India Stays Out of IMF Vote on Pakistan Bailout, Citing Terror Links and Poor Track Record

The International Monetary Fund (IMF) on Friday, May 9, reviewed Pakistan’s $1 billion Extended Fund Facility (EFF) and considered a new $1.3 billion Resilience and Sustainability Facility (RSF). During the proceedings, India chose to abstain from the vote, raising pointed concerns about Pakistan’s financial management and the risks of international funding being misused.

According to diplomatic sources, India argued that IMF programs in Pakistan have shown limited success and that continued lending poses both financial and moral risks.

India outlined three major reasons for its abstention:

1. Weak track record with IMF programs:
   India highlighted that Pakistan has received IMF assistance in 28 out of the past 35 years. In the last five years alone, four different IMF programs have been initiated. Yet, these efforts have failed to create a stable macroeconomic foundation. India questioned whether the IMF’s programs for Pakistan are fundamentally flawed or whether their implementation lacks accountability and compliance on Pakistan’s part.
   
2. Military interference in economic affairs:
   Despite a civilian government, the Pakistani military retains heavy control over economic policymaking. India cited a 2021 United Nations report that described military-linked business entities as the country’s largest corporate conglomerate. The military’s role has since expanded further, including a key presence in Pakistan’s Special Investment Facilitation Council, raising concerns about transparency and reform reliability.
   
3. Risk of funding terrorism:
   India warned that international financial assistance to Pakistan could inadvertently support state-sponsored cross-border terrorism. It argued that offering financial relief under these circumstances could damage the credibility of donor agencies and send the wrong message globally. While several IMF members echoed similar concerns, the fund’s response remains constrained by technical limitations. India emphasized the need to integrate moral and ethical considerations into such financial decisions.

Despite India’s objections, the IMF is moving ahead with its assessments. New Delhi’s stance, however, underscores growing international scrutiny of Pakistan’s financial and governance practices.