Page 38 - CMA Journal (May-Jun 2026)

F oc us S ec t ion

However, little noticeable improvement has occurred, • Pakistan has 217 state-owned enterprises (SOEs), Rain and glacier melting are natural phenomena and Our Constitution has since manifested all the
apart from advancing the budget preparation employing more than half a million people, with generally occur during monsoon periods. The excess possibilities for rule of law, fundamental rights, and
schedule by one month to allow more time for combined assets valued at approximately Rs. 38 water owing down to the plains could be managed setting up the principles, making every individual
planning, review, and consultation with stakeholders. trillion. However, they collectively incur annual for better usage in agriculture and for producing accountable while performing his functions on behalf
The IMF has also encouraged budget digitalization to losses exceeding Rs. 800 billion, funded by electricity, thereby avoiding oods. Therefore, oods of the organs of the state, transparently and e ciently,
avoid policy slippages and improve reporting. A 10 taxpayers. The primary causes include favoritism in causing damage to lives and property are a result of and would not allow his personal interests to in uence
percent reduction was made in the Public Sector appointments and delays in decision-making. Since his o cial conduct. This is the De Jure position.
Development Programme by eliminating low-priority poor governance through deforestation, uncontrolled A good governance system is always proactive and
Pakistan is an Islamic Republic governed under the corruption might get the projects. Despite numerous reform initiatives, tax the publication of the SOE Portfolio Report in 2023, construction and use of kacha plains, inadequate takes action well before a matter turns into a problem,
Constitution of the Islamic Republic of Pakistan, 1973. job done at its own collection and poverty alleviation remain major information regarding losses, subsidies, and conservation of excess water, shortages of dams, and causing more damage and costing far more. We have
The Constitution protects the Fundamental Rights of terms, whereas false challenges. government guarantees has become more blockage of rainwater drainage systems, especially in some very valuable natural resources awaiting action
the people and requires every organ of the state, as promises may give There is a widespread perception that federal and accessible. Reforms have included independent cities. and fast action, but our “no time value” approach is
well as every individual exercising state authority, to hopes and only hopes. provincial budgets are prepared under IMF guidance. boards, merit-based appointments of CEOs, audit stopping us from reaping the bene ts of these gold
act in accordance with the Principles of Policy and Budget proposals are often not made available to committees, and quarterly reports on the largest On the other hand, Pakistan is among the most mines:
constitutional provisions. Any law that is inconsistent Good governance refers parliamentarians in su cient time for review and loss-making enterprises. A central monitoring unit water-scarce countries. Water availability per capita,
with Fundamental Rights is considered void to the to the wise, honest, comments. Important details relating to defense has also been established to oversee these a airs. which was about 5,000 cubic meters during the 1950s, • Mountains and glaciers. Precious water is going into
extent of that inconsistency. The Constitution transparent, and expenditures and debt obligations are also not fully Furthermore, audit objections raised by the Auditor has dropped to around 800 cubic meters. The the sea and we lose around $200 billion yearly and
therefore embodies the philosophy of protecting accountable management disclosed. Provincial budgets tend to be less General of Pakistan should be addressed promptly. groundwater level is falling by about 1–3 feet annually. hydropower opportunities of about 60,000 MW.
citizens' rights and ensuring that state institutions of state resources and transparent. The IMF has therefore pushed for greater Political interference must be minimized. Privatization Water pollution is another major issue, where around • Jhimpeer and o shore wind, about 40,000 MW plus
function within constitutional limits. public a airs. It requires clarity, especially regarding the division of e orts, including those related to Pakistan 80 percent of industrial waste and 40 percent of 25,000 MW.
The elected representatives of the people in the public o cials to place responsibilities between the federal and provincial International Airlines, should be completed without untreated sewage water ows into rivers, making • Precious minerals in Balochistan worth $5–6 trillion.
National Assembly/Provincial Assemblies are the public interest above governments under the 18th Constitutional delay. Steel mill is closed since 2015, yet the issues of agricultural and drinking water harmful. And many other such untapped treasures are waiting
entrusted with governing the state/provinces and their personal interests. Amendment, along with measures for monetary liabilities, land matters, theft of machinery and other Air pollution and smog are products of for some prudent leadership to encash all these

safeguarding the interests of citizens, is a sacred trust. Achieving good control and burden-sharing. valuables worth crores of ruppes posing a big opportunities on a priority basis.
Every person who performs functions on behalf of a governance ultimately depends upon e ective, In November, 2025 IMF reported on country 's challenge. DISCOs and K-Electric, facing illegal power smoke-emitting factories and transport, spreading
state institution or authority is expected to discharge ethical, and visionary leadership. Good governance is corruption that during the last two years NAB use through KUNDAS together with line losses and environmental hazards. Careful water management would boost the
those responsibilities prudently and honestly. Such to be proactive and taking care before it ends at curing recovered Rs. 5.3 trillion. IMF gave a 15 -point reform weak distribution infrastructure, must handle these Prevention is better than cure. Preventive measures agriculture sector in just a few months. Supporting
conduct promotes good governance and after the damage has been done. All it needs is a plan plus 142 -point governance plan with blunt unfair practices with strong hands and without any cost four to seven times less than remedial action. solar and wind energy would ease our power crisis,
transparency, ultimately leading to the welfare and steelframe leadership. remarks like failure of implementation of laws and political interference. Regarding infrastructure it must Good governance is far cheaper than poor especially the huge burden of electricity payments to
betterment of the people. accountability gives vested interest too often free rein be improved with complete vigilant planning keeping IPPs. The use of proper government authority against
The present condition of the country presents a gulping 5-6 percent of GDP annually. This is the type of governance. deforestation, smoke-emitting industry and transport,
Under the Constitution, the President and Provincial gloomy picture. Beside, increasing public debts, which governance the country has. in mind the expanding solar use. If all of this is done, Conclusion uncontrolled solid waste spread, and sewage over ow,
Governors are required to present reports yearly reportedly exceeded Rs. 90 trillion in May 2026, this would immediately stop the annual loss of Rs. 800 etc., is essential. All these are the De Facto parts.
before the National and Provincial Assemblies concerns remain regarding whether public o cials • Debt itself is not necessarily harmful if it is used billion or even more. E cient working of these SOEs "Time is money” is a billion-dollar quote the world
concerning the observance and implementation of the and institutions are performing their duties with the productively. Many advanced countries carry would start contributing a good amount of income to always remembers and excels ahead. Japan has been “The buck stops here —
Principles of Policy. Such reporting is intended to required level of accountability, honesty, and e ciency substantial debt burdens but utilize borrowed funds the national excheaquer, and the products and the maximum bene ciary with its practical use. On the
for development projects that generate long-term
promote transparency, accountability, and adherence as enumciated by the Constitution. bene ts. In Pakistan, however, debt is frequently services they provide would de nitely be improved in other hand, we keep ourselves aloof from these golden The Good Governance”
to the rule of law, both in theory (de jure) and in used to nance budget de cits. By May 2026, the quality at a ordable prices.
practice (de facto). Pakistan has been blessed with abundant natural country's total debt had reached approximately Rs. • Pakistan hardly contributes less than one percent to words as a society and especially in our public sector,
where passing the buck, red-tapism, forming
The solution lies in the e ective observance and resources, enough to qualify as a developed nation. Yet 90 trillion, representing around 75 percent of GDP, climate change but faces huge losses as a result of committees, etc., are the name of the game, causing About the Authors: Syed Shamim Ahmed is a senior Chartered
Management Accountant having Fellow membership of ICMA. He retired
implementation of laws. A distinction exists between: it remains among the weaker and poorer countries. whereas the Fiscal Responsibility and Debt global warming. Only during 2022 ood, the delays and loss of money. Every public sector project is as General Manager Finance from the Karachi Port Trust (KPT) where he
Frankly, this situation has arisen because of fragile Limitation Act envisaged a lower debt level of about served for around 22 years in different positions. He was also a member of
• De Jure (in law): Citizens pay their due taxes and governance and weak management. In other words, 60 percent of GDP. Debts are still rising reportedly country faced widespread devastation. The death a victim of this approach. Bhasha Dam and Karachi Bulk the Karachi Dock Labour Board for 7 years. After doing his MBA from IBA
comply with legal obligations. our failures stem from two major problems: nepotism Rs. 20 billion per day. A large share of the budget is toll was 1,740 people, around 12,900 were injured, Water Supply K-4 projects are the leading examples. Karachi, he started his initial career with Citibank and then served in
Awami Autos (now Pak Suzuki).
• De Facto (in practice): People often fail to observe and procrastination. spent on debt servicing. Nearly half of the 2026 and 33 million people were a ected. Crops on 4.4
million acres were lost, livestock deaths reached
the law. Authorities may fail to implement and • Pakistan's foreign debt is approximately US$130 budget is allocated to servicing existing debt, while about 1.2 million, setbacks exceeded $30 billion,
enforce laws e ectively. new borrowing continues. Treasury Bills worth
billion, of which IMF lending constitutes an approximately Rs. 3.5 trillion are auctioned regularly, and economic losses were up to $16 billion.
Although the Constitution of Pakistan provides a insigni cant portion of $7.7 billion (6.4%) yet IMF and circular debt in the power sector has risen to At Geneva during 2023, a sum of $10.56 billion was
framework for the rule of law, yet the law enforcement directives on nancial and economic matters cannot around Rs. 2.6 trillion. pledged for “Resilient Pakistan” under the 4RF Plan.
ranking of the country is at 129 out of 142 countries as be ignored. Other major donors often follow the However, only about $4 billion had been received by
per World Justice Project Rule of Law Index (May 2025). IMF's lead because of its credibility. The IMF has To improve transparency, the State Bank now releases May 2026. These physical losses were in addition to the
monthly data on public debt and debt servicing.
Poor governance is often characterized by unful lled repeatedly advised Pakistan to improve nancial Government guarantees are also reported. These
promises, weak accountability, corruption and governance by increasing revenues and controlling transparency measures, encouraged by the IMF, have su ering, pain, and mental distress endured by the
discriminating while implementing laws. Unful lled public-sector expenditures. improved public access to information. people of a ected areas, who spent months after the
promises are more damaging than corruption as oods waiting for rehabilitation in helpless conditions.

36 ICMA’s Chartered Management Accountant, May-Jun 2026