IMF Conducts Governance and Corruption Diagnostic Assessment in Pakistan

A three-member scoping mission from the International Monetary Fund (IMF) is currently visiting Pakistan to conduct the Governance and Corruption Diagnostic Assessment (GCDA). The mission’s main goal is to assess the extent of corruption risks in six key state functions, as outlined in a press statement issued by the ministry to clarify the ongoing visit in light of circulating media reports.

These six core functions include fiscal governance, central bank operations, financial sector oversight, market regulation, the rule of law, and Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).

During their visit, the mission will primarily engage with key organizations, including the Finance Division, Federal Board of Revenue, State Bank of Pakistan, Auditor General of Pakistan, Securities and Exchange Commission of Pakistan, Election Commission of Pakistan, and the Ministry of Law & Justice.

The findings of the GCDA report will provide recommendations for addressing corruption vulnerabilities and strengthening governance and integrity. These suggestions are intended to support the Pakistani government in implementing reforms that promote transparency, improve institutional capacities, and foster inclusive and sustainable economic growth.

The Government of Pakistan has expressed appreciation for the IMF’s ongoing technical support. The IMF has consistently provided guidance and assistance to improve public sector transparency and accountability, contributing to good governance.

While the IMF's traditional focus has been on correcting macroeconomic imbalances, reducing inflation, and implementing essential market reforms to drive economic growth, it has become increasingly aware of the need for broader institutional reforms. These are vital to maintaining private sector confidence and creating the foundation for long-term economic prosperity.

The IMF recognizes that improving governance, ensuring the rule of law, enhancing public sector efficiency, and tackling corruption are crucial for establishing a framework in which economies can thrive.

In 1997, the IMF introduced a policy on addressing economic governance, known as the Guidance Note “The Role of the IMF in Governance Issues.” This policy was further strengthened in 2018 with a new Framework for Enhanced Engagement on Governance, which promotes more systematic and candid dialogue on governance challenges, including corruption, that are crucial for macroeconomic performance.

As part of this framework, the IMF has been conducting Governance and Corruption Diagnostic Assessments (GCDA) with member countries to identify corruption vulnerabilities and recommend actions to strengthen governance. The IMF has finalized 20 GCDA reports since 2018, covering countries like Sri Lanka, Mauritania, Cameroon, Zambia, and Benin. Additionally, 10 more diagnostics are currently in progress.

For Pakistan, under the EFF 2024 program, a structural benchmark has been set to undertake a GCDA, with the IMF's support, to analyze key governance and corruption challenges. The final GCDA report will be published once the analysis is complete