After months of delays, the IMF Governance and Corruption Diagnostic Assessment (GCDA) on Pakistan has finally been released and its diagnosis is quite grim, with even those attuned to Pakistan’s corruption and elite capture woes a bit stunned. The report finds that the Rs5.3 trillion recovered by the National Accountability Bureau (NAB) between January 2023 and December 2024 accounts for only a small fraction of the and projects that Pakistan could gain between a 5.0 to 6.5 per cent increase in GDP by implementing a package of governance reforms over the course of five years, including improvements in governance and anti-corruption. And one must also keep in mind that this report was confined to governance and corruption issues at the federal level and that similar issues exist at the provincial and local levels as well, so even this massive figure might be an underestimation. According to the report, the most economically damaging manifestations of corruption involve privileged entities that exert influence over key economic sectors, including those owned by or affiliated with the state. This problem is only compounded by the widespread perception that the anti-corruption process has been inconsistent and biased, eroding confidence in the agencies tasked with eradicating the corruption problem. Fragmentation among accountability institutions and lack of operational independence also do not help.
The GCD report points to how weaknesses across basic state functions budgeting and reporting of fiscal information, management of public financial and non-financial resources, taxation and oversight and running of state-owned enterprises, leave Pakistan exposed to corruption. It obviously does not help that a state with such limited capacity to carry out simple functions properly is also extensively involved in the economy and ends up crowding out the private sector. As per the report, many ministries and agencies face capacity constraints in delivering core functions, compounded by weak internal controls and underinvestment in management systems. But it is not private business that ends up being the main victim. The ultimate bill for all this corruption and incompetence is ultimately sent to the people of Pakistan who have to make continuous payments to officials to obtain basic services, while funds lost to corruption could otherwise support higher production and development. Sadly, the main victims also lack the tools to take ownership of the problem and fix it. The report notes how opportunities for engagement by non-state actors are constrained by limited access to public information and the absence of platforms for engagement. Where does one report demands for bribes? And if such an avenue does exist, how many have any hope that such complaints will be resolved?
This is, of course, only one way that the state shuts the people out. It is not exactly very transparent when it comes to sharing information and requests for such data can often take years to fulfill. Little hope is offered by the slow and complicated legal system. Ironically, this leaves a top-down approach as the only hopes for salvation. Which means that the very privileged entities which the report blames for the corruption problem are also the only ones that can seemingly solve it. While the report notes that Pakistan has demonstrated capacity to design and implement technically difficult and institutionally challenging reforms and praised recent reforms in the money laundering area, it remains to be seen whether the same elite that has captured the economy at the expense of others has any incentive to relinquish it.
