India-Pakistan Conflict: India raises concerns over IMF’s bailout for Pak, flags possible use of funds for cross-border terrorism

At a key executive board meeting of multilateral lender International Monetary Fund (IMF) on Friday, India raised serious concerns over Pakistan’s poor record and the possibility that the country could be misusing the funds for “state-sponsored cross border terrorism”. The development assumes significance as the Indian Armed Forces have been intercepting Pakistani military’s violations on Indian soil with its attempts to target several Indian cities blocked and responded to swiftly by the Indian Armed Forces.

The IMF was conducting a scheduled review of its Extended Fund Facility (EFF) lending program to the tune of $1 billion for Pakistan. The multilateral lender was also considering fresh lending of $1.3 billion to India’s bordering nation under its Resilience and Sustainability Facility (RSF) lending program. 

India voiced its concerns about the possibility of terror funding using the funds given the neighbour’s poor track record.  

“As an active and responsible member country, India raised concerns over the efficacy of IMF programs in case of Pakistan given its poor track record, and also on the possibility of misuse of debt financing funds for state sponsored cross border terrorism,” read a Ministry of Finance statement. 

Meanwhile, blackouts were imposed in several Indian cities including Akhnoor, Samba, Samba, Rajouri and Ferozepur on Friday, and explosions heard in Samba, Nagrota and Rajouri. 

Pakistan, a long-time IMF borrower 

In the 35 years since 1989, Pakistan has had disbursements from the IMF in 28 years.

In the last five years, since 2019, there have been four IMF programs for Pakistan.

“Had the previous programs succeeded in putting in place a sound macro-economic policy environment, Pakistan would not have approached the Fund for yet another bail-out program,” noted the statement.