India raises concern over IMF’s $2.3 billion bailout package for Pakistan, abstains from voting

New Delhi: India on Friday raised concern over the International Monetary Fund’s $2.3 billion loan and bailout package for Pakistan saying the money is likely to be used for funding state sponsored cross border terrorism.

The IMF board in Washington reviewed the “Extended Fund Facility (EFF)” lending programme of $1 billion and also considered a fresh “Resilience and Sustainability Facility (RSF)” lending programme of $1.3 billion for Pakistan. During the meeting India not only voiced concern but also abstained from voting for the proposal.

“As an active and responsible member country, India raised concerns over the efficacy of IMF programmes in case of Pakistan given its poor track record, and also on the possibility of misuse of debt financing funds for state sponsored cross border terrorism,” the Union Finance Ministry said in a statement.

New Delhi underlined that Pakistan military’s deeply entrenched interference in economic affairs of the country poses significant risks of policy slippages and reversal of reforms.

“Even when a civilian government is in power now, the army continues to play an outsized role in domestic politics and extends its tentacles deep into the economy,” it said.

India’s opposition to IMF’s bailout package to Pakistan comes amid growing conflict among the two countries following a barbaric terror attack on tourists at Pahalgam in Kashmir valley last month.

Flagging the possibility of misuse of funds, India said “Pakistan has been a prolonged borrower from the IMF, with a very poor track record of implementation and of adherence to the IMF’s programme conditions.”

India pointed out that rewarding continued sponsorship of cross-border terrorism sends a dangerous message to the global community, exposes funding agencies and donors to reputational risks, and makes a mockery of global values.

“While the concern that fungible inflows from international financial institutions, like IMF, could be misused for military and state-sponsored cross border terrorist purposes resonated with several member countries, the IMF response is circumscribed by procedural and technical formalities,” the Finance Ministry said.