Field Marshal Asim Munir.
Photo : AP
When the IMF released its governance diagnostic on Pakistan, the language caught the attention of analysts across the region. The document, which examines how institutions function behind the scenes, describes a state shaped not by fair competition or open policy-making, but by entrenched networks of influence stretching across politics, the security establishment, and business elites. It places Pakistan among countries where corruption has become an operating environment rather than an isolated failure.
The timing is significant. Pakistan is already dealing with persistent economic strain, repeated debt negotiations, and a dense cycle of political transitions. Against that backdrop, the IMF’s assessment reads less like a technical review and more like a catalogue of structural problems that have gathered force over the years. The overarching theme is clear: powerful groups have shaped the rules to secure advantages, and those patterns now define how the country’s economy functions.
The Rs 5.3 Trillion Question
Alongside the IMF’s broader findings, another figure has raised eyebrows: the National Accountability Bureau’s claim that it recovered roughly Rs 5.3 trillion between 2023 and 2025. Officials in Islamabad present this as a sign of strict enforcement after years of slow progress, pointing out that the total far exceeds NAB’s cumulative recoveries since its creation in 1999.
The abrupt jump, however, has led many observers to ask how such a surge came about. Lawyers familiar with accountability cases note that plea bargains, negotiated settlements, and selective targeting have historically shaped NAB’s methods. Economists argue that recoveries of this magnitude require transparent auditing and a clear explanation of where the funds ultimately went. The IMF, for its part, stops short of addressing NAB directly, but it emphasises the need for governance systems that operate consistently rather than episodically.
Sectors Shielded From Competition
A major section of the IMF report looks at how certain industries in Pakistan operate with limited competition. It points out that several military-linked enterprises and politically aligned conglomerates enjoy conditions that make it difficult for independent firms to enter or grow. This pattern, the report notes, has weakened the country’s capacity to attract investment and slowed the development of a transparent market environment.
Regulators face their own challenges. In some cases, the report suggests, oversight bodies are constrained by mandates that can be subject to political pressure or internal resistance. In others, the absence of uniform enforcement has allowed dominant entities to expand their influence. The combined effect is a business landscape where rules exist, but their application varies depending on the identities and connections of the participants.
Governance Gaps in Public Institutions
Beyond market structures, the IMF points to gaps across multiple administrative domains. Procurement processes, revenue collection, state-owned enterprise management, and regulatory enforcement all feature in the diagnostic as areas where inefficiencies create opportunities for rent-seeking. The report emphasises that these weaknesses hinder the delivery of public services and contribute to the country’s repeated need for external financial support.
These findings echo concerns raised in earlier reviews, though the new diagnostic brings them together in a single framework. By linking governance failures to macroeconomic instability, the IMF sets the stage for more detailed discussions about the reforms Pakistan may need to undertake. For policymakers, the challenge lies in translating technical recommendations into institutional changes that survive political shifts.
What It Means for Future IMF Engagement
Given the depth of the issues outlined, it is likely that any future IMF programme will push for more specific governance reforms. These may include measures aimed at improving transparency in procurement, strengthening competition laws, and addressing weaknesses in the management of state-owned enterprises. Analysts also expect closer scrutiny of enforcement bodies, particularly regarding how they wield their authority and how their decisions fit within broader accountability frameworks.
International financial institutions often consider governance indicators when assessing long-term risk, and the IMF’s diagnostic will contribute to those evaluations. For Pakistan, this means that improving institutional performance is no longer just a domestic priority; it is also tied to its ability to secure financing on sustainable terms. The months ahead will reveal how the government intends to respond to the report’s findings and whether the political climate allows for the depth of reform the IMF has suggested.