India Raises Red Flag Over IMF’s New Bailout for Pakistan Amid Terrorism Concerns
India Slams Pakistan’s Military-Economic Nexus, Warns IMF of Global Reputational Risks
BNH NETWORK
IMP- HIGHLIGHTS
- IMF reviews new $1.3 billion loan for Pakistan; India flags risks of fund misuse.
- Pakistan’s record: 28 years of IMF bailouts in 35 years, 4 programs since 2019.
- India cites military’s outsized role in economy as key hurdle for real reforms.
- Concerns over terror financing echoed by other IMF members, but procedural hurdles limit response.
- India abstains from IMF vote, calls for reforms to integrate moral values in lending.
IMF Reviews New $1.3 Billion Loan for Pakistan; India Voices Serious Concerns
New Delhi - The International Monetary Fund (IMF) today reviewed its Extended Fund Facility (EFF) lending program of $1 billion for Pakistan while weighing approval of an additional $1.3 billion under the Resilience and Sustainability Facility (RSF). India, as an active and responsible IMF member, raised robust concerns over Pakistan’s dismal record in implementing IMF-backed reforms and the high risk of misuse of funds for state-sponsored cross-border terrorism.
PAKISTAN'S LONG IMF DEPENDENCY UNDER SCRUTINY
India underscored Pakistan’s chronic dependence on IMF bailouts. Since 1989, Pakistan has received IMF disbursements for 28 of the past 35 years, including four bailout packages since 2019 alone. New Delhi questioned why successive IMF programs have failed to establish a sustainable macroeconomic framework in Pakistan, warning that continued financial support raises questions over both IMF program design and Pakistan’s commitment to reforms.
MILITARY'S ECONOMIC GRIP: A RECIPE FOR POLICY FAILURE
India spotlighted Pakistan’s unique challenge—a military that not only dictates security policy but also deeply influences economic governance. New Delhi referred to a 2021 UN report describing the Pakistani military’s business empire as the country’s largest conglomerate, and pointed out that the army now spearheads the Special Investment Facilitation Council, tightening its grip over economic decision-making despite a civilian government facade.
FUNDING TERROR: A GLOBAL REPUTATIONAL RISK
Highlighting grave security concerns, India flagged the IMF’s own report evaluating Pakistan’s prolonged use of Fund resources, which acknowledged perceptions of political considerations in approving IMF lending. India warned that providing fresh funds to Pakistan—despite its history of cross-border terrorism—sends a dangerous message, risks reputational damage to global funding agencies, and undermines international norms.
IMF RESPONSE: FORMALITIES VS. MORALITY
While India’s concerns over the misuse of fungible IMF inflows for military and terrorist activities resonated with several IMF members, the Fund’s response remained circumscribed by procedural formalities. India stressed that this exposed a critical gap and called for urgent reforms to integrate moral and security considerations into IMF’s lending framework.
FACT FILE:
| DETAIL | INFORMATION |
|---|---|
| Meeting | IMF Review of EFF & RSF for Pakistan |
| Loan Amounts | $1 Billion (EFF), $1.3 Billion (RSF) |
| India’s Position | Raised concerns over misuse of funds, abstained from the vote |
| Pakistan’s IMF Record | Bailouts in 28 of the past 35 years |
| Latest Package | 4th IMF program since 2019 |
| Main Concerns | Terror financing, military's economic role, repeated bailouts |
| Key Report Cited | IMF Report on Prolonged Use of IMF Resources |
| UN Report Reference | 2021: Military is Pakistan’s largest business conglomerate |
