India has voiced significant concerns over Pakistan’s Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) proposed by the International Monetary Fund (IMF), abstaining from voting on both. India’s finance ministry raised alarms about Pakistan’s governance structure, specifically the military's deep involvement in economic affairs, and questioned the effectiveness of past IMF programs in supporting Pakistan’s economic recovery.
In an official statement, India expressed unease about the potential misuse of IMF funds, emphasizing the risk that these funds could be diverted to support state-sponsored cross-border terrorism. India questioned Pakistan’s ability to effectively manage these loans, citing the country’s long history of failing to implement sound macroeconomic policies, which has led to repeated bailouts from the IMF.
“Had the previous programs succeeded in putting in place a sound macro-economic policy environment, Pakistan would not have approached the Fund for yet another bail-out program,” the Indian Ministry of Finance stated, pointing out the recurring need for Pakistan to seek financial aid from the IMF.
India also raised concerns over the role of Pakistan's military in economic matters, noting that it poses significant risks to effective policy implementation and economic reforms. The statement highlighted the military’s significant influence on Pakistan’s economic landscape, referencing a 2021 UN report which described military-linked businesses as the “largest conglomerate in Pakistan” and their growing control over the Special Investment Facilitation Council.
“Pakistan military's deeply entrenched interference in economic affairs poses significant risks of policy slippages and reversal of reforms,” India’s statement cautioned.
India’s concerns extended beyond economic matters, warning that any IMF funds provided to Pakistan could potentially fund terrorism, a practice that India believes should not be rewarded. “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,” India stated.
While India’s concerns were echoed by several other IMF member countries, it criticized the IMF’s response, which it described as being limited by procedural and technical formalities. “This is a serious gap, highlighting the urgent need to ensure that moral values are given appropriate consideration in the procedures followed by global financial institutions,” India emphasized.
The Indian government’s stance has sparked a wider debate about the role of international financial institutions in dealing with countries involved in regional conflicts and sponsoring terrorism.
(This story is published from a syndicated feed)