India abstained from voting as the IMF’s board met to approve a $1 billion release under Pakistan’s $7 billion Extended Fund Facility and consider a $1.3 billion Resilience and Sustainability Facility. India’s Ministry of Finance cited Pakistan’s poor track record with IMF programs and the risk of funds being misused for state-sponsored cross-border terrorism as reasons for its strong dissent. Following the review approval, which India did not support, Pakistan’s government announced that the $1 billion disbursement brought the total funding received under the $7 billion program to $2 billion.
What is an IMF Loan?
The International Monetary Fund (IMF) provides financial assistance to member countries facing balance of payments crises (e.g., debt defaults, currency crashes). Loans come with strict reform conditions (austerity, privatization, tax reforms).
Types of IMF Loan Facilities
Criticisms of IMF Lending:
- Austerity measures: Often force cuts in public spending.
- Sovereignty issues: Perceived loss of policy autonomy.
- Social unrest: Reforms can hurt vulnerable populations.
“IMF loans are a lifeline—but with strings attached that can strangle growth.”
