IMF Flags Deep Corruption, Imposes 11 New Conditions on Pakistan’s Bailout
Washington: The International Monetary Fund (IMF) has raised fresh red flags over Pakistan’s entrenched corruption and weak governance, imposing 11 new conditions under the second review of its $7 billion bailout programme. With this, the tally of IMF-mandated reforms has shot up to 64 in just 18 months, signalling the Fund’s growing frustration with Islamabad’s slow progress.
In a hard-hitting staff-level report released Thursday, the IMF pointed to “deep-rooted distortions” across Pakistan’s economic and institutional landscape — from opaque decision-making and elite capture to crippling losses in key sectors.
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Asset disclosures at the heart of reforms
A headline condition requires senior federal civil servants to publicly declare their assets by December 2026 on a government website. The plan will later be expanded to provinces. In a major transparency push, the IMF has also mandated that banks be granted full access to these asset declarations to detect mismatches between income and wealth.
Crackdown on high-risk departments
By October 2026, the government must publish corruption-risk action plans for 10 high-risk departments. The National Accountability Bureau (NAB) will coordinate reforms in the most vulnerable agencies, while provincial anti-corruption bodies will receive expanded powers to use financial intelligence and pursue investigations.
Wide-ranging economic reforms
The new conditions span multiple sectors:
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Revenue overhaul: Islamabad must present a long-term tax reform strategy and a restructuring roadmap for the revenue board.
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Remittance probe: A detailed assessment of high remittance costs and cross-border payment hurdles is required.
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Sugar market liberalisation: A national policy must be drafted to open up the politically sensitive sugar sector.
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Power sector cleanup: Pakistan must curb commercial losses and meet prerequisites for private investment in power distribution companies.
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Corporate law updates: Amendments to the Companies Act and SEZ Act are required to improve transparency and governance.
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Mini-budget warning: If revenue collections slip, a mid-year mini-budget will be unavoidable.
Pakistan’s economic stress deepens
Pakistan narrowly avoided default last year after the IMF revived the bailout package and has since received around $3.3 billion. But the Fund’s latest corruption diagnostic shows severe weaknesses in legal, regulatory and oversight systems — weaknesses it says must be fixed to stabilise the economy and restore investor confidence.
