‘Dangerous message’: India on IMF bailout to Pak, abstains from vote
The International Monetary Fund (IMF) on Friday cleared a loan of about $1 billion to Pakistan with India abstaining from the vote and describing the move as “dangerous”. India, an active IMF member, said 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”.
India said while the concern that fungible inflows from international financial institutions, like the 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”.
“This is a serious gap highlighting the urgent need to ensure that moral values are given appropriate consideration in the procedures followed by global financial institutions. The IMF took note of the India’s statements and its abstention from the vote,” a statement from the Ministry of Finance said.
The PTI, meanwhile, quoted the Pakistan PMO as saying that the IMF has approved immediate disbursement of about $1 billion to Pakistan under the ongoing Extended Fund Faci lity.
“Prime Minister Shehbaz Sharif expressed satisfaction over the approval of a $1 billion instalment for Pakistan by the IMF and the failure of India’s high-handed tactics against it,” the PTI report said. India registered a very strong protest at the IMF and said Pakistan military’s deeply entrenched interference in economic affairs posed a 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. A 2021 UN report described military-linked businesses as the “largest conglomerate in Pakistan”. The situation has not changed for the better; rather the Pakistan Army now plays a leading role in the Special Investment Facilitation Council of Pakistan," said India which is engaged in thrawting constant escalations by Pakistan.
Ministry of Finance sources here said India abstained from the IMF vote on approving a loan to Pakistan not due to a lack of opposition, but because IMF rules do not permit a formal “no” vote. “By abstaining, India conveyed its strong dissent within the IMF’s constraints," Indian government sources said.
India questioned the effectiveness of ongoing IMF assistance, noting that Pakistan has received support in 28 of the past 35 years, including four programmes, in just the last five without meaningful or lasting reform. It firmly opposed providing funds to a country that continues to sponsor cross-border terrorism and warned that such support carries reputational risks for global institutions.
No provision to vote against loan
The IMF Executive Board of 25 Directors from member countries handles loan approval. The IMF voting power reflects the economic size of each member, with the US holding a disproportionately high voting share. It typically makes decisions by consensus. In cases where a vote is required, the system does not allow a formal “no” vote. Directors can either vote in favour or abstain. There is no provision to vote against a loan or proposal which is why India abstained, say official sources
India