*** India slams IMF Pakistan loan | THE DAILY TRIBUNE | KINGDOM OF BAHRAIN

India slams IMF Pakistan loan

AFP | New Delhi

Email : editor@newsofbahrain.com

Indian Defence Minister Rajnath Singh said yesterday the International Monetary Fund (IMF) should reconsider a one billion dollar loan to Pakistan alleging it was “funding terror”, a move denounced by Islamabad as proof of New Delhi’s desperation.

India and Pakistan last week clashed in the worst military violence in decades, killing around 70 people before agreeing a ceasefire that began Saturday.

The confrontations were sparked by an attack on tourists by gunmen in Indian-administered Kashmir last month that New Delhi accused Islamabad of backing -- a charge it denies.

“I believe a big portion of the $1 billion coming from IMF will be used for funding terror infrastructure,” Singh told troops at an air force base in western India.

“I believe any economic assistance to Pakistan is nothing less than funding terror.”

Despite India’s objections, the IMF last week approved a loan programme review for Pakistan, unlocking a $1 billion payment which the state bank said has already been received.

A fresh $1.4 billion loan was also approved under the IMF’s climate resilience fund. India -- which also represents Bhutan, Sri Lanka, and Bangladesh on the IMF board -- abstained from the review vote with a statement from its finance ministry stating, “concerns over the efficacy of IMF programmes in case of Pakistan given its poor track record”.

“India was the lone country which tried to stop it and it failed. It again reflects Indian frustration. Trying to criticise an institution like IMF speaks about this desperation,” Pakistan’s foreign ministry spokesman Shafqat Ali Khan told reporters.

Pakistan came to the brink of default in 2023, as a political crisis compounded an economic downturn and drove the nation’s debt burden to terminal levels before being saved by a $7 billion bailout from the IMF which sparked further crucial loans from friendly nations.

Pakistan, which has long battled militancy within its borders, has faced scrutiny over its ability to combat illicit financing, including to militant organisations and in 2022 was put on an international money-laundering watchlist.

However, the Financial Action Task Force removed Pakistan from it so-called grey-list in 2022 after “significant progress” which included charges being filed against suspected militants accused of being involved in the 2008 attacks in India’s Mumbai.