IMF Warns of Economic Consequences as Deadline Nears for SOE Evaluation in Pakistan

The International Monetary Fund (IMF) has expressed concern over the delay in evaluating Pakistan’s state-owned enterprises (SOEs) under its $3 billion Standby Arrangement (SBA). The evaluation, set as a structural benchmark, is expected to be completed by the end of December 2023. The Central Monitoring Unit (CMU), established in September 2022 to enhance SOE monitoring and oversight, is set to deliver its first report on SOE performance by December 31. The Ministry of Finance assured the IMF that the CMU will be fully operationalized with necessary personnel and the publication of the report.

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The IMF emphasized the urgency of passing a new SOE law in early 2023 and urged progress on ownership policy, SOE policy Acts revision, CMU deployment, regular SOE audits, and reducing the state’s influence. The focus is on improving governance through the approved SOE law on ownership arrangements and role classifications. Pakistan is committed to implementing IMF recommendations and is targeting evaluations of key SOEs, including NHA, PNSC, Pakistan Post, and Pakistan Broadcasting Corporation. The Auditor General has been enlisted to audit several SOEs, with ministries defining scope and terms of reference in collaboration with relevant parties. The nation faces increasing pressure to meet IMF deadlines and ensure comprehensive reforms in its state-owned enterprises.

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