India abstained from voting for the IMF’s $1.3 billion loan under its Resilience and Sustainability Facility (RSF) lending program to Pakistan
India opposed the International Monetary Fund’s (IMF) $1.3 billion fresh loan to Pakistan on May 9. While abstaining from voting in favour of IMF’s loan under its Resilience and Sustainability Facility (RSF) lending program, India flagged that continued financial assistance to Pakistan can be misused to finance terror-related activities or military purposes. The move also undermines international financial integrity, India said.
“Rewarding continued sponsorship of cross-border terrorism sends a dangerous message, exposes donors to reputational risks, and makes mockery of global values,” the Indian delegation said, according to a statement.
Indian delegation cited the IMF’s internal valuation report that highlighted that political considerations played a major role in influencing lending decisions in Pakistan’s case.
“India flagged the Pakistan chapter of the IMF Report on Evaluation of Prolonged Use of IMF Resources. The report noted that there was a widespread perception that political considerations have an important role to play in the IMF lending to Pakistan,” said the Indian delegation.
Addressing India’s concerns, the IMF said that its authority is limited by procedural and technical rules. In response to the IMF’s reason behind the $1.3 billion loan for Pakistan, the Indian delegation reportedly said amendments to procedural and technical rules of the financial institution should be made to incorporate moral grounds as a factor to be considered while making lending-related decisions.
This development followed the executive board meeting of the IMF on Friday to vote on disbursing $1 billion out of a total $7 billion Extended Fund Facility (EFF) to Pakistan and to extend a fresh $1.3 billion to financially troubled Pakistan under its RSF lending program.
Prime Minister Shehbaz Sharif has expressed satisfaction over the IMF’s financial lifeline for Pakistan and has taken a dig at India’s failed attempt to restrict disbursement of the loan.
“Prime Minister Shehbaz Sharif expressed satisfaction over the approval of a USD 1bn dollar installment for Pakistan by the IMF and the failure of India’s high-handed tactics against it," said Pakistan’s PMO in a statement, according to PTI.