As tensions between India and Pakistan continued, Jammu and Kashmir chief minister Omar Abdullah in a scathing response questioned how the “international community” thinks the current tension between the neighbouring countries will be de-escalated when the International Monetary Fund (IMF) approved a funding of $1 billion for Pakistan on Friday.
Asian neighbours India and Pakistan are waging a war following the Pahalgam terror attack that claimed the lives of 26 people in Jammu and Kashmir, India on April 22.
As soon as IMF approved the release of funds under a Stand-By Arrangement (SBA) of $1 billion, Pakistan offensive continued with renewed strength as drones and missiles reportedly violated India’s airspace in the wee hours.
Pakistan had also requested for another arrangement under the Resilience and Sustainability Facility (RSF), with access of about US$1.4 billion.
“This timing is no coincidence. It has always been a part of a well-worn playbook. When Pakistan secures international funding, particularly from Western-backed institutions like the IMF, any regime in Pakistan often translates that financial relief into geopolitical defiance,” a senior government official said.
“Economic crisis may bring Islamabad to the negotiating table for some time, but cash in hand quickly revives the military’s confidence—and its appetite for further and escalated confrontation,” the source added.
“Our senior diplomats, including ambassadors and high commissioners in the US and UK, in their public statements and through interviews to international media channels, showed proof of Pakistan’s complicity and support to terrorist organisations. They have also shown glaring evidence, including photos of Pakistan Army officials, in uniform, standing behind a globally recognised terrorist,” the government source added.
The IMF’s goal was economic reforms and sustainability. “Pakistan’s 37-month EFF was approved on Sept 25, 2024, and aims to build resilience and enable sustainable growth. Key priorities include (i) entrenching macroeconomic sustainability through consistent implementation of sound macro policies, including rebuilding international reserve buffers and broadening of the tax base; (ii) advancing reforms to strengthen competition and raise productivity and competitiveness; (iii) reforming SOEs and improving public service provision and energy sector viability; and (iv) building climate resilience,” IMF said in a press release on Friday.
Shehbaz Sharif, Pakistan’s prime minister claimed that “hostile efforts to derail the IMF program have failed” after IMF announced the package.
Pakistan’s coalition government has endorsed an 18 percent increase in defence spending in the next budget due to conflict in the region, Indian news agency PTI reported on Tuesday. The government is set to unveil the 2025-26 budget in the first week of June ahead of the start of the new fiscal year from July 1.
India alleged that the sign is very clear–priority was given to strategic and geo-political dominance over structural reform. At many international forums, India has expressed apprehension that IMF money can unintentionally support destabilising activities.
A source who has served on Pakistan’s desk for many years said, “from cross-border ceasefire violations to supporting proxy actors, Pakistan’s behaviour has often sharpened in periods following financial bailouts. The insider has also analysed the country’s track of receiving 25 bailout packages from various global forums.
Check out the media briefing by the India’s ministry of external affairs on Saturday.