IMF Funding to Pakistan :New information that came to the IMF authorities’ attention, and which was shared with Fund staff, has revealed that the data on Pakistan guarantees dating back to FY 2016 was reported inaccurately.
Explained: How Pakistan Fudged Data to Get IMF’s Funding
Delhi (ABC Live India): IMF Funding to Pakistan :The Executive Board of the International Monetary Fund
(IMF) approved a 39-month Extended Arrangement under the Extended Fund Facility
(EFF) for Pakistan in the amount of SDR 4,268 billion (about US$6 billion),
equivalent to 210 percent of quota, on July 3, 2019.
first review under the arrangement was completed by the Executive Board on
December 19, 2019, based upon, inter alia, the reported observance of the
quantitative performance criteria (PC) at end-September 2019, including the
amount of government guarantees. Upon completion of the first review under the
EFF, Pakistan made a purchase equivalent to SDR 328 million (about US$452.4
new information that came to the authorities’ attention, and which was shared
with Fund staff, has revealed that the data on government guarantees dating
back to FY 2016 was reported inaccurately.
revised data indicates a nonobservance of the PC on government guarantees at
end-September 2019 by a margin of PRs 357 billion (about 0.9 percent of GDP),
which resulted in a noncomplying purchase and a breach of obligations under
Article VIII, Section 5 of the IMF Articles of Agreement.
authorities previously reported that the PC had been met with a margin of PRs
55 billion (0.1 percent of GDP) at end-September 2019. The statistical revision
only had a small impact on public debt.
authorities have taken strong corrective actions to address institutional and
technical short-comings that gave rise to the inaccurate information,
including: (i) creating a working group to reconcile and cross-check guarantees
and debt data; (ii) announcing additional functions for the Debt Policy
Coordination Office (DPCO), including to act as custodian of all guarantees
issued by the federal government; and (iii) publishing a semi-annual debt
bulletin that consolidates key debt statistics. Beyond these actions, the
authorities have committed to include a list of all new guarantees expected to
be issued in the FY 2022 budget submitted to Parliament.
the conclusion of the meeting, Deputy Managing Director Antoinette Sayeh and
Acting Chair, stated:“The Executive Board of the International Monetary Fund
(IMF) reviewed Pakistan’s remedial actions and data revisions linked to a
noncomplying purchase under the Extended Arrangement under the Extended Fund
Facility as well as a breach of obligations under Article VIII, Section 5. The
non-complying purchase arose as a result of a lack of inter-agency coordination
in the compilation of government guarantees provided by the federal government
to state-owned enterprises that contributed to incorrect estimates of
government guarantees starting as far back as FY 2016.
In view of the strong and proactive commitment by Pakistan to provide timely and accurate data to the IMF in the future, the Executive Board decided not to require further remedial action in connection with the breach of obligations under Article VIII, Section 5. As the authorities have taken appropriate corrective measures since the purchase in December 2019, the Executive Board also granted a waiver for the nonobservance of the quantitative performance criterion.”
transparency policy requires publication of misreporting related to use of Fund
resources, including Executive Board findings in these matters.