India Opposes Fresh IMF Loans to Pakistan Citing Terror Financing Concerns
India opposed the International Monetary Fund's proposal for new loans totaling $2.3 billion to Pakistan, abstaining from the crucial vote. New Delhi expressed concerns that the funds could be misused to finance state-sponsored cross-border terrorism, especially amid the recent conflict. Despite India's opposition, Pakistan's Prime Minister's Office later announced that the IMF board had approved an immediate disbursement of approximately $1 billion under the existing Extended Fund Facility arrangement for the country's troubled economy.
Unpacked:
India abstained because IMF rules do not allow a formal 'No' vote. By abstaining, India formally recorded its strong objections and concerns about Pakistan’s poor record with previous IMF loans and possible misuse of funds, particularly regarding state-sponsored terrorism and lack of economic reforms.
India’s concerns are heightened by a recent escalation in conflict, including Indian airstrikes on alleged terror camps in Pakistan following a terror attack in Kashmir that killed 26 people. India accuses Pakistan of supporting militant separatism and fears IMF funds could indirectly finance such activities.
Pakistan has received IMF aid 28 times in the past 35 years, including four separate programs since 2019. India criticizes this frequent assistance, arguing that it has failed to bring about significant reforms or transparency, instead perpetuating problematic economic practices and military dominance.
Despite India’s opposition, the IMF board approved an immediate disbursement of about $1 billion to Pakistan under the Extended Fund Facility. Pakistan’s Prime Minister’s Office welcomed the decision, viewing it as crucial for addressing the country’s economic challenges.