Pakistan Country Profile

Snapshot of the Pakistan Country Profile


Pakistan has suffered high political instability since the assassination of the Pakistani People's Party leader Benazir Bhutto in 2007. Companies mention this instability as the most serious problem to doing business followed by the endemic corruption at every level of government. The fight against corruption is reportedly not a priority of the government and the sporadic allegation of taking bribes are used as political weapons. The political elite is regarded as corrupt by Pakistani people and current President Zardari is sometimes referred to as 'Mr. 10%', due to several allegations of corruption. Lower levels of administration are also rife with corruption, from police service to procurement to the provision of basic public services. The army's influence on the political and economic scene is huge and opens the way for many conflicts of interests. Business-to-business corruption is also a major problem, with the population actually perceiving the private sector to be just as corrupt as the public sector.

Positive developments in relation to corruption and investment:

  • Pakistani legislation contains hard penalties for both public and private corruption. In case of private assets disproportionate to their income, the burden of proof rests on civil servants to prove that they earned it in a legal way.
  • Since 2002, Pakistan has started working at the preventive site of the fight against corruption. The National Anti-Corruption Strategy (NACS) project is structured around the pillars of the National Integrity System, a concept taken from Transparency International and adapted to local conditions.

Risks of corruption:

  • The military involvement in virtually any sector of the economy makes the awarding of public contracts unfair, as companies with ties to the military elite have a status of preferential bidders.
  • Protection of property rights and the fair decisions in commercial disputes are hampered by and inefficient and corrupt judiciary system. Bribes are reportedly extorted by judges as well as by lawyers.
  • Encounters with tax authorities are reportedly often used by officials as an opportunity to extort bribes and by companies as an opportunity to obtain lower tax rate in change of undue payments. The situation is worsened by complex and non-transparent regulation, which allow for facilitation payments. Tax evasion is also a huge problem, distorting competition between companies that comply with tax regulations and those which do not.
  • Public servants enjoy a wide margin of discretion, which makes the implementation of the law unpredictable. This situation opens the way to corruption and favouritism.


We are currently conducting a survey, which takes just 5 minutes to complete, to improve the quality of the Business Anti-Corruption Portal. We would therefore value your feedback and appreciate if you took a moment to respond to some questions. Click here to take the survey.