India Abstains from Vote, Citing Terror Funding Concerns as IMF Approves $1.3 Billion Loan to Pakistan
- MGMMTeam
- May 11
- 2 min read
The International Monetary Fund (IMF) conducted a review of Pakistan's $1 billion Extended Fund Facility (EFF) on Friday, while also considering a new $1.3 billion loan through its Resilience and Sustainability Facility (RSF). India, an influential member of the IMF, raised concerns regarding the efficacy of IMF bailouts to Pakistan, pointing to the country’s poor track record and the potential misuse of debt funds.
Questioning the Effectiveness
India highlighted that Pakistan has repeatedly turned to the IMF for assistance, with 28 disbursements over the last 35 years. “In just the past five years, there have been four IMF programs. If the previous ones had worked, Pakistan would not be seeking yet another bailout,” India remarked, casting doubt on whether the issue lies in the “effectiveness of the IMF's program designs, their monitoring, or Pakistan's implementation.”
Military's Economic Influence
India also emphasized the role of Pakistan’s military in the nation’s economic affairs, which continues to pose challenges to reform initiatives. “Even under civilian rule, the military maintains significant control over domestic politics and extends its influence into the economy,” India said, referencing a 2021 UN report that labeled military-linked businesses as Pakistan’s largest conglomerate.
Political Influence on IMF Lending
India pointed to findings in the IMF’s own Evaluation Report, which noted that “political considerations play a crucial role in IMF lending to Pakistan.” India warned that repeated bailouts have burdened Pakistan with an unsustainable level of debt, making it a “too big to fail debtor” for the IMF.
Concerns over Funding Misuse
India raised alarms about the potential diversion of IMF funds, warning that “rewarding continued support for cross-border terrorism sends a harmful signal to the global community.” The country cautioned that such financial support risks “damaging the reputations of agencies and donors” and “undermines global values.”
A Call for Reform
India urged the IMF and other international bodies to better incorporate moral considerations into lending decisions. “The risk of these funds being misused for military or terrorist purposes resonated with multiple member nations,” India said, adding that the IMF’s response remains limited by “procedural and technical constraints.”
In response, the IMF acknowledged India’s concerns, noting its abstention from voting on the new program for Pakistan.
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