US urges Pakistan to open defense, intelligence budgets to public oversight

The United States has urged Pakistan to bring its defense and intelligence budgets under parliamentary or civilian oversight, calling the step critical to strengthening fiscal accountability and transparency.

The recommendation is part of the U.S. Department of State’s 2025 Fiscal Transparency Report, released Friday. The annual assessment reviews budgetary practices in 140 governments and entities, focusing on openness in publishing, auditing, and managing public funds.

“The military and intelligence budgets were not subject to adequate parliamentary or civilian public oversight,” the report said in its Pakistan section. It advised Islamabad to improve transparency by subjecting these expenditures to greater scrutiny.

The report also urged Pakistan to publish its executive budget proposal in a timely manner, noting that the government “did not publish its executive budget proposal within a reasonable period.” The State Department said earlier release would allow for informed debate and legislative review.

On debt disclosure, the report criticized Islamabad for releasing only limited information on debt obligations, including liabilities from major state-owned enterprises. It recommended making “detailed information on government debt obligations, including for state-owned enterprises” publicly available.

While highlighting these shortcomings, the report acknowledged progress in other areas. It said Pakistan’s enacted budget and end-of-year report were “widely and easily accessible to the public, including online,” and that the information was “generally reliable and subject to audit by the supreme audit institution.”

The independence of Pakistan’s supreme audit institution also earned praise. The State Department said it “met international standards of independence” and released audit findings within a reasonable timeframe.

On natural resources, the report noted that Pakistan had laws and regulations guiding the award of extraction contracts and licenses, and that “basic information on natural resource extraction awards” was publicly available.

Still, the State Department stressed that Pakistan’s shortcomings on debt transparency and legislative oversight of defense spending mirror concerns raised in previous reports.

The release comes as Pakistan grapples with mounting fiscal pressures. The government recently presented its budget for fiscal year 2025-26, totaling PKR 17.57 trillion. Of that amount, PKR 9.7 trillion has been allocated for debt servicing and PKR 2.55 trillion for defense — a nearly 20 percent increase from the previous year.

The State Department said its recommendations are intended to bolster public trust and international confidence in Pakistan’s financial management. Such measures are particularly important as Islamabad seeks external financing and investment to stabilize its fragile economy.