he visit by an International Monetary Fund delegation made significant waves in Pakistan, particularly after the guests met with Chief Justice Yahya Afridi. This was an unlikely meeting, and for the right reasons, raised eyebrows. However, the delegation had a wide ranging agenda. More IMF teams will be visiting Pakistan, each with a specific mission relevant to economic stability.

Every time an IMF team visits, the country braces itself. There is now a kind of predictability to the process. They talk about governance; they bring up fiscal discipline; they press for reforms; and they leave behind a trail of commitments that Pakistan must fulfil if it wishes to receive the next tranche of funding. This time was no different, except for the additional weight of a Governance and Corruption Diagnostic Assessment. The assessment boiled down to a six-point examination of how well Pakistan handles its fiscal governance, banking sector, market regulations and legal system.

We can all recall the moment when Pakistan celebrated its exit from the FATF grey list purgatory, thinking it was a step towards global credibility. Yet, as the IMF delegation combed through governance indicators, Pakistan still stood at 140 out of 180 on the Corruption Perceptions Index and struggled at 108 out of 190 on the Ease of Doing Business ranking. These numbers paint a grim picture, one the IMF will highlight to justify the need for tighter oversight.

Beyond governance, the IMF delegation also had climate finance on their agenda. A separate team arrived to discuss a $1.5 billion concessional loan for climate resilience. Pakistan’s external debt has already crossed $126.3 billion. While such loans come with lower interest rates, they still add to the pile. Pakistan has already secured several climate-related financial packages, including a $1 billion commitment from the Green Climate Fund, a $500 million resilience package from the World Bank, and a $350 million adaptation programme through the UNDP. So does Pakistan need more climate loans or better financial management? Less than 40 percent of the post-2022 flood rehabilitation funds have been utilised fully. Only a fraction of the expenditure has been on targeted climate adaptation projects.

Then there is the heavyweight, the Extended Fund Facility review. Early in March, the IMF will make an assessment whether Pakistan has kept its promises on fiscal and monetary reforms and is qualified for the next tranche of IMF money. Not all numbers look good. The fiscal deficit is again higher than targeted. Foreign exchange reserves are barely enough to cover 1.5 months of imports.

Sir, this is too low a word count for a dialogue piece.Beyond governance, the IMF delegation had climate finance on their agenda. A separate team would discuss a $1.5 billion concessional loan for climate resilience.

One of the biggest concerns has been the power sector. The circular debt in this sector hit Rs 2.3 trillion when it should have been Rs 1.8 trillion. State-owned enterprises like Pakistan International Airlines and the power distribution companies continue to bleed money. The IMF isn’t having it. The message is clear—privatisation needs to happen, sooner rather than later. But in a country where privatisation is as much a political issue as it is an economic one that is easier said than done. The government has to decide whether it wants to push through these painful changes.

Then there is taxation. The IMF has long pressed for an improved tax collection system, yet Pakistan has struggled to implement reforms that would significantly raise revenues. It is not just about inefficiency—it is about political will. Increasing taxes, especially through fuel and electricity tariffs is always a delicate balancing act. More price hikes could push the people further into economic hardship. But from the IMF’s perspective, tax collection has to improve, no matter the cost.

At the heart of all these discussions is a bigger concern—Pakistan’s economic autonomy. Every time the IMF has stepped in, Pakistan has had to negotiate on terms that often leave little room for independent policy-making. An argument is always made that the IMF conditions are necessary for fiscal discipline, but at what cost? Every tranche of funds seems to come with additional constraints, and every reform demanded is another step towards deeper financial dependency. Pakistan needs to think beyond just securing the next IMF bailout—it needs to redefine its economic strategy altogether.

For Pakistan to break out of this cycle, it has to take a different approach. It needs to show the IMF that governance reforms are being taken seriously, but on its own terms. It needs to forgo additional climate debt and instead argue for grants, ensuring that the funds so received are spent transparently. It has to demonstrate tangible progress on fiscal discipline, energy sector reform, and tax collection—not just to secure the next loan, but to ensure long-term stability.

The writer is a chartered accountant and a business analyst