India has abstained from voting on the International Monetary Fund’s (IMF) review of a USD 1 billion Extended Fund Facility (EFF) and a proposed USD 1.3 billion Resilience and Sustainability Facility (RSF) for Pakistan, the Ministry of Finance said in a statement released today.
In its statement, India voiced strong concerns over Pakistan’s history with IMF loans and the risk of funds being diverted to support “state-sponsored cross-border terrorism.”
It also noted that Pakistan has been a “prolonged borrower,” receiving IMF disbursements in 28 of the 35 years since 1989. Additionally, the country has launched four separate IMF programmes in just the past five years.
The statement underscored Pakistan’s long-standing dependence on IMF support, noting it has received disbursements in 28 of the 35 years since 1989 and launched four separate IMF programmes within the last five years.
“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 finance ministry said, questioning “either the effectiveness of the IMF program designs in case of Pakistan or their monitoring or their implementation by Pakistan.”
The ministry further pointed out that while several other member countries shared India’s concerns regarding the potential misuse of international financial aid, “the IMF response is circumscribed by procedural and technical formalities.”
India calls for moral values in global financial procedures
{{/usCountry}}The ministry further pointed out that while several other member countries shared India’s concerns regarding the potential misuse of international financial aid, “the IMF response is circumscribed by procedural and technical formalities.”
India calls for moral values in global financial procedures
{{/usCountry}}India described this as “a serious gap highlighting the urgent need to ensure that moral values are given appropriate consideration in the procedures followed by global financial institutions.”
Despite India’s objections, the IMF proceeded with its review of the loan programs, merely acknowledging India’s statements and abstention from the vote.
This development comes amid ongoing tensions between India and Pakistan, with India continuing to accuse Pakistan of supporting terrorist activities in the region, allegations that Pakistan denies.
Pakistan's economy is grappling with major challenges, such as soaring inflation, dwindling foreign exchange reserves, and a heavy external debt burden, underscoring the need for international financial aid to stabilize the country.