elite

Islamabad, Pakistan – A new assessment by the International Monetary Fund (IMF) has concluded that corruption in Pakistan is behind an economic crisis driven by “state capture” – where public policy is manipulated to benefit a narrow circle of political and business elites.

The Governance and Corruption Diagnostic Assessment (GCDA), finalised in November 2025, presents a grim picture of a system marked by dysfunctional institutions that are unable to enforce the rule of law or safeguard public resources.

According to the 186-page report, corruption in Pakistan is “persistent and corrosive”, distorting markets, eroding public trust and undermining fiscal stability.

The report, requested by the Pakistani government, warns that without dismantling the structures of “elite privilege”, the country’s economic stagnation will persist.

While corruption vulnerabilities are present at all levels of government, according to the report, “the most economically damaging manifestations involve privileged entities that exert influence over key economic sectors, including those owned by or affiliated with the state.”

The report argues that Pakistan stands to gain substantial economic benefits if governance improves and accountability is strengthened. Such reforms, it notes, could significantly lift the country’s gross domestic product (GDP), which stood at $340bn in 2024.

“Based on cross-country analysis of the reform experience of emerging markets, IMF analysis projects that Pakistan could generate between a 5 to 6.5 percent increase in GDP by implementing a package of governance reforms over the course of five years,” the report said.

Stefan Dercon, a professor of economic policy at the University of Oxford who has advised the Pakistani government on economic reforms, said that he agreed that the absence of accountability in corruption cases was eating away at the country’s economic potential.

“Failure of implementation [of laws and principles of accountability] gives vested interests too often free rein and addressing this must be at the core of efforts for economic reform,” he told Al Jazeera.

Here is what we know about the IMF report, the areas of weakness it highlights, the policy recommendations it makes, and what the experts say.

What does the IMF report say?

Pakistan has turned to the IMF 25 times since 1958, making it one of the fund’s most frequent borrowers. Nearly every administration, whether military or civilian, has sought IMF assistance, reflecting chronic balance of payments crises.

The current programme was started under Prime Minister Shehbaz Sharif.

The GCDA’s release comes ahead of the IMF executive board’s expected approval of a $1.2bn disbursement next month, part of the ongoing 37-month-long, $7bn programme.

Pakistan narrowly avoided default in 2023, surviving only after the IMF extended an earlier nine-month deal, which was followed by the ongoing 37-month programme.

According to the GCDA, Pakistan consistently ranks near the bottom of global governance indicators among nations. Between 2015 and 2024, the country’s score on control of corruption remained stagnant, placing it among the worst performers worldwide and within its neighbourhood.

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.

The new report notes that tax expenditures, including exemptions and concessions granted to influential sectors such as real estate, manufacturing and energy, cost the state 4.61 percent of GDP in the 2023 fiscal year alone.

It also calls for an end to special treatment for influential public sector entities in government contracts and urges greater transparency in the functioning of the Special Investment Facilitation Council (SIFC).

The SIFC, created in June 2023 during Sharif’s first term, is a high-powered body comprising civilian and military leaders and tasked with promoting investment by easing bureaucratic obstacles. Although positioned as a flagship initiative jointly owned by the government and the military, it has faced sustained criticism for a lack of transparency.

The report describes broad legal immunity granted to SIFC officials, many from the armed forces, as a major governance concern. It warns that this immunity, combined with the council’s authority to exempt projects from regulatory requirements, creates significant risks.

Highlighting the absence of transparency, the GCDA says the SIFC should publish annual reports with details of all investments it has facilitated, including concessions granted and the rationale behind them.

“The recently established Special Investment Facilitation Council, which has been vested with substantial authority to facilitate foreign investments, operates with untested transparency and accountability provisions,” the report said.

Judiciary and rule of law

The report identifies the judiciary as another critical bottleneck. Pakistan’s legal system is overwhelmed by more than two million pending cases. In 2023 alone, the number of unresolved cases before the Supreme Court increased by 7 percent.

Over the last 12 months, Pakistan has passed two constitutional amendments, both of which faced severe backlash from many in the legal community who said that they represent a “constitutional surrender”. In essence, the amendments create a parallel Federal Constitutional Court that critics say will reduce the powers of the Supreme Court, while also changing rules that guide how judges are appointed and transferred, in ways that opponents say could give the executive great control over whom to promote and whom to punish.

The government, however, has insisted that the changes were made to improve the efficiency and efficacy of the judicial system.

Similar credibility challenges affect the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA), the two principal bodies responsible for investigating corruption.

The GCDA cites a 2024 government task force, which found that NAB has, at times, exceeded its mandate and launched politically motivated cases. This selective accountability, the report says, has damaged public trust and created a climate of fear within the bureaucracy, slowing decision-making.

While NAB says it recovered 5.3 trillion rupees ($17bn) between January 2023 and December 2024, the report notes that conviction rates remain low.

The diagnostic calls for fundamental reforms to NAB’s appointment processes to ensure independence and a shift from “political victimisation” to “rule-based enforcement”.

Was the report necessary?

The IMF outlines reforms which experts acknowledged would be comprehensive if pursued by authorities.

Yet analysts also note that international institutions and domestic researchers have repeatedly made similar observations in the past, with little follow-through by the government.

Sajid Amin Javed, a senior economist at the Sustainable Development Policy Institute (SDPI) in Islamabad, says the fact that Pakistan is already under an IMF programme may compel the government to take the findings more seriously.

He said that the IMF report could have gone further than it has by acknowledging that many of its recommendations have been made by others in the past, “without bringing any change”.

“Perhaps the assessment could have been made to see why these failures happened,” he said.

Javed welcomed the report’s attempt to quantify economic losses from corruption, hoping it might push policymakers to act.

“Corruption and governance are intrinsically tied to each other. Corruption leads to weak governance, and weak governance promotes corruption, making them conjoined,” he said.

Hasanain, however, was more sceptical, questioning why the IMF waited for a formal request from the Pakistani government despite having its own internal assessment mechanisms.

What can the government do?

Analysts said Pakistan’s economic landscape has long been shaped by politically connected actors who enjoy preferential access to land, credit, tariffs and regulatory exemptions. The IMF’s observations, they noted, are not new.

Hasanain argues that corruption, including elite capture of markets, regulatory bodies and public policy, is political in nature and cannot be addressed without deeper reforms.

“Without a broader political awakening, governance reforms will remain technical fixes built on unstable foundations. Ultimately, elite capture is undone only when political incentives change,” he said.

Javed, meanwhile, pointed to what he called policy design capture, arguing that those responsible for drafting governance and anticorruption reforms are often part of the same elite ecosystem.

“Elite policy capture on policy design is perhaps the most important component which allows the elite capture. The report’s recommendations show that we must go for participatory and inclusive methods to get out of our current conundrum,” he said.

For Hasanain, the most urgent reform is a unified economic turnaround plan that is fully owned by the prime minister and communicated clearly.

He said that Pakistan’s economic landscape was cluttered with “committees, councils, task forces and overlapping ministries”, each producing its own documents without accountability.

“The government should consolidate these scattered structures into one clear reform platform with defined priorities, timelines and measurable outcomes. Progress should be published monthly, debated publicly, and subjected to independent scrutiny,” he said.

Hasanain argued that such consolidation would improve coordination, build public trust and signal seriousness to investors.

For Javed, the most immediate priority is reforming the public procurement system, which governs how government bodies buy goods and services using public funds.

“Our procurement system is not working on value of money, but instead it focuses on quantity of money, where lowest bidder wins the bid,” he said, arguing that this approach meant that contracts often did not go to those best suited to deliver what was needed. “This system needs urgent modernisation.”

“An urgent realisation is the order of the day that if we need to have a flourishing, transparent economy, we have no choice but to overhaul our entire economic framework,” Javed said.

Before she came to USC, it had never occurred to Jazzy Davidson how charmed her basketball upbringing had been. Growing up outside of Portland, nearly all of her years playing the game were spent with the same tight-knit group of girls — girls who’d been best friends since before the fifth grade and who, after all that time, could anticipate her every move before she made it.

“They’re basically my sisters,” Davidson says.

They’d been that way pretty much as far back as she could remember. Allie, she met in kindergarten. She and Sara joined the same squad in second grade. By 10, Dylan, Reyce and Avery were on the club team, too. For the next eight years or so, up through March’s Oregon girls 6A state championship, they were inseparable, the six of them spending almost every waking moment together.

But now, a few days before the start of her freshman season at USC, Davidson is in Los Angeles, while her former teammates are scattered across the Pacific Northwest playing with various other Division I schools. It’s an odd feeling, she admits, but a thrilling one, too — to be here with a new team, continuing her basketball journey without the girls who’d been there the whole way.

Reyce Mogel, left, Avery Peterson, Dylan Mogel and Jazzy Davidson played together on youth and high school teams.

(Courtesy of Reyce Mogel)

“Being here made me realize how comfortable I was with them,” Davidson said. “It’s definitely different now, definitely a learning experience.”

Within that well-worn dynamic, Davidson developed into one of the top women’s hoops prospects in the nation, all while she and her friends led Clackamas High on an unprecedented, four-year run of success. Now, early in her freshman season at USC, Davidson steps into circumstances that no one would have anticipated when she signed with the school.

At the time, the expectation was that she could be brought along as a talented No. 2 while the Trojans’ generational star JuJu Watkins commanded all the outside noise and nightly double teams. But then Watkins injured her knee in March, forcing her to sit out the 2025-26 season. Suddenly, the Trojans’ top prospect also became their saving grace.

No one, for the record, is saying that out loud at USC. Nor does anyone in the building expect Davidson to step seamlessly into Watkins’ shoes.

“Those are very unique shoes,” USC coach Lindsay Gottlieb says. “But the fact that Jazzy can step into our program and already just make a really unique and incredible impression on everybody is pretty wild.”

By her own admission, Davidson has never been the fastest to warm up with new people. Most outside of her circle would probably describe her as “quiet” or “reserved.” It’s only once you get to know her that you really see who she is and what she’s capable of.

USC got a brief glimpse Sunday, with the Trojans trailing by a point to No. 9 North Carolina State and 10 seconds on the clock. Coming out of a timeout, the 6-1 Davidson cut swiftly through two defenders toward the basket, caught an inbound pass and, without taking a step, laid in the game-winning bucket.

The stage gets even bigger on Saturday, when No. 8 USC meets No. 2 South Carolina at Crypto Arena in the first of several grueling tests awaiting on a slate that includes four games against the top three teams in the Associated Press preseason top 25 poll. Any hope of the Trojans reaching the same heights as last season hinges in part on their star freshman quickly finding her potential.

No one has seen Davidson fulfill that promise like the girls who have been there since the start. As far as they’re concerned, it won’t be long before the world sees what they have.

“If you know Jazzy,” says Allie Roden, now a freshman guard at Colorado State, “you know she can do anything she wants, pretty much.”

When Davidson’s mother saw that her 5-year old daughter was unusually tall, she signed Jasmine — who would later be known as Jazzy — up for basketball. Roden was on that first team. She has seen the video evidence of the two of them, both still in kindergarten, launching basketballs over their heads at the backboard.

“We were terrible,” Roden says with a laugh, “but we thought we were really great.”

Davidson moved down the street from Roden in the fourth grade, and by that point, she’d figured something out. Enough at least to catch the attention of Clackamas High coach Korey Landolt, whose daughter played for the same club program.

“I saw [Davidson] working with a trainer and just thought, ‘Huh, this kid is different,’” Landolt says.

From left to right, Avery Peterson, Sara Barhoum, Dylan Mogel, Jazzy Davidson, Reyce Mogel, Allie Roden played together for years, leading Clackamas High in Oregon to a state championship.

(Courtesy of Reyce Mogel)

Once the others joined forces a year later on the club team Northwest Select, there wasn’t much anyone could do to stop them. The six girls seemed to fit seamlessly together on the court. Off it, Roden says, “we were inseparable pretty much as soon as we met.” She doesn’t recall their team losing a game against their age group for two full years at one point.

It was around that time that Davidson separated herself from the pack as a prospect. She’d grown to 5-foot-10 by the seventh grade, only for the pandemic to shut down essentially the entire state, including all high school sports.

So Davidson threw herself into basketball. She and Sara Barhoum, who’s now a freshman at Oregon, started working out together during free time between online classes, doing what she could to add strength to her spindly frame. Then they’d shoot together at night, each pushing the other to improve.

“It was a big time for me,” Davidson says. “That was when I honed in on everything.”

Two or three times per month, the team would travel out of state to test themselves. On one particularly memorable trip, just the six of them entered a tournament in Dana Point. They ended up winning the whole thing, beating some of the nation’s best teams, despite the fact they’d stayed up late playing Heads Up and were sunburned from a beach visit the day before.

Those middle school trips only cemented their bond — as well as Davidson’s place as a top prospect. By her freshman season, with all of them together at Clackamas High, the secret was out. College coaches came calling. Gottlieb, who had just taken the job at USC, was one.

Even then, there was a certain grace with which Davidson played the game — as if it flowed from her naturally. “She’s so fluid,” Gottlieb explains. “She glides.” But there was also a fearlessness in getting to the rim against much older, stronger players.

“She had to hold her own,” Landolt says. “But people couldn’t stop her inside. They couldn’t stop her outside. She was just so versatile. She could do everything.”

As a gangly freshman, Davidson stuffed the stat sheet with 22 points, eight rebounds, four steals, three assists and one block per game on her way to being named Oregon’s Gatorade Player of the Year. She won the award again as a sophomore … as well as the next two years after that.

When those four years were up, Davidson was the all-time leading scorer in Oregon Class 6A girls basketball history with 2,726 points. Still, some of her teammates contend she was even better on the defensive end.

“Jazzy is good at everything she does,” Barhoum said. “But she’s probably the best defender I’ve ever seen.”

USC guard Jazzy Davidson blocks a shot by North Carolina State’s Devyn Quigley on Nov. 9 in Charlotte, N.C.

(Lance King / Getty Images)

The girls played on the same team for six years when Clackamas made a run to the 6A state championship game. They’d spent so much time with each other, their coach says, that it could be “a blessing and a curse.” Sometimes, they bickered like sisters, too.

Landolt would urge them to hang out with other friends, only half-kidding. But all that time together made their connection on the court pretty much telepathic.

“There were so many passes I threw to Jazzy that no one else would’ve caught, but she was just there.” said Reyce Mogel, who now plays at Southern Oregon. “We were always on the same page. And not just me and Jazzy. Everybody.”

Davidson was on the bench, in foul trouble, for a long stretch of the state championship game against South Medford. But she delivered two key blocks in the final minute as Clackamas won its first state title.

Two years later, when they returned to the state championship as seniors, Davidson was again forced to sit for a long period after twisting her ankle. This time, her absence “took the wind out of everyone’s sails,” Landolt says. Clackamas blew a 19-point, third-quarter lead from there, even as a hobbled Davidson tried to give it a go in the final minutes.

The six girls found each other after the final buzzer, heartbroken. They knew it would be the last time.

Their final record together at Clackamas: 102-14.

“We all were hugging,” Barhoum says, “and just saying to each other, we’re all off to do better things. We all made history. And now everybody is going to make history somewhere else.”

They may live apart now, but the six girls, all now playing on separate for college basketball programs, still talk all the time.

“I FaceTime one of them at least every day,” Davidson says.

Her Trojan teammates are still getting to know her, still learning her tendencies. That will come with time. But the reason she ultimately chose USC, over every other top program, was how much it felt like home.

Through two games, Davidson seems to have settled seamlessly into a starring role at USC, inviting the inevitable comparisons to Watkins that Gottlieb would rather avoid.

USC guard Jazzy Davidson puts up a three-point shot against North Carolina State on Nov. 9 in Charlotte, N.C.

(Lance King / Getty Images)

“You do not need to be anything other than what your best self is,” Gottlieb insists.

Her friends have seen up close how far Davidson can take a team at her best. But no one, not even the six of them, understand the circumstances Davidson has stepped into quite like Watkins.

Her advice was simple. But it still resonated with Davidson on the doorstep of the season.

“She just told me not to be anxious about any of this,” Davidson says. “You’re good. Just go play how you play, and you’ll be fine.”