On November 19, 2025, the Ministry of Finance dutifully uploaded the IMF’s Governance and Corruption Diagnostic Assessment (GCDA) for Pakistan. The 190-page document is, by the Fund’s normally bloodless standards, astonishingly blunt.
It declares in measured but merciless prose that governance failures and corruption are not peripheral irritants in Pakistan; they are the central macroeconomic constraint, draining a significant percentage of GDP every single year—many trillions vanishing into elite pockets, offshore accounts, and plain old cash envelopes, an amount larger than the entire federal divisible pool.
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The findings are brutal and familiar:
- Tax and fiscal systems remain a patchwork of discretionary exemptions and off-budget slush funds. Illicit flows and legal tax avoidance together siphon off as much revenue as the state actually manages to collect.
- Public procurement and loss-making state-owned enterprises function as a parallel patronage economy.
- An archaic, overburdened judiciary has become a binding constraint on investment; contract enforcement is a joke, and property rights are negotiable for the right bribe.
- The much-hyped Special Investment Facilitation Council (SIFC), sold as a red-carpet welcome mat for Gulf investors, is called out for opaque tax concessions, extra-legal immunities, and zero accountability: in effect, a brand-new channel for the very elite capture the report condemns elsewhere.
- Anti-corruption bodies are fragmented, starved of funds, and offer no whistle-blower protection. The Fund quietly floats the idea everyone has whispered for decades: one genuinely independent anti-corruption agency.
The IMF even attaches a price tag to salvation: credible implementation of its 15-point matrix could add 5–6.5 percentage points to GDP growth over five years. Mandatory e-governance in procurement and tax filing within 12 months, full public disclosure of every SIFC deal, hard budget constraints, an end to routine tax amnesties, operational autonomy for the FBR -the list is specific, sensible, and politically radioactive.
But there lies the economic rub. For all its candor, the GCDA is a toothless ritual. Unlike Sri Lanka’s governance diagnostic, which arrived with hard priors, measurable triggers, and actual disbursement conditions, Pakistan’s version floated in with no benchmarks, no binding conditionality, and no consequences. Insiders might admit, off the record, that the exercise was never designed to bite. The tranche will flow anyway. Business as usual.
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Consider Sri Lanka’s case, a stark reminder of what real leverage looks like in a functioning democracy. Their 2023 diagnostic, embedded in a $3 billion EFF program, imposed tough, tranche-linked reforms: mandatory asset declarations for public officials, digitized procurement to curb kickbacks, and judicial efficiency benchmarks with verifiable timelines—all enforced through prior actions that delayed disbursements until met.
As a multi-party democracy with robust civil society oversight, Sri Lanka’s government faced genuine accountability; failure risked not just funds, but political capital. Pakistan, by contrast, operates in a shadow of elite capture—commercial alliances, security establishment, and civil bureaucracy that treats IMF programs as tactical checklists, not transformative mandates. Where Sri Lanka’s leaders bent to democratic pressures for compliance, Pakistan’s dispensation can afford defiance, shielded by geopolitical blind spots. This isn’t equity; it’s exceptionalism that perpetuates the bleed.
Commentators rushed to call the report “landmark,” “bombshell,” “unprecedented.” In doing so, we unintentionally polished the loan conveyor belt a little brighter. By showering diplomatic candor with praise, we let the one institution with real leverage off the hook. Stern criticism without enforceable action is not courage; it is complicity.
These are not normal times. When the IMF itself puts a number on the hemorrhage—6.5 percent of GDP bleeding out annually—yet stops short of demanding the only reforms that could stanch it (constitutional protection for judicial independence, make SIFC accountable, creation of a truly independent anti-corruption commission), the silence is deafening.
Moreover, critics—and one suspects some IMF staff also, privately—fear that the current dispensation will wave the GCDA like a prop to justify the 27th Constitutional Amendment and its ongoing reconfiguration of the superior judiciary. The report documents judicial delay, bloat, and corruption in painstaking detail, yet conspicuously refrains from prescribing greater independence as the remedy. That’s the tragedy of sincere effort and much critical analysis, but so long as geopolitical considerations dominate, not much good will happen.
Pakistan’s tragedy is not that it lacks diagnostics. It has endured more IMF, World Bank, and donor autopsy reports than virtually any other country on earth. Each one rediscovers the same congenital deformities, updates the jargon, and is quietly laid to rest. Seventy-seven years after independence, policy capture by a narrow civil-military-commercial elite remains the country’s core economic institution.
The 2025 GCDA is remarkably candid and unusually specific. Whether it joins the graveyard of unimplemented reform agendas will tell us everything we need to know about Pakistan’s trajectory, and about the limits of Fund conditionality in a sovereign state that has perfected the art of tactical compliance and strategic defiance.
The IMF has finally said the quiet part loud: corruption is killing Pakistan’s economy. Then it looked the other way while the patient kept bleeding.
Javed Hassan has held senior executive positions both internationally and in Pakistan. He is a Senior Visiting Fellow at the Pakistan Study Center, Fudan University. He tweets as @javedhassan. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy.
The opinions presented here reflect the author’s personal analysis and experience, which may not fully align with the publication’s editorial outlook.