Finance Ministry Clarifies IMF’s Governance and Corruption Assessment Mission to Pakistan

ISLAMABAD: The Ministry of Finance and Revenue issued a statement on Sunday, providing clarity regarding the visit of an International Monetary Fund (IMF) mission to Pakistan. The mission’s purpose is to conduct a Governance and Corruption Diagnostic Assessment (GCDA), aimed at addressing governance and corruption vulnerabilities in the country.

The spokesperson for the finance ministry explained that the IMF has been offering technical assistance to foster good governance, with a particular focus on public sector transparency and accountability. Traditionally, the IMF has guided countries in correcting macroeconomic imbalances, reducing inflation, and implementing reforms in trade, exchange, and markets to improve efficiency and promote economic growth. However, it is also recognized that good governance, including upholding the rule of law, improving public sector efficiency, and tackling corruption, is critical to economic prosperity.

The IMF’s approach to governance has evolved since it adopted its policy on economic governance in 1997, which was later reinforced in 2018 with a Framework for Enhanced Engagement on Governance. This policy promotes systematic engagement with member countries on governance challenges, including corruption, that can impact macroeconomic performance. As part of this framework, the IMF conducts GCDA in member countries, providing an analysis and recommending actions to address governance vulnerabilities.

The spokesperson pointed out that 20 GCDA reports have been completed since 2018, with several others under consideration, including for countries like Sri Lanka, Mauritania, and Zambia. Under Pakistan’s IMF-supported Economic Fund Facility (EFF) for 2024, the government has committed to conducting a GCDA to assess critical governance and corruption vulnerabilities.

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A team of three IMF officials will conduct the GCDA in Pakistan, focusing on six core state functions: fiscal governance, central bank operations, financial sector oversight, market regulation, the rule of law, and anti-money laundering/counter-financing of terrorism (AML-CFT). The mission will engage with various organizations, including the Finance Division, Federal Board of Revenue, State Bank of Pakistan, Auditor General, Securities and Exchange Commission, Election Commission, and Ministry of Law and Justice.

The GCDA report will offer actionable recommendations for addressing corruption vulnerabilities and enhancing governance, which will support Pakistan’s efforts to improve transparency, strengthen institutional capacity, and promote sustainable economic growth. The government has expressed its appreciation for the IMF’s technical support in these reforms.