US, IMF criticise Pak fuel price hike reversal

Friday, January 7, 2011

WASHINGTON - US Secretary of State Hillary Clinton has called the Pakistan Government’s decision to reverse the controversial fuel price hikes a “mistake”, as it undermined its efforts to bolster the nation’s ailing economy.

On Thursday, Pakistan’s beleaguered Prime Minister Yousuf Raza Gilani caved into political pressure and reversed the fuel price hikes, in a move designed to prevent his fragile coalition government from collapsing.

“We believe that the government of Pakistan must reform its economic laws and regulations, including those that affect fuel and its cost,” The News quoted Clinton, as telling reporters.

“We have made it clear… that we think it is a mistake to reverse the progress that was being made to provide a stronger economic base and we will continue to express that opinion,” she added.

Clinton said that she had made the point when she met Pakistan’s Ambassador to Washington, Hussain Haqqani, at the State Department on Tuesday.

State Department spokesman Mark Toner also indicated that the US did not consider it a wise decision, and that increase in prices was vital for Pakistan’s financial stability.

“Our position is that… Pakistan needs to undertake difficult economic reforms that are going to require some pain, frankly, politically,” Toner said.

The International Monetary Fund (IMF) also criticised the Pakistan Government’s decision to reverse the fuel price hike.

“They’re inefficient and untargeted so that the bulk of the benefit from the energy subsidy goes to higher income individuals and large companies,” IMF spokeswoman Caroline Atkinson said from Washington. (ANI)

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