Govt partially meets 19 IMF actions

ISLAMABAD:

Despite being a top priority for both the International Monetary Fund (IMF) and Prime Minister Shehbaz Sharif, the government managed to complete only four out of 19 actions due by end-June, which the global lender had identified to improve weak economic governance.

Proceedings of the Economic Governance Systems Committee – one of three ministerial bodies tasked with implementing the IMF action plan – show that only four actions were fully met during the January-June 2026 period.

Planning Minister Ahsan Iqbal, who heads the committee, chaired its fourth meeting this week and directed officials to expedite progress on the remaining action points.

According to top government officials, of the 19 priority and complementary actions assigned to the committee for completion by June, 12 were only partially implemented, while three were delayed.

The IMF had highlighted serious governance gaps in its Pakistan Governance and Corruption Diagnostic Assessment. To address these vulnerabilities, which can foster corrupt practices, the prime minister launched a 142-point reform agenda in December last year, aimed at strengthening institutions and the rule of law over three years.

Of the 142 actions, Iqbal's committee was responsible for overseeing 59 actions. For the first six months, 19 fell under the Economic Governance Systems committee.

During the launching ceremony at the PM's House, Sharif said under his governance plan, there were 59 priority actions and 83 complementary actions that would be implemented over three years.

However, performance against the initial targets remained weak. Most of the 19 actions due by June, largely considered easier tasks involving regulatory changes and publication of reports, were not completed.

Only four actions were declared complete: formation of a methodology working group, review of international best practices in judicial governance, some legal clarifications, and revisions to civil servants' asset declaration rules.

"Finance deals with IMF programme" said Iqbal when asked about the progress.

Partially completed actions

The government partially implemented a key reform to approve the new Public Procurement Rules 2025 by removing preferential treatment for state-owned enterprises (SOEs) in public contracts.

Currently, contracts are often awarded to SOEs without competitive bidding, despite their limited capacity and without independent price discovery. Several infrastructure projects, including the NIH underpass in Islamabad, have faced delays under such arrangements.

A finance ministry official said the PM's Office has endorsed the draft rules, which are now with the Cabinet Committee on Legislative Cases (CCLC) awaiting cabinet approval. Revising these rules in line with IMF requirements would mark a significant shift from the existing practice of awarding multi-billion-rupee contracts without open competition.

Another IMF condition required an assessment of systemic strengths and weaknesses in the judicial system, particularly in economic dispute resolution. Officials said this had been partially met, with reviews of relevant laws, policies and reports still underway.

Similarly, a working group tasked with examining the causes of litigation delays and case backlogs has only partially completed its work.

A critical action to develop a methodology for clearing court case backlogs also remains incomplete, with officials stating that the framework is still under development.

Officials said the plan to devise a comprehensive performance assessment framework for courts and judicial governance has also been partially implemented. A new system is being designed based on indicators such as pendency, disposal rates and case duration.

The IMF had further required the notification of a data collection framework for administrative tribunals and special courts to improve efficiency. While the Law and Justice Commission of Pakistan has endorsed the framework, its formal notification is still pending.

The condition to develop alternative mechanisms for resolving economic and commercial disputes are also incomplete, with the matter still under review by a committee led by the law minister.

Implementation of the 142-point action plan is being overseen by three committees: Economic Governance Systems, Tax Administration, and Anti-Corruption and Anti-Money Laundering. A six-monthly progress report is to be submitted to the prime minister, with key indicators made public for transparency.

However, the Ministry of Finance has yet to release any such reports.

When contacted, the finance ministry spokesperson said the Prime Minister Economic Reforms programme was launched in December and was progressing as per timelines. To monitor progress, three committees were constituted under three different federal ministers, he added.

"As a result of the mechanism in place, substantial progress has been made on short-term priority reform areas, which are interconnected and sequenced in a structured way to achieve long-term targets spanning three years," the spokesperson said.

"All implementing agencies under the multi-layered monitoring system are moving ahead as per timelines, with a special focus on priority reforms," he added.

Another partially implemented condition relates to reducing the backlog of audit findings. Officials said the deadline has been extended to June next year due to the scale of the exercise.

The introduction of public procurement monitoring reports has also seen partial progress. Officials said the report for fiscal year 2024-25 has been prepared and will be published soon, while the 2025-26 report is under preparation.

Similarly, the requirement to improve complaint resolution mechanisms has only been partially met. A grievance report covering 113 high-value procurements across 100 agencies for FY2024-25 has been completed.

The report shows an overall compliance rate of 80%, with grievances filed in 10% of open competitive bidding processes. These findings will be included in the Public Procurement Regulatory Authority's annual report.

Another IMF condition, to develop a high-priority, machine-readable regulatory database, has not been fully met. The government has now set an end-August deadline for completion.

Officials said standards for machine-readable legislation have been finalised, and all active laws have been uploaded. Secondary instruments, including rules and regulations since 2016, are being reviewed and incorporated into the system. Gazette notifications and statutory regulatory orders (SROs) will be added subsequently.

A memorandum of understanding will be entered into with all relevant regulators, including SBP, SECP, OGRA, PPRA, NEPRA, PVARA, FBR, NADRA, to enable direct integration of their notifications into the database.

Delayed actions

Three key actions have been delayed outright.

The government failed to promulgate new Public Procurement Regulatory Authority (PPRA) rules by June. Officials said the rules cannot be finalised until approved by the CCLC, and the deadline has now been extended to December.

As a result, the issuance of new standard bidding documents has also been delayed.

A comparatively simple reform, the creation of chief technology officer positions in the Auditor General's office, has also been delayed due to objections from the Establishment Division. The government now plans to complete this hiring by mid-next year.