India's Stance on IMF Loans to Pakistan
India abstained from voting during an International Monetary Fund (IMF) board meeting on loans to Pakistan, citing concerns over the effectiveness of such bailouts and the potential misuse of funds for state-sponsored cross-border terrorism.
IMF Loan Review
- The IMF reviewed a $1 billion extended fund facility and a $1.3 billion credit line for climate resilience efforts to Pakistan.
- The meeting coincided with heightened tensions following a terrorist attack in Pahalgam, which India blamed on Pakistan.
India's Concerns
- India argued that rewarding Pakistan might endorse its continued sponsorship of terrorism, risking the reputation of funding agencies.
- New Delhi emphasized the importance of integrating moral values into the procedures of global financial institutions like the IMF.
Historical Context
- In 35 years since 1989, Pakistan received IMF disbursements in 28 years.
- In the past five years, Pakistan engaged in four IMF programmes, yet failed to establish a stable macroeconomic policy environment.
- India questioned the effectiveness of IMF programme designs and their implementation by Pakistan.
India's statement noted Pakistan's military interference in economic matters, posing risks of policy slippages and reform reversals. The IMF, while acknowledging India's concerns, reportedly approved the support, according to Pakistani government sources.
