Government reaffirms commitment to macroeconomic reforms

June 17, 2025 (MLN): The government's reform agenda as laid out in the recent Federal Budget has reaffirmed the government's commitment to macroeconomic reforms, said Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb.

Senator Aurangzeb participated as the Chief Guest at the “National Workshop on Transitioning to Defined Contribution Pension Schemes” organized by the Securities and Exchange Commission of Pakistan (SECP) at a local hotel in Islamabad today.

In his keynote address, the Minister began by briefing the participants on the recent geopolitical tensions and regional developments, sharing insights from a high-level meeting he chaired yesterday to review the evolving situation and its potential economic implications for Pakistan.

He noted that in-depth discussions were held with key stakeholders on scenario planning, ensuring adequate stockpiles of petroleum products, and monitoring asset class pricing, according to the press release issued today.

He emphasized the government’s firm resolve and preparedness to handle any eventuality, stating, “We are in a good place but hope is not a strategy. We have to plan for every possible outcome.”

Touching upon international economic developments, Senator Aurangzeb shared details of his constructive and positive conversation with the U.S. Commerce Secretary held late last night.

He described the ongoing discussions on U.S. tariffs as encouraging and noted that both countries are making steady progress and the broader objective is to deepen bilateral relations into a strategic economic partnership.

Highlighting the government's reform agenda, the Minister reaffirmed the government’s commitment to macroeconomic reforms.

He emphasized that the government would continue to push forward on key areas such as privatization, tax reform, state-owned enterprise (SOE) restructuring, federal government rightsizing, pension, and public finance reform.

Speaking on the subject of pension reforms, Senator Aurangzeb explained the rationale behind the government’s decision to transition new civil servants to a Defined Contribution (DC) pension scheme, effective July 1, 2024.

He underscored that this shift was a critical step taken even before addressing the legacy issue of unfunded pension liabilities.

“We had to stop the bleeding,” he said, referencing the fiscal burden of pension payments which have now exceeded one trillion rupees surpassing the federal government’s entire development budget.

“This raises a fundamental question of macroeconomic sustainability,” he added, stressing the urgency of reform.

The Minister also commended provincial governments for their proactive role, particularly in the area of public-private partnerships and for taking the lead on defined contribution initiatives.

He noted that the theme of the workshop transitioning to defined contribution schemes was both timely and significant, likening it to ongoing tariff reforms in its structural importance.

Concluding his remarks, Senator Aurangzeb expressed confidence in the collective ability of stakeholders to bring about meaningful change in Pakistan’s pension landscape, driven by sustainability, transparency, and long-term fiscal responsibility.

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