Tue Nov 25 03:20:09 UTC 2025: ## IMF Report Blasts “State Capture” Corruption in Pakistan, Calls for Urgent Reforms
Islamabad, Pakistan – A damning new report by the International Monetary Fund (IMF) has concluded that widespread corruption, driven by “state capture” where elites manipulate policy for their benefit, is at the heart of Pakistan’s ongoing economic crisis. The report, titled the Governance and Corruption Diagnostic Assessment (GCDA), paints a grim picture of dysfunctional institutions unable to enforce the rule of law and protect public resources.
The IMF warns that Pakistan’s economic stagnation will persist unless structures of “elite privilege” are dismantled. The report highlights vulnerabilities across government, but singles out the influence of privileged entities, particularly those linked to the state, over key economic sectors as the most damaging. The report estimates that implementing governance reforms could boost Pakistan’s GDP by 5-6.5% over five years.
While the report offers detailed recommendations for improvement, experts are skeptical, pointing to a history of similar assessments with little tangible impact. They emphasize that real change requires political will to challenge entrenched interests, rather than simply implementing technical adjustments.
The report criticizes the lack of transparency within the Special Investment Facilitation Council (SIFC), a powerful body designed to attract investment, and highlights concerns about the broad legal immunity granted to its officials. It also points to critical weaknesses in the judiciary and anti-corruption bodies like the National Accountability Bureau (NAB), citing political interference and low conviction rates.
Economists emphasize that the issues raised by the IMF are not new, with domestic studies having long documented how powerful groups secure preferential access to resources and exemptions. They argue that addressing corruption requires fundamental political reforms to shift incentives away from elite capture and towards greater accountability. Experts are also calling for transparent procurement systems to ensure public funds are spent responsibly.
The report’s release comes as the IMF prepares to approve a $1.2 billion disbursement to Pakistan, part of an existing $7 billion loan program. Pakistan has turned to the IMF for assistance 25 times since 1958, highlighting the chronic nature of its economic challenges.
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