IMF Approves $1 Billion Loan to Pakistan; India Objects, Citing Terrorism Concerns. IMF Asserts Compliance with Regulations.
IMF-Pakistan: The International Monetary Fund (IMF) recently announced a $1 billion loan disbursement to Pakistan, part of an ongoing $7 billion bailout package. This announcement follows India's appeal to the IMF to refrain from providing financial assistance to a country it believes sponsors terrorism. India contends that Pakistan may utilize these funds to support terrorist organizations.
India's Objection and the Defense Minister's Statement
India bly opposed the IMF's decision. Defense Minister Rajnath Singh recently stated that a portion of the IMF loan, amounting to ₹14 crore (approximately $1.7 million USD), would be diverted to the terrorist Masood Azhar. India has also voiced its concerns on international platforms.
IMF's Stance: Aid Provided According to Regulations
Despite these objections, the IMF maintained that loans are disbursed only to countries fulfilling specific regulations and conditions. The IMF board confirmed its satisfaction with Pakistan's fulfillment of all economic targets and conditions for the loan.
Accelerated Review Process
The IMF stated that while the review was initially scheduled for early 2025, Pakistan met the required standards ahead of schedule, leading to the early completion of the process and the approval of the additional $1 billion.
Loan Utilization: IMF's Clarification
Julie Kozack, Director of the IMF Communications Department, clarified that IMF funds are not allocated for government spending. She explained that the funds are deposited into Pakistan's central bank reserves and used solely to improve the balance of payments, not for government programs. However, there are no restrictions on the central bank lending to the government.
New Conditions: A Total of 50 Conditions
The IMF also stated that Pakistan must fulfill a total of 50 conditions, including 11 newly added ones, to receive future installments. Failure to meet these conditions could result in the withholding of subsequent installments.
India-Pakistan Tensions Cited as a Risk
The IMF acknowledged that escalating tensions between India and Pakistan pose a significant risk to the financial program. It expressed regret over recent violent incidents between the two countries and called for a peaceful resolution.
