IMF sanctions $1bn loan for Pak, says PMO, Cong calls out India's abstention

The International Monetary Fund (IMF) on Friday approved the immediate disbursement of about USD 1 billion to Pakistan under the ongoing Extended Fund Faci­li­ty, the Pakistan prime minister’s office (PMO) said.

“Prime Minister Shehbaz Sharif expressed satisfaction over the approval of a USD 1bn dollar instalment for Pakistan by the IMF and the failure of India’s high-handed tactics against it," according to a statement issued by the PMO. It said Pakistan's economic situation has improved and the country is moving towards development.

With India abstaining from voting at the IMF meeting that discussed fresh loans to Pakistan, the Congress on Friday said the Narendra Modi government "chickened out" and a "strong no" from the Centre would have sent a powerful signal.

Congress general-secretary (communications) Jairam Ramesh recalled that on 29 April, the Congress had demanded that India vote against the IMF loan to Pakistan, which was considered today by its executive board.

"India has only abstained from the vote. The Modi Government has chickened out. A strong NO would have sent a powerful signal," Ramesh said in a post on X.

India on Friday opposed the IMF's proposal to extend fresh loans of USD 2.3 billion to Pakistan, saying they could be misused for financing state-sponsored cross-border terrorism.

The Union finance ministry said as an active and responsible member country, India raised concerns over the efficacy of IMF programmes in the 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.

India registered its protest at the board of IMF, which met on Friday to review the Extended Fund Facility (EFF) lending programme (USD 1 billion) and also considered a fresh Resilience and Sustainability Facility (RSF) lending programme (USD 1.3 billion) for Pakistan.

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, the finance ministry said in a statement.

"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," it said.

India's opposition at the IMF comes at a time when military conflict between India and Pakistan has intensified.