The International Monetary Fund (IMF) has raised serious concerns over Pakistan’s governance structure, highlighting issues such as the politicisation of the civil service, weak institutional accountability, and an overemphasis on short-term policy goals. These shortcomings, the IMF noted, contribute to systemic vulnerabilities and increase the risk of corruption.
The findings emerged after a 12-day visit to Pakistan by an IMF legal mission led by Joel Turkewitz. The team met with around 30 government institutions and departments to finalise its “Governance and Corruption Diagnostic Assessment” report, which is expected to be made public by August.
According to sources, the IMF’s preliminary conclusions were shared with Pakistani officials during a concluding meeting this week. However, the detailed report will be delivered later. Neither the Cabinet Division nor the IMF’s resident representative in Pakistan has commented on the matter.
Key Concerns Identified by IMF
- Politicised Civil Service: One of the mission’s main observations was the deep politicisation of Pakistan’s civil bureaucracy. Appointments to key positions, including heads and boards of state-owned enterprises (SOEs), were often influenced by political affiliations rather than merit.
- Example in Power Sector: The PML-N government changed boards for 8 out of 10 power distribution companies last year, while two companies — Hyderabad and Sukkur — were spared due to a political understanding with the PPP. These companies have since been criticised by the Power Minister for their poor performance.
- Lack of Accountability: The IMF noted that civil servants often benefit from protection by senior officials, leading to a culture of impunity where serious corruption often goes unpunished.
Anti-Corruption Framework Lacks Cohesion
The IMF highlighted the absence of a uniform national anti-corruption strategy. Agencies like NAB, FIA, and provincial anti-corruption bodies operate in silos, often acting in response to specific events rather than through a comprehensive, sustained approach.
The effectiveness of NAB, in particular, has been diluted following amendments to the accountability laws. The Right to Information Act (RIA) is also applied inconsistently, undermining transparency.
Procurement practices are another weak spot. The Public Procurement Regulatory Authority (PPRA) rules are frequently bent to suit specific procurements, and the IMF has suggested these rules be revised to close loopholes and prevent misuse.
Weak Institutional Oversight
The report is also expected to highlight deficiencies in organisational accountability, specifically in departments like the Auditor General of Pakistan (AGP) and the Competition Commission of Pakistan (CCP).
- The AGP is tasked with auditing public funds, while the CCP oversees market competition. However, despite issuing rulings against groups like the Pakistan Sugar Mills Association (PSMA), the CCP has failed to prevent these entities from influencing policy decisions — especially on sugar pricing.
- The IMF noted that such gaps enable policy capture by vested interests.
Other Observations
- Judicial Delays: The IMF expressed concern over Pakistan’s slow judicial processes, which contribute to a large backlog of unresolved cases.
- Poor Risk Management: Government agencies were found to lack prioritisation of risks, leading to weak governance and policy missteps.
- Fragmented Authority: Overlapping responsibilities across institutions have blurred lines of accountability and weakened effective decision-making.
- Short-Term Focus: The IMF found that Pakistan’s policy focus is often short-sighted, undermining long-term governance and development goals.
- Outdated Regulations: In several sectors, outdated licensing regimes and regulations remain in place, hampering progress and increasing red tape.
The IMF’s final report will offer recommendations to enhance transparency, strengthen public sector performance, and reduce opportunities for corruption through merit-based governance.
