Pakistan required to keep SOEs under finance ministry oversight: IMF

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The International Monetary Fund’s (IMF) representative in Pakistan on Wednesday said that the reform process to which the government had agreed required the country to keep all state-owned enterprises (SOEs) under finance ministry oversight.

“Following through on the previously agreed 2021 triage reform process, and other governance and private sector reforms, is important to durably attract foreign investment,” the IMF’s Esther Perez Ruiz said in a statement to Reuters.

Pakistan has been discussing outsourcing operations of several of its state-owned assets to outside companies.

In March, it kicked off the outsourcing of operations and land assets at three major airports to be run under a public-private partnership, a move to generate foreign exchange reserves for its ailing economy.

The IMF reached a staff-level pact with Pakistan in June on a $3 billion stand-by arrangement (SBA), a decision long awaited by the country that had been teetering on the brink of default.

Perez Ruiz said in the statement that it was “premature to consider what will follow the current SBA, which runs through early 2024.”

The SBA focuses on the implementation of the FY24 budget to facilitate Pakistan’s needed fiscal adjustment and ensure debt sustainability while protecting critical social spending, a return to a market-determined exchange rate and proper forex market functioning to absorb external shocks and eliminate forex shortages, an appropriately tight monetary policy aimed at disinflation and further progress on structural reforms, particularly with regard to energy sector viability, SOE governance, and climate resilience.

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