At the heart of the IMF’s findings is the concept of “state capture”, where, according to the fund, corruption becomes the norm and, in fact, the primary means of governance. The report argues that the Pakistani state apparatus is frequently used to enrich specific groups at the expense of the broader public.
The report estimates that “elite privilege” – defined as access to subsidies, tax relief and lucrative state contracts for a select few – drains billions of dollars from the economy annually, while tax evasion and regulatory capture crowd out genuine private sector investment.
These findings echo a 2021 United Nations Development Programme (UNDP) report, which said economic privileges granted to Pakistan’s elite groups, including politicians and the powerful military, amount to roughly 6 percent of the country’s economy.
Ali Hasanain, an associate professor of economics at the Lahore University of Management Sciences, said the IMF’s description of elite capture is accurate but added that it was “hardly a revelation”.
He pointed to the 2021 UNDP report and other domestic studies that describe how Pakistan’s economic system has long served politically connected actors who secure “preferential access to land, credit, tariffs and regulatory exemptions.”
“The IMF diagnostic repeats what many domestic studies, including those by the World Bank and Pakistan’s own institutions, have already emphasised: Powerful interests shape rules to maintain their advantage,” he told Al Jazeera.