Enforce economic reforms or forget aid, US tells Pakistan

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ISLAMABAD: The US has warned Pakistan that its failure to go for the much-needed stringent economic reforms, including the expansion of tax base, will result in loosing Washington’s backing for Islamabad’s efforts to seek financial assistance from international financial institutions (IFIs) and the developed countries.
The current economic crisis confronting Pakistan, US main ally in counter-terrorism efforts, has deeply perturbed the Obama administration and especially Islamabad’s failure to go for the required economic reforms including expansion of its tax base. The US feels that prolongation economic crisis and the woes of common people in Pakistan is only helping Al Qaeda and Taliban militants’ cause.
The US, like other developed nations and the international finance institutions, wants Pakistan to tax its wealthy and affluent classes as they feel it would help a lot in addressing the grave financial problems facing the country in the wake of the massive floods.
“(New US ambassador) Cameron Munter has conveyed US concerns over Islamabad’s deteriorating economic situation and warning by the Obama administration to withdraw its vital support during his ongoing meetings with top Pakistani leaders including President Asif Zardari and army chief General Ashfaq Kayani,” a senior Pakistani official said on Sunday.
He said the Obama administration felt that without Pakistani government taking initiatives for improving the country’s economy, it would be difficult for Washington and the rest of the world to continue with their financial support at the cost of their taxpayers’ money.