US calls on Pakistan to place Defence Budgets under civilian oversight

The United States has urged Pakistan to bring its defence and intelligence budgets under parliamentary or civilian oversight, describing it as a key step to strengthen fiscal accountability and transparency.

The recommendation was made in the US Department of State’s 2025 Fiscal Transparency Report, released on Friday.

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The annual report evaluates how governments manage, disclose, and audit public funds, with a focus on budgetary openness.

According to the report, Pakistan made its enacted budget and end-of-year financial report widely accessible, including online. However, the executive budget proposal was not published in a timely and reasonable period. The government made only limited information on debt obligations, including major state-owned enterprise debt, publicly available.”

“The military and intelligence budgets were not subject to adequate parliamentary or civilian public oversight,” the report stated in its Pakistan section. It added that “steps Pakistan could take to improve fiscal transparency include subjecting the military and intelligence agencies’ budgets to parliamentary or civilian public oversight.”

On debt disclosure, the report observed that “the government made only limited information on debt obligations, including major state-owned enterprise debt, publicly available.” It recommended “disclosing detailed information on government debt obligations, including for state-owned enterprises.”

The 2025 review echoed concerns raised in previous reports about gaps in debt transparency and the absence of legislative oversight of defence expenditure.

The US said that implementing these measures would bring Pakistan’s fiscal practices closer to international standards and enhance democratic accountability.

The State Department noted that its recommendations were aimed at bolstering public trust and international confidence in Pakistan’s financial management, particularly as the country seeks critical external financing and investment for economic stability.

The 2025 Fiscal Transparency Report covered 140 governments and entities, assessing practices such as timely budget publication, debt disclosure, audit independence, and oversight of sensitive spending, including defence and intelligence.

The release comes as Pakistan faces mounting budgetary pressures, with its 2025-26 budget setting allocations at Rs17.57 trillion. Of this, Rs 9.7tr is earmarked for debt servicing, while Rs 2.55 trillion has been designated for defence, a nearly 20 per cent increase from the previous year, Dawn reported.

Earlier, the International Monetary Fund (IMF) has called on Pakistan to bring greater transparency and discipline to its public spending, urging the government to route parliamentarians’ development schemes through formal approval mechanisms and limit mid-year budget changes.