Ghulam Mustafa has held a savings account at National Bank of Pakistan for twenty-two years. He is sixty-one years old and works the morning shift at a private security firm near Clifton. He does not know that in August 2023, the federal government transferred its majority shareholding in NBP into a legal structure called the Pakistan Sovereign Wealth Fund, bundled with six other state enterprises worth an estimated eight billion dollars in government stakes. He does not know that the law creating that fund gave it the explicit authority to sell his bank to a foreign government without a competitive bidding process. He does not know that the committee designed to identify that foreign buyer included the Chief of Army Staff. He keeps his money there because it is a government bank, and government banks, as he understands it, belong to the government.
He is not wrong about the ownership. What the government built in the summer of 2023 was a mechanism for transferring it.
The mechanism had two parts, and each part needed the other to work.
The Special Investment Facilitation Council, established on June 20, 2023, was the sales operation. Its Apex Committee, co-chaired by the Prime Minister and the Chief of Army Staff, would identify sectors and assets for foreign investment, negotiate terms with Gulf sovereign counterparts, and provide the military guarantee that Saudi Arabia, Qatar, and the UAE had explicitly demanded as a precondition for any significant commitment to Pakistan. The army’s presence was not incidental. Gulf states had refused to make investment commitments when only civilian officials were at the table. They wanted the institution capable of ensuring a policy survives a change of government, and in Pakistan, that institution is not the elected one. COAS Syed Asim Munir, who had served in a Pakistani military detachment in Saudi Arabia and maintained documented relationships with Gulf royal families, traveled to Riyadh and Abu Dhabi to advance the deals the SIFC was built to close.
The Pakistan Sovereign Wealth Fund, whose enabling Act was passed in August 2023, was the execution vehicle. Into it went the government’s shareholding in seven state enterprises: Oil and Gas Development Company, Pakistan Petroleum Limited, Mari Petroleum, National Bank of Pakistan, Government Holdings (Private) Limited, Pakistan Development Fund, and Neelum-Jhelum Hydropower Company. The fund was then given, by the terms of that Act, three specific powers: to sell those assets directly to foreign governments without competitive bidding through the Privatisation Commission, to retain all revenues generated by the seven entities rather than remitting them to the federal budget, and to borrow against the state assets as collateral.
Now put the two together.
The SIFC brings the buyer: a Gulf sovereign wealth fund, a royal family investment vehicle, a state-owned energy company from Abu Dhabi or Riyadh. The Apex Committee, where the COAS sits alongside the Prime Minister, negotiates the terms and provides the military guarantee. The SWF closes the transaction. No open tender. No Privatisation Commission. No public price discovery. No parliamentary scrutiny of what was paid for oil and gas fields built over decades with public money and gas royalties that have never been adequately returned to the communities above them. The army-led sales committee brings the buyer and sets the terms. The civilian-governed fund signs the papers. Between the two of them, the entire architecture of accountability that exists to protect public assets from exactly this kind of disposal, meaning competitive bidding, parliamentary oversight, and disclosed pricing, is bypassed entirely.
This is what the International Monetary Fund spent two years trying to close down.
The SIFC was presented at launch as a bureaucratic reform: a one-stop shop to eliminate the regulatory friction that had discouraged foreign investment in Pakistan for decades. The Apex Committee’s three-tier structure, with its quarterly apex meetings, monthly executive sessions, and fortnightly implementation reviews, was framed as the machinery of acceleration. The army’s presence was explained as a stabilizing signal to investors uncertain about the durability of civilian policy commitments. None of this was hidden. It was stated publicly, argued for openly, and treated as a reasonable response to a genuine problem.
What was not stated publicly was the mechanism. The SIFC’s founding documentation gave it authority to coordinate “Pakistan Army’s assistance for the purposes” of facilitating investment in five priority sectors: defense, agriculture, minerals, information technology, and energy. Army personnel occupied key coordination roles across the SIFC Secretariat. The implementation committee had a director general drawn from the armed forces. Articles 10F and 10G of the Board of Investment Act, under which the SIFC was constituted, granted broad legal immunity to its officials in decision-making, including those seconded from the military. No annual report was required. No public accounting of which investors were seen, which concessions were offered, or which regulatory exemptions were granted on whose behalf.
The IMF’s Governance and Corruption Diagnostic Assessment, finalized in November 2025 after Pakistan delayed its publication for three months, named the SIFC explicitly as a major governance concern. The report documented the broad legal immunity enjoyed by SIFC officials, many from the armed forces. It noted the council’s authority to exempt projects from regulatory requirements. It questioned the parallel functioning of the SIFC and the Board of Investment, which continues to operate separately despite the SIFC’s mandate overlapping with it entirely. The council, the report said, operated with “untested transparency and accountability provisions.” The IMF demanded that Pakistan publish the SIFC’s first annual report detailing every investment facilitated, every concession granted, and the rationale behind each decision. That report, as of the third EFF review concluded this week, has still not been published in final form.
The SWF’s architecture had its own accountability gaps, and the IMF identified them from the moment the law was passed. The fund’s Supervisory Council was chaired by the Prime Minister, with the Finance Minister, Planning Minister, Economic Affairs Minister, and State Bank Governor as members. Its Board of Directors was to be appointed by the federal government, with no mandatory cooling-off periods preventing the rotation of officials directly from state positions into board seats. Section 50 of the SWF Act granted the fund a set of legal exemptions that further insulated it from the standard oversight mechanisms that apply to state-owned enterprises.
But the structural problem was not the governance of the fund itself. It was the combination of what the fund held and what it was legally empowered to do with those holdings.
OGDCL, in the fiscal year ending June 2024, produced an average of 33,117 barrels of crude oil per day, accounting for 46 percent of Pakistan’s total national oil production and 28 percent of national gas output, according to the company’s own results presentation. PPL’s Sui gas field in Balochistan has been in production since 1952, supplying domestic gas through decades of under-royalty arrangements that have left Balochistan among the poorest provinces in the country while its gas heated the rest of it. NBP manages government payroll accounts, runs pension disbursements, and holds the savings of a significant portion of Pakistan’s formal workforce. Mari Petroleum operates fields across Sindh and Punjab. These are not paper assets. They are the accumulated extraction capacity of a state that has used public money, eminent domain, and sovereign rights over subsurface resources to build enterprises whose dividends, when they flow to the national exchequer, constitute a portion of the government’s non-tax revenue base.
The original SWF Act gave the fund the power to sell these assets, to retain their revenues, and to borrow against them as collateral, all without the competitive process that exists to ensure the public receives fair value when public assets change hands. A Gulf sovereign wealth fund could acquire a stake in OGDCL through a direct government-to-government transaction, at a price negotiated at the SIFC’s Apex Committee table, without any of the disclosure requirements that would apply to a Privatisation Commission sale. The price would not be publicly contested. The terms would not be publicly known. The revenue generated by OGDCL would not flow to the treasury in the years following the transaction; it would remain within the fund.
The IMF called this a fiscal black hole. They were describing the SWF. They were also describing the SIFC. They were describing what the two instruments would produce together.
What Pakistan has now agreed to, under the third review of the thirty-seven-month Extended Fund Facility, dismantles the SWF’s operational capacity entirely. The fund will not be allowed to sell assets directly to foreign nations. Any transaction involving the seven entities must follow, in the language of Pakistan’s written commitments to the IMF, “open, competitive, transparent and non-discriminatory procedures, requiring minimum disclosure requirements for each stage of the process, including on beneficial ownership.” The fund is barred from borrowing in any form and cannot issue guarantees, provide collateral including over SOE shares, or take on debt. It cannot lend to public or private entities, cannot participate in public-private partnerships, and cannot receive contributions from the State Bank of Pakistan, state-owned enterprises, or any other public body. All revenues from the fund and its sub-funds go directly to the government. The exemptions under Section 50 of the SWF Act are withdrawn. Appointments to the board and advisory committee must be made through transparent, merit-based processes with cooling-off periods.
The fund will remain non-operational until Parliament passes these amendments. Pakistan’s written commitments state this explicitly: “The execution of the SWF Act and any other action aimed at preparing the SWF for its operation will only be carried out after these amendments become law.” Finance Minister Muhammad Aurangzeb personally assured the IMF that the agreed amendments will be implemented. The government submitted six amendments to Parliament for the SOE laws governing the seven entities and has committed to finalizing laws for the remaining entities by August 2026.
The finance ministry missed the March 2026 deadline for placing these amendments before Parliament.
The IMF approved two loan tranches worth $1.2 billion this week.
The vault has been locked. The sales team is intact.
The SIFC continues to hold its Apex Committee meetings. The Chief of Army Staff continues to sit at that table. The legal immunity its officials enjoy under Articles 10F and 10G of the Board of Investment Act has not been revoked. The authority to exempt projects from regulatory requirements has not been revoked. The army’s role as guarantor of economic continuity to Gulf investors, which was the premise on which the entire arrangement was built, has not changed. What has changed is that the SWF can no longer be the execution vehicle for whatever the SIFC negotiates. Any future disposition of the seven enterprises must go through the Privatisation Commission’s competitive process, with disclosed pricing and beneficial ownership requirements. The shortcut that made the SIFC’s one-window model operationally meaningful for a direct asset transfer has been closed.
The question of whether Gulf investors wanted the shortcut more than they wanted the assets is answered, at least partially, by the investment data. According to State Bank of Pakistan figures, Pakistan received $2.46 billion in total FDI in FY2025, against the SIFC’s stated target of $5 billion. Net FDI then fell 41 percent in the first seven months of FY2025-26 compared to the same period the prior year. The KSE-100 Index gained 85 percent in rupee terms during 2024, making it one of the best-performing equity markets in the world that year, but analysts at Topline Securities attributed the performance to rate cuts, a stabilizing rupee, and IMF disbursements, not to an influx of Gulf direct investment. On privatisation, which the SIFC was also mandated to accelerate, the government’s completed transaction list has one entry: Pakistan International Airlines, an airline that was losing money before it was sold.
The government that built both instruments was the Pakistan Democratic Movement coalition of Shehbaz Sharif, which came to power following the removal of Imran Khan in April 2022. It passed the SIFC legislation in June 2023 and the SWF Act in August 2023, in the same summer, with the same cabinet, under the same stated logic of urgency. The foreign exchange crisis of early 2023 was real. Reserves had fallen to a few weeks of import cover. The risk of a sovereign default was documented and proximate. Speed was a genuine constraint.
But speed was also a framing. The competitive bidding process the Privatisation Commission runs is not primarily slow because of bureaucratic inefficiency. It is slow because it requires disclosure, public notice, open tendering, and documentation of the price paid. Removing those requirements does not only accelerate a transaction. It removes the mechanism by which the public determines whether the price was fair, whether the buyer was selected on merit, and whether the terms served the national interest. The SIFC and SWF together would have removed those mechanisms for the eight billion dollars in public assets that the government had chosen to make available. The urgency argument justified the removal. Whether the urgency required it is a different question.
The government now committed to the IMF on dismantling the SWF’s operational powers is also led by Shehbaz Sharif. The finance minister who assured the IMF and missed the March 2026 deadline is Muhammad Aurangzeb, a banker who came to the portfolio with the Fund’s confidence behind him, and whose credibility is now formally attached to amendments his ministry has not yet submitted.
Seven companies sit in a legal holding room. OGDCL contributes 46 percent of the country’s crude oil production. PPL’s Sui field has supplied gas to Pakistan since 1952. NBP runs government financial transactions and holds the savings of a significant share of the formal workforce. Neelum-Jhelum Hydropower Company, with an installed capacity of 969 MW, has been intermittently non-operational since July 2022, when its tailrace tunnel cracked and collapsed; electricity generation was restricted to 530 MW in April 2024 and halted for physical inspection of the headrace tunnel in May 2024, meaning one of the seven assets is a troubled project carrying approximately $2.89 billion in construction costs and unresolved structural damage. Once Parliament passes the amendments the finance ministry has already missed the deadline to submit, the fund holding all seven will be a holding company in the technical sense: it will hold shares and do nothing else.
Meanwhile, the SIFC’s Apex Committee will continue to meet. The COAS will continue to sit at the table. Gulf investors will continue to be received by a body whose officials enjoy legal immunity, whose concessions are not publicly disclosed, and whose first annual report has not yet been published in final form.
The question the record raises and cannot yet answer: with the SWF’s direct-sale powers gone, what exactly does the army’s seat at the Apex Committee now produce, for whom is it producing it, and why, across two years of meetings and Gulf visits and investment pledges, has it produced so little of what it promised?