- IMF report highlights points requiring government action.
- All identified gaps to be resolved promptly, says minister.
- IMF board decisions expected soon, says finance minister.
ISLAMABAD: Finance Minister Mohammad Aurangzeb has said Pakistan will address all gaps identified in the International Monetary Fund (IMF) report and take steps to resolve the issues highlighted.
“These are points identified by the IMF that require action, and we will work to resolve them,” the finance czar told Geo News on Thursday.
He added: “God willing, an agreement with the IMF will be reached. The IMF board’s upcoming decisions will show the way forward.”
The Fund’s Governance and Corruption Diagnostic Assessment (GCDA) on Pakistan, which was released last week, warned that persistent corruption and weak institutions continue to undermine the country’s economic development even as it stabilises under an Extended Fund Facility (EFF).
“Corruption is a persistent challenge in Pakistan, with significant adverse implications for economic development,” the report states. It said indicators reflect weak control of corruption over time, with negative consequences for the effectiveness of public spending, revenue collection and trust in the legal system.
The publication of the report is a precondition for the IMF executive board’s approval of a $1.2 billion disbursement next month under the $7 billion programme.
The Washington-based lender said policy efforts under the EFF have already delivered “significant progress” in stabilising the economy and rebuilding confidence.
The IMF notes that Pakistanis are often compelled to make continuous payments to officials to obtain basic services, while funds lost to corruption could otherwise support higher production and development.
While vulnerabilities exist at all levels of government, the IMF finds that the most economically damaging manifestations involve “privileged entities” that exert influence over key economic sectors, including those owned by or affiliated with the state.
The report says political and economic elites have obstructed economic development by seizing control of policies and capturing public benefits for their own gain.
In the judicial sector, the report cites organisational complexity, large case backlogs, antiquated laws and questions over the integrity and independence of judges and judicial personnel as factors undermining reliable enforcement of contracts and protection of property rights.
It describes Pakistan’s judicial sector as structurally complex and says the complexity and delays in the system affect economic activity. Reliance on courts to enforce economic rights is discouraged, it says, by delays and concerns over institutional integrity.
The report sets out a series of recommendations ranging from immediate and short-term steps to medium- and long-term structural reforms aimed at strengthening governance, reducing corruption vulnerabilities and supporting sustainable, private sector-led growth.
The IMF calls for the immediate initiation of a 15-point reform agenda and says improving governance, accountability and integrity along the lines recommended would yield significant economic benefits.
Key recommendations include ending special privileges granted to major public institutions in government contracts, shifting all government procurement to an e-governance system within 12 months, and establishing strict parliamentary oversight of the government’s financial powers. The report also urges greater transparency and accountability in policymaking and implementation, including more open access to fiscal information.
