India stressed that Pakistan’s high debt burden, a result of these repeated bailouts, paradoxically makes it a “too big to fail” debtor for the IMF.
India has abstained from voting on the International Monetary Fund’s (IMF) proposed $1.3 billion bailout package for Pakistan, citing Islamabad’s “poor track record” in effectively utilising previous financial aid.
The decision comes amid escalating tensions between the two countries following India’s recent military strikes against terror infrastructure in Pakistan and Pakistan-Occupied Kashmir as part of Operation Sindoor in retaliation against the April 22 Pahalgam attack.
At the IMF board meeting held on May 9 in Washington, India flagged concerns over Pakistan’s repeated failure to meet conditions attached to IMF assistance.
India flagged the Pakistan chapter of the IMF Report on Evaluation of Prolonged Use of IMF Resources.
The report noted that “there was a widespread perception that political considerations have an important role to play in the IMF lending to Pakistan. As a result of repeated bailouts, Pakistan’s debt burden is very high, which paradoxically makes it a too-big-to-fail debtor for the IMF.”
India’s position also pointed to the widespread perception that political considerations have influenced IMF lending to Pakistan, raising questions about the effectiveness and end-use of the funds.
New Delhi has consistently argued that financial aid to Pakistan indirectly supports military intelligence operations and terrorist groups such as Lashkar-e-Taiba and Jaish-e-Mohammed, which have orchestrated attacks on Indian soil.
The IMF’s review of Pakistan’s bailout package coincided with India’s “Operation Sindoor,” a military campaign targeting terror camps inside Pakistan and PoJK in response to the April 22 Pahalgam terror attack that killed 26 civilians.
India has repetedly emphasised that its strikes were precise and targeted only terror infrastructure, while Pakistan’s retaliatory drone and missile attacks on Indian military and civilian sites were repulsed by India’s air defence.
India’s abstention signals a firm stance urging the IMF and other multilateral lenders to exercise caution in extending further financial support to Pakistan without concrete steps to end cross-border terrorism.
With Pakistan’s economy heavily reliant on IMF funding, India’s move adds diplomatic pressure amid a volatile security situation in the region.(IT)
