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Pakistan Expected to Privatize sick SOEs, says IMF

Pakistan is expected to privatize a triage of all state-owned enterprises (SOEs), which would identify those that would be maintained under state management, subject to privatization, or liquidated by the end of September 2020 structural benchmark, said the International Monetary Fund (IMF).

The IMF in its report, Progress in Implementing the Framework for Enhanced fund Engagement on Governance, said that the three-year EFF for Pakistan (approved in July 2019) highlighted the need to prioritize strengthening the effectiveness of the country’s anti-corruption institutions as well as improving the governance, transparency, and efficiency of state-owned enterprises (SOEs) as well as central bank governance.

Capacities of law enforcement agencies to conduct financial investigations continue to be upgraded.

It said that efforts are underway to establish a publicly available asset declaration system for high-level public officials, complete the second review cycle of the implementation of the UNCAC, and conduct a domestic assessment of the framework for anti-corruption institutions.

Improving mechanisms for international cooperation are also supporting the authorities’ activities in identifying assets owned by Pakistani citizens located abroad and recovering stolen assets. With technical assistance from the IMF, a new SOE law is being prepared that would define the rationale for state ownership, ensure SOE operations are grounded on commercial footing, and regulate oversight and ownership arrangements (end-September 2020 structural benchmark).

In the interim, the authorities continue to advance the privatization and audits of selected SOEs. To strengthen the State Bank of Pakistan (SBP)’s autonomy, governance, and mandate in line with the recommendations of IMF safeguards assessment, the SBP Act is being amended.

“Under the RFI to ensure the quality of the additional spending in the health sector, Pakistan is committed to subject the procurement of urgently needed medical supplies to an ex-post audit by the Auditor General of Pakistan, the results of which will be published on the website of the Ministry of Finance. Pakistan will continue to strengthen governance by enhancing the effectiveness of anti-corruption and AML/CFT frameworks”, it added.

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