IMF Loan and India's Stance
The International Monetary Fund (IMF) approved a $1-billion tranche for Pakistan as part of its $7-billion Extended Fund Facility (EFF) and a $1.3 billion tranche under the Resilience and Sustainability Facility (RSF).
India’s Abstention and Concerns
- India abstained from voting, expressing concerns about the efficacy of IMF programs for Pakistan due to its poor track record.
- India was apprehensive about the misuse of debt financing for state-sponsored cross-border terrorism.
- India conveyed a strong dissent during the board meeting over these issues.
Opposition and Voting Procedures
- Opposition parties in India questioned the government's decision to abstain rather than vote against the loan.
- IMF rules do not allow a formal "no" vote, leading to India's abstention.
India’s Critique of IMF’s Support to Pakistan
- India highlighted Pakistan's history of frequent IMF bailouts and poor adherence to program conditions.
- Since 1989, Pakistan has had IMF disbursements for 28 out of 35 years, with four programs in the last five years.
Concerns About Military Influence
- India noted the Pakistan military's substantial interference in economic affairs, posing risks to policy implementation and reform.
- The military's involvement is evident in its role in the Special Investment Facilitation Council of Pakistan.
- A 2021 UN report described military-linked businesses as the largest conglomerate in Pakistan.
IMF's Role and Evaluation Report
- The IMF Report on Evaluation of Prolonged Use of resources suggested political influences play a role in lending to Pakistan.
- Repeated bailouts have made Pakistan a significant debtor for the IMF, increasing their debt burden.
Comments from India’s Foreign Secretary
- India’s Foreign Secretary, Vikram Misri, urged the IMF Board to consider the facts before approving further financial support to Pakistan.
Journalist Background
Aanchal Magazine, Senior Assistant Editor at The Indian Express, reports on macroeconomics, fiscal policy, and economic science, with 13 years of experience.
