According to a statement issued by the Finance Ministry today, India has stopped considering the review of the International Monetary Fund (IMF) of USD 1 billion Extesting Fund Facility (EFF) and considering a fresh USD1.3 billion flexibility and stability facility (RSF) for Pakistan.
In its official statement, India expressed significant concern about Pakistan’s track records with previous IMF loans and potential misuse of funds for “state-rich border terrorism”.
The statement exposed the long history of Pakistan as a “long borrower” from the IMF, given that the country has received reclusion in 28 out of the last 35 years since 1989. Recently, Pakistan has introduced four separate IMF programs in the last five years.
The Indian Finance Ministry said, “The previous programs managed to help in a sound macro-economic policy environment, Pakistan would not have contacted the fund for another bail-out schedule yet.”
India’s concerns expanded beyond economic views to the issues of governance, especially the role of Pakistan’s army in economic matters. The statement said that “there is a significant risk of policy slippery and reforms in the economic matters of Pakistan’s army deeply intervene in economic matters.” It referred to a 2021 United Nations report, stating that military-linked businesses were described as the “largest group in Pakistan” and the current lead role of the Army in Pakistan’s Special Investment Facilitation Council.
India had the ability to support terrorism, especially for IMF funds. India’s statement said, “Awarding sponsor of cross-border terrorism sends a dangerous message to the global community, exposes funding agencies and donors for reputed risks, and makes fun of global values.”
The ministry also said that while many other member countries shared India’s concerns about the possible misuse of international financial aid, “IMF reaction is operated by procedural and technical formalities.” India specialized as a need to highlight a serious gap, it is necessary to ensure that the procedures after global financial institutions give proper consideration to moral values. “
Despite India’s objections, IMF proceeded with its review of loan programs, only focused on India’s statements and focused on its restraint by vote.
This development occurred amid tensions between two neighboring nuclear powers, India accused Pakistan of repeatedly supporting terrorist activities in the region, which Pakistan has continuously denied.
Financial analysts noted that Pakistan’s economy faces significant challenges, including high inflation, reducing foreign exchange reserves, and adequate external debt burden, which makes international financial assistance important for the country’s economic stability. (AI)
