Finance ministry clears air surrounding IMF mission reviewing Pakistan's governance framework

• IMF mission visiting Pakistan for GCDA, clarifies finance ministry.
• IMF has long been providing advice, technical assistance, it adds.
• Says report to recommend actions against corruption vulnerabilities.

In a bid to clear the air surrounding the visit of the International Monetary Fund’s (IMF) mission to Pakistan, the Ministry of Finance and Revenue on Sunday clarified that the trip aimed at conducting a governance and corruption diagnostic assessment (GCDA).

In a statement, a spokesperson for the finance ministry said that the IMF has long been providing advice and technical assistance that has helped to foster good governance, such as promoting public sector transparency and accountability.

Traditionally the IMF’s main focus has 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, clarified the spokesperson.

The ministry added that the IMF identified that promoting good governance in all its aspects, including ensuring the rule of law, improving the efficiency and accountability of the public sector, and tackling corruption are 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 “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) that aims to promote more systematic, effective, candid, and evenhanded engagement with member countries regarding governance vulnerabilities—including corruption—that are critical to macroeconomic performance,” read the statement.

Under this policy and framework, IMF offers to undertake GCDA with member countries to analyse and recommend actions for addressing corruption vulnerabilities and strengthening integrity and governance in IMF member countries, the spokesperson further clarified.  

“Following the analysis, GCDAs prioritise and sequence recommendations for systematically addressing the vulnerabilities.”

Giving details, the spokesperson said, since 2018, twenty GCDA reports were finalised and include Sri-Lanka, Mauritania, Cameroon, Zambia, and Benin, adding that 10 diagnostics were ongoing, and several were under consideration by IMF.

So, similarly under the EFF 2024 program, there is a structural benchmark that with IMF capacity development support, the spokesperson said, adding that the government will undertake a GCD assessment to analyse critical governance and corruption vulnerabilities and identify priority structural reforms moving forward.

“In line with this commitment, three member IMF scoping mission is visiting Pakistan to undertake the GCD Assessment,” read the statement.

The official said that the focus of the mission will be to 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 AML-CFT.”

The mission will mainly engage with organisations like Finance Division, Federal Board of Revenue, State Bank of Pakistan, Auditor General of Pakistan, Securities and Exchange Commission of Pakistan, Election Commission of Pakistan and Ministry of Law and Justice, it added  

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 ministry said, adding that the government appreciates the technical support of IMF in this regard.