Pakistan Shelves New Export Processing Zone Amid IMF Opposition

The Pakistan government has canceled plans to establish a new Export Processing Zone (EPZ) in Balochistan due to opposition from the IMF. The decision underscores the lender’s influence over Pakistan’s economic policies. The EPZ proposal aimed to boost copper exports but was dropped in line with IMF stipulations.

The Pakistan government has abandoned its plan to establish a new Export Processing Zone (EPZ) in Balochistan, following opposition from the International Monetary Fund (IMF). The decision points to the significant influence the IMF holds over Pakistan's economic policies, especially as the country remains under the lender's guidance to secure much-needed loans.

The initial plan, proposed by the Ministry of Industry and Production, aimed to boost copper exports from the Siah Diq area in Balochistan. The proposal, however, was dropped during a meeting of the Economic Coordination Committee (ECC) chaired by Finance Minister Muhammad Aurangzeb. The Finance Ministry highlighted that the EPZ would violate IMF conditions under a $7 billion Extended Fund Facility extended in July, which has yet to receive final approval.

This development was further echoed by the Secretary of the Special Investment Facilitation Council, Jamil Qureshi, whose earlier upbeat statements on new EPZs were rendered moot as the government retracted its support for the zone. The ECC also approved an additional Rs1 billion for hosting a significant diplomatic event for the Shanghai Cooperation Organisation, illustrating the financial tightrope Pakistan continues to walk.

(With inputs from agencies.)