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To manage the fiscal risks arising from SOEs, countries need to establish a strong framework to manage their finances and to ensure that the framework is implemented robustly. Similar frameworks have been developed to manage the finances of other categories of public agency that are within the general government sector and have an autonomous and quasi-commercial nature.15 For example, rules need to be established for determining the prices (or fees) they charge for services provided, for their accounting and reporting systems, for their audit and oversight and for their internal governance. The financial management of SOEs, however, is especially problematic because of the statutory basis of many of these corporations, and their arms-length relationship with the government.


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