ISLAMABAD: The International Monetary Fund (IMF) scoping mission is currently in Pakistan to undertake Governance and Corruption Diagnostic Assessment (GCDA) and examine the severity of corruption vulnerabilities across six core state functions including fiscal governance, central bank governance and operations, market regulation and rule of law.
This was confirmed by the Finance Division here on Sunday.
The IMF country report under the Extended Fund Facility (EFF) released in October 2024 noted that a structural benchmark was agreed upon in Memorandum of Economic and Fiscal Policies to ensure robust governance and anti-corruption institutions will contribute to inclusive growth, a level playing field and sustainability of reform efforts.
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Corruption, red tape, and a weak business climate are long-standing structural bottlenecks holding back Pakistan’s socio-economic development. Vested interests wield significant influence over government functions and can block or reverse reforms.
In this regard, the authorities requested capacity development support from IMF staff to conduct a Governance and Corruption Diagnostic Assessment, and committed to publishing the report, including an action plan (end-July 2025 SB).
In addition, the authorities will formalize their intent to publish the full review report of its compliance with the UN Convention against Corruption through regulations to be issued by end-September 2024, once the review process is completed.
To address the impunity for corruption, allegations of politically motivated persecution and weak investigative capacities, the authorities will enhance, as required, the independence and effectiveness of the National Accountability Bureau (NAB), following the expected ruling by the Supreme Court on the agency’s organic law. To ensure accountability of
public officials and deter illicit enrichment, asset declarations of high-level public officials (similar to members of parliament) will be made publicly accessible through legislative amendments (end-February 2025 SB), subject to safeguards of limited personal data.
The asset declaration system will be digitalized through the FBR and subject to risk-based verification by the Establishment Division.
However, the government has yet to amend the laws. Further the FBR has also not digitalized the asset declaration system.
The three member IMF scoping mission which will remain in Pakistan till February 14, will mainly engage with organizations like Finance Division, Federal Board of Revenue, State Bank of Pakistan, Auditor General of Pakistan, Securities & Exchange Commission of Pakistan, Election Commission of Pakistan and Ministry of Law & Justice, Finance Division added.
The GCDA report will recommend actions for addressing corruption vulnerabilities and strengthening integrity & governance, which will assist the government in bringing about reforms for promoting transparency, strengthening institutional capacities and achieving inclusive & sustainable economic growth.
Finance Division stated that under the Extended Fund Facility (EFF) 2024 program, there is a structural benchmark that with IMF capacity development support, Government of Pakistan will undertake a GCD Assessment to analyze critical governance and corruption vulnerabilities and identify priority structural reforms moving forward. This GCDA report will be published.
In line with this commitment, three-member IMF scoping mission is visiting Pakistan to undertake the GCD Assessment.
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 Fund has long provided 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.
While these remain its main focus in all its member countries, however the IMF has found that a much broader range of institutional reforms is needed if countries are to establish and maintain private sector confidence and thereby lay the basis for 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.
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 even-handed engagement with member countries regarding governance vulnerabilities—including corruption—that are 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 & governance in IMF member countries.
Following the analysis, GCDAs prioritize and sequence recommendations for systematically addressing the vulnerabilities. Since 2018, twenty GCDA Reports were finalized and include Sri-Lanka, Mauritania, Cameroon, Zambia, and Benin. Ten Diagnostics are ongoing, and several are under consideration by IMF.
Talking to Business Recorder Minister of State for Finance Ali Pervaiz Malik said the objective of such missions is to assess progress on different benchmarks.
Copyright Business Recorder, 2025
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