased to constitute NAC," the report said.

"The committee has recommended, inter-alia, that the expenditure on Pakistan Missions abroad may be reduced by 15 per cent. This may be achieved by curtailing the number of Foreign Missions, reduction in the number of officers and staff posted there and other suitable measures," the report added.

The move came as there has been increasing frustration among the political-cum-technocratic members of the federal cabinet for reluctance on the part of the government not to implement the recommendations given by the NAC which was constituted by the premier himself but so far no action got implemented Pakistan has a chronic balance of payments problem which was exacerbated in the last year, with the country's forex reserves declining to critical levels.

As of February 10, the central bank had only USD 3.2 billion in reserves, enough to cover barely three weeks of imports. To stem dollar outflows, the government has imposed restrictions, allowing imports of only essential food items and medicines until a bailout is agreed upon with the International Monetary Fund (IMF), which is seen as essential for the country to stave off default. Sharif's government is hellbent on implementing measures to cut down on its expenditures by increasing taxes on the public and bringing down government expenses.

Although Finance Minister Ishaq Dar in his mini budget speeches reiterated the government’s commitment to undertaking austerity steps by the Prime Minister within weeks, there was a perception that the government undertook all tough measures by hiking electricity, and gas tariffs and imposing Rs 170 billion additional tax burden there was no hurry for cutting down wasteful expenditures, the report said.