By Zia Uddin
Pakistan’s governance crisis, laid bare by the IMF’s Governance and Corruption Diagnostic Assessment (GCDA), does more than throttle economic growth. Corruption, discretionary governance and opaque institutions not only impose financial costs on citizens, but also erode trust in the state, making people vulnerable to crime and militancy.
The country’s repeated reliance on IMF bailouts is a double-edged sword. While these loans briefly ease macroeconomic pressure, they come at a heavy price. Pakistan has borrowed heavily over decades, receiving about US$24 billions since 2008, while paying roughly US$2.69 billion in interest, and still owes SDR 6,369 million in principal. These payments limit the government’s ability to invest in health, education and security. For ordinary people, this translates into stagnant wages, inflation and weakened public safety nets. The burden of debt and economic mismanagement constrains not just growth, but the very fabric of social order.
This economic stress is fertile ground for crime. Multiple studies in Pakistan highlight to a strong “poverty-crime nexus” showing that when inflation rises, jobs vanish, and poverty deepens, crime rates tend to surge. People under economic strain may turn to theft, organised crime, or illicit ways to survive. At the same time, weak law enforcement makes crime more widespread because powerful individuals often escape accountability.
Beyond the crime, the security landscape in Pakistan is worsening dramatically. Terrorism is surging to alarming levels, adding a critical layer to the human cost of governance failure. According to the Global Terrorism Index (GTI) 2025, Pakistan saw more than a doubling of terror attacks in 2024, from 517 to 1,099 incidents, while terrorism-related deaths jumped 45pc, from 748 in 2023 to 1,081 in 2024.
The Pakistan Security Report 2024, published by the Pak Institute for Peace Studies (PIPS), shows there were 521 terrorist attacks in the country in which 852 were killed and more than 1,000 injured. PIPS also revealed an uptick in militant fatalities, with 621 militants killed in counterterror operations in 2024, up from 373 in 2023.
The first quarter of 2025 has already seen a troubling escalation. Data reported by security analysts shows a massive 81% surge in terrorist incidents compared to the same period in 2024, with 80 attacks and 218 fatalities reported. In March 2025, militant activity peaked with 105 militant attacks in one month resulting in 228 deaths. These numbers reveal a dire picture: pervasive economic mismanagement, combined with governance rot, is fueling a surge in unrest and insecurity. The very elites who benefit from nepotism and corruption seem to ignore how their privilege destabilizes society.
The Governance and Corruption Diagnostic Assessment (GCDA) report lays out a blueprint for reform that goes beyond mere macroeconomic prescriptions. It calls for enhanced transparency, accountability and the empowerment of anti-corruption agencies. It also stresses stronger rule-of-law institutions, and greater citizen participation in decision-making. If reforms remain superficial, Pakistan risks perpetuating a vicious cycle: debt, austerity, crime, terrorism and social fragmentation.
Reversing this downward spiral requires bold action. IMF programs must be restructured so that conditionality includes benchmarks for governance reform, not just economic targets. Lawmakers must hold security agencies and public institutions to account. Anti-corruption bodies should be made stronger, independent and genuinely empowered. Citizens should be given a voice to demand reforms that protect their lives, not just the profits of the elite.
Pakistan now faces an inflection point. The GCDA report offers a rare and honest assessment of structural rot in the system. IMF support gives financial leverage. However, unless political will, effective institutions and a commitment to justice and security align, the debt trap will not just stunt economic growth, it will continue to corrode society, deepen inequality, and put ordinary people at risk. In short: the cost of governance failure is no longer just economic, but a security crisis. And Pakistan cannot afford to ignore it.
Zia Uddin is a PhD scholar at the School of Economics, Quaid-i-Azam University (QAU), Islamabad. He is a policy analyst who writes on green economic growth, environmental sustainability and climate change.
