US Urges Pakistan to Strengthen Fiscal Transparency and Civilian Oversight

The US State Department has called on Pakistan to improve transparency in its public finances, particularly over military and intelligence spending, in its latest Fiscal Transparency Report.

The report said Pakistan had made some financial information publicly available, including its enacted budget and year end financial statements. However, Washington identified significant gaps in the country’s fiscal disclosure and oversight systems. The US specifically criticised the lack of adequate parliamentary or civilian oversight of military and intelligence budgets. It also raised concerns about limited disclosure of government debt, including liabilities linked to state owned enterprises.

Washington recommended that Pakistan take three key steps: publish its executive budget proposal on time, provide fuller information about government debt obligations and subject military and intelligence spending to greater civilian and parliamentary scrutiny. The report comes as Pakistan plans to spend around Rs3 trillion on defence during the 2026-27 financial year, making defence one of the country’s largest areas of public expenditure. The level of military spending has increased scrutiny over how such funds are accounted for and monitored.

The State Department’s wider 2026 assessment examined 139 governments and one entity, with 73 meeting minimum fiscal transparency requirements and 67 falling short. Fourteen of those that failed to meet the standard were nevertheless judged to have made significant progress. The US said stronger fiscal transparency can improve public accountability, strengthen market confidence and create a more predictable environment for businesses and investors.

For Pakistan, the recommendations add pressure on the government to provide greater public access to financial information and strengthen civilian oversight of areas of spending that have traditionally received limited scrutiny.