IMF Funding to Pakistan: India's Concerns

The International Monetary Fund (IMF) has a long history with Pakistan, with 24 loan facilities provided since 1958. The latest proposed facility, a $1.3 billion Resilience and Sustainability Facility, would mark the 25th instance.

India's Stance

• On May 9, 2025, India raised concerns at the IMF regarding the efficacy of its funding to Pakistan, given the country's poor track record with IMF programs.
• India abstained from voting on an additional $1 billion disbursement to Pakistan as part of a $7 billion Extended Fund Facility (EFF) and the $1.3 billion RSF.
• The Ministry of Finance (MoF) highlighted the risk of funds being misused for state-sponsored cross-border terrorism.

Political Reactions

• The Congress party criticized the Indian government for abstaining, suggesting India should have voted against the loan to send a strong signal.

Pakistan's Track Record

• Pakistan has been a "prolonged borrower" with a poor implementation record of IMF conditions.
• In 35 years since 1989, Pakistan has received IMF disbursements for 28 years, with four programs in the last five years alone.
• India argued that ineffective IMF program designs and monitoring contribute to Pakistan's recurring bailouts.

Risks and Global Concerns

• India warned that continued IMF loans to Pakistan could lead to it becoming too significant a debtor for the IMF to allow failure.
• The potential misuse of funds for terrorism poses reputational risks to global funding agencies and undermines global values.
• India emphasized the need for moral values to be considered in IMF procedural and technical formalities.

India's concerns resonated with several IMF member countries, though procedural constraints limited the response. The IMF acknowledged India's concerns and noted its abstention from the vote.