India raised strong concerns at the International Monetary Fund (IMF) Board meeting, where the IMF reviewed Pakistan’s ongoing Extended Fund Facility (EFF) program amounting to USD1 billion and considered a new proposal under the Resilience and Sustainability Facility (RSF) for an additional USD 1.3 billion. During the discussions, India, as a responsible and active member of the IMF, questioned the efficacy and credibility of the IMF's lending programs in Pakistan, particularly in light of the country's history of poor implementation and potential misuse of funds for state-sponsored cross-border terrorism.
India highlighted that Pakistan has consistently demonstrated a poor track record with the IMF, having received disbursements in 28 out of the last 35 years since 1989. In just the past five years, four separate IMF programs have been assumed. India asserted that if previous programs had succeeded in establishing a sound macroeconomic framework, Pakistan would not be in a position to seek yet another bailout. This repeated cycle, according to India, raises serious questions regarding the design, monitoring, and implementation of IMF programs in Pakistan.
Of particular concern is the rooted role of Pakistan’s military in the country’s economic management. India drew attention to the undue influence of the Pakistan Army, even under a civilian government. The military’s supremacy in economic affairs poses a significant risk of policy slippages and reform reversals. Citing a 2021 UN report that described military-linked enterprises as the “largest conglomerate in Pakistan,” India noted that the situation has only worsened, with the military now playing a leading role in the Special Investment Facilitation Council.
India also referenced the IMF’s own evaluation report on the lengthy use of its resources in Pakistan, which underlined a widespread perception that political considerations play a substantial role in IMF lending decisions to the country. India pointed out that continuous bailouts have resulted in an unsustainable debt burden for Pakistan, effectively making it a "too big to fail" borrower for the IMF and undermining the credibility of international financial support mechanisms.
In its intervention, India strongly warned that providing financial assistance to a nation that continues to support cross-border terrorism sends a troubling message to the international community.
It risks damaging the standing of funding institutions and undermines the principles of global governance. India expressed concern over the fungibility of such international inflows, which could potentially be diverted toward military activities and state-sponsored terrorism.
India’s position vibrated with several other IMF member countries, though the Fund’s official reply remained constrained by procedural and technical norms. India stressed the urgent need to mix moral and ethical thoughts into the financial decision-making processes of global institutions like the IMF.
The IMF approved India’s intervention and took note of its choice to refrain from the vote on the planned lending program.
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