The Federal Government of Pakistan has enacted four presidential ordinances in response to the International Monetary Fund’s (IMF’s) demands. These ordinances include amendments to the National Highway Authority, Pakistan Postal Services Management Board, Pakistan National Shipping Corporation, and Pakistan Broadcasting Corporation.
The move aligns with the agreements made with the IMF in July regarding the governance of these state-owned enterprises (SOEs).
These amendments aim to bring the operations of the SOEs in line with the State Owned Enterprises (Governance and Operations) Act of 2023, promulgated earlier in January. The primary goal of this act and the subsequent amendments is to enhance the governance, operations, and service delivery of SOEs while instilling fiscal discipline. This is part of broader SOE reforms agreed upon by the Pakistani government with international partners, including the IMF, as a structural benchmark in their Standby Agreement (SBA).
Structural Changes and Transparency Measures
Key changes include separating the roles of chairman and chief executive in these entities to promote good governance following international best practices. Introducing independent members to the boards is expected to bring fresh perspectives and expertise to decision-making processes. Security of tenure for these independent members has also been assured.
The amendments mandate regular reporting of each entity’s performance to the Central Monitoring Unit (CMU) in the Ministry of Finance, which oversees the performance of SOEs. They must also prepare annual business plans and publicly disclose reports for greater transparency. This aims to increase public awareness of the entities’ operations and accountability.
Performance reports of these entities will be submitted to the Cabinet Committee on State-Owned Enterprises. This ensures visibility at the highest levels of government, highlighting the strengths and weaknesses of the SOEs and promoting better oversight.
Overall, these amendments are designed to lead to improved governance, service delivery, and accountability of state-owned entities to the public, fulfilling key objectives outlined in Pakistan’s agreement with the IMF. This step signifies a crucial move towards enhancing the efficiency and transparency of SOEs in Pakistan.