IMF grants $1 billion loan to Pakistan despite escalating tensions

New Delhi (India) May 10: At the Executive Board meeting of the International Monetary Fund on Friday, India voiced concerns over the IMF's financial support for Pakistan.

Despite not casting a vote, India stated that "Pakistan has been a prolonged borrower from the IMF, with a very poor track record of implementation and of adherence to the IMF's program condition."

The IMF's plan to offer loans of up to $2.3 billion, including a new $1.3 billion Reliance and Sustainability Facility credit program, was met with opposition from India.

Because of its poor track record and the possibility that debt financing monies may be moved to fund state-sponsored cross-border terrorism, India has previously voiced concerns about the efficiency of IMF initiatives in Pakistan.

When the IMF board assembled on Friday to examine the Extended Fund Facility (EFF) financing program (worth USD 1 billion) while looking into a new Resilience and Sustainability Facility (RSF) lending program (worth USD 1.3 billion) for Pakistan, India raised its opposition.

India could only abstain from voting against the decision as consensus makes up the majority of IMF decisions. Members can only cast "in favour" or "abstain" votes when they actually appear. A "no" vote or straight rejection of a motion is not formally handled.

India refused to provide financial help to a state that still offers and aids terrorist organisations that carry out cross-border assaults. India said that giving money to a state like that is against international law and might harm the IMF's standing as an impartial organisation.

The loan was accepted in spite of India's abstaining, indicating widespread international agreement that was probably caused by concerns about regional instability in the event of a Pakistani failure. However, India used its vote to express its displeasure and highlight the dangers of supporting a militarised and primarily broken economy on a global scale.

Umar Abdullah expressed his displeasure by posting on social media platform X that,“I’m not sure how the “International Community" thinks the current tension in the subcontinent will be de-escalated when the IMF essentially reimburses Pakistan for all the ordnance it is using to devastate Poonch, Rajouri, Uri, Tangdhar & so many other places.”

Aadrika Tayal