IMF Mission To Inspect Regulatory, Judicial System: Pak Govt

Islamabad: The International Monetary Fund (IMF) is scrutinising the judicial and regulatory system of Pakistan as part of the ongoing USD 7 billion Extended Fund Facility (EFF) to address governance and corruption vulnerabilities, the government has said. An IMF technical mission is in town for a week-long examination of six key governance-related sectors and institutions, the Ministry of Finance revealed on Sunday. 

Dawn News reported that Pakistan committed to strengthening institutional capacities with the IMF in October to fight corruption, support inclusive growth, and provide a level playing field for businesses and investments. As a result, the ministry said a structural benchmark had been set to publish a report on the Governance and Corruption Diag­nostic Assessment (GCDA) by July 2025, which will analyse critical governance and corruption vulnerabilities and identify priority structural reforms moving forward.

ALSO READ: Trump Says He Will Announce 25% Steel, Aluminum Tariffs Monday, More Import Duties Coming

Sources said the mission would also engage with leading members of the superior judiciary besides the leadership of the financial, revenue, and election bodies to review their process. The mission will examine 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 and counter-financing terror. The IMF team will engage with the Finance Division, the Federal Board of Revenue, the State Bank of Pakistan, the Auditor General of Pakistan, the Securities and Exchange Commission of Pakistan, the Election Commission of Pakistan, and the Ministry of Law and Justice. It said the GCDA report will recommend actions for addressing corruption vulnerabilities and strengthening integrity and governance, which will assist the government in bringing about reforms for promoting transparency, strengthening institutional capacities, and achieving inclusive and sustainable economic growth.

IMF’s Governance Framework: Strengthening Transparency and Accountability

The finance ministry said the IMF had long provided advice and technical assistance that helped foster good governance, including promoting public sector transparency and accountability. Traditionally, the IMF’s main focus had been 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, the IMF has found that a much broader range of institutional reforms was needed if countries were to establish and maintain private sector confidence and thereby lay the basis for sustained growth, the ministry explained. It added the IMF had identified that promoting good governance in all its aspects, including the rule of law, improving the efficiency and accountability of the public sector, and tackling corruption, were essential elements of a framework within which economies can prosper.

IMF reviews Pakistan's regulatory, judicial system

In 1997, the IMF adopted a policy on addressing economic governance, embodied in the Guidance Note on 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) to promote more systematic, effective, candid, and evenhanded engagement with member countries regarding governance vulnerabilities. The IMF offers to undertake GCDA with member countries to analyse and recommend actions for addressing corruption vulnerabilities and strengthening integrity and governance in its member countries under this policy framework. Following the analysis, GCDAs prioritise and sequence recommendations for systematically addressing the vulnerabilities. As many as 20 GCDA reports have been finalised since 2018 and include Sri Lanka, Mauritania, Cameroon, Zambia, and Benin. Ten diagnostics are ongoing, and several are under consideration.

Pakistan Strengthens Anti-Corruption Framework to Meet Global Commitments

As part of its commitment to strengthening the capacity of relevant institutions to fight corruption to support inclusive growth and provide a level playing field for businesses and investments, Pakistan is also required to publish the complete UN Convention against Corruption Review Report immediately after the review process is completed. The government has also committed, subject to the Supreme Court clearance, to consider enacting legislative amendments, if required, to the National Accountability Bureau (NAB) Ordinance to strengthen the NAB’s independence and effectiveness and empower the Provincial Anti-Corruption Establish­ments under the law to investigate money laundering related to corruption offences within their jurisdiction.

ALSO READ: Japan Runs Record Current Account Surplus In 2024 On Foreign Investment Returns

It will also allow them to request and receive financial intelligence from the Financial Monitoring Unit (FMU) as an investigating agency under the AML Act and have sufficient resources and training to conduct parallel financial investigations. Under a similar structural benchmark for February 2025, the government is required to amend the Civil Servants Act 1973 to ensure that asset declarations of high-level (BPS 17-22) public officials (including domestic and foreign assets beneficially owned by them or a member of their family) will be digitally filed and publicly accessible with sufficient safeguards over data protection and privacy of personal information.