New Delhi [India], May 10 (ANI): India on Wednesday firmly opposed providing funds to a country that continues to sponsor cross-border terrorism, warning that such support carries reputational risks for global institutions and undermines international norms.
This stand was taken during the International Monetary Fund’s (IMF) review of a USD 1 billion Extended Fund Facility (EFF) and consideration of a fresh USD 1.3 billion Resilience and Sustainability Facility (RSF) for Pakistan, sources within the Government of India said.
India abstained from the recent IMF vote on approving a loan to Pakistan, not due to a lack of opposition, but because IMF rules do not permit a formal “no” vote, sources added.
Further, New Delhi conveyed its strong dissent within the constraints of the IMF’s voting system and used the opportunity to record its objections formally. India’s key objections included:
India also questioned the effectiveness of ongoing IMF assistance, noting that Pakistan has received support in 28 of the past 35 years including four programs in just the last five without meaningful or lasting reform and highlighted the Pakistani military’s continued dominance in economic affairs, which undermines transparency, civilian oversight, and sustainable reform.
The International Monetary Fund (IMF) on Wednesday reviewed the Extended Fund Facility (EFF) lending program (USD 1 billion) and also considered a fresh Resilience and Sustainability Facility (RSF) lending program (USD 1.3 billion) for Pakistan.
In its official statement, India raised significant concerns regarding Pakistan’s track record with previous IMF loans and the potential misuse of funds for “state-sponsored cross-border terrorism.”
India’s concerns extended beyond economic considerations to governance issues, particularly the role of Pakistan’s military in economic affairs. The statement pointed out that “Pakistan military’s deeply entrenched interference in economic affairs poses significant risks of policy slippages and reversal of reforms.” It referenced a 2021 UN report that described military-linked businesses as the “largest conglomerate in Pakistan” and noted the army’s current leading role in Pakistan’s Special Investment Facilitation Council.
The Ministry also noted that while several other member countries shared India’s concerns about the potential misuse of international financial assistance, “the IMF response is circumscribed by procedural and technical formalities.” India characterised 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.”
Notably, the IMF Executive Board consists of 25 Directors who represent member countries or groups of countries. It handles daily operational matters, including loan approvals.
Unlike in the United Nations, where each country has one vote, the IMF voting power reflects the economic size of each member. For instance, countries like the United States hold a disproportionately high voting share. Thus, to simplify things, the IMF typically makes decisions by consensus. In cases where a vote is required, the system does not allow a formal “no” vote. Directors can either vote in favour or abstain. There is no provision to vote against a loan or proposal. (ANI)
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