 "IMF approves $1 billion loan for Pakistan despite India's objection over terror concerns")
The International Monetary Fund (IMF) on Friday approved the immediate release of approximately $1 billion to Pakistan as part of the ongoing Extended Fund Facility (EFF), aimed at stabilising the country’s struggling economy.
“Prime Minister Shehbaz Sharif expressed satisfaction over the approval of a $1bn dollar instalment for Pakistan by the IMF and the failure of India’s high-handed tactics against it," PTI quoted a statement issued by his office as saying.
India earlier raised strong objections to the International Monetary Fund’s (IMF) decision to extend fresh financial assistance to Pakistan, citing concerns over the country’s poor track record with past programmes and the potential misuse of funds for state-sponsored cross-border terrorism.
During the IMF Executive Board meeting held on Friday, which approved a $1 billion disbursement under the Extended Fund Facility (EFF) and considered an additional $1.3 billion under the Resilience and Sustainability Facility (RSF), India registered its protest and abstained from voting.
New Delhi opposed the proposed $2.3 billion in new loans, warning that such financial support could be diverted to fund activities linked to terrorism.
In a statement, the Indian Ministry of Finance 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 undermines global values.”
India also criticised Pakistan’s repeated requests for IMF assistance, noting the country’s failure to adhere to previous programme conditions and implement sustained reforms.
India’s opposition at the IMF comes at a time when military conflict between India and Pakistan has intensified.
The statement issued by the PM office in Islamabad said Pakistan’s “economic situation has improved, and the country is moving towards development. India is plotting a conspiracy to divert attention from our country’s development through unilateral aggression.”
“Indian attempts to sabotage the IMF programme have failed,” the statement said, adding that the IMF programme would help stabilise the economy and put it on the path towards long-term recovery.
Impact Shorts
More Shorts“We are working on priority areas such as tax reform, improved energy sector performance and private sector development. The improved economic indicators in the last 14 months are a reflection of the government’s positive policies,” it said.
The approval of the IMF’s executive board has led to an immediate disbursement of $1 billion, bringing total disbursements under the loan programme to about $2 billion. On successful completion of seven half-yearly reviews, Pakistan is entitled to seven equal instalments of about $1 billion under the loan programme.
Pakistan and the IMF had reached a three-year, $7 billion aid package deal in July last with the new programme set to allow the country to cement macroeconomic stability and create conditions for stronger, more inclusive and resilient growth.
The IMF and Pakistan had reached a staff-level agreement on March 25 on the first biannual review of the 39-month $7 billion loan programme, agreeing on a series of reforms including the introduction of a carbon levy, timely revisions to electricity tariffs, increased water pricing and liberalisation of the automobile sector.
With inputs from agencies
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