IMF Bailout For Pakistan: India Abstains From Voting, Cites 'Poor Track Record', Terrorism Funding Concerns

India targeted Pakistan for its poor record of repaying debts and voiced concerns on the possibility of misuse of debt financing funds for state-sponsored cross-border terrorism.

India abstained from the vote on the International Monetary Fund’s proposed $1.3 billion bailout for Pakistan. India has cited concerns over Islamabad’s historical inefficiency in utilising prior financial assistance and has expressed concerns over its neighbour's "poor track record". India also voiced concerns on the possibility of misuse of debt financing funds for state-sponsored cross-border terrorism.

The IMF conducted a review today of Pakistan’s $1 billion Extended Fund Facility (EFF) program while also assessing a proposed $1.3 billion Resilience and Sustainability Facility (RSF) loan package. Meanwhile, earlier in the day, Foreign Secretary Misri confirmed that India’s executive director, Parameswaran Iyer, will participate in the upcoming IMF board meeting to highlight concerns related to Pakistan as a country that funds and actively promotes terrorism as a state policy. He said that “the case with regard to Pakistan should be self-evident to those who generously open their pockets to bail out this country.”

He had urged the IMF board members to “look within and study the facts before extending further assistance.” The IMF Executive Board will take a decision on Islamabad’s request for a loan under a climate resilience programme, along with the first review of the ongoing $7 billion bailout package that has been given to Pakistan. India is staunchly opposed to extending financial assistance to Pakistan because of serious concerns over the neighbouring country’s role in financing terrorism.

The IMF meeting comes within days of the horrific terror attack in Pahalgam, sponsored by Pakistan, in which 26 tourists were killed. Misri accused Pakistan of misusing international financial assistance, including IMF loans, to support military-intelligence operations and terrorist groups. He specifically pointed to Pakistan-based groups such as Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM), which have been linked to multiple attacks in India and are designated terrorist entities under UN sanctions. The country was on the brink of sovereign default in 2023 and had to be bailed out by a $3 billion IMF loan. The country is still critically dependent on this financial lifeline and is desperately trying to raise another $1.3 billion climate resilience loan.

The IMF had, on March 25, announced a staff-level agreement with Pakistan under a new 28-month Resilience and Sustainability Facility (RSF), granting Islamabad access to $1.3 billion. Meanwhile, World Bank President Ajay Banga has reached Lucknow as part of his visit to Uttar Pradesh on Friday to get a first-hand view of the remarkable economic progress of the state. He has already met Prime Minister Narendra Modi on Thursday. Banga is reported to have assured the Prime Minister that the World Bank will not interfere in India’s decision to suspend the Indus Water Treaty amid tensions with Pakistan. The World Bank chief also met Finance Minister Nirmala Sitharaman in the national capital.

(IANS inputs)