IMF seeks to include anti-corruption mechanism in ‘prior actions’

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The IMF logo. Photo: The News/File

ISLAMABAD: Pakistan and International Monetary Fund (IMF) are making every effort to reach consensus on prior actions to move towards agreement at staff level and one of the bones of contention is related to institution building anti-corruption mechanism.

The IMF wants to make it part of the list of prior actions because the government could not meet the structural benchmark (SB) agreed by the regime led by the PTI at the end of the 6th review. Today, the IMF is fighting to make it a new action prior to the relaunch of the program.

Pakistan asked the IMF to exclude anti-corruption institution building from the list of prior actions, arguing that it was outside the Fund’s remit and mandate. To strike a staff-level agreement, the leaders of Pakistan and the IMF are discussing a list of prior actions. Pakistan will have to implement some prior actions from July 1, 2022, including the enactment of the Finance Act 2022 after obtaining parliamentary approval, the imposition of a petroleum tax, and the gradual increase of electricity tariffs. The Monetary Policy Committee is also due to meet on July 7 to tighten the monetary stance. Now, bearing in mind that CPI-based inflation is skyrocketing to 21.3% while the wholesale price index hit 38.94%, there is no doubt that a tightening monetary is on the cards.

The deregulation of POL prices is part of the structural benchmark for the completion of the next reviews under the IMF program. There is now a bone of contention that the IMF is asking for the inclusion of anti-corruption measures as part of prior actions.

This scribe sent a questionnaire to the IMF headquarters in Washington, D.C., and asked 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, the door IMF spokesperson replied: “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 a key objective in under Pakistan’s EFF-supported program as these ultimately support robust inclusive growth”.

However, the Pakistani authorities had no objection to the continuation of the structural benchmark (SB) for the establishment of a working group with inputs from international experts and civil society organizations to strengthen the institutional framework for of an anti-corruption campaign. But the IMF argued that the absence of the structural benchmark had led to prior actions being put in place because Islamabad had committed to implement the structural benchmark during the last review, but had not met the deadline. .

Pakistan and the IMF had agreed on the completion of the 6th review under the PTI-led regime that the government would take steps to strengthen the effectiveness of anti-corruption institutions. Priority actions include putting in place an asset declaration system focused on senior civil servants (including federal cabinet members) by end-January 2022 (end-June 2021 structural benchmark, postponed to end-January 2022) , publication of the second review cycle report under the United Nations Convention against Corruption and review of the institutional framework of Pakistani anti-corruption institutions by independent experts with international experience.

Measures to strengthen governance and fight corruption remain crucial. The Pakistani authorities have made a commitment to the IMF to include among their priorities the strengthening of the effectiveness of anti-corruption institutions. To further advance transparency, accountability and integrity in the public sector, Pakistan will issue regulations to establish a comprehensive Electronic Asset Disclosure System (SB end-June 2021, reset to end-Jan 2022) ( i.e. covering assets held in beneficial ownership or located abroad), centralized at the Federal Office of Revenue, covering federal civil servants in the basic pay scale 17 to 22, accessible to entities authorized by law (including banks for the limited purpose of conducting customer due diligence as required for the provision of banking services) and effectively audited.

It will also institutionalize public access to the annual statements of all members (elected and unelected) of the Cabinet of the Federal Government of Pakistan. “We are undertaking the 2nd review cycle under the UNCAC implementation mechanism and will publish the full report, including findings, analysis and recommendations to improve the anti-corruption framework,” he said. he declared.

A working group with inputs from reputable international experts and civil society organizations will complete a review of the institutional framework of our anti-corruption institutions by the end of December 2021 in order to strengthen their independence and effectiveness in the investigation and prosecution of corruption cases, with proposals for legislative amendments. if so, he added. However, the government could not keep its commitments and now the IMF wants to include it in the prior actions for the relaunch of its program.

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