The International Monetary Fund (IMF) on Friday approved the immediate disbursement of about $1 billion to Pakistan under the ongoing Extended Fund Facility, according to the Pakistan PMO, despite India’s conveying its strong dissent over these funds being misused for cross-border terrorism.
The global moneylender had reviewed the extended fund facility (EFF) lending programme ($1 billion) and also considered a fresh resilience and sustainability facility (RSF) lending programme ($1.3 billion) for Pakistan.
According to a statement by the Pakistan PMO, Prime Minister Shehbaz Sharif expressed satisfaction over the approval of a $1 billion installment, asserting that Pakistan’s economic situation had improved and the country is moving towards development.
India had earlier raised concerns over the efficacy of IMF programmes in the 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.
India registered its protest during a board meeting of the IMF and abstained from voting on the bailout package to Pakistan, because IMF rules do not permit a formal “no" vote. The IMF took note of the India’s remarks and its abstention from the vote.
India told the IMF that Pakistan has been a “prolonged" borrower with a poor track record of implementation and adherence to programme conditions. Out of the last 35 years since 1989, the IMF has disbursed funds to Pakistan for 28 years, including four programmes in just the last five years without significant reform, it said.
India also highlighted that if these programmes had succeeded, Pakistan would not have approached for another bailout package, adding that the Pakistani military’s deeply entrenched interference poses significant risks to policy making and reforms.
India also pointed out that rewarding continued sponsorship of cross-border terrorism sends a dangerous message to the global community, exposes funding agencies and donors to reputational risks, and makes a mockery of global values, according to the Indian finance ministry.
Pakistan and the IMF had reached a three-year, $7 billion aid package deal in July last year with the new programme set to allow the country to cement macroeconomic stability and create conditions for stronger, more inclusive and resilient growth.
This comes amid a military standoff between the two neighbours, following India’s missile strikes on “terror targets" in Pakistan and Pakistan-occupied Kashmir. These were carried out as a retaliation to cross-border links to the Pahalgam terror attack, which claimed 26 lives, on April 22.
Following India’s strikes in Pakistan, Islamabad has resorted to unprovoked missile, artillery and drone attacks along the International Border and the Line of Control (LoC) in Jammu and Kashmir, targeting military installations in J&K, Punjab and Rajasthan. These brazen attacks have escalated tensions between the two neighbouring countries.
