India Abstains From IMF Vote, Citing Terror Financing Concerns
New York/Islamabad, May 10 — The International Monetary Fund (IMF) has approved the immediate disbursement of approximately USD 1 billion to Pakistan under its ongoing Extended Fund Facility (EFF), triggering strong objections from India, which abstained from the crucial vote citing serious concerns over terror financing and misuse of funds.The decision, announced following an IMF Executive Board meeting held on Friday in Washington, brings total disbursements under the arrangement to USD 2.1 billion. The IMF also approved Pakistan’s request for access to about USD 1.4 billion under the Resilience and Sustainability Facility (RSF), which aims to support the country’s climate and economic resilience efforts.
India's Protest: Terrorism and Military Interference Cited
India registered a formal protest and abstained from the vote, warning that continued financial support to Pakistan could embolden cross-border terrorism and undermine global financial ethics. In a statement, the Indian Ministry of Finance said:India highlighted that Pakistan has availed IMF support 28 times in the past 35 years, with four separate programmes in the last five years, yet has failed to implement meaningful reforms. Officials also raised concerns about the Pakistani military’s entrenched influence in the economy, undermining transparency and civilian oversight.
A senior official noted, “India conveyed its strong dissent within the constraints of the IMF’s voting system, as a formal ‘no’ vote is not permitted.”
IMF’s Position and Programme Details
The IMF said its 37-month programme, approved in September 2024, aims to build resilience and promote sustainable growth in Pakistan. Priorities include tax reforms, energy sector improvements, and private sector development.Nigel Clarke, IMF Deputy Managing Director and Chair, acknowledged that risks remain elevated, citing “global economic uncertainty, rising geopolitical tensions, and persistent domestic vulnerabilities.”
The RSF facility is designed to assist Pakistan in reducing vulnerability to natural disasters and strengthening climate resilience.
Pakistan's Reaction: PM Slams India, Hails IMF Support
In Islamabad, Prime Minister Shehbaz Sharif welcomed the IMF approval and accused India of attempting to derail Pakistan’s economic recovery.Sharif said the government’s policy focus on tax reform, energy sector efficiency, and investment facilitation is showing results, and that IMF support will help stabilize the economy and promote long-term growth.
Programme Breakdown
- Total Package: USD 7 billion over 39 months
- Instalments: Seven equal disbursements of about USD 1 billion each
- Next Steps: Pakistan must meet conditions like carbon levies, energy pricing revisions, and liberalisation of sectors like automobiles to continue receiving funds.
Global Scrutiny and Future Challenges
India’s strong opposition has spotlighted the ethical and strategic risks tied to global financial support in politically and militarily sensitive environments. While the IMF acknowledged the concerns, it cited procedural limits in addressing them directly.India’s abstention serves as a recorded dissent in IMF proceedings and may influence future deliberations over funding to countries with controversial records.
As geopolitical tensions rise and military confrontations between India and Pakistan continue, the IMF’s decision is likely to remain a focal point of diplomatic and economic debate.