US Urges Pakistan to Enhance Oversight of Defence Budgets

The United States has instructed Pakistan to place its defence and intelligence budgets under civilian oversight to improve fiscal transparency. This directive comes from the US State Department, which emphasized the importance of parliamentary supervision in its recently released 2025 Fiscal Transparency Report.

In the report, Washington highlighted that the military and intelligence budgets currently lack adequate public oversight. It proposed that Pakistan take significant steps to enhance fiscal accountability, including making its executive budget proposal available to the public in a timely manner. According to the report, “the military and intelligence budgets were not subject to adequate parliamentary or civilian public oversight.”

The document further criticized Pakistan for not publishing its executive budget proposal within a reasonable timeframe, which has limited public access to information about the government’s debt obligations. Dawn, a prominent Pakistani news agency, reported on these findings, underscoring the need for improved transparency in financial matters.

Concerns about fiscal oversight coincide with long-standing issues regarding counter-terrorism in the region. Several reports from US and international agencies have alleged that certain factions within Pakistan have either tolerated or facilitated militant groups that operate as strategic proxies. India has consistently claimed that these groups receive state sponsorship, contributing to instability in the Kashmir region and throughout South Asia.

The situation has escalated following a recent counter-terror operation, known as Operation Sindoor, during which Indian forces targeted key militant leaders and their hideouts. Videos emerged showing senior officials from the Pakistani army attending funerals of those killed in the operation, raising further questions about the country’s military ties to these groups.

The US Congressional Research Service (CRS) has noted that Pakistan continues to serve as a haven for numerous Islamist extremist and terrorist organizations. The CRS report indicated that Islamabad has, at times, supported proxy groups during regional conflicts, further complicating counter-terrorism efforts.

Global watchdogs have also expressed concern about Pakistan’s counter-terror financing mechanisms. The Financial Action Task Force (FATF) has called for stronger oversight, even after Pakistan was removed from its “grey list.” This ongoing scrutiny reflects the international community’s apprehensions regarding Pakistan’s efforts to combat terrorism financing effectively.

The implications of the US’s recommendations are significant, not only for Pakistan’s fiscal governance but also for regional stability. Implementing these changes could enhance Pakistan’s credibility on the global stage and address persistent issues related to fiscal accountability and counter-terrorism.