The United States has called on Pakistan to bring its military and intelligence budgets under parliamentary or civilian oversight, identifying this as a key step to improving fiscal transparency. The recommendation was made in the US State Department’s 2025 Fiscal Transparency Report, released on Friday, which reviewed how 140 governments disclose and manage their public finances.“The military and intelligence budgets were not subject to adequate parliamentary or civilian public oversight,” the report said in its section on Pakistan. It went on to recommend that “steps Pakistan could take to improve fiscal transparency include subjecting the military and intelligence agencies’ budgets to parliamentary or civilian public oversight.”
The report also urged Islamabad to make its executive budget proposal available to the public within a reasonable time frame. “The government… did not publish its executive budget proposal within a reasonable period,” it noted, adding that such publication would allow for wider scrutiny and informed debate.
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Is the current allocation for defence in Pakistan’s budget justified?
On debt disclosure, the assessment was equally critical. It observed that “the government made only limited information on debt obligations, including major state-owned enterprise debt, publicly available.” The State Department advised “disclosing detailed information on government debt obligations, including for state-owned enterprises” to enhance openness.Despite these shortcomings, the report acknowledged areas where Pakistan has shown progress. It said the “enacted budget and end-of-year report [were] widely and easily accessible to the public, including online,” and described the budget information as “generally reliable and subject to audit by the supreme audit institution.” It also praised Pakistan’s auditing body, noting it “met international standards of independence” and produced findings that were publicly available within a reasonable time.The report further highlighted that Pakistan had “specified in law or regulation, and appeared to follow in practice, the criteria and procedures for awarding natural resource extraction contracts and licences,” with “basic information on natural resource extraction awards [made] publicly available.” It also noted that the country’s sovereign wealth fund operated under a sound legal framework, and information on procurement contracts was accessible.The findings echo concerns raised in previous years about gaps in debt transparency and the absence of legislative scrutiny of defence spending. The timing of the report is significant, coming as Pakistan grapples with fiscal pressures. Its 2025-26 budget set total outlays at Rs17.57 trillion, with Rs9.7tr allocated for debt servicing and Rs2.55tr for defence — a near 20 per cent increase from the previous year, Dawn reported.According to the State Department, its recommendations aim to strengthen accountability, bolster investor confidence, and support Pakistan’s efforts to attract foreign financing for economic stability. The annual report also underlined that fiscal transparency is essential for good governance, market confidence, and international financial credibility.
