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IMF Approves $1 Billion Loan to Pakistan, Ignores India's Warning About "Repeat Offender" Borrower

In what appears to be yet another act of blind optimism, the International Monetary Fund (IMF) on Friday approved the immediate release of a $1 billion loan to Pakistan — a country that, by all accounts, seems to treat international bailouts like an annual subscription.

The loan, part of the Extended Fund Facility (EFF), comes despite clear and vocal objections from India, which pointed out the obvious: Pakistan’s appalling track record with IMF funds and the not-so-secret possibility of these resources being funneled into cross-border misadventures.

But never mind. The IMF, ever the believer in second (or 28th) chances, also considered an additional $1.3 billion under its shiny new Resilience and Sustainability Facility (RSF). Because nothing says "resilience" like depending on financial lifelines year after year.

Pakistan’s Prime Minister Shehbaz Sharif predictably hailed the disbursement as a “sign of confidence” in the country’s economy — the same economy that has required four different IMF programmes in just the last five years, each failing to spark meaningful reform. But apparently, confidence is more about appearances than outcomes.

India, understandably, refused to play along. While IMF voting rules don’t allow a formal “no,” India made its stance clear by abstaining from the board vote and expressing serious reservations about Pakistan’s chronic dependency on bailout funds. According to the Indian Finance Ministry, if any of the previous programmes had worked, Pakistan wouldn’t be back with another begging bowl so soon.

In its statement, India diplomatically reminded the IMF that Pakistan has borrowed in 28 of the last 35 years. It also noted the “unique” influence of the military in shaping the country’s economic policies — a recipe that hasn’t exactly inspired reform or stability. But why let a little authoritarian interference stand in the way of a billion-dollar check?

India went further, warning that continued handouts to a country accused of state-sponsored terrorism may send “a dangerous message” to the global community, exposing donors to reputational risks and making a mockery of international accountability. But hey, perhaps accountability is a flexible concept these days.

The $7 billion aid package signed last year was supposed to usher in a new era of reform and resilience in Pakistan. And yet, here we are — same script, different year, and the IMF still playing the role of enabler-in-chief.

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5/9/2025
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