Amid tensions with India, the IMF has approved a billion-dollar loan to Pakistan. This is part of the previously agreed bailout package. However, India has opposed the loan. India has accused Pakistan of misusing IMF loans and not implementing economic reforms. It has reminded Pakistan that it has received assistance from the IMF several times in the past. Due to this, India boycotted the board vote without taking any action.
In retaliation for the Pahalgam attack, India launched a lightning strike on terror camps in Pakistan with Operation Sindoor. Pakistan is also retaliating against India . This has led to a clash between the two countries. While tensions with India continue.. Pakistan has received a huge relief from the International Monetary Fund (IMF). It has recently sanctioned a loan of $ 1 billion to the country. This loan is part of the previously agreed $ 7 billion bailout package. This will help stabilize the country’s economy, reduce external debt burden, and improve foreign exchange reserves. However, India has objected to the sanction of this loan. It boycotted the voting in opposition to this. India has made serious efforts to prevent the loan from being sanctioned.
The IMF-Pakistan agreement was signed on March 25, 2024. As part of this loan package of $7 billion for a total of 39 months, Pakistan has agreed to the IMF’s conditions. These include key items such as carbon levy, timely adjustment of electricity prices, increase in water prices, and liberalization in the automobile sector.
1. Misuse of IMF assistance
India has accused Pakistan of misusing IMF loans. Despite undertaking 28 IMF programmes in the last 35 years, no fundamental reforms have been carried out. Pakistan, which has received 4 bailouts in the last 5 years, has been badly mismanaging its finances. India believes that such continuous assistance is likely to lose credibility.
2. Military dominance – The influence of the Pakistani army on the economy
India has strongly criticized the army’s dominance over the Pakistani economy. India believes that large companies owned by the Pakistani army (military-run consumer goods) are influencing the country’s economy and system, which is against the objectives of IMF reforms.
3. Diplomatic signal
While protesting against terrorism, India believes that providing funds to Pakistan is against international standards in the context of the fact that it is still providing shelter to terrorist organizations on Indian borders. India has warned that there is a risk that these funds could be used for state-sponsored terrorist activities.
4. Flaws in IMF policies – Representation of India’s protest
According to IMF policy, member countries have to show only two options: ‘acceptance’ or ‘silent abstention’. There is no ‘direct rejection’. Therefore, India sent a strong signal of its objection to the IMF forum by silently abstaining.
Also Read: Security Tightened at Tirumala Temple Amid India-Pakistan Tensions
Share
IAF Officer Shivangi Singh Captured? Here's the Truth
Do you Know what Rashmika Mandanna calls Vijay?
