Pakistan’s sovereign wealth funds have come under international scrutiny as the IMF warned that weak governance, political influence and limited transparency are creating serious corruption risks. The latest Governance and Corruption Diagnostic Assessment highlights that Pakistan’s SWFs remain exposed to misuse unless strong reforms are implemented.
The warning comes as Pakistan’s 2023 SWF Act is still not operational, with the government drafting amendments to introduce better oversight and clearer mandates. The IMF noted that opaque decision making leaves room for embezzlement and fraud, especially in countries where institutions struggle to enforce accountability. It also pointed to the notorious 1MDB scandal as an example of how poorly managed sovereign funds can suffer massive corruption losses.
According to officials, the IMF and the government have held multiple rounds of discussions since the diagnostic mission’s visit to Islamabad. The Fund has raised concerns that exempting seven SWF-owned state enterprises from the SOE Act weakens the overall governance framework. Reforms being prepared will align Pakistan with global standards such as the Santiago Principles and OECD corporate governance guidelines.
The report said Pakistan must adopt strict transparency rules for asset sales, procurement and beneficial ownership disclosures to close loopholes. An official involved in the process said the amendments are “currently under legal vetting and will be presented to Parliament soon,” adding that the goal is to build a system that cannot be influenced for personal or political gain