'Reimbursing Pakistan', says Omar Abdullah as IMF approves $1 billion loan

J&K CM Omar Abdullah questioned the IMF's decision to fund Pakistan amid cross-border attacks, while India warned of misuse for terrorism and abstained from the vote

Jammu and Kashmir Chief Minister Omar Abdullah on Saturday criticised the International Monetary Fund (IMF) for approving a new $1 billion loan to Pakistan amid rising cross-border tensions with India.

 

In a post on X, Abdullah said, “I’m not sure how the ‘International Community’ thinks the current tension in the subcontinent will be de-escalated when the IMF essentially reimburses Pakistan for all the ordnance it is using to devastate Poonch, Rajouri, Uri, Tangdhar & so many other places.

 

  The IMF’s Executive Board on Friday completed its first review of Pakistan’s economic reform programme under the Extended Fund Facility (EFF), enabling an immediate disbursement of approximately $1 billion. This brings total disbursements under the EFF arrangement to around $2.1 billion, the Washington-based financial institution said in a statement.

 

Additionally, the Board approved Pakistan’s request for a new arrangement under the Resilience and Sustainability Facility (RSF), providing access to around $1.4 billion. The IMF noted that the 37-month EFF programme—approved on 25 September 2024—is aimed at promoting economic stability and sustainable growth, while the RSF is designed to bolster climate and disaster resilience.

 

India abstains, voices concern

India abstained from voting on the combined $2.3 billion IMF assistance package to Pakistan, raising strong objections over potential misuse of funds for sponsoring terrorism. In a statement, the Indian government warned that rewarding Pakistan in this manner “sends a dangerous message to the global community” and “makes a mockery of global values.”

 

India cited Pakistan’s track record of non-compliance with IMF conditionalities, highlighting that the country has received disbursements in 28 of the past 35 years despite its inconsistent reform commitments. These concerns were raised during the IMF Board’s review meeting, the Finance Ministry said.     

 

  “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 statement added.

 

India also flagged concerns over the misuse of fungible funds for military or terrorist activity. While several board members reportedly shared these apprehensions, India noted that the IMF’s scope for action was limited due to procedural constraints.

 

Terming this a “serious gap”, India called for global financial institutions like the IMF to integrate moral considerations into their lending decisions.

 

During the review, India referenced the IMF’s own internal assessments, noting the “widespread perception that political considerations have an important role to play in the IMF lending to Pakistan.”   

 

  India’s representative reportedly added, “As a result of repeated bailouts, Pakistan’s debt burden is very high, which paradoxically makes it a too-big-to-fail debtor for the IMF.”

 

India also pointed out that the IMF has engaged Pakistan in four separate lending programmes since 2019, reflecting its chronic dependence on external financial support.