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The IMF has raised a pertinent issue of propriety in governance by refusing to accept the government’s request to appoint heads of state-owned entities. This issue has a direct linkage with the monopoly of the executive as well as the interference of the bureaucracy in these entities. The global lender, which sat in review for the next tranche of the $1 billion loan under the Extended Fund Facility, pointed out the inherent discrepancies and went on to flag weak governance of the incumbent government.
The Fund says it has noticed a staggering 300% surge in losses, despite a Rs1.2 trillion fiscal support. This is tantamount to charge-sheeting a government that has failed to come full circle on reforms.
The appointment of heads of SOEs and other autonomous bodies in our checkered system of governance is seen as an opportunity to leeway influence. While the financial edifice is already infected with a troublesome tweaking from the officialdom, it slides into a chaotic territory as corruption goes unchecked. Thus, the IMF’s reservations regarding further empowerment of the government should be seen as a valve of checks and balances, as necessary safeguards are needed to ensure that these entities are irritant-free and independent on meritorious decision-making.
The intention as far as the lender is concerned is to checkmate the grip of the executive on these public enterprises. Likewise, the IMF has refused to entertain a similar suggestion pertaining to appointment of ex-officio members of the SOEs from outside the relevant ministries.
Pakistan is in need of a detailed and foolproof format to overcome discrepancies in its governance. The Fund’s repeated concerns on legislation to provide cover to the parliamentarians from disclosing their assets and liabilities, vetting the bureaucrats’ sources of income, and disciplining the ministries, divisions and the public sector are justified interventions. It would be more appropriate to appoint heads of corporations and CEOs of public-private entities by empowering the civil society with a say in the matter. Let the rot be stemmed through a self-construed watchdog.
