The Finance Ministry on Sunday clarified that an International Monetary Fund (IMF) mission currently visiting Pakistan is conducting a Governance and Corruption Diagnostic Assessment and is not the review mission expected to visit the country later this month.
In a statement, the ministry noted that the IMF had long provided advice and technical assistance aimed at fostering good governance. “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,” it said. However, it added, the lender had found that a much broader range of institutional reforms was needed for countries to establish and maintain private sector confidence and achieve sustained growth.
“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,” it said.
The ministry recalled that in 1997 the IMF had adopted a policy on how to address economic governance. To implement this policy, it said, in 2018 the IMF adopted a new Framework for Enhanced Engagement on Governance (Governance Policy) aiming to promote more systematic, effective, candid, and evenhanded engagement with member countries regarding governance vulnerabilities critical to macroeconomic performance.
“Under this policy and framework, IMF offers to undertake Governance and Corruption Diagnostic Assessment (GCDA) with member countries to analyze and recommend actions for addressing corruption vulnerabilities and strengthening integrity and governance in IMF member countries,” it said. The GCDA, noted the statement, prioritizes and sequences recommendations for systematically addressing identified vulnerabilities. “Since 2018, 20 GCDA Reports were finalized and include Sri-Lanka, Mauritania, Cameroon, Zambia, and Benin. Ten Diagnostics are ongoing, and several are under consideration by IMF,” it added.
As part of this policy, read the statement, Pakistan had agreed to a structural benchmark under the ongoing $7 billion Extended Fund Facility to undertake a GCDA to analyze critical governance and corruption vulnerabilities and identify priority structural reforms. The country is required to make this report upon its completion in June 2025.
According to the ministry, the three member IMF scoping mission currently visiting Pakistan would undertake the GCDA. It would focus on examining the severity of corruption vulnerabilities across six core state functions, including fiscal governance, central bank governance and operations, financial sector oversight, market regulation, rule of law, and anti-money laundering. The mission, it said, would primarily engage with organizations like the 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 may also meet members of the judiciary, according to sources.
The GCDA report, read the statement, would recommend actions for addressing corruption vulnerabilities and strengthening integrity and governance. This, it said, would assist the government in bringing about reforms for promoting transparency, strengthening institutional capacities and achieving inclusive and sustainable economic growth.
“The Government of Pakistan appreciates the technical support of IMF in this regard,” it added.