IMF mission to inspect regulatory, judicial system
• Team in town to engage with financial, revenue, election bodies
• Assessment report to be published in July, measures to address corruption, governance vulnerabilities to be shared
• Pakistan required to publish corruption report under UN framework immediately after review
ISLAMABAD: The government on Sunday said the International Monetary Fund (IMF) was scrutinising the judicial and regulatory system as part of the ongoing $7 billion Extended Fund Facility (EFF) to address governance and corruption vulnerabilities.
A technical mission of the IMF is in town for a week-long examination of six key governance-related sectors and institutions, the Ministry of Finance said in a statement.
Pakistan made a commitment with the IMF in October to strengthen institutional capacities to fight corruption, support inclusive growth, and provide a level playing field for businesses and investments.
As a result, a structural benchmark had been set to publish by July 2025 a report on the Governance and Corruption Diagnostic Assessment (GCDA) to analyse critical governance and corruption vulnerabilities and identify priority structural reforms moving forward, the ministry said.
Sources said the mission would also be engaging with leading members of the superior judiciary besides the leadership of the financial, revenue, and election bodies to review their process.
The mission will examine the severity of corruption vulnerabilities across six core state functions. These include fiscal governance, central bank governance and operations, financial sector oversight, market regulation, rule of law, and anti-money laundering and counter-financing terror.
The IMF team will engage with the Finance Division, the Federal Board of Revenue, the State Bank of Pakistan, the Auditor General of Pakistan, the Securities and Exchange Commission of Pakistan, the Election Commission of Pakistan, and the Ministry of Law and Justice.
It said the GCDA report will recommend actions for addressing corruption vulnerabilities and strengthening integrity and governance, which will assist the government in bringing about reforms for promoting transparency, strengthening institutional capacities and achieving inclusive and sustainable economic growth.
The finance ministry said the IMF had long provided advice and technical assistance that helped foster good governance, such as promoting public sector transparency and accountability.
Traditionally the IMF’s main focus had been on encouraging countries to correct macroeconomic imbalances, reduce inflation, and undertake key trade, exchange, and other market reforms needed to improve efficiency and support sustained economic growth.
While these remain its main focus in all its member countries, the IMF has found that a much broader range of institutional reforms was needed if countries were to establish and maintain private sector confidence and thereby lay the basis for sustained growth, the ministry explained.
It added the Fund had identified that promoting good governance in all its aspects, including the rule of law, improving the efficiency and accountability of the public sector, and tackling corruption were essential elements of a framework within which economies can prosper.
In 1997, the IMF adopted a policy on how to address economic governance, embodied in the Guidance Note on the Role of the IMF in Governance Issues. To further strengthen the implementation of this policy, the IMF adopted in 2018 a new Framework for Enhanced Engagement on Governance (Governance Policy) to promote more systematic, effective, candid, and evenhanded engagement with member countries regarding governance vulnerabilities.
Under this policy framework, the IMF offers to undertake GCDA with member countries to analyse and recommend actions for addressing corruption vulnerabilities and strengthening integrity and governance in its member countries.
Following the analysis, GCDAs prioritise and sequence recommendations for systematically addressing the vulnerabilities. Since 2018, as many as 20 GCDA reports have been finalised and include Sri Lanka, Mauritania, Cameroon, Zambia, and Benin. Ten diagnostics are ongoing, and several are under consideration.
As part of its commitment to strengthening the capacity of relevant institutions to fight corruption to support inclusive growth and provide a level playing field for businesses and investments, Pakistan is also required to publish the full and complete UN Convention against Corruption Review Report immediately after the review process is completed.
The government has also committed, subject to the Supreme Court clearance, to consider enacting legislative amendments, if required, to the National Accountability Bureau (NAB) Ordinance to strengthen the NAB’s independence and effectiveness and empower the Provincial Anti-Corruption Establishments under the law to investigate money laundering related to corruption offences within their jurisdiction.
It will also allow them to request and receive financial intelligence from the Financial Monitoring Unit (FMU) as an investigating agency under the AML Act, and have sufficient resources and training to conduct parallel financial investigations.
Under a similar structural benchmark for end-February 2025, the government is required to amend the Civil Servants Act 1973 to ensure that asset declarations of high-level (BPS 17-22) public officials (including domestic and foreign assets beneficially owned by them or a member of their family) will be digitally filed and publicly accessible with sufficient safeguards over data protection and privacy of personal information.
Published in Dawn, February 10th, 2025