Pakistan has fulfilled a major condition ahead of the IMF Executive Board meeting by releasing the Governance and Corruption Diagnostic Assessment Report.

The report identifies long-standing governance weaknesses and outlines reforms to strengthen anti-corruption institutions and economic performance.

The report, prepared with technical assistance from the IMF and World Bank, emphasizes that corruption has plagued Pakistan for over 70 years, significantly hindering economic and social development.

Weak governance, lack of transparency, and inconsistent accountability have slowed down the pace of economic growth and reduced public trust in institutions.

Officials noted that groups linked to powerful or government institutions pose the most serious forms of corruption, consuming government funds, distorting markets, and obstructing fair competition.

Key findings of the report

Fiscal and institutional weaknesses

Inefficiencies in the tax system and government spending
Weak public sector performance and limited capacity in internal and external audits
Some budget-using institutions operate beyond supervision, increasing corruption risk

Governance and accountability issues

Anti-corruption institutions, including NAB, have inconsistent performance
Weak transparency in government decision-making
Public participation in policymaking is negligible
Judicial system trust is low, affecting accountability

Economic impacts

Corruption is cited by 11.1% of businesses as the biggest obstacle, higher than the South Asian average of 7.4%
Complex business and foreign trade laws hinder investment and private sector potential
Fiscal weaknesses increase borrowing needs, adding external risks

Recommendations for reform

The report emphasizes comprehensive reforms to improve governance and economic performance, including:

Empowering and modernizing anti-corruption institutions
Establishing an open data system for public access to information
Simplifying business regulations and digitalizing processes
Enhancing private sector involvement and reducing government interference
Reforming foreign trade regulations to increase efficiency and transparency

Officials highlighted that implementing these recommendations could boost Pakistan’s GDP by 5–6.5%, strengthen investment, and significantly reduce corruption.

The report is a key part of Pakistan’s $7 billion IMF loan program. Government sources say the country has already stabilized its economy with measures that increased foreign exchange reserves, reduced inflation, and achieved a primary surplus.

The Governance and Corruption Diagnostic Assessment provides a roadmap for structural reforms, aiming to improve governance, rebuild public trust, and create a more transparent economic system in Pakistan.