Shared responsibility, real development

2026-02-24 - 22:23

AN IMF mission, led by Iva Petrova, is arriving in Pakistan this week to assess progress under the $7 billion Extended Fund Facility and the $1.1 billion Resilience and Sustainability Facility. During its two-week stay, it will review reform commitments, with particular focus on fiscal discipline and structural adjustments. Although provincial surpluses and a narrowing deficit point to improvement on paper, the larger question lies elsewhere. The real test is whether fiscal responsibility is being genuinely shared across the federation—or whether power and resources continue to be concentrated in a few provincial hands despite formal commitments to reform. On paper, the task seems simple: raise revenue, rein in spending and reduce the deficit. Provinces have chipped in, producing cash surpluses that have helped federal targets and headline numbers have improved. Yet the deeper story is about how power is concentrated. National decisions remain tied up in provincial politics because the federal government is shaped by provincially rooted parties. The same parties that resist complete and thorough transfer of ministries and departments to provinces also hold back from passing powers down to local governments. Power has moved out of Islamabad, but it has stopped at provincial capitals. Districts and municipalities struggle for resources and real development rarely trickles down. Autonomy exists in theory but falters in practice. The National Fiscal Pact, signed in September 2024 under IMF guidance, was supposed to fix this. Provinces were meant to broaden their tax base, take on more spending responsibilities and coordinate on programs like the Higher Education Commission and the Benazir Income Support Programme. It has helped some coordination and contributed to surpluses, but the bigger structural reforms have lagged. Provinces have dragged their feet on cost-sharing and taxing politically sensitive sectors like agriculture and property. So, while the numbers look healthier, the system of accountability and burden-sharing is still weak. The issue is not just numbers—it is incentives and governance. When provincial elites hold onto resources without matching responsibility, autonomy becomes a shield for entrenched interests rather than a ladder for development. The IMF mission is pressing provinces to step up, implement reforms and pass resources to local governments. If they follow through, fiscal credibility improves, governance strengthens and development can reach beyond a handful of urban centers. Pakistan now faces a clear choice. Provincialism can either continue as a tool for elite protection—concentrating power and resources in a few hands—or become a framework for stability, shared responsibility and growth. Provinces must broaden tax bases, shoulder fiscal responsibility and empower local governments so that autonomy reaches the grassroots. Otherwise, temporary surpluses may fade, leaving the federation exposed to recurring fiscal stress. The coming months will show whether provincialism can be transformed from a cover for entrenched power into a stepping stone for national cohesion, sustainable growth and shared prosperity. How provinces act now will determine whether Pakistan turns autonomy into opportunity—or lets it trap the country in cycles of political and fiscal imbalance. —The writer is a political analyst, based in Islamabad. (riaz.missen@gmail.com)