Mohammad Majid Bashir
During his visit to China for Internal Judicial Conference in Hangzhou in April 2025, the Chief Justic of Pakistan(CJP) Justice Yahya Afridi signed a Memorandum of Understanding (MoU) with his Chinese counterpart Justice Zhang Jun calling for enhancing bilateral judicial cooperation, institutional linkages, and capacity building initiatives.
This MoU reflects both CJs’ commitment to knowledge exchange on international commercial law, arbitration, enforcement of awards and decision among the countries to make a fair trade at global level. Two decades ago, Pakistan also hosted similar conference in 2005 in Islamabad wherein the then President and the Chief Justice of the Chinese People’s Supreme Court had called for a vital role by higher judiciary in economic development through improved bilateral judicial cooperation and functional justice system to attract investments and confidence of the investors in the legal systems.
The 2025 MoU also urges the need to handle emerging cybercrimes and financial litigations, cases regarding legal suits on climate change, alternate dispute resolution, mutual legal assistance in civil matters and use of technology in judicial systems.
In reflection of the two CJs’ initiative on enhancing role and capacity of the judiciary on global economic and investments, one can rightly look at the recent interaction of the International Monetary Fund (IMF)’s delegation with the highest judiciary probably in governance and judicial accountability perspective pointing to the intersection of international financial oversight and judicial independence.
For legal professionals, this visit raises several critical questions: Why did the IMF feel the need to interact with the Supreme Court? What are the broader implications of such an engagement? How does this align with the principles of judicial independence and the separation of powers?
To look at these questions, one may think of Pakistan’s ongoing engagement with the IMF under the Extended Fund Facility (EFF) has necessitated comprehensive reforms, not only in the financial sector but also in governance and legal frameworks. The IMF’s Governance and Corruption Diagnostic Assessment (GCDA) mission is a key component of this process. The mission aims to evaluate governance structures, identify corruption vulnerabilities, and recommend actions to enhance institutional integrity.
The Finance Division, the Government of Pakistan requested the Supreme Court’s participation in this process, recognizing that legal and judicial reforms are integral to fostering economic stability and investor confidence. However, CJP was cautious about this engagement, emphasizing that direct interaction between the judiciary and such international missions is uncommon and must be approached carefully to safeguard judicial independence.
One of the outcomes of the meet seems that IMF might have looked at exploring legal avenues to ensure recovery of its loans as per conditions of its agreement. One potential strategy involves expediting the disposal of applications in the Court, wherein stays had been granted, which often delay financial recoveries. By engaging with the judiciary, IMF could be seeking mechanisms that prevent prolonged legal hurdles obstructing debt repayment.There is a possibility that the IMF is subtly indicating to the Supreme Court and the rest of Pakistan that future loans could be tied directly to the efficiency of recovery processes. If true, this would mean that the judiciary may have an indirect but crucial role in determining Pakistan’s ability to secure international financial assistance, making legal and institutional cooperation an unstated prerequisite for any future IMF engagement.
Another possibility is that the IMF is looking to work alongside the Supreme Court in drafting a legal framework that promotes public-private partnerships. Given that Pakistan’s economic situation demands more private sector involvement in infrastructure and service delivery, IMF could be aiming to introduce legal safeguards that encourage such investments while minimizing risks for foreign and local investors.
IMF may also be seeking assurances from the Supreme Court that it will not intervene in financial and economic matters under Article 184(3) of the Constitution, which deals with issues of public importance. This could mean that IMF wants a commitment that the judiciary will not obstruct economic policies that may be unpopular but necessary for financial stability. This is particularly significant considering that judicial interventions in fiscal matters have, at times, led to policy reversals in Pakistan.Likewise, article 184 of the Constitution is a guarantee to every citizen in case the rights of the citizen are infringed by anyone including the Government.The loan and debts services repayment on behalf of people of Pakistan to IMF, a continuous financial burden, is a menace.
The common people in the country have no idea who takes loans from lenders and why they are taken and on which grounds the loan repayment schedules, debt serving, and tax policies are farmed. The loans are considered per capita which means every citizen on behalf of the country remains in debt; that is why many consider this process a. punishment to the citizens, though the government claims that these loans facilitate change in the country. With this wide gap between the common people and the successive governments on the debates around loans, issue around fundamental rights of the people emerges which ultimately comes under the domain of the judiciary under the article 184(3) of the Constitution that gives immense power to judiciary. The Court can come to the rescue of the people if the Federation and the provinces make and impose tough and stern legislation to collect extra taxes to secure loans and debt financing from international financial institution for ambitious projects or politically motivated uncertain development schemes that are considered flimsy by many in opposition and common people who are not directly benefitted from these schemes.
The judiciary comes to rescue the citizen of Pakistan as the recent judicial activism and sue-motto actions by the Supreme Court and the High courts had done a great deal of good in establishing a new equilibrium between executive, parliament, and judiciary, especially in the field of excessive taxation and financial projects which later become financial labilities on the government and the citizens.The Supreme Court may examine all the fiscal plans for loans,debts services initiatives with the international institutions strictly in compliance with the Fiscal Responsibility and Debt Limitation Act 2005.The fiscal legislation should be a need rather than external pressures for repayments to international institutions.Pakistan’s legal system must evolve to provide greater legal security to the citizen of Pakistan and the investors.
By emphasizing judicial accountability and efficiency, this engagement could lead to stronger legal frameworks that enhance governance, reduce corruption, and foster economic stability. Whether this engagement with the IMF leads to positive judicial reforms or sets a precedent for external influence in legal affairs will depend on how these discussions translate into tangible legal and economic changes in the years ahead.
(The author is a former judge and lawyer)
