New Delhi, Dec 28 – The IMF’s Executive Board has, in what many observers see as an odd juxtaposition, approved a fresh $1.29 billion in support for Pakistan even as the multilateral lender has just released a 186‑page diagnostic that exposes a deep‑rooted corruption system in the debt‑laden country.
The report, titled Governance and Corruption Diagnostic Assessment, paints a stark picture of institutional decay. “The timing is striking: the diagnostic was published just before the Board meeting that approved the latest disbursement. In effect, the IMF has acknowledged that Pakistan’s governance vulnerabilities are systemic, yet continues to lend without dismantling the ecosystem of capture that perpetuates the crisis,” wrote Dr. Sakariya Kareem for the UK‑based Asian Lite.
In its assessment, the IMF calls corruption “macro‑critical,” describing it as an embedded flaw that shapes who benefits, keeps growth sluggish, and forces Pakistan back to the Fund every few years with a hopeful hand out. The evidence is stark: in fiscal year 2024‑25, actual spending exceeded the approved budget by 9.4 trillion Pakistani rupees—five times the overrun seen in the previous year. Parliament did not debate these excesses beforehand; they were neatly regularised afterward through supplementary grants, presented as a fait accompli. The pattern, the article notes, is not new: ministries spend with the expectation of bailout, the finance ministry shelters them to avoid political backlash, and Parliament rubber‑stamps overruns that can top 10 % of the original budget.
The Public Sector Development Programme, meant to channel funds into growth‑enhancing infrastructure, has turned into a graveyard of unfinished projects. The IMF reports a “large overhang of ongoing projects” costing an estimated 10.7 trillion rupees. With annual allocations hovering around 1.1 trillion rupees, even without new projects it would take nearly a decade to clear the backlog. Chronic delays, cost escalations and sub‑standard execution are the predictable result of a system that lacks transparent criteria for project selection or prioritisation.
Anti‑corruption advocates argue that the IMF must live up to its promises by weaving anti‑corruption safeguards into its lending framework. When corruption is “macro‑critical,” as it is in Pakistan, the Fund should tie disbursements to verifiable governance reforms. Without such accountability, IMF support risks reinforcing the very vulnerabilities it diagnoses.
Ultimately, the IMF can’t clean Pakistan’s house—only Pakistan’s own institutions can. If corruption keeps siphoning public resources, any gains from IMF support will be short‑lived. The money will come, reserves will rise, but public confidence and economic resilience will remain fragile. Each loan becomes a temporary reprieve rather than a path to sustainable growth, the article observes.
The IMF’s conditionality calls for greater fiscal transparency, which, in theory, should expose corrupt leaders. Yet in Pakistan that transparency appears not to be translating into accountability, even as the Fund itself warns that corruption poses an existential threat to the nation’s economic future.
Unless governance reforms move from paper to practice, IMF lending will stay a revolving door for Pakistan—stabilising crises without ever resolving them.
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