On May 9, 2025, the International Monetary Fund (IMF) disbursed a fresh $1 billion loan to Pakistan under its Extended Fund Facility. An additional $1.3 billion under the Resilience and Sustainability Facility was also considered. But this financial support comes with more than just fiscal implications—it raises a haunting question for the world: Has the IMF just rewarded a terror state? Yes
India Raises the Alarm Over IMF: Terror Over Economics
India, a responsible and active IMF member, abstained from the vote and voiced grave concerns about Pakistan’s repeated abuse of such funds. In a bold move, India stated that rewarding a state sponsor of cross-border terrorism sends a dangerous global message. Notably, Pakistan’s record with IMF lending is abysmal: 28 years of disbursements in the last 35 years, including four bailouts since 2019 alone.
If previous loans had succeeded in stabilising Pakistan’s economy, why is another bailout necessary? India pointed out this contradiction, arguing that the IMF’s continued assistance reflects either poor program design, weak monitoring, or blatant misuse by Pakistan
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Pakistan’s Military-Run Economy: A Danger to Global Stability
Pakistan’s military isn’t just meddling in politics—it is the economy. According to a 2021 UN report, military-linked enterprises are the nation’s largest conglomerates. That influence has only grown, with the army now running the Special Investment Facilitation Council.
India highlighted this structural distortion, stressing that economic aid from global bodies like the IMF may end up enriching the very institutions that sponsor jihadist groups like Lashkar-e-Taiba and Jaish-e-Mohammed. These aren’t empty concerns—they’re documented facts, ignored at global peril.
IMF: Moral Blindspot: Procedural Comfort, Global Risk
India also cited the IMF’s own “Evaluation of Prolonged Use of IMF Resources” report, which admitted that political considerations heavily influenced lending decisions to Pakistan. Several member countries echoed India’s concern that such funds, being fungible, could be diverted toward state-sponsored terror.
Yet, the IMF continues to hide behind procedural formalities. By refusing to factor in moral and security implications, it risks reputational collapse. Rewarding a state that butchers civilians in Pahalgam and trains global jihadists in Bahawalpur isn’t just immoral—it’s reckless.
A World at Risk: What Message Does This Send?
India’s abstention from the vote was a clear signal of protest, but the IMF went ahead regardless. This move has global consequences. If financial credibility comes without ethical accountability, then terrorist states will continue to play the system—arming themselves not just with weapons, but with funds from institutions meant to preserve stability.
Pakistan’s debt burden has turned it into a “too big to fail” client for the IMF. But must the world now also tolerate that it’s too terror-ridden to be held accountable?