Finance ministry issues clarification on IMF mission visiting Pakistan

ISLAMABAD: The Ministry of Finance issued a clarification on the International Monetary Fund’s (IMF) mission visiting Pakistan to conduct a Governance and Corruption Diagnostic Assessment (GCDA), ARY News reported.

“This Press Release aims to add clarity to reports circulating in the media regarding an International Monetary Fund’s (IMF) mission visiting Pakistan for conducting a Governance and Corruption Diagnostic Assessment,” the ministry’s clarification read.

It added that the IMF 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.”

The clarification read 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.”

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It added, “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.”

The Ministry of Finance added that following the analysis, GCDAs prioritise and sequence recommendations for systematically addressing the vulnerabilities.

“Since 2018, twenty [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 that 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 mission 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.”

The clarification 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. The Government of Pakistan appreciates the technical support of IMF in this regard.”