According to the most recent information, the IMF program has been postponed again, and this time the impasse is over anti-corruption regulations, as well as other financial measures such as the increase in gas and oil prices. ‘electricity.
With the exception of reviewing the NAB laws, the government is willing to implement other financial measures.
According to the latest information, the IMF program is still delayed and this time the impasse concerns anti-corruption laws as well as other financial measures aimed at increasing gas and electricity prices.
The government is ready to adopt all financial measures except the review of the NAB laws
— Economy of Pakistan (@Pakistanomy) July 2, 2022
Pakistan and the International Monetary Fund (IMF) are constantly working to reach an agreement on prior actions before moving forward with a staff level agreement, and a point of contention is the improvement of institutional anti-corruption mechanisms. -corruption.
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The IMF wants to include it on the list of prior actions because the government failed to meet the structural benchmark (SB) stipulated by the PTI-led regime after the 6th review. The IMF is now fighting to make it a new action prior to the renewal of the program.
Pakistan has asked the IMF to remove anti-corruption institution building from the list of past acts, saying it is outside the Fund’s remit and mandate. Prior initiatives are being discussed between Pakistan and the IMF to reach a service level agreement.
Pakistan will be required to take certain prior actions from July 1, 2022, including the implementation of the Finance Act 2022, the application of a petroleum tax and the gradual increase in electricity tariffs. The Monetary Policy Committee will also meet on July 7 to tighten the monetary stance. With CPI-based inflation hitting 21.3% and the wholesale price index hitting 38.94%, there is no doubt that monetary tightening is imminent.
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The deregulation of POL prices is part of the structural criteria to complete the next evaluations of IMF programs. There is now a point of contention in that the IMF is asking for anti-corruption measures to be included in the prior actions.
After sending a questionnaire to IMF headquarters in Washington, DC, asking if the institutional anti-corruption mechanism is part of the prior actions for the completion of the 7th and 8th reviews under the EFF program, a spokesperson for the IMF responded: “Discussion with the Pakistani authorities on the review is ongoing, and we do not comment on the specific items under discussion. In general, strengthening governance and transparency has been one of the main objectives of Pakistan’s EFF-supported program, as these ultimately underpin robust inclusive growth.
However, the Pakistani authorities had no objection to maintaining the structural benchmark (SB) for the establishment of a task force with the contribution of specialists and civil society organizations to strengthen the institutional framework with the aim of an anti-corruption campaign. However, the IMF argued that Islamabad’s failure to meet the structural benchmark resulted in the imposition of prior actions because Islamabad had committed to meet the structural benchmark at the last review but failed to meet the structural benchmark. met the deadline.
Attempts to strengthen governance and fight corruption remain essential. The Pakistani authorities have agreed with the IMF that one of their main priorities would be to increase the effectiveness of anti-corruption agencies. The Pakistani authorities have agreed with the IMF that one of their main priorities would be to increase the effectiveness of anti-corruption agencies. Pakistan will implement laws to develop a comprehensive e-asset disclosure system (SB end-June 2021, reset end-Jan 2022) to improve transparency, accountability and integrity in the public sector. It would also allow the public to have access to the annual statements of all cabinet members (elected and unelected) of the Pakistani Federal Government.
By the end of December 2021, a working group composed of renowned international experts and civil society organizations will conclude a review of the institutional framework of anti-corruption institutions in order to improve their independence and effectiveness in the investigation and prosecution of corruption cases, with recommendations for the adoption of legislative measures. amendments if necessary. Undoubtedly, the government could not keep its commitments and consequently the IMF asked to include it in the framework of the actions prior to the renewal of the program.