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The International Monetary Fund (IMF) has concluded the initial review of Pakistan’s economic reform agenda under the Extended Fund Facility (EFF), unlocking a financial disbursement of approximately USD 1 billion.
In a post on social media platform X, the IMF announced: “IMF Board approved the first review of Pakistan’s economic reform program under the EFF, enabling a disbursement of ~ $1 billion, reflecting strong program implementation which has contributed to continuing economic recovery.”
India Opposes IMF Loan Over Pakistan’s Role in Cross-Border Terrorism
India has voiced strong objections to the IMF’s decision to continue funding Pakistan, arguing that offering financial aid to a nation allegedly supporting cross-border terrorism sets a dangerous precedent and undermines the credibility of international financial bodies.
Officials from the Indian government stated that this stance was communicated during the IMF’s assessment of the $1 billion EFF loan and the potential approval of a new USD 1.3 billion Resilience and Sustainability Facility (RSF) for Pakistan.
Why Did India Abstain from the Vote?
Sources clarified that India did not vote against the disbursement because IMF procedures do not allow formal “no” votes. Instead, countries can only express dissent by abstaining. India, therefore, abstained from the vote to register its opposition within the bounds of IMF protocols.
India also used the opportunity to formally raise concerns over the effectiveness of repeated IMF interventions in Pakistan. Officials pointed out that Pakistan has been under IMF support for 28 of the last 35 years, including four separate programs in just the past five years, with limited evidence of lasting reforms.
New Delhi also criticized the ongoing influence of the Pakistani military in the country’s economic decisions. Indian authorities argued that this undermines civilian oversight, transparency, and the integrity of reform efforts.
A UN report from 2021 was referenced, describing military-owned businesses as the largest commercial conglomerates in Pakistan. India further highlighted the military’s control of the Special Investment Facilitation Council, raising red flags about the misuse of international financial aid.
Concerns Over Misuse of Funds for Terror Activities
In its official remarks, India accused Pakistan of potentially diverting IMF funds to support “state-sponsored cross-border terrorism.” It stressed the importance of enforcing stricter oversight mechanisms to prevent misuse of loans for non-economic or militaristic purposes.
India noted that several other IMF member nations echoed these concerns, though the institution’s responses were restricted due to procedural limitations. According to Indian authorities, this reveals a serious flaw in how moral and ethical considerations are handled within global financial decision-making frameworks.
Understanding IMF Voting Rules
The IMF Executive Board comprises 25 Directors, each representing either a single country or a coalition of nations. Voting power is weighted based on the economic strength of each member, meaning larger economies like the U.S. have greater influence.
Unlike the United Nations, the IMF does not permit formal “no” votes. Decisions are usually made through consensus. If a vote is required, Directors can either vote in favor or abstain, as was the case with India during the latest session.
