Critics argue IMF loans without governance reforms risk perpetuating vulnerabilities, with little evidence of addressing corruption, leaving loans as temporary relief without sustainable growth
New Delhi
The International Monetary Fund (IMF) has approved a $1.29 billion loan for Pakistan even as its own report highlights deep-seated corruption and governance failures in the country. The decision comes shortly after the IMF released a 186-page “Governance and Corruption Diagnostic Assessment,” which details systemic institutional weaknesses obstructing effective use and repayment of funds.
According to the report, corruption in Pakistan is “macro-critical,” embedded in the state’s economic and political structures, influencing who prospers and why growth remains weak. The assessment noted that in fiscal year 2024–25, actual government spending exceeded the approved budget by Rs 9.4 trillion, five times more than the previous year, often bypassing parliamentary debate and regularised only after the fact.
The Public Sector Development Programme (PSDP), designed to support infrastructure and growth, has become a graveyard of incomplete projects. With an estimated backlog of Rs 10.7 trillion and annual allocations of just Rs 1.1 trillion, it could take nearly a decade to clear unfinished projects. Chronic delays, cost overruns, and poor execution are rampant due to the lack of transparent project selection and prioritisation.
Critics argue that IMF lending without enforcing governance reforms risks perpetuating these vulnerabilities. While IMF conditions theoretically demand fiscal transparency, the report indicates little evidence that corrupt practices are being addressed. Without real institutional reforms, loans serve only as temporary relief, stabilising reserves but failing to create sustainable economic growth.
Experts warn that unless Pakistan implements verifiable anti-corruption measures, IMF support will remain a revolving door—providing funds without resolving the fundamental governance issues that threaten the country’s economic future.
