Islamabad says IMF diagnostic and corruption report ‘catalyst’ for reforms

A man stands near a logo of IMF at the International Monetary Fund — World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, on October 12, 2018. (REUTERS/File)
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Updated 30 November 2025
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Islamabad says IMF diagnostic and corruption report ‘catalyst’ for reforms

  • The global lender pointed out weaknesses in Pakistani institutions, shared recommendations to address issues tied to heightened risk of corruption
  • Finance minister says the report also acknowledged ‘meaningful progress’ in various sectors, reiterates the government’s resolve to consolidate gains

KARACHI: Pakistan’s Finance Minister Muhammad Aurangzeb on Sunday described a recent International Monetary Fund (IMF) report on corruption and governance weaknesses as a “catalyst” for long-overdue reforms, saying the findings would help the government strengthen oversight, plug leakages and improve transparency in the South Asian country.

The IMF this month pointed out weaknesses in Pakistani institutions and urged prioritizing a 15-point set of recommendations to address issues tied to a heightened risk of corruption. The recommendations focus on private sector development, public sector performance and accountability.

The directions published in the IMF’s Governance and Corruption Diagnostic Assessment (GCDA) estimate that implementing the recommended reforms could raise Pakistan’s gross domestic product (GDP) by 5–6.5 percent over the next five years.

The report, published by Pakistan’s finance ministry, followed an IMF team’s visit to Pakistan last month to help local authorities address budget discrepancies amounting to the tune of Rs448 million ($1.58 million).

“The report’s findings should be viewed within the context of Pakistan’s long-standing structural challenges, some dating back decades, and that the government is determined to advance the remaining recommendations,” Aurangzeb was quoted as saying by his ministry.

“Structural reforms without institutional strengthening would remain incomplete... the government considers the report a catalyst for accelerating reforms rather than a criticism of current policy direction.”

Pakistan has been working closely with the IMF on economic reforms. In September 2024, the South Asian nation secured a $7 billion bailout from the international lender after months of negotiations, aiming to stabilize its struggling economy. It was followed by a $1.4 billion, 28-month Resilience and Sustainability Facility in May.

The IMF’s executive board is scheduled to meet on Dec. 8 to review Pakistan’s performance under the extended fund and resilience and sustainability loan facilities. A successful review would see the release of $1.2 billion tranche for Pakistan.

“While corruption vulnerabilities are present at all levels of government, 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 global lender said in its report this month.

Aurangzeb clarified that the government had itself requested and fully facilitated the assessment as part of its commitment to transparency and reform.

“The report acknowledged meaningful progress in key areas particularly taxation, governance, public financial management, and procurement,” he said, highlighting that many of the priority reforms identified by the IMF are already underway.

He shared that the government’s medium-term economic vision rests on moving from stabilization to durable, broad-based and inclusive growth led by exports, remittances, productivity and private investment.

“From July to October, cement production rose by 16 percent, fertilizer by 9 percent, petroleum by 4 percent, automobiles by 31 percent, and mobile phone manufacturing by 26 percent,” the minister said. “Large-scale manufacturing grew by 4.1 percent year-on-year in the first quarter, reflecting a positive shift compared to the contraction recorded last year.”

He emphasized the challenge ahead was to sustain this trajectory while ensuring that Pakistan does not return to the boom-and-bust cycles driven by external sector pressures.


Walnut tree remains ‘under arrest’ for over a century, living symbol of colonial power in Pakistan

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Walnut tree remains ‘under arrest’ for over a century, living symbol of colonial power in Pakistan

  • British officer is said to have ordered chaining of the tree in 1898, a reminder of the absolute authority and psychological control enforced under colonial rule in Khyber Pass region
  • Locals and historians say the shackled tree survives as a physical memory of the Frontier Crimes Regulation era, when even nature could be punished to discipline subjects and display power

LANDI KOTAL, KHYBER: In the military cantonment of Landi Kotal, close to Pakistan’s Torkham border crossing with Afghanistan and the mouth of the historic Khyber Pass, a single walnut tree stands bound in heavy iron chains.

It has been this way for more than a century, a surreal, almost absurd monument to the power structures and punitive imagination of the British Empire’s rule in the tribal frontier.

Black shackles still brace parts of its branches, giving it the appearance of a theatrical installation. To locals, it is a wound that never fully healed, a reminder that even nature could be punished when authority wished to show dominance.

Local oral histories trace the origin of this bizarre imprisonment to 1898, when a British officer named James Squid, allegedly intoxicated, believed the tree was moving toward him and instantly ordered it arrested. Soldiers carried out the instruction and the walnut tree has never been freed since.

Muhammad Sardar, the caretaker who oversees the site today, recounted the story as it has been passed down for generations.

“This British military official at that time was drunk and thought this walnut tree was moving toward him to attack him,” he told Arab News. “The officer ordered to arrest this tree, hence the soldiers had to obey the order and arrest this tree.”

Whether the event unfolded exactly as described is impossible to verify, but historians and residents agree on what the continued chaining represented: the unquestionable authority of colonial power.

A LAW THAT COULD BIND PEOPLE — AND TREES

Landi Kotal was one of the most militarized points of the British-controlled frontier, a strategic chokepoint along the Khyber Pass, a route armies, traders and empires have used for thousands of years. To control the region, the British introduced the Frontier Crimes Regulation (FCR), a law that denied locals the right to appeal, hire lawyers or challenge government decisions. Entire tribes could be punished for the suspected action of one member.

The chained walnut tree is often interpreted as a physical embodiment of that era: a warning made visible.

Dr. Syed Waqar Ali Shah, Assistant Professor of History at the University of Peshawar, said the symbolism was deliberate.

“It was an assertion of their [British] authority, it was a symbol of their power. Right. It’s a funny thing as well, because it’s something which was under the influence of some intoxication,” he explained.

“The officer behaved or gave orders for the imprisonment of that particular tree under the influence of some intoxicants.”

Dr. Shah continued:

“It was something which was a symbol of colonial authority, assertion of their authority, of bureaucratic diplomacy, a symbol of their bureaucratic strength and power, and maybe some cultural encounter as well.”

He added that such displays endured because “it was a cultural link between the locals and the colonial power. So it was a reflection of that. But later on, they continued with it in the presence of FCR (Frontier Crimes Regulation) and regulations like this.”

Even once the officer sobered, the chains remained.

Dr. Shah believes that was intentional: psychological messaging meant to instill conformity and fear in people living under colonial law.

“Their objective and purpose was to make it a symbol of discipline for the masses. It was an exhibition of power, a sheer exhibition of power, a symbol that if we can do this to something which was inhuman … if they can deal with a tree like this, so the general public, they should be aware that discipline is very important.”

Landi Kotal’s older residents say their fathers and grandfathers retold the story long before Pakistan existed and long before independence movements dismantled the Raj.

Usman Khan Shinwari, a 26-year-old shopkeeper, said the story continues to live in households like a family inheritance.

“My grandfather would often narrate this story of the arrested tree,” he recalled. “My grandfather would say that it shows how the then rulers were treating the locals and what our ancestors had endured.”

Over a century later, long after the end of British rule and the formal abolition of the Frontier Crimes Regulation in 2018, the walnut tree remains exactly where it was chained, part spectacle, part scar.

Tourists sometimes come to photograph it. Others stand silently before it.

But for many in Khyber, it is neither attraction nor curiosity.

It is proof that power once flowed one way only. A tree could be punished, so people learned not to resist.