Hundreds of thousands of businesses went on strike across Pakistan on Saturday to protest against increased sales tax, which opposition parties say was imposed as part of the government's recent bailout agreement with the International Monetary Fund (IMF).

The strike almost brought the South Asian country's commercial activities to a halt, as stores, shopping malls, commodity markets as well as restaurants remained closed in many parts of the country's urban centers.

In addition to an increased sales tax, authorities are also forcing traders to document all substantial transactions as part of a drive to boost the country's embattled economy.

Read more: Pakistan: Imran Khan announces tax evasion amnesty scheme

After months of difficult negotiations, the IMF approved a $6 billion (€5.32 billion) financial bailout package for Islamabad. The IMF has imposed tough conditions for the bailout, including a commitment to let the market decide the Pakistani rupee rate, rather than have it be protected by the Central Bank. The Pakistani currency has plunged more than 40% in the last year.

Markets were closed on Saturday due to a countrywide strike by the business community

But many economists say the country's working classes are bearing the brunt of the spike in taxes

Mushahid Ullah Khan, an opposition senator, blamed PM Khan's "ill-conceived" financial policies for the economic turmoil.

However, Shabbar Zaidi, head of the federal tax collection body, said the new economic measures were intended to streamline the economy and widen the tax base.

Read more: Ishaq Dar: Pakistani PM Imran Khan 'responsible for current economic mess'

Growing discontent

The economy of the majority-Muslim nation with a population of over 200 million has slid deeper into crisis since Imran Khan took over as prime minister last year. Burgeoning fiscal and current account deficits and a dip in revenues from tax collection are at the heart of the crisis.

"The IMF deal, with the austerity measures it will entail, will be a political blow to a Pakistani government that had promised to build out a new welfare state," Michael Kugelman, a South Asia expert at the Washington-based Woodrow Wilson Center for Scholars, told DW. "The IMF package will make it quite tough for Khan to achieve his economic promises and therefore undercut the populist image that he has sought to showcase to the electorate," he added.

This view is shared by Kaiser Bengali, a renowned economist in Pakistan. "The IMF has an agenda to privatize the assets of the country, which will lead to massive unemployment," said the expert.

The bailout comes as discontent is already growing over measures Khan's government has taken to fend off the crisis, including devaluing the rupee by some 30% since January 2018, sending inflation to five-year highs.

Khan came to power after winning a simple majority in last year's parliamentary elections on promises to improve the country's economy and provide jobs to people. But his critics say his government has so far not been able to honor his commitment to the masses. A government report published in May also noted that Pakistan's growth rate is set to hit an eight-year low, with the country's GDP rate likely to sink to 3.3% against a projected target of 6.2%.

But some observers say the IMF package will be beneficial to end the growing uncertainty and build investor confidence. "The deal will put an end to uncertainty and improve Pakistan's financial situation," Abid Sulehri, an economist, told DW. "Even though it might have some negative effects, in the form of a rise in inflation, it will produce positive results in the long run."

Political impact

Pakistan's economic woes have piled more pressure on Khan's government in the past few months. Opposition parties and the business community have called for more protests and strikes, which could make governance more difficult for the cricketer-turned-politician.

Read more: Pakistan: Is PM Imran Khan's popularity waning?

Khan, who is set to visit the United States on July 21, is hoping to secure the financial backing from President Donald Trump's administration, which has slashed Pakistan's military and economic aid substantially in the past few years. Washington's possible support to Pakistan could ease Islamabad's problems but will also likely tie it to difficult conditions such as assistance in securing a peace deal with the Taliban in Afghanistan and support in the confrontation with Iran.

But analysts say that a possible uprising against inflation and higher taxes could be a hindrance for Khan to tackle serious foreign policy matters.

Read more: Global terror watchlist: Will Pakistan change its Afghanistan policy?

Who is Imran Khan, Pakistan's prime minister? Affluent upbringing Imran Khan was born in Lahore in 1952, the son of a civil engineer. Khan grew up with his four sisters in a relatively affluent part of the city. He received a privileged education, first in his hometown and then in Worcester, England. It was there that Khan's love and talent for the game of cricket became evident. In 1972, he enrolled at Oxford University to study politics and economics.

Who is Imran Khan, Pakistan's prime minister? Pakistan cricket's blue-eyed boy Khan played cricket throughout his time in England and after returning to his native Pakistan in 1976, he quickly became a regular in the national team. By 1982, he was awarded the captain's armband. Khan enjoyed an illustrious career and was regarded by many as one of the best all-rounders in the world.

Who is Imran Khan, Pakistan's prime minister? World champion The ultimate high point of Khan's sporting career saw him captain Pakistan to the 1992 Cricket World Cup in Melbourne, Australia. As if his popularity couldn't get any bigger back home, Khan even took the winning wicket in the final against England.

Who is Imran Khan, Pakistan's prime minister? From playboy to (thrice) married man Khan enjoyed hedonistic bachelor life and was a regular fixture on London's nightlife scene. However, in 1995, at age 42, he finally tied the knot to 21-year-old Jemima Goldsmith. During their nine-year marriage, the famous couple provided plenty of fodder for the British and Pakistani tabloids. Despite separating in 2004, Goldsmith has remained a vocal supporter of Khan's politics.

Who is Imran Khan, Pakistan's prime minister? Khan enters politics Khan wasted little time after retiring from cricket in 1994. Just two years later he entered Pakistani politics and founded the Pakistan Tehreek-e-Insaf (PTI) party. However, his popularity was slow to carry over from cricket into politics. In the 1997 general elections, his PTI party failed to win a single seat.

Who is Imran Khan, Pakistan's prime minister? Political activist Khan remained active in politics over the next decades. In 1999, he supported General Pervez Musharraf's military coup, only to later turn against Musharraf ahead of the 2007 presidential election. Khan was subsequently placed under house arrest and even spent a few days in prison. However, his supporter base continued to grow, and by 2013 he became a key candidate in the general elections.

Who is Imran Khan, Pakistan's prime minister? 2013: Khan's political breakthrough The PTI made substantial gains in the 2013 election, claiming 30 parliamentary seats and finishing second behind the Pakistan Muslim League. The party became the main opposition in the key provinces of Punjab and Sindh. However, its greatest feat was winning its first province in Khyber Pakhtunkhwa.

Who is Imran Khan, Pakistan's prime minister? "Taliban Khan" Khan has often been the butt of jokes for his pacifist stance towards terrorism in the region. He earned the moniker "Taliban Khan" for claiming that the only way to achieve peace with the Taliban in neighboring Afghanistan was through negotiation. Khan was also a vocal critic of US drones strikes on Pakistan and has promised to disengage Pakistan from America's conflicts in the Middle East.

Who is Imran Khan, Pakistan's prime minister? Two more marriages Since his divorce from Goldsmith in 2004, Khan has remarried twice. In January 2015, Khan announced his marriage to British-Pakistani journalist Reham Khanm although just 10 months later the couple said they were filing for divorce. In February 2018, Khan married his third wife, Bushra Manika (pictured front row, second from the left), whom he describes as his spiritual adviser.

Who is Imran Khan, Pakistan's prime minister? Making waves in 2018 By 2018, Khan's PTI were among the favorites going into the general election. Campaigning on a populist platform, Khan pledged to break away from Pakistan's corrupt legacy. His plans include a poverty reduction program similar to that seen in China. This would see the establishment of an "Islamic welfare state," the creation of 10 million jobs and construction of 5 million homes for the poor.

Who is Imran Khan, Pakistan's prime minister? Prime Minister Imran Khan Khan completed his journey from all-star cricketer to political leader on July 26, 2018. With most votes counted, the PTI is expected win up to 119 seats in Pakistan's 272-seat parliament. "I started this struggle 22 years ago and today I have been given a chance to fulfill what I dreamed for the country," Khan said in a televised speech. "We will run Pakistan like it's never been run before." Author: David Martin



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